Earnings breakdown: Shopify exceeded expectations for the third quarter, reporting higher-than-expected revenues and a smaller-than-expected loss.
- Total revenues increased 22% year over year to 1.4 billion.
- Shopify’s subscription solutions revenues grew 12% to $376.3 million, partially due to growth in monthly recurring revenue, which climbed 8% year over year to $107.0 million.
- Gross merchandise volume (GMV) increased 11% to $46.2 billion and gross payments volume grew to $25.0 billion, representing 54% of GMV in the third quarter.
- The company’s adjusted net loss totaled $30.0 million.
Making moves: The ecommerce company made several additions to its offerings to strengthen its buyer relationships and simplify logistics.
Looking up: Shopify’s third-quarter success comes as welcome news after a disastrous second quarter, which forced the company to cut 10% of its workforce as it struggled to course correct.
- The company made huge investments during the pandemic, assuming that ecommerce’s staggering growth would continue.
- But CEO Tobi Lütke said that his big bet on ecommerce “didn’t pay off” and that the company needed to adjust to grow into something “more focused, more driven, and more singular in mission.”
The bottom line: Despite the fact that ecommerce gains have slowed, Shopify isn’t completely down for the count. Plus, the economy has begun to grow again, a good sign for the retail industry as a whole.
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