SHOP Q4 2022 Earnings

Call Details

• Call Title: Shopify Q4 2022 Earnings Call
• Date: February 15, 2023 at 1:00 PM UTC
• Management Team:
  • Tobi Lütke (Chief Executive Officer)
  • Harley Finkelstein (President)
  • Jeff Hoffmeister (Chief Financial Officer)

Call Summary

Financial Performance

• Q4 revenue was $1.7B, up 26% year-over-year and up 28% on a constant currency basis.
• Full-year 2022 revenue was $5.6B, up 21% year-over-year.
• Q4 merchant GMV was $61B, up 13% year-over-year and up 17% on a constant currency basis.
• Q4 merchant solutions revenue was $1.3B, up 30% year-over-year and up 32% on a constant currency basis.
• Subscription solutions revenue in Q4 was $400M, up 14% year-over-year.
• Total attach rate increased to 2.85% in Q4 from 2.55% a year earlier.
• Monthly recurring revenue (MRR) exceeded $109M in Q4, up 7% year-over-year.
• Gross profit for Q4 was $799M, up 15% year-over-year.
• Cash and marketable securities balance was $5.1B as of December 31, 2022.

Guidance

• Q1 2023 revenue is expected to grow in the high teens year-over-year, reflecting a normal seasonality decline from Q4.
• Q1 2023 gross margin is expected to be slightly higher than Q4 2022 gross margin.
• Q1 2023 operating expenses are expected to be up in the low single-digit percentage versus Q4 2022 when excluding Q4 one-time charges.
• Q1 2023 stock-based compensation is expected to be in line with Q4 2022.
• Q1 2023 capital expenditures are expected to be in line with full-year 2022 CapEx levels.
• Shopify expects the Shopify Fulfillment Network (SFN) to be a headwind to gross margin and a significant contributor to operating expenses in 2023, with the impact most prominent in H1 2023.
• The compensation leveling exercise that increased expenses starting in September 2022 will affect year-over-year comparability during the first three quarters of 2023.