Core Viewpoint - Shopify's stock declined after third-quarter earnings report, which, despite showing better-than-expected revenue and gross merchandise volume, did not meet investor expectations [2][3]. Financial Performance - Revenue surged 32% to $2.84 billion, exceeding the consensus estimate of $2.76 billion [3][5]. - Gross merchandise volume increased 32% to $92 billion, surpassing the projected 28% growth to $89.12 billion [3][5]. - Operating income rose 53% to $434 million, slightly missing the estimate of $435 million [3][5]. - Transaction and loan losses more than doubled to $148 million from $58 million the previous year [7]. Market Reaction - Following the earnings report, Shopify's stock fell by 3.5% [3][5]. - The stock had previously risen nearly 63% in 2025, reflecting strong performance and recovery from a significant drop in 2022 [8]. Future Outlook - Shopify expects revenue growth at a mid-to-high-twenties percentage rate, which is above the consensus estimate of 23% [4]. - Analysts noted concerns regarding a potential pullback in consumer spending, which may affect future performance [6]. Valuation Concerns - Shopify's stock is valued at approximately 98 times forward earnings, compared to about 23 times for the S&P 500 [5][7].

opengridscheduler / Flickr Quick Read Shopify beat revenue expectations and posted 32% year-over-year growth in Q3, signaling sustained momentum in its core merchant and subscription businesses. still, shares of SHOP fell by nearly 6% in pre-market trading before recovering those loses in early a.m. trading. Some investors get rich while others struggle because they never learned there are two completely different strategies to building wealth. Don’t make the same mistake, learn about both here. S ...

Shares of shop five moderately lower this morning despite reporting a Q3 sales rise by nearly a third showing strong merchant growth on the platform. Uh the stock's been way up since we had Harley Flestein on last and now we've got him again. Chop five president Harley Finkelestein. Harley's great to see you. Thank you for coming on with us. >> Great to be here Jim. Thank you. >> See Harley, I think a lot of people want to talk about small mediumsized businesses get started and of course I do too because I ...

Core Insights - Shopify reported a Q3 sales increase of 32% in gross merchandise volume (GMV) and revenue, alongside an 18% free cash flow margin, indicating strong growth and consistent profitability [1][4] - The platform is attracting both small startups and large brands like Estee Lauder, suggesting a trend of larger enterprises seeking to modernize their commerce solutions [1][3][4] - Shopify holds approximately 12% of the U.S. e-commerce market share and is outpacing the overall e-commerce market growth [4][5] Company Strategy - Shopify aims to simplify the process of starting an online store, allowing entrepreneurs to set up a store in under an hour, which contributes to a rapid increase in new businesses [6][7] - The company is leveraging AI to enhance its platform, enabling merchants to sell across various channels and future-proof their businesses [1][2][8] - Shopify's focus on operational discipline while maintaining high revenue growth positions it as a strong player in the e-commerce space [5] Market Position - The company has seen a shift where larger brands prefer to utilize Shopify's infrastructure rather than maintaining their own technology stacks, indicating a trend towards outsourcing commerce solutions [2][3] - Shopify's ease of use and comprehensive features have led to a significant reduction in competition, with fewer viable alternatives for entrepreneurs [5][6] - Success stories of brands that started on Shopify, such as Aloe and Gym Shark, highlight the platform's capability to support growth from inception to scale [8]

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Shopify (NYSE: SHOP) beat revenue expectations and posted 32% year-over-year growth in Q3, signaling sustained momentum in its core merchant and subscription businesses. ...

