Shopify stock falls as its quarterly revenue misses analysts’ estimates — SkimNews
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- Shopify reported third-quarter revenue of US$3.742 billion, narrowly below the US$3.744 billion S&P Global Market Intelligence consensus, although revenue grew 31.5% year over year.
- Shopify posted US$584 million in profit, or US$0.49 per share, slightly ahead of analyst estimates even after US$122 million in on-paper losses from lower equity-investment valuations; president Harley Finkelstein cited durable growth and expanded free cash flow margins.
- Shopify shares opened 12.8% lower at US$136.21 on Tuesday and traded at US$143.92 at 2:37 p.m. ET, recovering from the opening drop.
- Shopify reported US$119.1 billion in third-quarter merchant sales, with gross merchandise volume up 29.5% year over year; European clients’ business grew particularly fast, while the U.S. remained its biggest market. Scotiabank’s Kevin Krishnaratne cited greater payments-processing use and free cash flow as positive signals.
- Shopify built a shared merchant catalog with current inventory and pricing for AI shopping agents including Meta’s Muse and Anthropic’s Claude Duet and Instinct; AI traffic more than doubled and automated orders more than tripled year over year, while Amazon blocked AI agents over privacy and security concerns.
- Sidekick daily use by merchants rose nearly fourfold year over year, but CFO Jeff Hoffmeister said its development and increased adoption lowered Shopify’s subscription-sales margins.
- Shopify projected fourth-quarter revenue growth at a low-thirties percentage rate while holding free cash flow margins steady, a forecast slightly above analysts’ consensus.
Why it matters: Shopify’s revenue landed just US$2 million below consensus, yet shares opened 12.8% lower, a stark reaction to a small shortfall. Merchants gained AI-assisted reach, while Shopify reported lower subscription-sales margins as daily Sidekick use rose nearly fourfold from a year earlier.
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