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jlee2027_yv75wi72

Bringing innovation through automation to help small business succeed has been my career goal.
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q3Our customers rely on various e-commerce platforms to run their business. As such, we like to monitor the finacials, performance and future looking statements of these platforms to understand how we can tailor our product to best support our customers. In this articles we’ve recaped the 2016 Q3 performance and provided some additional comments on Shopify, eBay, Amazon, Bigcommerce and Etsy.

Shopify Performance

Last week, Shopify reported their Q3 2016 numbers, which came in at just under 100 million in revenue with an $9.7 million loss. The 2015 Q3 numbers had shown a loss of only $4.6 million. As we reported before, this is a growing trend with Shopify, as they have continued to lose money since their 2015 IPO. And while their revenue is growing, so are their losses.

Analysis & Comments:

Shopify issued additional shares to improve their cash position from $68 million last quarter to $212 million.  They did report receiving almost $225 million from share dilution. So they burned their entire cash reserve of $68 million and then some in only 90 days. This is staggering, as in less than a year they will need to dilute again. We had warned share dilution was coming  in our last report.  Again, at some point you have to accept slower growth to stop literally burning money, as Shopify has elected to do. It going to depend on how much pain their shareholders want to put up with.

eBay Performance

While Shopify is burning out, eBay is doing well. They reported $2.2 billion in sales for Q3 and earnings of nearly $413 million.

Analysis & Comments:

  • eBay reported 165 million unique buyers, adding over 1 million new buyers for the quarter.
  • Over $2 billion available in cash. It’s enough to buy and develop the Congo it seems if they wanted too.
  • eBay repurchased over 500 million in common stock during the quarter.
  • Despite reports of many disgruntled eBay Sellers, ever-tightening standings, and poor customer service, eBay is a model of financial efficiency in generating solid profits for it’s shareholders.

Amazon Performance

The largest player by far, Amazon reported over $32 billion in sales for its most recent quarter and net income of $252 million.

Analysis & Comments:

  • With the election of Donald Trump, Amazon will face an uncertain tax future. Trump claims that Amazon should be paying billions more in taxes as they have unfair marketplace advantages over department stores.
  • In August, Bezos sold an amazing $757 million worth of AMZN shares. You have to wonder if any of that money went to the Clinton Campaign in a failed effort to stop Trump.
  • Active buyers – 244 million (reported in 2014).
  • Overhead remains at 20%. There is no specific breakdown as to marketing costs on the Summary financials.
  • R&D is a tad over 10%. This is about the industry norm.

Etsy Performance

Total revenue was $87.6 million, up 33.3% year-over-year.

Analysis & Comments:

  • Etsy has been under pressure since it’s IPO to admit more eBay-like sellers to increase visibility, appeal, and the bottom line. So far, they have resisted this pressure insisting they stick to their niche of handmade and vintage items.
  • Etsy reported spending 14% on R&D. This has not changed.
  • Net Loss was 2.4 million, which was narrower than previous quarters.
  • Etsy has a strong cash and cash equivalent position with over $250 million available.

Bigcommerce Performance

Bigcommerce completed it’s last funding round, raising 30 million in May, 2016. However, the IPO Market has cooled off and so has news from Bigcommerce in this regard. Raising funding shows they are losing money, but it’s impossible to speculate further on their financial status.