categories

HOT TOPICS

NEWSLETTER

If you are considering becoming a 1M/1M premium member and would like to join our mailing list to receive ongoing information, please sign up here.

Subscribe to our Feed

Cloud Stocks: Shopify and BigCommerce Building API-based Ecosystems

Posted on Wednesday, Feb 24th 2021

Ontario-based Shopify (NYSE:SHOP) recently announced its fourth-quarter results that surpassed all market expectations. Nothing seems to be stopping Shopify as it continues to invest in its platform and business.

Shopify’s Financials

Shopify’s fourth-quarter revenues grew 94% to $977.7 million, significantly ahead of the market’s forecast of $910.2 million. Net income was $123.9 million, compared with a net income of $0.8 million a year ago. On an adjusted basis, earnings grew to $1.58 per share, surpassing the market’s forecast of $1.28 per share.

By segment, subscription revenues grew 53% to $279.4 million, ahead of the estimates of $265 million. Merchant solutions revenue rose 117% to $698.3 million.

Among other metrics, gross merchandise volume (GMV) rose 99% to $41.1 billion and Gross Payments Volume (GPV) grew 115% to $19.1 billion.

Revenue for the full year grew 86% to $292.5 million and adjusted net income was $3.98 per share compared with $0.30 per share a year ago.

Shopify did not provide a forecast for the first quarter.

Shopify’s Growth Focus

During the quarter, Shopify made its product, Shopify Balance, available for early access. Shopify Balance lets US-based sellers open no-fee business accounts, allowing them to assess the health of their business by being able to separate their business finances from their personal finances.

Recently, it expanded its accelerated checkout service, Shop Pay. Keeping the growing importance of social networks in mind, Shop Pay has been integrated with Instagram and Facebook. With the expansion, Shopify Payments will process all transactions by Shopify merchants on Facebook and Instagram upon full implementation of the integration later this year. This will be the first time that Shop Pay will be offered outside of Shopify. It will provide buyers on Facebook and Instagram a fast and secure way to checkout. Shop Pay is currently available on Instagram in the US and will be rolled out to merchants on Facebook in the US in the coming weeks.

For the current fiscal, Shopify plans to invest in five key areas of growth. First, Shopify Fulfillment Network will continue to be a growth area. Shopify plans to invest in building the software that will fully integrate fulfillment into Shopify’s tech stack, optimize its distributed network of nodes, and improve the overall merchant experience to deliver fast and affordable fulfillment to end consumers.

Second, it plans to continue to develop the Shop App to transform it into a must-have shopping companion that promotes buyer loyalty and retention. It is looking at investing in building features that will help manage discovery to delivery for the buyer throughout the purchase process. Third, it plans to encourage international adoption by continuing to localize the platform in several non-English speaking geographies.

Fourth, it will invest in growing the adoption of Retail POS and POS Pro offering by investing in foundational technologies to make it easier for merchants to onboard and will be expanding its POS products to more countries. And, finally, it plans to invest in bringing Shopify Plus’s enterprise-level capabilities to more brands both in North America and internationally.

Meanwhile, Shopify has built a PaaS ecosystem through API integrations. The Shopify App Store allows developers to leverage API keys to publish apps on its platform. Shopify claims that it has delivered over 11.6 million app installs so far. 84% of the apps on its App Store have earned revenues for the developers and nearly half of its top 25 grossing apps were published in the last two years. Shopify allows developers to use its Billing API to charge for their app in three different ways: one-time, usage-based, or recurring charges. And, in return, the developer keeps 80% of all revenue. You can read more about my view on the Platform vs API Ecosystems here.

Shopify’s stock is trading at $1,300.24 with a market capitalization of $151.4 billion. It had touched a 52-week high of $1,499.75 earlier this month. The stock hit a 52-week low of $305.30 in March last year.

BigCommerce’s Financials

BigCommerce’s revenue in the fourth quarter grew 39% to $43.1 million. GAAP net loss was ($14.2) million, compared to ($10.3) million fourth quarter of 2019. Non-GAAP net loss per share was ($0.12). Analysts had expected a loss of ($0.15) per share on revenue of $38.5 million.

By segment, subscription solutions revenue increased 33% to $29.7 million. Partner and services revenue (PSR) grew 54% to $13.5 million and accounted for 31% of its Q4 revenue. Among other business metrics, ARR from Enterprise accounts was up 56% to $100.8 million. Number of accounts greater than $2,000 in annual contract value (ACV) was up 82%. Average revenue per account (ARPA) of accounts greater than $2,000 in ACV was up 32% to $14,615.

