Shopify Inc (TSX:SH., NYSE:SHOP) swung to a profit in its third quarter thanks to a surge in subscription solutions and merchant solutions revenue.
The Canadian e-commerce platform posted a net income of $718 million compared to a loss of $159 million during the same period last year, or earnings per diluted share of $0.55 cents compared to a loss of $0.12 cents per share in the prior year's third quarter.
Revenue for the quarter reached $1.71 billion, reflecting a 25% increase from $1.37 billion in the same quarter a year earlier.
On an adjusted basis, Shopify reported earnings of $0.24 per diluted share, a significant improvement from an adjusted loss of $0.02 per diluted share in the previous year.
Analysts had projected an adjusted profit of $0.14 per share and revenue of $1.67 billion.
Shopify’s strong performance followed cost-cutting measures and a strategic partnership with Amazon for its fulfillment network.
In August, Shopify partnered with Amazon to enable its platform's merchants to use Amazon's "Buy with Prime" service for package delivery.
The company’s gross merchandise volume, the total value of merchant sales on its platform, reached $56.2 billion, surpassing Wall Street expectations.
Shopify said it anticipates maintaining a "mid-twenties percentage rate" revenue growth in 2023, with strong sales growth projected in the fourth quarter.
Shares of Shopify surged over 19% in early Thursday trading.
The company has been focused on revitalizing its business after facing challenges in the later stages of the COVID-19 pandemic, including job cuts and the sale of its logistics unit to Flexport Inc.