Shopify: From subscriptions to merchant solutions, breakthrough revenue growth

It is learned that according to foreign media reports, Shopify's financial profile is similar to that of Amazon. Amazon's cloud computing department accounts for more than 60% of its gross profit, while Shopify relies mainly on subscription solutions and merchant solutions for revenue and gross profit.

Fees for access to Shopify's core SaaS platform, called "Subscription Solutions," accounted for less than half of gross profit in the first quarter of 2024. Shopify's "Merchant Solutions," primarily its credit card processing service Shopify Payments, generated about 70% of revenue and 56% of gross profit in the first quarter.

In the first quarter, Shopify's total revenue increased by about 23% from last year to $1.9 billion. In comparison, Amazon's revenue in the first quarter of 2024 was $143.3 billion, of which BigCommerce's revenue was $80.4 million.

Although Shopify benefited greatly during the pandemic, the stock price fell about 60% to $66.73 on July 4, 2024, as revenue growth accelerated but net income lagged.

Shopify Plus, which targets high-volume sellers, accounted for about 32% of subscription solutions in the first quarter, including some big names: Heinz, FTD, Netflix, Kylie Cosmetics, and SKIMS.

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

Shopify has customers in 175 countries, but in 2023, more than 70% of its revenue will come from the United States (66%) and Canada (5%).

Shopify's App Store contains more than 8,000 third-party apps.

Shopify holds equity investments in three companies, including Global-E Online, Affirm, and Klaviyo. As of March 31, the fair value of each company was: Global-E Online: $802 million, Affirm: $756 million, Klaviyo: $451 million.

Author✎ Summer/
Disclaimer: This article is copyrighted and may not be reproduced without permission. If you need authorization, please contact: happy