Why Is Shopify (SHOP) Up 2% Since Last Earnings Report?

Core Viewpoint - Shopify's third-quarter 2024 earnings report showed strong performance, with revenues and earnings exceeding estimates, driven by a growing merchant base and diversified product offerings [2][4][14]. Financial Performance - Non-GAAP earnings for Q3 2024 were 36 cents per share, surpassing the Zacks Consensus Estimate by 33.33%, compared to 24 cents per share in the same quarter last year [2]. - Revenues reached $2.16 billion, exceeding the Zacks Consensus Estimate by 2.59%, and increased by 26.1% year-over-year [2]. - Merchant solutions revenues were $1.55 billion, accounting for 71.8% of total revenues, with a year-over-year increase of 26.4% [5]. - Subscription solutions revenues were $610 million, making up 28.2% of total revenues, and grew by 25.5% year-over-year [7]. - Gross Merchandise Volume (GMV) for Q3 was $69.7 billion, reflecting a 24% year-over-year increase, driven by the adoption of Shopify's point-of-sale solutions by major retailers [8]. Operational Highlights - Shopify's operating expenses for Q3 were $835 million, up 7.2% from the previous year, but as a percentage of revenues, they decreased to 38.6% from 45.4% [10]. - The company reported an operating income of $283 million, significantly higher than the $122 million reported in the prior-year quarter [11]. - Monthly Recurring Revenue (MRR) was $175 million, up 27.7% year-over-year [9]. Strategic Developments - Shopify has expanded its Payments product offerings through a partnership with PayPal, enhancing its service portfolio [3]. - The company continues to invest in modern e-commerce solutions, integrating AI through Shopify Magic to assist merchants [6]. Future Outlook - For Q4 2024, Shopify anticipates revenue growth in the mid-to-high twenties percentage range year-over-year [14]. - The company expects GAAP operating expenses as a percentage of revenues to be between 32% and 33% [15]. - Recent estimates for Shopify have shown an upward trend, with a consensus estimate shift of 14.57% [16][17].