Shopify Inc, the virtual go-to destination for e-commerce entrepreneurs, has published impressive Q4 results that indicate a long runway of growth ahead. In Q4, revenue grew to $343.9 billion, a 54% y-o-y increase, and adjusted EPS rose to $0.26, a 73% y-o-y increase. Its gross merchandise volume (GMV) increased 54% to $14 billion. Overall, the company’s stock has appreciated over 800% in the last three years.
But do these figures tell the whole story.
Shopify is not just about pushing products; it’s about empowering merchants. The company helps merchants across the size spectrum to set up virtual shops quickly and affordably with the help of select tools that make it easier for clients to process payments, ship packages, secure financing, and reduce fraudulent transactions. This merchant solutions segment has alone accounted for a revenue growth of $210.3 million in Q4, a 63% increase over last year’s Q4.
Further, once the shops have been set up, the platform soon becomes indispensible for the merchants who don’t find it beneficial to leave it for another competitor. The listing and shipping of products, acceptance of payments, and the financing of future growth – the entire gamut of the shopping segments makes it impossible for the merchants to dump it altogether.
Other two important Shopify segments include Shopify Shipping, launched in 2015 that allows merchants to select from a variety of shipping partners to buy and print outbound and return shipping labels and track orders directly within the Shopify platform. Almost 40% of eligible merchants used the platform in Q4, up from 30% of U.S. and 20% of Canadian merchants in 2017's final quarter.
The next one is Shopify Payments, which enables merchants to accept card and digital payments across its online and offline commerce platforms. In Q4, $5.8 billion was processed on Shopify Payments, a 65% y-o-y increase, and about 41% of the company's GMV.
All these beneficial factors coupled with its sticky ecosystem and features, is likely to help Shopify keep the merchants on its platform for years to come.