Eye on Acquiring: Shopify’s Volume Booms; North American Revenues Grow for Global Payments

More sales on its commerce platform and more payment-processing business from its merchants translated into a 71% revenue increase for Shopify Inc. in the fourth quarter. And the big merchant acquirer Global Payments Inc. reported Thursday that its North American revenues grew 9% in the quarter.

Ottawa, Ontario-based Shopify, which provides a cloud-based sales and payment platform for small and medium-sized online and physical merchants, on Thursday said total revenue hit $228.8 million versus $130.4 million in 2016’s fourth quarter. Driving the revenues were gross merchandise volume of $9.1 billion, a 65% increase over $5.5 billion a year earlier. Gross payment volume, which is the amount of merchandise volume processed through the Shopify Payments service, increased 59% to $3.5 billion and accounted for 39% of merchandise sales.

“That our merchants sold more in the fourth quarter than in all of 2015, achieving $1 billion of this in just four days, speaks to how far we have come in the past few years,” Russ Jones, Shopify’s chief financial officer, said in a statement. “Our leadership role in commerce, together with the scale we have achieved, position us well to invest in our next phase of growth: one marked by expansion of our capabilities upmarket and down, in retail, in our ecosystem, and internationally.”

Gross merchandise volume for all of 2017 grew 71% to $26.3 billion. Gross payment volume increased 39% to $10 billion from $5.9 billion in 2016, and accounted for 38% of merchandise volume in both years.

Some 61% of fourth-quarter orders for Shopify merchants came through mobile devices, up from 55% in the prior-year quarter, the company said. Shopify Pay, an expedited online and mobile checkout service for customers of Shopify-using stores that the company introduced in 2017’s second quarter, generated 4.8 million transactions from 2.1% consumers. Cash advanced to merchants through the Shopify Capital service more than doubled on a year-over year basis in the fourth quarter to $39.7 million.

Founded in 2004, Shopify is still operating in loss mode as it continues to build its business. The company posted a net loss of $2.99 million in the fourth quarter, an improvement from the $8.87 million loss a year earlier. For the year, revenues jumped 73% to $676.3 million from $389.3 million in 2016, but the net loss totaled $40 million against a $35.4 million loss in 2016. The company projects revenues of about $980 million this year and an operating loss of about $100 million.

Meanwhile, Atlanta-based Global Payments reported fourth-quarter North American revenues of $766.6 million, a 9% increase from $704.4 million a year earlier. North America accounted for 73% of the processor’s $1.05 billion in quarterly revenues, up 11%. Thanks in part to an income-tax benefit, net income came in at $242 million versus $24.1 million in 2016’s fourth quarter.

Global Payments also announced a new joint venture with the big bank HSBC in Mexico.