Merchants solutions leading growth segment
Hoffmeister also highlighted the anticipated smaller benefit from pricing changes in the second quarter compared with the first three months of the year.
“We remain resolutely confident in the great products and go-to-market initiatives fuelling our continuous growth and our ability to further strengthen our position as a leader in unified commerce,” he said. “We expect Q2 to be a continuation of our strong momentum.”
The company said its merchants solutions revenue amounted to USD$1.35 billion in its latest quarter, up from USD$1.13 billion a year earlier, which it attributed primarily “to the benefit from the absence of logistics.”
Meanwhile, subscription solutions revenue totalled USD$511 million, up from USD$382 million in the same quarter last year.
On an adjusted basis, Shopify said it earned 20 cents USD per diluted share in its latest quarter, up from an adjusted profit of a penny USD per share in the first quarter of 2023. That compared with analysts’ expectations of 17 cents USD per diluted share, according to LSEG Data & Analytics.
Automation enables growth without hiring
Following last year’s job cuts, Shopify has kept its headcount flat for three consecutive quarters, said president Harley Finkelstein. He said he believes Shopify can limit headcount growth while “achieving a continued combination of consistent top-line growth and profitability” in part because of automation.
“Over the past 18 months, we’ve committed significant effort into building efficient infrastructure and systems, which are instrumental in streamlining our work and maintaining our high-velocity product releases,” Finkelstein said. “Essentially, these systems and this infrastructure act as catalysts, enabling us to operate with increased efficiency and speed.”
Hoffmeister pointed to increased use of artificial intelligence for merchant support. He said more than half of Shopify’s merchant support interactions in the first quarter were assisted by AI “and often fully resolved with the help of AI.”
AI has also enabled 24/7 live support in eight languages that previously were offered only certain hours of the day.
“We have significantly enhanced the merchant experience,” he said. “The average duration of support interactions has decreased, and the introduction of AI has helped reduce the reluctance that some merchants previously had towards asking questions that they might perceive as trivial or naïve.”
Read more on investing:
