Shopify’s third quarter was better than expected as the e-commerce platform vendor continued to benefit from small businesses going digital.
The company, which has been among the winners during the COVID-19 pandemic, reported third quarter revenue of $767.4 million, up 96% from a year ago, with earnings of $191.1 million, or $1.54 a share. Non-GAAP earnings for the quarter were $1.13 a share.
Wall Street was expecting Shopify to report third quarter revenue of $657.9 million with non-GAAP earnings of 51 cents a share.
Gross merchandise volume of $30.9 billion, surged 109%, as small businesses adopted Shopify to take operations digital. Shopify said it has been adept at converting merchant free trials into paying customers.
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Harley Finkelstein, Shopify’s president, said the “accelerated shift to digital commerce triggered by COVID-19 is continuing.” Shopify has been adding products and services as it build out services like buy now, pay later offerings like Shop Pay Installments, Shopify Fulfillment Network and expands internationally.
Shopify didn’t provide an outlook for the fourth quarter or 2020. The company ended the quarter with $6.12 billion in cash, cash equivalents and marketable securities.
For 2020, Wall Street is modeling Shopify’s non-GAAP earnings to be $2.51 a share with revenue of $2.61 billion.
Other key figures:
- Research and development is 24% of Shopify’s revenue for the nine months ending Sept. 30.
- Subscription revenue for the third quarter was $245.3 million.
- Merchant revenue was $767.4 million.
Here’s a look at Shopify’s stack of services that cover the range of company sizes.
