Shopify Inc. reported a third-quarter profit of US$264 million as its revenue rose 32 per cent compared with a year ago. The company, which keeps its books in U.S. dollars, says the profit amounted to 20 cents US per diluted share for the quarter ended Sept. 30 compared with a profit of US$828 million or 64 cents US a year ago. On an adjusted basis, Shopify says it earned 34 cents US per share in its latest quarter compared with an adjusted profit of 36 cents US per share a year ago. Revenue for the quarter totalled US$2.84 billion, up from US$2.16 billion in the same quarter last year. The increase came as merchant solutions revenue amounted to US$2.15 billion, up from US$1.55 billion a year ago, while subscription solutions revenue totalled US$699 million, up from US$610 million in the same quarter last year. In its outlook, Shopify says it expects its fourth-quarter revenue to grow at a percentage rate in the mid-to-high twenties on a year-over-year basis.
OPINION
Here’s a summary of the recent earnings report for SHOP.TO (the TSX-listed shares of Shopify Inc.) — pulling in key metrics, context and my interpretation.
✅ What went well
- Shopify reported strong volume growth: its Gross Merchandise Volume (GMV) rose ~32 % year-over-year to about US $92 billion. Investors.com+1
- Revenue also rose ~32 % (approx) in the quarter, beating consensus estimates. Investing.com+1
- Its “Merchant Solutions” segment (which includes payments, etc.) showed a particularly strong uptick. Investors.com+1
- The company continues investing into AI and international expansion, outlining opportunities in those areas as growth levers. Futu News+1
⚠️ Areas of caution / Mixed outcomes
- Although revenue and GMV beat expectations, some margin metrics came under pressure (for example higher hosting/expansion costs) which weighs on profitability. Investing.com+1
- Despite the beat, the stock apparently declined after the release, suggesting that investors may have expected stronger guidance or had concerns about future growth. Investing.com+1
- The company flagged that in certain regions or segments comparability is tougher (e.g., due to previous trial-promotions or policy changes) which could cloud near-term growth metrics. Investing.com+1
🔍 Outlook & Guidance
- Shopify guided that for Q4 it expects revenue growth in the mid to high 20 % range year-over-year. Investing.com+1
- They expect gross profit dollars to grow in the “low to mid-20s %” and free-cash-flow margin to be slightly above Q3 levels. Investing.com
- The business emphasises that growth is coming from both increased merchant adoption and deeper penetration of services (payments, ad campaigns, enterprise offerings). The shift to AI/agent-commerce is a highlighted strategic focus. Futu News+1
🎯 My takeaways
- Shopify delivered very solid growth in top-line and GMV, which is encouraging given the competitive e-commerce environment.
- However, the margin/expense side and the expectations for future growth may be acting as a dampener on investor sentiment (hence the stock drop despite the beat).
- For someone tracking SHOP.TO, the story remains strong growth + platform shift, but the “how fast vs how expensive” question is front and centre. If the company can keep scaling payments/ad/enterprise revenue and hold or improve margins, upside remains; if cost/investment pressure mounts or growth slows, risk rises.
- The guidance (mid-to-high 20 % growth) is good but suggests the company sees some moderation (vs the ~32 % growth achieved) — investors will likely watch whether the “mid” or “high” end of that range is hit, and how costs develop.
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