Shopify beats revenue estimates as new tools pull in businesses

SHOPIFY beat Wall Street estimates for quarterly revenue on Thursday (Oct 27) and reported a smaller-than-expected loss, powered by businesses relying on the company’s tools and payment options to scale up their online and office stores.

Best known as a one-stop-shop platform for online businesses, Shopify is slowly moving into offline payments and adding more tools for businesses to connect with their shoppers online and build on the growth of influencers on social media.

The new tools, such as the offline payments devices it provides retailers, could help Shopify cope with a post-pandemic slowdown in e-commerce.

“We’re preparing our merchants for what’s ahead,” Shopify’s President Harley Finkelstein said, adding that the tools it provides – from payments to fulfillment – could help them gear up for the busiest shopping season of the year.

DA Davidson analyst Tom Forte said the results were “a reflection of (the company’s) ability to exploit not only the online e-commerce opportunity, but also the offline retail one.”

For the holiday quarter, Shopify expects gross merchandise volume (GMV), or total sales made through the platform, to “outperform the broader US retail market” as it diversifies into providing tools for online and offline stores.

It also expects operating expenses to sequentially decrease in the holiday quarter.

GMV grew 11 per cent to us$46.2 billion in the third quarter ended Sep 30.

Merchant solutions revenue, which accounts for services it provides business, grew 26 per cent. Revenue rose 22 per cent to us$1.4 billion. Analysts had expected US$1.34 billion, according to Refinitiv IBES data.

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On an adjusted basis, the company lost 2 cents per share, far smaller than the analysts’ estimate of a 7-cent loss. REUTERS