Shopify shares dropped after its September-quarter report, even though revenue grew 32% and free cash flow 61%. Gross merchandise volume came in below analyst estimates, and MarketWatch says revenue also missed expectations.
Shopify shares fell about 16% in early trading on Tuesday after the company's gross merchandise volume landed slightly below Wall Street estimates. MarketWatch reported that shares were set for a steep drop as investors panned a mixed report.
Earnings beat, with a reported revenue miss
The company reported adjusted earnings per share of 49 cents for the September quarter, up from 34 cents a year before and ahead of the 47-cent FactSet consensus. According to MarketWatch, however, Shopify missed revenue expectations.
Crypto Briefing put revenue at $3.7 billion in the third quarter ended September 30, a 32% year-over-year increase from $2.8 billion. Free cash flow rose 61% to $816 million, a 22% margin against 18% a year earlier.
GMV slips below the estimate
Gross merchandise volume reached $119.2 billion, marginally below the approximately $120.1 billion analysts expected. Merchant solutions remained the largest contributor, generating $2.9 billion, up 35%, while subscription solutions revenue grew 20% to $836 million.
Operating income rose 66% to $568 million, and net income climbed 75% to $462 million. Shopify also disclosed that orders from AI-driven searches increased 3.3 times from a year earlier.
Fourth-quarter outlook
For the fourth quarter, Shopify expects revenue to rise at a low-thirties percentage rate year-over-year. It forecasts gross profit dollars to grow at a high-twenties rate, with operating expenses at 29% to 30% of revenue.
Sources: MarketWatch (snippet-based), Crypto Briefing
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