Shopify, the leading global e-commerce company released its first economic impact report and gains a mixed reaction.
The company’s shares plunged after it released is earning dip. That result, however, is due to the tax charge amounting to $48.3 million. When taking the tax charge out of the equation and adding the stock-based compensation and payroll taxes, Shopify still has a gain of 15 cents a share which could forecast further gains in the future.
Despite the drop in shares, Spotify’s quarterly results urge investors that their worries are unwarranted according to Timothy Collins, a financial planner and contributor to Real Money and The Street.
The e-commerce provider reported a 45% growth in revenue from the previous year, giving the company a total revenue of $390.6 million as opposed to last year’s $270.1 million. Aside from that, Shopify passed the 1 million merchant mark on its platform due to its international expansion.
Healthy revenue for Shopify
Shopify’s number keeps on growing year after year. Despite lapses and share losses, the company bounces back strong and healthy. Its merchants are also growing strong along with it thus showing how independent business owners are important in the overall economic prosperity.
“With over one million businesses now built on Shopify, together we’re rewriting the rules for our modern economy,” said Tobi Lutke, CEO of Shopify. He added that the company aims to provide entrepreneurs the tools to grow and connect more to their costumers. This is something that other e-commerce platforms have failed to give their entrepreneurs. These opportunities open doors to all budding startup companies.
The number of merchants joining Shopify is attributed to the company’s values and its consistent financial execution.
The challenge of moving forward
Collins added that Shopify’s challenge isn’t coming from the competition in the industry, rather, it’s the provision for income tax. While it works, the company’s aggressive marketing strategy and massive budget spend is also proving to be one of its challenges. Shopify announced that it’s planning to spend $1 billion for building fulfillment centers all throughout the US similar to what Amazon has been doing.
What does this mean?
Shopify is expanding its operation from its machine learning-powered network, acquisition of robotics and warehouse to grow its distributions, to the integration with Microsoft advertising to allow merchants the ability to also expand their reach and improve their marketing campaigns. Marketers are also given the Constant Contract platform.