E-commerce Platform Shopify' Soars On Solid Q3, Gross Merchandise Volume Hits $56.2B

Shopify Inc SHOP reported third-quarter revenue growth of 25% year-over-year to $1.71 billion, which beat the consensus estimate of $1.67 billion. 

The e-commerce platform company reported adjusted EPS of $0.24, which beat analyst estimates of $0.14.

Gross merchandise volume increased 22% year-over-year to $56.2 billion. Gross payments volume came in at $32.8 billion. Merchant solutions revenue increased 24% year-over-year to $1.2 billion. 

Free cash flow totaled $276 million in the second quarter compared to negative free cash flow of $148 million in the same quarter last year. 

Shopify expects FY23 revenue growth of a mid-twenties percentage rate on a Y/Y basis (prior expectation of low-twenties percentage rate) versus $6.95 billion consensus, driven by Q4 revenue growth in the high-teens Y/Y compared to a consensus of $2.08 billion.

The company expects the Q4 gross margin to be higher by 300 - 400 bps than the Q4 FY22 margin of 46.0%, primarily due to the absence of the logistics business.

It projects a free cash flow margin in the high teens and expects capital expenditures of approximately $45 million for FY23. 

The stock has gained 37% YTD.

SHOP Price Action: Shopify shares traded higher by 17.40% at $57.27 premarket on the last check Thursday.