Shopify: the 10 best quotes from the conference call
Getting the essence in a fraction of the time
Hi all!
When I write an article for the subscribers of Potential Multibaggers, I always go through the conference call. I make a full analysis there, but for you, I collect the best quotes from the conference call, so you don’t have to do the heavy lifting yourself.
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All the quotes that follow are from Harley Finkelstein, Shopify’s President. Tobi Lütke, the founder and CEO of Shopify is always present, but he’s not the biggest talker. He usually answers a few questions and he did that again now, answering two questions. I hope you enjoy the article.
Our revenue grew 21% for the year, reaching $5.6 billion as we added nearly $4 billion to our top line since 2019.
The growth rate we saw in 2022 is particularly noteworthy when you realize that this growth was on top of the incredible 57% growth we saw in 2021 and 85% growth in 2020.
Shopify’s penetration of the U.S. e-commerce market is currently 10%, with this year’s GMV surpassing $197 billion as GMV has grown more than 3 times since 2019. Since our inception, Shopify has powered over $0.5 trillion in global commerce as we increasingly become the platform of choice for brands of all sizes. This past year, our merchants had their most successful Black Friday, Cyber Monday selling period ever, generating $7.5 billion in sales over that period, a growth of 21% year-over-year on a constant currency basis.
Focusing on the point-of-sale product, we continued to increase its scalability. Shopify can now power retailers with up to 1,000 physical locations.
About Shopify Audiences:
With tens of millions using the app every month, we’re able to match the right merchants to the right buyers, creating personalized shopping feeds for the buyer segment and a new customer acquisition tool for merchants. Shop is still in its early days, but it’s one of the ways we’re investing to help merchants win over the long-term.
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We also launched Audiences for Google during the quarter, allowing merchants to reach high intent audiences from their own store across YouTube, Google Search, Google Display Network and Gmail.
In 2022, Shopify enabled approximately $28 billion in cross-border sales, capitalizing on the surge of international interest, with nearly 28% of all traffic to Shopify stores coming from buyers outside of the merchant’s home country.
As part of our enterprise strategy, in 2022, Shopify signed business partnership agreements with Accenture, Deloitte, Ernst & Young and KPMG to enable greater opportunities for larger brands to adopt Shopify. And last month, we formed alliance with IBM Consulting. We considered a great testimony to the power of Shopify that such a premier group of system integrators are so quickly building teams to help enable Shopify for large enterprises. These systems integrators will be a critical element in helping us reach more enterprises and in a way, which is an extension of our core customer acquisition efforts.
Merchants repeatedly tell us that providing greater visibility and confidence in delivery dates can help improve their store conversion. This is why we launched Shop Promise in 2022, a consumer-facing badge that provides reliable and accurate delivery dates across the merchant’s online store, check out and on the shop app.
Shopify looks at merchant shipping performance to identify which brands consistently ship reliably to determine their eligibility for the program. Merchants in the program have seen up to 25% increase in conversion rates. As part of our additions release last week, we are working to expand Shop Promise to all eligible U.S. merchants over the next few months. With Shopify Fulfillment Network, merchants have access to Shop Promise by default.
Of note, when you compare the operating expenses of Q3 and Q4 and remove the one-time items that it impacted both periods, we were able to keep our operating expense dollars relatively flat and still deliver strong revenue growth quarter-over-quarter.
If you look at our seven years since IPO, we were profitable five out of the seven and we like being profitable, and we’re going to work towards that. We were cash flow positive in Q4.
Not every merchant will be successful. But the key for us is that we want Shopify to be the place that everybody goes to start a business. Some of those businesses won’t succeed, but the ones that do – it’s in our investor deck on our investor site. The ones that do succeed stay with us indefinitely. They take more and more of our Merchant Solutions.