For the year, revenues grew 36% to $152.4 million with a non-GAAP net loss of ($0.79).

For the first quarter of 2021, BigCommerce expects total revenue between $41.8 million and $42.3 million and non-GAAP operating loss between ($8.2) million and ($7.9) million. For the full year 2021, it expects total revenue between $189 million and $191 million and non-GAAP operating loss between ($34.5) million and ($33.3) million.

BigCommerce’s New Offerings and Partnerships

During the quarter, BigCommerce launched Open Checkout, an open-source extension of its native checkout. The solution has been created to enable merchants, developers, and partners to create fully-customized checkout experiences. The extension has been built on BigCommerce’s Checkout SDK and accelerates the process of adding features such as including branded checkout pages to create a cohesive brand experience throughout the customer’s journey. It optimizes checkout pages to make modern delivery options such as buying online and picking up in-store, scheduling delivery dates, and picking up from shared locations easier. Additionally, it presents a one-of-a-kind front-end interface with customer group rules to provide specific pricing, payment, and shipping methods on the checkout page.

Recently, it also announced a new partnership with EPAM Systems, a leading global provider of digital platform engineering and software development services. Through this partnership, BigCommerce merchants will be able to access EPAM’s expertise in crafting customer-centric experiences across digital touchpoints. Together, the companies will be able to help address e-commerce issues faced by organizations and help them expand their digital presence.

Like Shopify, BigCommerce also operates an API-focused platform. It allows developers to build an app, theme, or custom integration with BigCommerce using its API codes. It does not disclose statistics on the apps and developers leveraging its platform.

BigCommerce went public in August of 2020 at a list price of $24 and raised $216 million. Its stock is currently trading at $63.33 with a market cap of $4.06 billion. It hit a high of $162.50 in August.

Disclosure: All investors should make their own assessments based on their own research, informed interpretations, and risk appetite. This article expresses my own opinions based on my own research of product-market fit, channel execution, and other factors. My primary interest is in product strategy. While this may have bearing on stock movements, my writings tend to focus on long-term implications. The information presented is illustrative and educational, but should not be regarded as a complete analysis nor recommendation to buy or sell the securities mentioned herein. I am not a registered investment adviser and I am not receiving compensation for this article.

