Quarter 4

E-Commerce Platform Financials Round-Up – Q4 2016

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jlee2027_yv75wi72

Bringing innovation through automation to help small business succeed has been my career goal.
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Our customers rely on various e-commerce platforms to run their business. As such, we like to monitor the financials, 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 recapped the 2016 Q4 performance and provided some additional comments on Shopify, eBay, Amazon, Bigcommerce and Etsy.

SHOPIFY PERFORMANCE

Last week, Shopify reported their 4th quarter numbers for the fiscal year ending 2016.  which came in at just over 130M in revenue with an $9.3M dollar loss. Interestingly enough, Shopify reported a store increase to over 377,000, with a net claim of 133,000 new merchants (quite impressive).  The 2015 Q4 numbers had shown a smaller loss of “only” $6.5M. As we reported now several times, 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:

While the growth is fantastic, cash on hand continues to plunge rapidly dropping from $212M to $84M. However, Shopify also listed $308M in marketable securities, these are usually short term CD’s on deposit. So they remain quite liquid.  Per our prior warning, 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 didn’t report until Feb 15th, eBay showed up with a full report nearly a month ago. is burning out, eBay is doing well. They reported $2.4B (as in billion) in sales for Q4 and earnings of nearly $600 million.

Analysis & Comments:

  • eBay reported 167 million unique buyers, adding over 2 million new buyers for the quarter.
  • Over $1.8B available in cash. Plus another 5B in short term investments.
  • eBay repurchased over 1B in in common stock or 34.6M shares 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 rock solid profits for it’s shareholders.
  • Financial outlook remains very positive.

AMAZON PERFORMANCE

The largest player by far, Amazon reported over $43B in sales for its most recent quarter. Analysts called this a miss, but profits were strong at $749M.

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.
  • Amazon continues to look to dominate the warehousing and delivery industry, with a proposal of floating blimps filled with stock that is delivered by drone robots. Check it out here: http://www.cnbc.com/2016/12/29/amazon-flying-warehouse-deploy-delivery-drones-patent.html
  • Active buyers – 310 million (reported at end of 2016).

ETSY PERFORMANCE

ETSY will not report until February 28th, 2017

Analysis & Comments (last quarter):

  • 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

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