Shopify (SHOP) Q3 Revenue $3.74B Misses Estimates, Shares Fall 7%
Published on · Source: cnbc.com
AI Summary
Summarized by AI from the source belowShopify (SHOP) shares dropped 7% after the company reported third-quarter results that missed key estimates. Adjusted earnings per share were 49 cents, above the expected 46 cents. However, quarterly revenue was $3.74 billion, slightly below the consensus estimate of $3.75 billion.
The company also reported gross merchandise volume (GMV) of $119.15 billion, missing analyst expectations of $120.03 billion. Subscription gross profit came in at $661 million, below the estimated $680.3 million. Subscription revenue was $836 million versus an estimate of $848.1 million. Merchant gross profit and revenue, however, beat estimates.
Shopify projects revenue growth in the low thirties percentage range year over year for the fourth quarter, slightly below analyst expectations of 32.1%. Shopify’s president Harley Finkelstein described the GMV growth as "consistent" and "durable," marking the thirteenth consecutive quarter with GMV growth above 20%. This earnings report shows mixed results with some missed targets, which impacted the share price negatively. For investors, the key takeaway is the near-term slowdown in subscription revenue and merchandise volume growth affecting Shopify's overall revenue trajectory.
Informational only, not financial advice. Content is AI-generated and may contain errors. How this works.
Our take
Opinion from the Newsstocks AI desk, not investment adviceWe think the mixed earnings report reflects ongoing challenges in Shopify's subscription-based revenue and merchandise volume growth. While merchant revenue and gross profit beat estimates, the shortcomings in subscription metrics may pressure revenue growth in the near term. The 7% share price decline indicates investor concern over these misses. Additional data from the fourth quarter will clarify if the slowdown is temporary or a growing trend.
Key numbers
- Quarterly revenue
- $3.74 billion
- Adjusted EPS
- 49 cents
- LSEG earnings estimate
- 46 cents
- Gross merchandise volume
- $119.15 billion
What could help
- Merchant gross profit and revenue exceeded analyst estimates.
- GMV growth has been above 20% for thirteen consecutive quarters, indicating sustained demand.
What could hurt
- Subscription gross profit and subscription revenue missed analyst expectations.
- Overall revenue slightly missed consensus estimates, signaling possible growth challenges.
What to watch next
Shopify's upcoming fourth quarter results and revenue growth guidance.
The background
Earnings reports detail a company's financial performance over a quarter. Investors use them to gauge business health and growth prospects.
Questions readers ask
Why did Shopify shares fall 7% after the Q3 report?
Shares fell because Shopify missed estimates on subscription gross profit, gross merchandise volume, and total revenue for Q3 despite beating earnings per share.
What were Shopify's reported Q3 earnings per share and revenue?
Shopify reported adjusted earnings per share of 49 cents and quarterly revenue of $3.74 billion for Q3.
What is Shopify's revenue growth guidance for the fourth quarter?
Shopify expects revenue growth in the 'low thirties' percentage range year over year for the fourth quarter.
Understand this kind of story
Get the weekly market brief
One email every Monday: what moved, why, and what to watch. Free, unsubscribe anytime.
Get stories like this as they break
Our Telegram channel posts every market story the moment it is published. Free, and you can mute or leave anytime.
