The Canadian commerce platform reported total quarterly revenue of $3.74 billion, narrowly missing expectations despite posting an adjusted profit beat of 49 cents per share. Performance was dragged down by soft gross merchandise volume and subscription gross profit, both of which failed to reach consensus estimates. However, the business saw relative resilience as both merchant revenue and merchant gross profit managed to surpass analyst projections. Looking forward to the fourth quarter, the firm anticipates annual revenue growth to land in the low thirties percentage range.
Key points
Weaker platform volume and subscription results prompted an immediate nine percent drop i…: Weaker platform volume and subscription results prompted an immediate nine percent drop in Shopify shares during early trading.
Better-than-expected merchant revenue and merchant gross profit partially cushioned the b…: Better-than-expected merchant revenue and merchant gross profit partially cushioned the blow of the quarterly subscription misses.
Management projected fourth-quarter revenue growth in the low thirties range, aligning cl…: Management projected fourth-quarter revenue growth in the low thirties range, aligning closely with analyst expectations of 32.1 percent.
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Shares of e-commerce platform Shopify plunged 9% in early trading on Tuesday after the company missed estimates on subscription gross profit and gross merchandise volume.
Shopify reported before the bell Tuesday and posted adjusted earnings of 49 cents per share, topping LSEG estimates of 46 cents per share.
Overall, quarterly revenue of $3.74 billion came in just below LSEG estimates of $3.75 billion. Shopify said it sees revenue growth in the "low thirties" range year over year for the fourth quarter, versus LSEG estimates of 32.1%.
Gross merchandise volume, which came in at $119.15 billion, missed analyst estimates of $120.03 billion for the quarter, according to StreetAccount. Subscription gross profit also missed estimates by nearly $20 million, coming in at $661 million compared to StreetAccount estimates of $680.3 million. Merchant gross profit beat estimates.
Subscription revenue of $836 million also missed analyst estimates of $848.1 million, according to FactSet. Merchant revenue beat estimates.
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