Financial Data and Key Metrics Changes - Q3 delivered 32% GMV growth, 32% revenue growth, and an 18% free cash flow margin, consistent with previous quarters [8][36] - Revenue grew 27% in Q1, 31% in Q2, and 32% in Q3, with free cash flow margin holding steady at 15% in Q1, 16% in Q2, and 18% in Q3 [8][36] - Q3 gross profit grew 24%, with gross margin at 48.9%, down from 51.7% in the prior year [39][41] Business Line Data and Key Metrics Changes - Merchant solutions revenue increased 38%, driven by strong GMV performance, while subscription solutions revenue grew 15% [37][39] - ShopPay processed $29 billion in GMV in Q3, up 67% year-over-year, indicating strong adoption [18][58] - B2B GMV was up 98% year-over-year, with significant growth across various verticals [29][36] Market Data and Key Metrics Changes - International GMV grew 41% in Q3, with Europe showing a 49% increase [21][35] - Revenue from Europe accounted for 21% of overall revenue in Q3, up from less than 18% two years ago [21] - Offline GMV increased 31%, reflecting the growing importance of retail-first brands [28][36] Company Strategy and Development Direction - The company is focused on leveraging AI to enhance merchant capabilities and streamline operations [10][14] - International expansion and the development of offline and B2B channels are key strategic priorities [5][22] - The company aims to simplify the commerce experience for merchants, enhancing their ability to compete globally [19][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to adapt to changing market conditions and technological advancements [4][6] - The outlook for Q4 anticipates revenue growth in the mid- to high-20s% year-over-year, with expectations for continued strong performance [46][48] - Management highlighted the importance of maintaining a balance between growth and profitability, with a focus on long-term merchant success [44][49] Other Important Information - The company has maintained a flat to down headcount for over two years, focusing on productivity and efficiency [42][43] - The partnership with OpenAI and other AI leaders is expected to enhance the shopping experience and drive traffic to Shopify stores [53][54] Q&A Session Summary Question: Integration with OpenAI and its impact on transactions - Management noted a significant increase in AI-driven traffic and orders attributed to AI searches, indicating early success in this area [53][54] Question: Instant checkout solutions and their prioritization - Management emphasized the popularity of ShopPay and its role as a leading accelerated checkout solution, positioning it favorably among consumers [58][59] Question: Marketing investments and their efficiency - Management confirmed that marketing investments are driving merchant adoption effectively, with a focus on maintaining tight guardrails for spending [63][64] Question: Success in the enterprise business - Management highlighted the strong pipeline and success in attracting large brands, indicating a broad spectrum of verticals being targeted [68][69]

Financial Data and Key Metrics Changes - Q3 delivered 32% GMV growth, 32% revenue growth, and an 18% free cash flow margin, consistent with previous quarters [8][36] - Revenue grew 27% in Q1, 31% in Q2, and 32% in Q3, with free cash flow margin holding steady at 15% in Q1, 16% in Q2, and 18% in Q3 [8][36] - Q3 gross profit grew 24%, with gross margin at 48.9%, down from 51.7% in the prior year [39][41] Business Line Data and Key Metrics Changes - Merchant solutions revenue increased 38%, driven by strong GMV performance, while subscription solutions revenue grew 15% [37][39] - ShopPay processed $29 billion in GMV in Q3, up 67% year-over-year, indicating strong adoption [18][58] - B2B GMV was up 98% year-over-year, with significant growth across various verticals [29][36] Market Data and Key Metrics Changes - International GMV grew 41% in Q3, with Europe showing a 49% increase [21][35] - Revenue from Europe accounted for 21% of overall revenue in Q3, up from less than 18% two years ago [21] - Offline GMV increased 31%, indicating strong performance in retail channels [28][35] Company Strategy and Development Direction - The company is focused on leveraging AI to enhance merchant capabilities and streamline operations [10][14] - Shopify aims to expand its international presence and enhance its product offerings to lower barriers for merchants [5][22] - The strategy includes building a robust ecosystem that supports various merchant types and channels, including B2B and offline sales [24][28] Management's Comments on Operating Environment and Future Outlook - Management highlighted the importance of AI in transforming commerce and enhancing merchant success [10][30] - The company expects Q4 revenue growth to be in the mid- to high-20s% year-over-year, facing a high benchmark from the previous year [46] - Management remains optimistic about maintaining consistent growth and profitability while investing in future opportunities [44][48] Other Important Information - The company has a cash balance of $6 billion and no debt following the settlement of a convertible note [45] - Operating expenses were $1 billion for the quarter, representing 37% of revenue, down from 45% in 2023 [42][43] - The company is seeing increased transaction and loan losses, primarily due to higher losses in the payments business [43] Q&A Session Summary Question: Integration with OpenAI and its impact - Management noted that AI-driven traffic to Shopify stores has increased 7x, with orders attributed to AI searches up 11x since January [53] Question: Instant checkout solutions prioritization - Management emphasized that ShopPay processed $29 billion in GMV in Q3, indicating its popularity among consumers [58] Question: Marketing investments and efficiency - Management confirmed that marketing investments are driving merchant adoption and are closely monitored for efficiency [63] Question: Success in the enterprise business - Management highlighted the strong pipeline in the enterprise segment, with notable brands migrating to Shopify [69]

