In a sense, Shopify’s financial overview is similar to Amazon’s. Both derive the most profit not from their core products but from complementary services. Amazon’s cloud computing division, an outgrowth of its marketplace infrastructure, accounts for over 60% of gross profit.

Similarly, fees to access Shopify’s core SaaS platform — called “Subscription solutions” — accounted for less than half of gross profit in Q1 2024.

Shopify’s “Merchant solutions” — almost entirely Shopify Payments, its credit card processing service — produced roughly 70% of revenue in Q1 and 56% of gross profit.

Total revenue for Q1 — Subscription solutions plus Merchant solutions — grew by roughly 23% from the prior year, from $1.5 billion to $1.9. In comparison, Amazon’s Q1 2024 revenue was $143.3 billion, with $80.4 million for BigCommerce.

Shopify was an obvious pandemic winner, with its share price hitting an all-time high of $169.21 in November 2021. The stock (NYSE: SHOP) is down by roughly 60% — to  $66.73 on July 4, 2024 — amid accelerating revenue but lagging net income.

Shopify Plus, for high-volume sellers, comprised roughly 32% of Subscription solutions in Q1. Example Plus customers include Heinz, FTD, Netflix, Kylie Cosmetics and SKIMS.

Shopify does not disclose the number of its merchant stores. Estimates range from 2 to 4 million.

The company has customers in 175 countries, although over 70% of 2023 revenue came from the U.S. (66%) and Canada (5%).

Shopify’s App Store contains over 8,000 third-party applications.

Notable Shopify board members include Gail Goodman, the former CEO of Constant Contact; Fidji Simo, CEO of Instacart; and, as of 2023, Brett Taylor, the board chair of OpenAI and co-founder of Sierra Technologies, a conversational AI company.

Shopify holds equity investments in three companies: Global-E Online, a cross-border ecommerce facilitator; Affirm, the buy-now-pay-later service; and Klaviyo, the marketing automation platform. The fair value of each, as of March 31, was:

  • Global-E Online: $802 million,
  • Affirm: $756 million,
  • Klaviyo: $451 million.

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