Shopify grows revenue 32 per cent as commerce volume expands
Shopify increased third-quarter revenue by 32 per cent and facilitated 119 billion dollars in commerce through its platform. Its free cash flow margin reached 22 per cent. Management projected further revenue and gross profit growth in the fourth quarter. The platform’s commerce volume measures facilitated orders separately from Shopify’s own revenue. The volume is calculated after refunds.
Economics & Markets··Midday
Revenue expands alongside merchant commerce
The Canada-based commerce infrastructure provider Shopify, increased its revenue in the third quarter.[1], [2]
Revenue growth was 32 per cent, both as reported and after removing currency movements. The quarter ended on 30 September. President Harley Finkelstein said the platform facilitated 119 billion dollars in gross merchandise volume during the period. This measure counts orders facilitated through Shopify, including certain applications and channels that share revenue with the company.[1]
Cash margin reaches 22 per cent
Free cash flow represented 22 per cent of revenue. Shopify calculates that cash measure by subtracting capital spending from operating cash flow. It is an adjusted measure outside generally accepted accounting principles. Gross merchandise volume is calculated net of refunds but includes shipping, handling, duties and value-added taxes. It measures the commerce passing through the platform separately from the revenue retained by Shopify.[1]
Management projects further fourth-quarter growth
For the fourth quarter, management projected revenue growth in the low thirties and gross profit growth in the high twenties. It put operating expenses at 29–30 per cent of revenue and stock compensation at 155 million dollars. Shopify expected the free cash flow margin to remain consistent with the same quarter last year. The company identified consumer spending, economic conditions and trade measures among risks to actual results.[1]