Core Insights - Shopify reported quarterly earnings of $0.34 per share, matching the Zacks Consensus Estimate, but down from $0.36 per share a year ago [1] - The company achieved revenues of $2.84 billion for the quarter ended September 2025, exceeding the Zacks Consensus Estimate by 3.34% and up from $2.16 billion year-over-year [2] - Shopify shares have increased approximately 62.7% year-to-date, significantly outperforming the S&P 500's gain of 16.5% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.50 on revenues of $3.46 billion, and for the current fiscal year, it is $1.45 on revenues of $11.25 billion [7] - The estimate revisions trend for Shopify was favorable prior to the earnings release, resulting in a Zacks Rank 1 (Strong Buy) for the stock, indicating expected outperformance in the near future [6] Industry Context - The Internet - Services industry, to which Shopify belongs, is currently ranked in the top 37% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8]

Financial Data and Key Metrics Changes - Q3 delivered 32% GMV growth and 32% revenue growth, with an 18% free cash flow margin, consistent with previous quarters [10][60] - Revenue grew 27% in Q1, 31% in Q2, and 32% in Q3, while free cash flow margin increased from 15% in Q1 to 16% in Q2 and 18% in Q3 [10][11] - Gross profit grew 24%, with overall Q3 gross margin at 48.9%, down from 51.7% in the prior year [64][66] Business Line Data and Key Metrics Changes - Merchant Solutions revenue increased 38%, driven by GMV growth and increased penetration of Shopify Payments, which reached 65% [61] - Subscription Solutions revenue grew 15%, with MRR up 10% year over year, led by growth in Plus plans [62][63] - B2B GMV was up 98% year over year, with strong performance across various verticals [50][58] Market Data and Key Metrics Changes - International GMV grew 41% in Q3, with Europe accounting for 21% of overall revenue, up from less than 18% two years ago [36][37] - Offline GMV increased 31%, attracting more retail-first brands globally [48][58] - Cross-border GMV remained consistent at 15% of total GMV, with stable inbound and outbound demand [71] Company Strategy and Development Direction - The company is focusing on AI integration to enhance merchant capabilities and streamline operations, positioning itself as a leader in agentic commerce [8][27] - Continued international expansion and product enhancements are aimed at lowering barriers for merchants and capturing growth in new markets [6][36] - The strategy emphasizes building a robust ecosystem that supports merchants across various channels, including online, offline, and B2B [40][41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to maintain consistent growth and profitability while adapting to technological changes [9][51] - The upcoming holiday season is expected to leverage AI tools and infrastructure to enhance merchant performance [52][53] - Q4 revenue growth is projected to be in the mid to high 20s year over year, with expectations for continued strong performance in gross profit [72][74] Other Important Information - The company has maintained a disciplined approach to operating expenses, reducing them from 45% in 2023 to 37% in Q3 2025 [67] - Free cash flow for Q3 was $157 million, or 18% of revenue, slightly ahead of expectations [69] - The company has no debt and a cash balance of $6 billion following the settlement of a convertible note [70] Q&A Session Summary Question: Initial observations from OpenAI integration - AI-driven traffic to Shopify stores has increased sevenfold, with orders attributed to AI searches up elevenfold since January [78] Question: Instant checkout flow and accelerated checkout solutions - Shop Pay processed $29 billion in GMV in Q3, up 67% year on year, positioning it as the leading accelerated checkout option on Shopify [86] Question: Marketing investments and MRR efficiency - The company is focused on driving merchant growth through effective marketing investments, with a flexible approach to spending [92] Question: Success in the enterprise business - The enterprise segment is seeing significant interest from large brands, with a strong pipeline and successful go-to-market strategies [100]