This segment is a part in the series : Cloud Stocks


. Smartsheet Acquiring Bootstrapped Startups to Drive Growth
. Bootstrapped Unicorn Atlassian is Acquiring Capital Efficient Startups
. Netflix Price Hike Ruffles Competition
. How Will Carbon Black Differentiate?
. ServiceNow Grows Through Addition of Capital-Efficient Startups
. Zendesk and Freshworks Follow Different Acquisition Strategies
. Tableau Grows Through Small Acquisitions
. Open Platform Strategy Stands Intuit in Good Stead
. Will GoDaddy Follow the PaaS Route?
. Adobe Delivers Via PaaS
. A Look at Oracle’s 2018 M&A Activity
. What Apps Will Drive More Traction for Cloudera?
. Slack's App Focus Will Be Key to Post-IPO Success
. IBM Counts on its Cloud and Platform for the Turnaround
. Atlassian Acquires From its PaaS Marketplace
. What Should SAP Acquire to Triple its Value by 2023?
. Expect ServiceNow to Acquire From App Marketplace
. Should Alarm.com Follow a PaaS Strategy?
. How Upwork Can Leverage the Virtual Company Trend
. Qualys Scouting For Acquisitions
. Should SAP Acquire Zendesk or Freshworks?
. HubSpot Counts on its API Strategy
. SurveyMonkey Eyes Acquisitions for Growth
. Workday Wants to Disrupt Cloud Computing Using Machine Learning
. Einstein and Open-Source Platform Lead the Charge for Salesforce
. DocuSign Prepares to Beat Rival Adobe
. Veeva Soars, But Dassault Acquires Medidata for $5.8 Billion
. Tableau Acquisition Signals Massive Analytics Push for Salesforce
. Oracle Joins Hands with Microsoft to Take on Amazon
. GoDaddy is Making Strategic Acquisitions for the Next Level of Growth
. Alteryx Sees Strong Momentum
. Adobe Leveraging Magento and Marketo to Deliver Blockbuster Performance
. Is Slack Overvalued?
. How Will Cloudera Address the Competition?
. Zoom is Not Bothered by Cisco or Microsoft
. Domo Counts on Enterprise Revenue for Growth
. Netflix Plays with Pricing and Games to Attract Subscribers
. CrowdStrike Has a Successful IPO
. Atlassian Crosses the Billion Dollar Revenue Milestone
. ServiceNow Believes Strength Lies in Tie-ups
. Partnerships are the Mantra for BlackLine
. SurveyMonkey Counts on Enterprise Segment for Growth
. HubSpot Soars to a New High
. Intuit Pushes AI to Simplify Tax Filing
. Splunk Sees Strong Cloud Momentum
. Forescout Partners with Big Names
. Smartsheet Tapping into the Government Sector
. Salesforce Continues its Shopping Spree
. Palo Alto Networks Targets the IoT Security Market
. DocuSign Focuses on the Mortgage Sector
. Oracle Brags About Autonomous Database
. Blackbaud Acquires YourCause to Grow Addressable Market
. The Market Expects a Lot More from Adobe
. Anaplan Makes its First Acquisition Post IPO
. Activist Investor Drives Market Interest in Box
. MongoDB's Formula for Success
. Coupa Aims for $1B Revenue
. Dropbox on a Rocky Road
. Medallia Banks on Acquisitions
. IBM Banks on AI
. Time For Skepticism with Netflix
. SAP Riding High on the Cloud
. Amazon's Faster Shipping Hurting its Earnings
. ServiceNow CEO Change Signals Focus on Acquisitions
. Will Google Acquire Fitbit?
. HubSpot Focuses on Its Platform
. BlackLine Partners with Google Cloud
. Rapid7’s Focus on Cloud SIEM Pays Off
. Splunk Bets Big on Data Streaming
. Intuit's QBO Scores Big
. VMware Builds Up With Acquisitions
. Palo Alto Targets $5B Revenue by 2022
. Workday Targeting Procure-to-Pay Cycle
. Will Salesforce Acquire DocuSign?
. Okta Targets Enterprise Customers
. MongoDB Eyeing China With Alibaba Partnership
. Twilio Counts on API Upgrades for Growth
. Adobe Revs up its Experience Platform
. Top 20 for 2020
. Anaplan Sees Expanding Use Cases
. Dropbox Gears Up to Regain Lost Valuation
. Forescout Fails to Deliver
. Enterprise Bet Pays Off for SurveyMonkey
. SAP Bets Big on Experience Management
. Twilio Steps up Investment in 2020 to Preserve Growth Momentum
. Zendesk, Freshworks Focus on Marketplaces and Integrations
. Proofpoint Targets Insider Threats Through Acquisition
. RingCentral's Powerful Partner Strategy Would Augment with PaaS
. Qualys Counts on Google and Microsoft for Growth
. Shopify Soars on Improved Merchant Offerings
. HubSpot Believes in the Importance of PaaS
. BlackLine Remains Focused on SAP Integration
. Recently Public Cloudflare has New Edge
. GoDaddy is on a Shopping Spree
