Shopify’s Q3 Earnings Show 32% Revenue Gain

Core Insights - Shopify reported a revenue of $2.84 billion for Q3, exceeding the consensus estimate of $2.81 billion by 1.2%, with a year-over-year growth of 32% [3][8] Merchant Solutions Performance - Merchant Solutions was the primary growth driver, increasing by 38% year-over-year to $2.145 billion, now accounting for 75% of total revenue [2] - Subscription Solutions also showed growth, rising 15% to $699 million, indicating a diversification in the business model [2] Profitability Metrics - Gross profit increased by 24% to $1.39 billion, while operating income rose 21% to $343 million [3] - Net income reached $264 million, and free cash flow was $507 million with an 18% margin, reflecting operational efficiency [3][5] Cash Flow and Balance Sheet - Operating cash flow was reported at $513 million against minimal capital expenditures of $6 million, highlighting the asset-light nature of the business [4] - The company holds a strong balance sheet with $2.414 billion in cash and equivalents, compared to total liabilities of $2.213 billion [4] Future Guidance - For Q4, management expects revenue growth in the mid-to-high twenties percentage range year-over-year, a decrease from Q3's 32% growth [6] - Gross profit growth is anticipated to be in the low-to-mid twenties, with operating expenses projected at 30% to 31% of revenue [6][7]