After Q1 Street beat, Shopify expects slower growth as economy reopens

After a year of unprecedented growth during the pandemic, business e-commerce platform Shopify Inc. expects slower gains as the vaccine rolls out worldwide and some consumers move offline, company executives said during a first-quarter earnings conference call April 28.

Shopify CFO Amy Shapero said she still expects company revenue to grow rapidly in 2021, but at a lower rate than in 2020 as the overall economic environment improves and some consumer spending moves to offline retail and services. The "ongoing shift to e-commerce, which accelerated in 2020, will likely resume a more normalized pace of growth," Shapero said.

Her comments came after Shopify reported first-quarter 2021 net income and revenue that handily beat analysts' expectations as more merchants flocked to the online business platform and e-commerce growth continued.

The Ottawa-based company reported first-quarter net income of $1.26 billion, or $9.94 per share, compared with a net loss of $31.4 million, or 27 cents per share, in the first quarter of 2020. Net income from the just-ended period included a $1.3 billion unrealized gain from Shopify's equity investment in Affirm, which went public in January.

Adjusted net income for the first quarter of 2021 was $254.1 million, or $2.01 per share. The consensus estimate predicted normalized EPS of 75 cents, according to S&P Capital IQ data.

Shopify reported first-quarter revenue of $988.6 million, up 110% from $470.0 million in the year-ago period, beating analysts' expectations of $861.1 million.

Shopify's first-quarter gross merchandise volume reached $37.3 billion, with growth accelerating 114% over the year-ago period. Shopify saw gross merchandise volume growth lifted in part by the latest round of U.S. government stimulus checks that began being processed in March.