SHOP Q2 2022 Earnings

Call Details

• Call Title: Shopify Q2 2022 Earnings Call
• Date: July 27, 2022 at 1:00 PM UTC
• Management Team:
  • Tobi Lütke (Chief Executive Officer)
  • Harley Finkelstein (President)
  • Amy Shapiro (Chief Financial Officer)

Call Summary

Financial Performance

• Total GMV in Q2 was $46.9B, up 11% year over year.
• Online GMV growth was up 8% year over year and offline GMV grew up 47% year over year.
• Total revenue in Q2 was $1.3B, up 16% year over year, and was negatively impacted by approximately 1.5 percentage points from a stronger U.S. dollar.
• Merchant Solutions revenue was $928.6M, up 18% year over year, and was negatively impacted by approximately two percentage points from currency headwinds.
• Subscription Solutions revenue was $366.4M, up 10% year over year, with a 4 percentage point negative impact from the prior change to app and theme revenue share.
• Monthly recurring revenue (MRR) was $107.2M, up 13% year over year, with Shopify Plus increasing its share of total MRR to 31% from 26% in Q2 2021.
• Adjusted gross profit was $665M compared to $627M in Q2 2021, and adjusted operating loss was $41.8M versus adjusted operating income of $236.8M in Q2 2021.
• Adjusted net loss was $38.5M, or a loss of $0.03 per diluted share, versus adjusted net income of $284.6M, or $0.22 per diluted share, in Q2 2021.

Guidance

• Shopify expects GMV growth in H2 2022 to continue to outperform broader retail but to be more evenly distributed across quarters similar to 2021.
• Merchant Solutions revenue growth year over year for full-year 2022 is expected to be more than double Subscription Solutions revenue growth.
• The company expects to generate an adjusted operating loss for the second half of 2022 and expects Q3 adjusted operating loss excluding severance to materially increase over Q2.
• Q4 adjusted operating loss is expected to be significantly smaller than Q3 but larger than Q2 as operating expense growth decelerates into Q4 and seasonality increases GMB and revenue.
• Estimates for stock-based compensation and related payroll taxes, CapEx, and amortization of acquired intangibles are $750M, $200M, and $62M, respectively.
• The outlook assumes persistent higher inflation and rising interest rates that will pressure consumer spending on goods for the foreseeable future.
• The company expects new compensation system costs of approximately $50M for the remainder of 2022.