Shopify sees soaring revenues but warns of slowed growth in FY22

Shopify has announced that Q4 revenue in 2021 soared by 41% to $1.4bn (£1bn) against 2020, but has warned that this growth may be softened in the coming year in the absence of an e-commerce boom.

Gross merchandise volume was $54.1bn (£40bn) in the period, marking an increase of $12.9bn (£9.5bn) or 31% over the fourth quarter of 2020, and Subscription Solutions revenue was $351.2m (£258m), up 26% year-on-year, primarily due to more merchants joining the platform.

Total revenue for FY 2021 was $4.6bn (£3.3bn), a 57% increase over 2020. Within this, Subscription Solutions revenue grew 48% to $1.3bn (£957m), while Merchant Solutions revenue grew 62% to $3.3bn (£2.4bn). GMV for 2021 was $175.4bn (£129bn) in total, an increase of 47% over 2020.

It comes as the past two years have been “transformational” to Shopify, with its GMV, revenue and employee base doubling since the end of 2019, and with nearly twice the number of merchants leveraging the platform, according to the group.  

It added that this momentum “sets us up to expand our ambitions on behalf of merchants into 2022 as the world continues to find normalcy living with and moving beyond Covid”.

Looking ahead, however, it expects that revenue growth will be lower in the first quarter of 2022, but highest in the fourth quarter of 2022. This is because it doesn’t expect the Covid-triggered e-commerce boom in the first half of 2021 to repeat again in the first half of 2022. 

Overall, its financial outlook anticipates revenue growth for the full year 2022 that is lower than the 57% revenue growth achieved in 2021, in part thanks to the absence of lockdowns, but still expects a growth that is “rapid and outpacing the growth of ecommerce”.

It added that this will be driven by the expansion of its services to more merchants in more geographies, the growing contribution of newly added products, and a “strong” value proposition for multi-channel commerce.

Overall, the group said it believes that changed behaviours adopted by both merchants and consumers in 2020 and 2021 have “significantly expanded” prospects for entrepreneurship and digital commerce. 

Harley Finkelstein, Shopify president, said: “The last two years have been extraordinary. We nearly tripled revenue, more than doubled GMV and the Shopify team, and the number of merchants using Shopify is nearly twice as big as 2019 levels. 

“We are emerging from the sprint of these last two years even stronger and more ambitious, since the accelerated leap into digital commerce means we can go farther faster for merchants and buyers alike.” 

He added: “As the commerce engine for independent brands who want to build a direct connection with their customers and to sell everywhere, whether it’s on mobile, on Main Street, or to buyers in cities you’ve never heard of, we head into 2022 energised by what we can build with the unique combination of merchants, ecosystem and top talent we have today.”