An employee works at Shopify’s headquarters in Ottawa, Ontario, Canada.
Chris Wattie | Reuters
Shopify stock jumped more than 20% on Thursday morning after the Canadian e-commerce company reported third-quarter results that beat expectations, and gave a strong forecast for the remainder of the year.
Here’s how the company did for the quarter compared to LSEG (formerly Refinitiv) consensus expectations:
- Earnings per share: 24 cents, adjusted, vs. 14 cents expected
- Revenue: $1.71 billion vs. $1.67 billion expected
Shopify said it expects 2023 revenue to grow at a mid-twenties percentage rate on a year-over-year basis, driven by fourth-quarter revenue growth in the high teens.
Gross merchandise volume, or the total volume of merchandise sold on the platform, rose 22% to $56.2 billion during the quarter. Analysts surveyed by FactSet had forecast GMV of $54.2 billion.
“Our results showcased the durability of our business model as we delivered a compelling combination of both top line growth and profitability, with revenue growing 25% year over year and free cash flow margin reaching 16%,” Shopify CFO Jeff Hoffmeister said in a statement. “We will continue to operate with discipline, thoughtfully investing in the huge opportunities ahead across regions, products and channels to help merchants capture every opportunity every step of the way.”
Net income for the quarter was $718 million, or 55 cents a share, compared to a loss of $158.4 million, or a loss of 12 cents per share, in the year-ago quarter.
The solid earnings beat comes after Shopify, which makes tools for companies to sell products online, has sharpened its focus on costs. The company in May laid off 20% of its workforce, and divested its logistics unit to supply chain software startup Flexport. The sale included Deliverr, the last-mile delivery company Shopify acquired for $2.1 billion last May.
During the quarter, Shopify announced a partnership with Amazon that allows its merchants to fast and free Prime delivery on their storefronts off Amazon. Shopify also invested in online marketplace Faire as part of a deal that will make it the recommended wholesale platform for Shopify merchants.
WATCH: Shopify expands seller ecosystem as company invests in wholesale site
