Shares of Shopify, which provides an e-commerce platform, are rising after reporting a lackluster third quarter.
DreamstimeShopify stock is trading higher Thursday morning despite reporting third-quarter earnings that fell short of analyst expectations, as growth slows following the company’s Covid-era boom. While missing Street estimates, results were apparently not as bad as some investors had feared.
For the quarter, Shopify (ticker:SHOP) posted revenue of $1.12 billion, up 46% from a year ago, but below the Street consensus estimate of $1.15 billion. Revenue growth has slowed from 57% in the June quarter and 110% in the March quarter. Adjusted profits were 81 cents a share, falling short of the consensus estimate for $1.23. Under generally accepted accounting principles, the company earned $1.1 billion, or $9 a share, reflecting a $1.34 billion unrealized gain on equity investments.
Despite the miss, Shopify stock is trading 5.7% higher at $1,438.82.
Gross merchandise value was $41.8 billion, up 35% from a year ago, but below the Street consensus at $43.4 billion, slowing from 40% growth in the June quarter and 114% growth in the March quarter.. The company said “Subscription Solutions” revenue was $336.3 million, up 37% from a year ago, while “Merchant Solutions” revenue was $787.5 million, up 51%.
The company as a matter of practice does not provide detailed guidance. Shopify said the company’s fourth-quarter earnings should grow faster than the overall e-commerce market, but that results could be impacted by “supply chain delays or increased costs for materials, labor, shipping or advertising.” The company also said that spending on Black Friday and Cyber Monday could be pulled forward compared with other years.
Write to Eric J. Savitz at eric.savitz@barrons.com
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October 28, 2021 at 09:36PM
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Shopify Stock Is Rising Despite Soft Third-Quarter Earnings - Barron's
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