. Intuit Targets Online User Base Through Acquisition
. Should Palo Alto Networks Acquire ZScaler?
. Why Salesforce Buying Vlocity Proves the Growing Importance of PaaS
. Datadog Performing Well Post Recent IPO
. Workday Should Open Up About its PaaS Success
. Anaplan Focuses on API Connectors for its Platform
. Veeva
. Five9 Strengthens its PaaS Focus
. RealPage Brings AI and SaaS to Real Estate
. Splunk Should Open up About its PaaS Metrics
. Okta Benefiting from App Diversity
. Oracle Sees Growth Momentum
. Xero Focuses on a PaaS Strategy
. DocuSign Resilient to COVID-19
. Smartsheet Looking up to Enterprise Customers for Growth
. Paylocity Delivers Solid Results
. Q2 Holdings Expands TAM with Acquisitions
. New Relic Focuses on PaaS
. AppFolio Leverages AI for Product Enhancement
. Will Adobe Open Up About its PaaS Statistics?
. Change Healthcare Pushes APIs
. Dropbox Needs to Share API Metrics
. Upwork Improves Monetization
. MongoDB has Miles to go
. Nutanix Needs to Define a PaaS Strategy
. Cloudera Focuses on Hybrid Cloud
. Atlassian Gears Up for Growth, Unfazed by Covid-19
. Shopify Helps Merchants Pivot to Online Stores
. ServiceNow Steady in Turbulent Seas
. RingCentral Sees Strong Traction
. Twilio Hits 52-Week High Amidst COVID Crisis
. HubSpot Lowers Outlook Amidst Virus Concerns
. Proofpoint Acquiring Even Amidst Crisis
. BlackLine Looks Solid In The Face of Covid-19
. GoDaddy Continues to Acquire
. Qualys Expands Cloud Offerings to Soar to New Highs
. Zendesk Struggling Amidst the Downturn
. Alteryx Bounces Back Despite Low Outlook
. Palo Alto Networks Continues to Acquire
. Workday Extends its PaaS Strategy
. Splunk Rides High on Cloud Initiatives
. Salesforce Partners with Workday to Address the New Normal
. Veeva Scales New Highs
. Is Smartsheet’s Pullback a Buying Opportunity?
. MongoDB Soars Even in the Crisis
. Okta Reiterates Outlook
. Is Anaplan a Prospect for Oracle, SAP?
. Oracle Relies on Autonomous Offerings
. Adobe Shifts its Focus
. Paycom Confident Under Current Conditions
. DocuSign Soars to Record Highs
. Paylocity Acquires Amid Crisis
. Datadog's Integrations and Upgrades Help it Soar
. AppFolio Improves Offerings for Current Conditions
. SurveyMonkey Should Get Into PaaS
. Model N Soars to a Record High
. Appian Focuses on RPA for Growth
. Slack Beefs up its Portfolio
. Coupa Expands into Treasury Services
. CrowdStrike Soars to Record Highs
. Guidewire Expands Cloud Offerings
. Dropbox Should Focus on PaaS
. Talend Expands Data Offering Through Partners
. IBM Expands Cloud Partners
. One Medical Supports COVID-19 Care Digitally
. Microsoft Rides High on Teams and Gaming
. Investors Say Yes to nCino’s IPO
. Nutanix Focuses on Government and Media Verticals
. SAP Rethinks Qualtrics Acquisition
. Tenable Expands Into Industrial Cyber-Security
. ServiceNow Expands Ties with Zoom
. Cloudera Powers its Data Platform with Partnerships
. Atlassian Continues to Acquire from PaaS Ecosystem
. Shopify Soars to an All-Time High
. The PaaS Landscape
. HubSpot Focuses on the Enterprise Segment
. GoDaddy Restructures During COVID
. Akamai's Security Solutions Thriving
. BlackLine Needs a PaaS Strategy
. Twilio - A Successful PaaS Story
. Zendesk Invests in the Future
. Qualys Continues to Acquire Indian Startups
. ZoomInfo Lists Despite COVID-19
. Analysis of Alteryx PaaS Strategy
. Fastly Needs to Diversify from TikTok
. Way to Go, Salesforce
. Intuit Continues to Acquire
. VMware Continues Buying Spree
. Analysis of Five9's PaaS Strategy
. Okta Expands Alliances to Attract Enterprises
. Palo Alto Continues to Acquire
. Analysis of Splunk's PaaS Strategy
. BigCommerce Goes Big with IPO
. Analysis of Workday's PaaS Strategy
. Analysis of Anaplan's PaaS Strategy
. Bill.com Sees Strong Demand
. Analysis of MongoDB's PaaS Strategy
. Analysis of Wix's Platform Strategy
. New Relic Product Upgrades Deliver Growth
. What Should Proofpoint Acquire?
. Smartsheet Should Follow Atlassian’s Example
. Adobe's Relentless Growth Continues
. SurveyMonkey's PaaS Prospects
. DocuSign Acquires Amid COVID
. Paylocity Counts on Video
. The Unstoppable Veeva
. Magic Software Acquires to Expand in Europe
. What Can Cloud Startups Do To Raise Seed Capital in 2021?
. Guardant Seeks to Disrupt Oncology Testing
