Shopify third-quarter operating income tops expectations

Investing.com - Shopify has posted third-quarter earnings and revenue which topped analysts’ expectations, as the Canadian e-commerce platform said its merchants were "built for" the crucial holiday trading season.

The firm’s merchant base has shown broad resilience to pressure from sweeping U.S. tariffs, which have threatened to weigh on spending among consumers wary of potential levy-driven price increases. The duties have also heightened uncertainty around the trading environment for retailers, casting doubt around the outlook for production, sourcing and input expenses.

Revenue for the three months ended on September 30 rose by 32% to $2.84 billion, compared to Bloomberg consensus estimates of $2.76 billion. This was marginally faster than growth of 31% in the previous quarter.

Gross merchandise value, a tracker of the total value of all items sold on the platform over a given timeframe, also jumped 32% to $92.01 billion, versus projections of $88.87 billion. Operating profit of $343 million was subsequently higher than estimates of $311.4 million.

Total operating expenses stood at $1.05 billion, in line with predictions. Shopify has been pouring investments into building out its artificial intelligence-enhanced services, in a bid to aid merchants with tasks like constructing websites, monitoring sales data and generating marketing images.

"Retail’s busiest season is here, and, as always, Shopify merchants are built for it," said President Harley Finkelstein in a statement.

Against this backdrop, Shopify said it expects to deliver fourth-quarter revenue expansion in the mid-to-high-twenties percentage rate on an annualized basis, while gross profit is tipped to increase at a low-to-mid-twenties percentage pace.

Operating expenses as a percentage of revenue, meanwhile, are seen at 30% to 31%. In the third quarter, the figure was just below 37%, according to Investing.com calculations.

U.S.-listed shares of Shopify, which have surged by more than 60% so far this year, were lower by over 3% in premarket trading on Tuesday.

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