Shopify Grows Revenues 57% Year Over Year In 2021
Shopify Inc (TSX: SHOP) this morning announced its fourth quarter and full year financial results for 2021. The company saw significant revenue increases on both a quarter over quarter and year over year basis, with the firm posting revenue of $1.4 billion for the three month period.
Revenue for the quarter represented a 22.8% increase over the $1.1 billion increase recorded in the third quarter, and a 41.1% increase over the $1.0 billion recorded in the year ago period. Much of the increase came from the Merchant Solutions segment, which saw revenues jump from $0.8 billion to $1.0 billion on a quarterly basis.
While revenues increased substantially, the firms cost of sales increased even more significantly. COGS rose to $0.7 billion from $0.5 billion on a quarter over quarter basis, a 33.5% increase, while year over year COGS rose 45.2%. Gross profit as a result came in at $0.7 billion, up from $0.6 billion in the third quarter and $0.5 billion in the year ago period.
Operating expenses meanwhile came in at $0.7 billion, lead by sales and marketing as well as research and development, both of which approached $0.3 billion. As a result, the company posting an income from operations of just $14.4 million.
Other expenses meanwhile totaled $0.5 billion, leading the company to record an overall net loss of $371.3 million following a recovery of income taxes. The loss equates to $2.95 per share.
For the full fiscal year, the company posted revenues of $4.6 billion, an increase of 57.4% from the $2.9 billion recorded in 2020. Gross profit meanwhile climbed from $1.5 billion to $2.5 billion.
Despite the fourth quarter loss, the company posted a net income of $2.9 billion, compared to $0.3 billion in 2020. The massive net income figure was primarily driven by other income of $2.9 billion. Earnings per share for the fiscal year as a result hit $23.38.
In terms of guidance for 2022, the company was vague. Revenue growth is expected to be lower than the 57% rate achieved in 2021, “but still rapid and outpacing the growth of ecommerce.” Growth is expected to be slow for Q1 and highest in Q4 2022, while Subscription Solutions is expected to be driven by user growth. Merchant Solutions growth meanwhile is expected to be double that of Subscription Solutions. The company also expects to deploy all gross profit dollars back into the business, with the company also broadcasting that its current sales and marketing expense will grow significantly due to accelerated hiring.
Capital expenditures of $200 million, stock based compensation and related payroll taxes of $800 million, and the amortization of intangibles of $28 million is also expected for 2022.
Shopify last traded at $1,132.62 on the TSX.
Information for this briefing was found via Sedar and Shopify. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.
