In Shopify’s Q2 2021 Financial Results Conference Call on July 28, 2021, the e-commerce leader announced that it achieved its first $1 billion revenue quarter on record gross merchandise volume (GMV).
Retail as the world knows it is changing and the e-commerce giant is paving the way for entrepreneurs all over the globe to capitalize on an ever-evolving industry.
“This past year has been one of great uncertainty for independent merchants. What used to be two completely distinct industries, the retail industry and the online commerce industry, are now just the commerce industry,” said Tobi Lütke, Shopify’s CEO.
Key Financial Highlights
Shopify’s impact is significant, with more than 3.5 million full-time jobs supported by businesses on Shopify worldwide. Furthermore, Shopify made up 8.6% of US retail e-commerce sales last year. The e-commerce leader’s total revenue in Q2 increased 57% year over year, to $1.12 billion.
Subscription Solutions revenue was up 70% year over year at $334.2 million, with their Merchant Solutions revenue coming in at $785.2 million, representing 52% year over year growth.
Amy Shapero, Shopify’s CFO, spoke to the company’s successes, “As consumer spending remained strong, our merchants thrived and extracted more value from our platform, contributing to our rapid growth. We built on our momentum, making significant updates to our platform infrastructure, expanding strategic partnerships, and advancing our portfolio of growth initiatives to future-proof the success of tomorrow’s entrepreneurs.”
What Shopify’s Recent Success Means for App Developers
There are currently 7,000 apps available on the Shopify App Store, more than double the number that were available in 2020. This growth will likely continue as there are various opportunities for app developers within Shopify’s ecosystem. Shopify noted some of the advancements that will benefit app developers on their Q2 Financial Results Conference Call:
- Most significantly, beginning next month developers will pay 0% revenue share for the first $1 million they earn selling apps on Shopify’s App Store and will only pay 15% on revenue exceeding $1 million per year. Revenue share changes will roll out for themes beginning in September.
- Developers will have access to unlock new features including local pickup, selling plans, international pricing and new cart functionality via new APIs and tooling.
- Through Shopify’s new Payments Platform, developers will have the ability to create payment gateways as apps and will be able to build apps into Shopify Checkout directly.
What’s in it for Shopify Merchants?
More and more merchants are joining the Shopify platform thanks to its merchant-friendly policies and offerings. Shopify’s leadership team highlighted some of these features on yesterday’s Q2 2021 Financial Results Conference Call. They include:
- Shopify’s platform upgrade, Online Store 2.0, enables merchants to produce one-of-a-kind customer-facing experiences in alignment with their business’ branding.
- The newly enhanced Shopify Checkout will be quicker and more streamlined, enabling merchants to handle orders at greater scale.
- Not only does Shopify offer its merchants a robust platform, but it also has a financing arm, Shopify Capital, to assist businesses in need of cash advances and loans. This offering has been well received and is expected to continue growing as interest remains.
- Shopify’s Fulfillment Network is rolling out new features to meet demand for network fulfilled orders. Merchants using this network will see increased accuracy and faster shipping speeds.
Merchants based in the US can utilize Shop Pay Installments whereby customers can purchase on Shopify and pay later.
Looking Beyond the Platform
The future for Shopify is bright and expands beyond the platform bearing the company’s name. Going forward, Shop Pay will be available to US merchants selling on Google and Facebook, even those not using Shopify’s online store. This positions Shopify as the go-to checkout option for e-commerce sellers, regardless of if they have a Shopify storefront or not. As a result, it is expected that Shopify will continue to see strong financial results and remain a key player in the e-commerce space going forward.