Sales are booming at Ottawa’s latest technology darling, Shopify Inc.
The company, which helps people to sell stuff online, said revenues hit $44.9 million in the second fiscal quarter of the year, which ended June 30. That represents a 90-per-cent, year-to-year jump in revenues for the Ottawa company, which credited new awareness of its products for the improved results.
However, the surge in sales wasn’t enough to help Shopify turn its first profit. The company reported a net loss of $3.3 million during the quarter. But the company pointed out that shortfall has dropped significantly when compared to the same quarter in 2014 when it reported a $5.9-million loss.
Shopify partnered with Facebook earlier this year to launch a “Buy” button which allows people to sell goods and services on Facebook using Shopify’s technology. The “Buy” buttons can also be integrated into blogs and other websites.
The increased spotlight on the firm has driven new subscriptions for its Internet retailing technologies, Shopify reported that revenues from new subscriptions jumped 64 per cent to $25.5 million, when compared to the same three months last year.
“It’s been a great year not only for Shopify, but our merchants as well,” said Tobias Lütke, chief executive officer of Shopify. “We completed our initial public offering, announced buy buttons with some of the most important social media companies and closed our fifth Build a Business competition. All this creates momentum toward our main goal, which is to continue to build a really great platform that makes commerce better for everyone.”
The company reported that stores using Shopify’s systems have doubled their sales, compared to the same quarter last year. Shopify said gross value of merchandise sold on Shopify websites hit $1.6 billion between April and the end of June. There are now more than 175,000 shops using Shopify’s Internet-based retailing platform.
The increased spotlight shining on the Ottawa firm is new to Lütke who has spent his career guiding a privately held Shopify through various stages of growth and now finds himself tasked with publicly reporting the company’s finances on a regular basis.
“This is very different for us,” said Lütke to open a conference call Thursday morning. “As a company we have never really talked about ourselves.”
Shopify started out as a four-man shop located in a 500-square-foot bachelor apartment above the Bridgehead coffee shop on Elgin Street. The room was outfitted with a desk, four computers, a TV and an Xbox video game system, which played the game Guitar Hero. Today the firm employs more than 600 people in a cavernous space at 150 Elgin St. The company raised $131 million in its initial public offering in May.
The company’s share price jumped to $49.50, up five per cent or $4.98, when the markets opened after the release of its financial results.
