Shopify beats Wall Street estimates in Q3 as COVID-19 boosts electronic commerce.
The e-commerce company reports that its revenue increased by almost 100% in the third quarter.
The Canadian multinational company refrains from giving its future forecast on Thursday.
Shopify Inc. (NYSE: SHOP) released its third quarter financial results on Thursday, which overshadowed Wall Street estimates due to the coronavirus-driven e-commerce boom.
The company’s shares rose nearly 3% in pre-trade trading on Thursday, but fell more than 6% when the market opened. Shopify is now trading at £762 per share, after recovering from its previous year low of £303 per share in March.
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Shopify’s financial results for Q3 compared to analysts’ estimates
Shopify said its net profit for the third quarter was £148.08 million, or £1.19 per share. In the same quarter last year, the company reported a massive net loss of £56.41 billion or 49.59 pence per share.
On an adjusted basis, the e-commerce company earned 88 pence per share in the third quarter compared to 22.47 pence per share in the same period last year. According to FactSet, experts for Shopify had forecast much lower adjusted earnings per share of 40.29 pence in the final quarter.
In terms of revenue, the Canadian multinational saw almost 100% growth to £594.66 million on an annualised basis compared to £302.68 million last year. In comparison, analysts had expected lower revenues of £513.84 million for the 3rd quarter. In the previous quarter (Q2), Shopify had reported a 97% year-on-year increase in revenue.
Shopify also highlighted in its earnings report on Thursday that it had revenue of £404.58 million from merchant solutions and £190.08 million from subscriptions. The Ottawa-based company reported that gross merchandise sales rose 109% year-on-year to £23.94 billion.
CEO Harley Finkelstein’s comments on Thursday
CEO Harley Finkelstein commented on the results report on Wednesday and said
“The accelerated transition to digital commerce triggered by COVID-19 continues as more and more consumers shop online and entrepreneurs meet the demand.
Shopify did not provide its forecast for the fourth quarter of the fiscal year. In a separate announcement from the United States, Comcast said that its revenues from all three business segments in the third quarter exceeded analysts’ estimates.
Shopify’s performance in the stock market was largely positive last year with an annual profit of 200%. At the time of writing, Shopify has a market capitalization of £93.27 billion.