Shopify Inc (TSX:SH., NYSE:SHOP) stock soared on Thursday morning after the eCommerce company posted 3Q revenue that beat Wall Street expectations and a smaller-than-expected loss as merchants have turned to the omnichannel solutions provider to support their online businesses.
The Ottawa, Canada-based company’s shares were up about 17.8% at about C$46.50 in Toronto, while in New York, its shares had jumped 18.3% to about US$34.40.
For the quarter ended September 30, 2022, Shopify reported a 22% increase year-over-year in its total revenue from US$1.1 billion to US$1.4 billion, above the consensus analyst expectation of US$1.3 billion.
READ: Shopify reports 2Q loss, forecasts further losses for rest of financial year
The company posted an adjusted net loss of US$30 million or US$0.02 loss per basic and diluted share compared to a net income of US$102.8 million or US$0.08 earnings per basic and diluted share in the year-ago quarter. However, this adjusted loss was smaller than that expected by analysts of US$0.07 per share.
Gross merchandise volume (GMV) for the quarter increased 11% to $46.2 billion for the quarter, compared to $41.8 billion in 3Q 2021.
Further, the company noted that its Merchant Solutions revenue as a percentage of its GMV climbed to 2.14%, the highest level in Shopify’s history.
“During 3Q, merchants continued to recognize Shopify's exceptional value and increased their adoption of our essential tools and innovative solutions,” commented Shopify president Harley Finkelstein.
Updated 2022 outlook
On its financial performance for the rest of 2022, the company forecast that its GMV growth will continue to outperform the broader US retail market in the fourth quarter aided by its omnichannel capabilities.
It also expects that Merchant Solutions revenue growth year-over-year will be more than double that of Subscription Solutions revenue growth for the full year 2022.
Shopify noted because of the larger mix of Merchant Solutions revenue contributing to its overall revenue and the dilutive impact of its new compensation system Deliverr, its gross profit dollar growth will meaningfully trail revenue growth.
The company also anticipates posting an adjusted operating loss for the full year.
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