Shopify (SHOP) Q3 2022 earnings

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Shopify is about 10% of total U.S. e-commerce capital

Shares of Shopify jumped 18% after the e-commerce company reported earnings that beat Wall Street’s revenue estimates and a narrower-than-expected loss for the third quarter.

  • Loss per share: loss of $0.02, adjusted, vs. loss of 0.07 expected by analysts according to Refinitiv.
  • Revenue: $1.37 billion vs $1.33 billion expected, according to Refinitiv.

Revenue was up 22% from the same quarter last year, but Shopify said the strong U.S. dollar weighed on its sales.

Last quarter, Shopify said 2022 will be “more of a transition year, in which ecommerce has largely reset to the pre-Covid trend line and is now pressured by persistent high inflation.” The company saw booming growth during the pandemic, when its stock hit new highs, as retailers sought out its services to sell products online.

Shopify forecasted that its operating expense growth rate will “sequentially decelerate” in the current fourth quarter relative to the third quarter.

Gross merchandise volume, or the total value of merchandise sold on the platform, rose 11% to $46.2 billion in the third quarter. That’s an increase of $4.4 billion over the third quarter of 2021.

“Our merchant solutions revenue as a percentage of GMV, or Merchant Solutions attach rate, climbed to 2.14%, the highest level in Shopify’s history,” said Harley Finkelstein, Shopify’s President.

This was the first quarter to include the results from the company’s acquisition of Deliverr, the e-commerce shipping company.

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

Shopify shares are down nearly 75% year-to-date. In July, the company announced it would lay off about 10% of its staff.

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