Shares of e-commerce platform Shopify fell 7% on Tuesday after the company missed analyst estimates on subscription gross profit and gross merchandise volume during the third quarter.
Shopify Third-Quarter Financial Results
Shopify reported its financial results before the opening bell on Tuesday, posting an adjusted earnings of 49 cents per share, which beat LSEG estimates of 46 cents per share. Overall quarterly revenue reached $3.74 billion, coming in just under LSEG estimates of $3.75 billion. For the fourth quarter, the company stated it anticipates revenue growth in the “low thirties” range year over year, compared to LSEG estimates of 32.1%.
Gross Merchandise Volume and Profit Misses
Gross merchandise volume totaled $119.15 billion for the quarter, missing analyst projections of $120.03 billion according to StreetAccount data. Subscription gross profit also fell short of expectations by nearly $20 million, reaching $661 million against StreetAccount estimates of $680.3 million, although merchant gross profit managed to beat expectations. Additionally, subscription revenue landed at $836 million, missing FactSet analyst estimates of $848.1 million, while merchant revenue surpassed projections.
Speaking on CNBC’s “Squawk on the Street” on Tuesday, Shopify president Harley Finkelstein described the gross merchandise volume results as “consistent” and “durable,” highlighting that it marked the thirteenth straight quarter of gross merchandise volume growth exceeding 20%. “We’re really proud of the print, and we’re going to keep building for the long term and ignore the noise day to day,” Finkelstein said.
