HomeMarket NewsShopify (SHOP) Q1 Earnings Beat Estimates, Revenues Rise Y/Y

Shopify (SHOP) Q1 Earnings Beat Estimates, Revenues Rise Y/Y

Actionable Trade Ideas

always free

Shopify SHOP reported first-quarter 2024 adjusted earnings of 20 cents per share, comfortably beating the Zacks Consensus Estimate by 25%. The company reported earnings of 1 cent per share in the year-ago quarter.

Total revenues jumped 23.4% year over year to $1.86 billion, which beat the Zacks Consensus Estimate by 1.36%.

Quarter in Detail

Subscription Solutions revenues increased 33.8% year over year to $511 million, primarily due to more merchants joining the platform, as well as pricing changes for existing merchants on its Standard subscription plans.

Merchant Solutions revenues improved 20% year over year to $1.35 billion, driven by robust Gross Merchandise Volume (GMV), which improved 23% year over year to $60.9 billion.

Shopify Inc. Price, Consensus and EPS Surprise

Shopify Inc. Price, Consensus and EPS Surprise

Shopify Inc. price-consensus-eps-surprise-chart | Shopify Inc. Quote


In the reported quarter, $36.2 billion of GMV was processed on Shopify Payments in the first quarter, 32% higher year over year. The penetration rate of Shopify Payments, as a percentage of GMV, was 60% compared with 56% in the year-ago quarter.

As of Mar 31, 2024, Monthly Recurring Revenues (MRR) were $151 million, up 32% from the year-ago quarter. Shopify Plus revenues were $48 million, representing 32% of MRR compared with 33% in the year-ago quarter.

In the reported quarter, Shop Pay increased 56%, processing $14 billion of GMV and accounted for 39% of Shopify’s Gross Payments Volume (GPV).

GPV grew to $36.2 billion, constituting 60% of GMV processed in the first quarter compared with $27.5 billion (56% of GMV) in the year-ago quarter.

Operating Details

Non-GAAP gross profit increased 30.4% year over year to $962 million. The gross margin expanded 280 basis points (bps) year over year to 51.7%.

Adjusted sales and marketing expenses, as a percentage of revenues, gained 80 bps year over year to 18.8%. Adjusted general and administrative expenses decreased 170 bps to 5.3%.

Moreover, adjusted research and development expenses, as a percentage of revenues, decreased 920 bps year over year to 14.1%.

Non-GAAP operating expenses decreased 1% year over year to $761 million. Operating expenses, as a percentage of revenues, were 40.9% compared with the year-ago quarter’s 51%.

Shopify’s adjusted operating income was $201 million against the year-ago quarter’s loss of $31 million.

Balance Sheet

As of Mar 31, 2024, Shopify had cash, cash equivalents and marketable securities balance of $5.2 billion compared with $5 billion as of Dec 31, 2023.

The free cash flow was $232 million compared with $446 million in the year-ago quarter.


For the second quarter of 2024, Shopify expects revenue growth in the high teens on a year-over-year basis. Adjusting for a 300-400 bps headwind related to the divestiture of the logistics business, revenues are expected to grow in the low to mid-twenties on a year-over-year basis.

The gross margin is expected to decrease 50 bps sequentially.

Operating expenses, as a percentage of revenues, are expected between 45% and 46%.

Zacks Rank & Stocks to Consider

Shopify currently carries a Zacks Rank #3 (Hold).

Shopify shares have declined 19.5% year to date, underperforming the Zacks Computer & Technology sector’s growth of 12.1%.

Nutanix NTNX, NetApp NTAP and NVIDIA NVDA are some better-ranked stocks that investors can consider in the broader sector. While Nutanix sports Zacks Rank #1 (Strong Buy) at present, NetApp and NVIDIA carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.

Nutanix shares have gained 38.8% in the year-to-date period. NTNX is set to report its third-quarter fiscal 2024 results on May 29.

NetApp shares have gained 24.2% year to date. NTAP is set to report its fourth-quarter fiscal 2024 results on May 30.

NVIDIA shares have gained 82.5% year to date. NVDA is set to report its first-quarter fiscal 2025 results on May 22.

Zacks Names β€œSingle Best Pick to Double”

From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.

It’s an American AI company that’s riding low right now, but it has rounded up clients like BMW, GE, Dell Computer, and Bosch. It has prospects for not just doubling but quadrupling in the year to come. Of course, all our picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.

Free: See Our Top Stock And 4 Runners Up

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

NetApp, Inc. (NTAP) : Free Stock Analysis Report

NVIDIA Corporation (NVDA) : Free Stock Analysis Report

Shopify Inc. (SHOP) : Free Stock Analysis Report

Nutanix (NTNX) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Swing Trading Ideas and Market Commentary

Need some new swing ideas? Get free weekly swing ideas and market commentary from Jonathan Bernstein here: Swing Trading.

Explore More

Weekly In-Depth Market Analysis and Actionable Trade Ideas

Get institutional-level analysis and trade ideas to take your trading to the next level, sign up for free and become apart of the community.