Shopify Inc. revenue and gross merchandise volume (GMV) both increased in the ecommerce platform provider’s Q4, which ended Dec. 31, 2023. Its revenue and GMV both increased for the full fiscal year, too.
It was “a phenomenal year for Shopify,” said president Harley Finkelstein in an earnings call with investors this week.
In North America, 45 of the Top 1000 online retailers use Shopify as their ecommerce platform. The Top 1000 is Digital Commerce 360’s database of the largest online retailers in the region by annual web sales. In 2022, those 45 online retailers combined for more than $8.29 billion in web sales.
Shopify revenue, profit and GMV grow in Q4 2023
In its fiscal Q4, Shopify revenue grew 24% year over year to $2.1 billion. Excluding Shopify’s logistics business, that growth rate shifts to 30%. It also marks the third consecutive quarter that growth (excluding logistics) has been greater than 25%, said Jeff Hoffmeister, chief financial officer. For the full year, Shopify revenue increased 26% over 2022 to $7.1 billion.
Of that $2.1 billion in Q4, $1.1 billion was gross profit. That’s 33% year-over-year growth in Q4 profit. Shopify gross profit in 2023 grew to $3.5 billion. That’s a 28% increase from $2.8 billion in 2022.
Meanwhile, Shopify GMV grew 23% in Q4 to reach $75.1 billion. That’s $14.2 billion more than Shopify’s GMV in Q4 2022. It’s also the largest quarterly GMV growth rate since the pandemic-driven rates in 2021, Hoffmeister said. For the full year, Shopify GMV grew 20% — or 38.7 billion — over 2022, to reach $235.9 billion in 2023.
In terms of channels, Shopify revenue from offline sources, which includes offline subscriptions and point-of-sale hardware, was $441 million. That’s more than five times what it was four years ago, Finkelstein said.
More than 70% of Shopify’s online checkouts in 2023 came from mobile devices, Finkelstein said. In Q4, the Shop App “nearly reached” $100 million in GMV in a single month, he said not specifying the exact figure.
Internationally, cross-border GMV was approximately 14% of total GMV in Q4. Europe, the Middle East and Africa represent 27% of Shopify’s total merchant base. More than $1.2 billion in Shopify revenue comes from sales in the region.
Shopify also noted growth in its B2B channel.
The biggest sales period: Black Friday through Cyber Monday
In the four days from Black Friday through Cyber Monday, Shopify merchants collectively generated $9.3 billion in sales, Finkelstein said. That’s 24% year-over-year growth. About 61 million consumers worldwide purchased from brands that use Shopify as their ecommerce platform, he said. More than 55,000 merchants had their highest-selling day ever on Shopify in that period, he added.
Part of that stemmed from scaling the platform to accommodate more traffic, Finkelstein said. Shopify handled, on average, 967,000 requests per second, he said. That’s the same as 58 million requests per minute. It’s also almost 80% higher than Shopify’s peak traffic two years ago, Finkelstein said.
Cyber Monday is still the largest online sales day in the U.S., with web sales reaching $12.4 billion in 2023, according to Adobe Analytics data. Cyber Monday 2023 online sales grew 9.6% over 2022’s $11.3 billion. Black Friday is the second largest at $9.8 billion in online sales. That represents 7.5% growth over 2022’s $9.12 billion.
Shop Pay and Shopify merchants
Finkelstein said that compared to 2022, Shopify has 35% more merchants from outside North America using its ecommerce platform. It has added brands including Dollar Shave Club, Authentic Brands Group, Buy Buy Baby, On Running and more, he said.
“In April, an external study by a big three consulting company confirmed that Shopify’s overall conversion rate surpassed the competition by up to 36% and on average is 15% higher than others,” Finkelstein said.
And when consumers use Shop Pay, conversion can grow by half, he said. More than 150 million users have signed up for Shop Pay, as of Q4 2023. For the quarter, it facilitated $18 billion in GMV. That’s up 58% year over year for the quarter and up 50% for the full year.
Shop Pay has facilitated a cumulative $127 billion since launching in 2017, according to Finkelstein.
Shopify 2023 highlights
“We cannot talk about 2023 without mentioning AI,” Finkelstein stated. “We launched our suite of AI-powered tools known as Shopify Magic, an AI shopping assistant on our Shop App and further embedded AI tools within Shopify to increase productivity and streamline administrative tasks that have saved our merchants and our team thousands of hours of work, enabling us to ship faster and make great decisions quicker.”
The ecommerce platform brought nearly a dozen AI-enabled tools to its Shopify Magic product suite in 2023.
Shopify also partnered with Amazon.com Inc. to release the “Buy with Prime” app for Shopify merchants. The deal gives merchants the choice to offer Buy with Prime directly within their Shopify Checkout. This provides Shopify merchants access to Amazon’s logistics network.
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