. Dropbox Adds Security Capabilities
. Domo Growing Steadily
. Nutanix Focuses on the Hybrid Cloud
. IBM Fails to Impress
. Microsoft’s Partnership with Tom Siebel’s C3 AI is Intriguing
. ServiceNow Well-Positioned for Digital Transformation
. Analysis of Shopify’s Long Term Strategy
. HubSpot Rethinks Pricing Model to Support Businesses
. Akamai Investing in 5G Security Solutions
. Twilio Should Provide Developer Marketplace Revenue Metrics
. How can Alteryx Improve its PaaS Strategy?
. Partnerships Ringing in Growth for RingCentral
. Five9 Focuses on AI-based Contact Centers
. Nutanix Builds a Kubernetes PaaS
. Workday and Anaplan Executing Well Amid Pandemic
. BlackLine Expands in Order-to-Cash Market
. Zoom Investing in Security
. Splunk is on a Shopping Spree
. Veeva Sees Customer Momentum
. Palo Alto Networks Has Missed the Window to Buy Zscaler
. Can Okta Keep the Momentum Going?
. Adobe Acquires to Address Growing Market Opportunity
. nCino's AI Products Help it Soar
. Analysis of Pure Storage’s Portworx Acquisition
. Analysis of Coupa's LLamasoft Acquisition
. Analysis of ZoomInfo’s Everstring Acquisition
. Q2 Holdings at a New High
. Data Breach Drives Cloud Security Stocks to Record Highs
. Should Zoom Acquire Smartsheet?
. New Relic Needs to Accelerate PaaS Strategy
. Proofpoint in the Cyber Attack Aftermath
. Talend Focuses on Data Reliability
. Medallia Continues to Acquire
. Lemonade and Root Disrupting the Insurance Industry
. The Key to PagerDuty's API Strategy
. CrowdStrike Gears up to Tackle Security Breach Concerns
. Everbridge Widens Products and Partnerships
. Cornerstone OnDemand Expands Product Line-up
. Alarm.com Expands Products to Address Competition
. Sumo Logic's IPO Going Strong
. Cloudera Grows Through Acquisition
. IBM Trying and Failing to Reignite Growth
. Box Knows it's All About PaaS
. Bill.com Focuses on Mobile and AI
. DocuSign Leverages AI in Product Innovation
. Atlassian Makes over $100M in PaaS in 2020
. PaaS Strategy Makes Unity IPO Soar
. ON24 Goes Public with $42B TAM as Covid Puts Webinars and Virtual Events Front and Center
. Amazon After Jeff Bezos
. ServiceNow Firing on All Cylinders But One
. Snowflake Focuses on Developer Community for Growth
. Is SAP Acquiring Alteryx?
. Qualys Focuses on SaaS App Security
. SurveyMonkey Remains Focused on APIs, ISV PaaS Still Missing
. Domo Needs to Open up About PaaS Metrics
. Like Wix, GoDaddy Needs to Focus on PaaS
. Datadog on an Acquisition Spree
. Twilio Soars, Focuses on Social Initiatives
. HubSpot Expands Content Offering Through Acquisition
. Zendesk Adds Products, While Freshdesk Keeps Acquiring
. Shopify and BigCommerce Building API-based Ecosystems
. RingCentral Acquires and Adds Partners, But PaaS is Still Missing
. Acquisitions and Product Upgrades are the Mantra for Palo Alto Networks
. Salesforce can Transform Slack PaaS, But Acquisition Still Pending
. After Acquisitions, Five9 Focuses on Channel and Network Partnerships
. Workday Drives Enterprise Use Cases Through PaaS, as Anaplan Taps Into Consultants
. C3.ai Should Do ISV Focused PaaS
. Splunk on the Right Track with Cloud and PaaS
. Veeva Sets an Example, Transitions to a Public Benefit Corporation
. BlackLine is Targeting A/R Automation Market
. Okta Targets $25B Customer Identity Market with Acquisition
. Teradata Trying to Reinvent Itself on the Cloud
. Dropbox Acquires, But Competition Remains Stiff
. Smartsheet Focuses on Partners, and not on ISVs
. MongoDB has Huge Room to Grow in $97B Market
. Cloud and Platform Expansion Continues at Nutanix
. Rapid7 Targets $1B ARR by 2025
. DocuSign Exploring Unprecedented Digital Signature Offerings
. Tenable Continues its Acquisition Spree
. SolarWinds Attack Driving Zscaler's Stellar Performance
. Zoom Should Report Developer Ecosystem Metrics
. DigitalOcean Goes Public with a Strong ISV PaaS Strategy
. Dynatrace Competing with Rivals by Simplifying DevOps
. Talend Becomes a Private Firm, Once Again
. Everbridge Focuses on the Government Sector
. Analysis of Fastly’s Signal Sciences Acquisition
. Cloudera Focuses on Machine Learning for Verticals
. Medallia Acquires to Expand Digital Experience Analytics
. PagerDuty Sees Market Expand Beyond ITOps

Hacker News
() Comments

Featured Videos