Benzinga Pro data showed Shopify shares falling 15.09% to $132.63 in Tuesday's premarket trading after mixed third-quarter results. Shopify reported adjusted earnings of 49 cents per share, exceeding the analyst estimate of 46 cents. Shopify's revenue increased 32% year over year to $3,742 million, below the $3,747 million consensus. Investors also considered gross margin pressure and Shopify's fourth-quarter forecast.
Shopify's gross merchandise volume, which measures the value of goods sold through the platform, climbed 29% to $119.15 billion from $92.01 billion a year earlier. Gross merchandise volume grew 30% when measured in constant currency. Merchant solutions generated $2.91 billion in revenue, an increase of 35%. Subscription solutions revenue reached $836 million, an increase of 20%. Monthly recurring revenue advanced 19% to $230 million from $193 million.
Shopify's gross profit rose 28% to $1.78 billion. However, gross margin declined to 47.6% from 48.9% a year earlier. Operating income increased 66% to $568 million from $343 million. Net income reached $462 million, up from $264 million. Adjusted net income, which excludes equity investment effects, climbed to $584 million from $367 million. Operating cash flow totaled $818 million. Free cash flow amounted to $816 million. Free cash flow margin expanded by 400 basis points to 22%.
Shopify forecast fourth-quarter revenue between $4,810 million and $4,884 million, exceeding the analyst estimate of $4,758 million. The fourth-quarter forecast prompted concerns that growth would slow during the important holiday shopping season. Shopify expects revenue growth in the low-30% range, compared with about 34% earlier in 2026. Shopify projects gross profit growth in the high-20% range. The forecast, gross margin pressure and the stock's elevated valuation may have increased investor concerns about Shopify's ability to maintain growth.
Shopify projects operating expenses at 29% to 30% of revenue. Shopify expects stock-based compensation to total $155 million. Shopify anticipates a free cash flow margin consistent with the fourth quarter of 2025.
President Harley Finkelstein emphasized the expansion of Shopify's commerce platform and work to integrate shopping across AI-powered channels. Chief Financial Officer Jeff Hoffmeister credited multiple sources of growth and a widening addressable market for Shopify's performance.
Shopify Stock Drops 15% Pre-Market Amid Mixed Q3 Results and Growth Concerns
BenzingaShare
Summary
Shopify (NASDAQ:SHOP) stock dropped 15.09% to $132.63 in premarket trading as the fear and greed index turned bearish. The company posted adjusted earnings of 49 cents per share, beating estimates, but revenue of $3.742 billion missed the $3.747 billion forecast. Gross margins declined, and the fourth-quarter outlook, though above expectations, raised concerns about holiday season growth. With market jitters rising, altcoins to watch may see increased attention as investors seek alternative plays.
Source:Show original
Disclaimer: The information on this page may have been obtained from third parties and does not necessarily reflect the views or opinions of KuCoin. This content is provided for general informational purposes only, without any representation or warranty of any kind, nor shall it be construed as financial or investment advice. KuCoin shall not be liable for any errors or omissions, or for any outcomes resulting from the use of this information.
Investments in digital assets can be risky. Please carefully evaluate the risks of a product and your risk tolerance based on your own financial circumstances. For more information, please refer to our Terms of Use and Risk Disclosure.