Shopify’s stock climbed sharply following a robust third-quarter report, driven by record revenue growth, expanding gross profit margins, and increased customer retention. The momentum reflects broader strength in digital commerce despite macroeconomic headwinds.
- Shopify reported Q3 revenue of $1.24 billion, up 18% YoY.
- Adjusted gross profit margin reached 69.3%, a 120 basis point year-over-year improvement.
- Active merchant accounts grew to 4.2 million, a 14% increase from prior year.
- Merchant retention rate for high-volume sellers is 93%.
- International revenue grew 26% in Europe and 31% in Latin America.
- Annualized GMV now exceeds $8.7 billion, up 20% YoY.
Shopify (SHOP) delivered a standout performance in late November, with its shares rising over 12% in after-hours trading after reporting fiscal Q3 results that exceeded expectations. The company reported total revenue of $1.24 billion, up 18% year-over-year, surpassing analyst forecasts by $45 million. This growth was fueled by a 21% increase in merchant services revenue, which now accounts for 43% of total revenue, signaling stronger platform stickiness and higher-value transactions. The company’s adjusted gross profit margin expanded to 69.3%, a 120 basis point improvement from the prior year, showcasing operational efficiency gains from scaling its fulfillment and logistics network. Shopify also announced that its active merchant accounts reached 4.2 million, up 14% from the same quarter last year, with a 93% retention rate for merchants with over $10,000 in annual sales—a key indicator of long-term platform loyalty. Investors reacted positively to Shopify’s renewed focus on international expansion, particularly in Europe and Latin America, where revenue grew 26% and 31% respectively. Additionally, the company revealed it now processes over $8.7 billion in annualized GMV (gross merchandise volume), up 20% YoY, highlighting sustained adoption of its commerce infrastructure across small and mid-sized enterprises. The strong results have prompted several analysts to upgrade their ratings on SHOP, with two major firms raising price targets to $1,050 and $1,100, citing improved scalability and resilience in e-commerce demand. The stock’s upward momentum is also contributing to broader tech sector optimism, particularly in digital infrastructure and SaaS platforms.