Shopify on Thursday reported third quarter earnings and revenue that topped analyst estimates as its merchant business turned in a strong quarter. SHOP stock rocketed as the e-commerce firm's key financial metrics came in above expectations.
Released before the market open, Shopify earnings for the quarter ending Sept. 30 were 24 cents, swinging to a profit from a 2-cent loss a year earlier. Also, the Canada-based company's revenue rose 25% to $1.7 billion.
"Management commentary during the earnings call and after suggested no signs of consumer spend softness," said Evercore ISI analyst Mark Mahaney in a report.
Analysts expected Shopify to report a profit of 15 cents a share on revenue of $1.67 billion.
SHOP stock popped 22.4% to close at 59.70 on the stock market today. Heading into the Shopify earnings report, shares were up 36% in 2023.
Shopify Stock: Logistics Business Sold
Shopify said Q3 gross merchandise volume from merchant transactions rose 22% to $56.2 billion versus estimates of $54.27 billion. Merchant solutions revenue rose 24% to $1.2 billion, in line with estimates.
The company recently sold its delivery and logistics business to Flexport, easing Wall Street worries over rising capital spending.
Shopify sets up e-commerce websites for small businesses, and partners with others to handle digital payments and shipping.
Meanwhile, Shopify stock had retreated from a 52-week high of 71.53, marked on July 14.
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