Last year was the best in history for the Canadian based e-platform Shopify, despite the covid pandemic. Truth be told, all e-commerce/internet based companies had record profits in 2020, but Shopify’s fourth quarter and also the full year financial results read like something out of this world.
To give you an example, total revenue for 2020 was 2.9 billion dollars, which marks a whopping 86 percent increase compared to the previous year. Gross profit was increased by 78 percent, hitting 1.5 billion, compared to 2019’s 865 million (USD).
The fourth quarter alone saw 977 million in total revenue, an absolute record for Shopify, making a 94 percent increase YoY. Here’s Harley Finkelstein, the president of Canada’s most beloved company:
“The spirit of entrepreneurship was strong in 2020, as our merchants’ resilience and ability to adapt helped many of them thrive in a difficult year”
A strong point for Shopify in 2020 was merchant solutions, which pulled $698.3 million in revenue, marking a 117 percent increase YoY, while subscription solutions revenue in Q4 hit $279.4 million (53 percent increase). Gross profit in the 4th quarter reached 504 million, growing by a whopping 91 percent, that compared to 2019 figures (263 million).
The main factors driving growth and profit in the fourth quarter were frantic Black Friday and Cyber Monday e-commerce shoppers, which generated more than 5 billion in sales globally, up 76% from 2019.
The net income for 2020 of f $319.5 million translated into $2.59 per diluted share. We must mention Shopify’s partnerships with Google/YouTube and TikTok from last year, which cemented its online retail capabilities, and the deal with Facebook in 2021, which brings Shop Pay to Facebook sellers (also on Instagram, also owned by Mark Zuckerberg). Another significant deal for Shopify in 2020 was to integrate Shopify merchants onto Walmart’s website.
Here’s Finkelstein again:
“While we expect that the first quarter will likely still contribute the smallest share of full-year revenue and the fourth quarter the largest, the revenue spread may be more evenly distributed across the four quarters than it has been historically if the rollout of a vaccine shifts more spending to services and offline shopping towards the back half of the year,” read the report.
“This year, we are doubling down on creating a frictionless path to successful entrepreneurship, as we continue to build a future-proof commerce solution to serve generations to come,”