SHOP Q4 2020 Earnings

Call Details

• Call Title: Shopify Q4 2020 Earnings Call
• Date: February 17, 2021 at 2:30 PM UTC
• Management Team:
  • Katie Keita (Director of Investor Relations)
  • Tobi Lütke (Chief Executive Officer)
  • Harley Finkelstein (President)
  • Amy Shapiro (Chief Financial Officer)

Call Summary

Financial Performance

• Revenue nearly doubled in Q4 to $977.7M, up 94% year-over-year.
• Subscription Solutions revenue was $279.4M, accelerating 53% year-over-year.
• Monthly recurring revenue (MRR) in Q4 was $82.6M, up 53% year-over-year.
• Merchant Solutions revenue grew 117% to $698.3M in Q4 year-over-year.
• Q4 GMV was $41.1B, nearly double year-over-year, with $19.1B processed on Shopify Payments, up 116% year-over-year.
• Adjusted gross profit was $510.6M, up 89% year-over-year, reflecting revenue growth despite a larger mix of lower-margin merchant solutions and SFN ramp.
• Adjusted operating income was $200M in Q4 versus $28.5M in Q4 2019, demonstrating material operating leverage in the quarter.
• Adjusted net income was $198.8M or $1.58 per diluted share versus $50M or $0.43 per diluted share in Q4 2019.

Guidance

• The company replaced quarterly and annual numeric ranges with directional indicators and explanations of primary levers rather than providing specific 2021 numeric guidance.
• Shopify expects to grow revenue rapidly in 2021, albeit at a lower rate than in 2020 and does not expect the 2020 GMV surge to repeat.
• Subscription and merchant solutions revenue growth rates are expected to be more similar in 2021 than in 2020.
• Shopify expects Q1 to likely contribute the smallest share of full-year revenue and Q4 the largest, but the revenue spread may be more evenly distributed across quarters if offline spending recovers.
• The company expects to deploy substantially all incremental gross profit dollars into growth investments across product, engineering, sales and marketing, and international expansion.
• For 2021, the company disclosed anticipated stock-based compensation and related payroll taxes of $465M and amortization of acquired intangibles of $21M.