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Shopify Shares Gain On Earnings Beat

Sam Boughedda trader
Updated 27 Oct 2022

Buy Shopify Shares Your Capital Is At Risk

Key points:

  • Shopify reported Q3 earnings before the open
  • The company's loss per share was less than expected
  • Shopify shares rose premarket

Shopify (NYSE: SHOP) reported its Q3 earnings on Thursday, which saw growth fueled by merchants adopting more solutions to run their businesses.

At the time of writing, Shopify shares are up 7.12%.

The e-commerce firm announced that total revenue increased by 22% to $1.4 billion compared to the prior year. However, it was negatively impacted by the significant strength of the U.S. Dollar. The company's loss per share came in at $0.02, better than the expected loss per share of $0.07.

The group posted a subscription solutions revenue of $376.3 million, up 12%.

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However, the company reported an adjusted operating loss of $45.1 million compared to an adjusted operating income of $140.2 million from the prior year. The company said the drop reflects increases in headcount, including Deliverr and one-time charges from severance-related costs.

“In Q3, we delivered another solid quarter of GMV, revenue, and gross profit dollar growth against the high inflationary environment,” said Amy Shapero, Shopify's CFO. “From an operational perspective, we recalibrated our organizational structure, successfully rolled out a new compensation framework, and began integrating Deliverr into Shopify.”

The stock has plummeted almost 80% this year, although much of its decline can be attributed to the broader market performance.

As of September 30, Shopify had $4.9 billion in cash, cash equivalents and marketable securities. Meanwhile, the company anticipates GMV growth to outperform the broader U.S. retail market in the fourth quarter while it continues to expect an adjusted operating loss for the full year.

Sam is a trader and lead stock market writer at AskTraders. After starting his career in the forex market, Sam now focuses on stocks, specifically consumer staples.