Shopify (SHOP.US) revenue grew more than 25% for six consecutive quarters and GMV grew 24% YoY.

Market IntelTuesday, Nov 12, 2024 8:10 am ET

1min read

Shopify (SHOP.US) third-quarter revenue topped analyst expectations, indicating the Canadian e-commerce company's growth momentum is picking up as consumption continues to shift from offline to online.

Data showed Shopify's revenue grew about 26% to US$2.16 billion, topping the average analyst estimate of US$2.12 billion, marking the sixth consecutive quarter the e-commerce company's revenue growth exceeded 25% (excluding logistics).

The company forecast fourth-quarter revenue growth of 25-29%, compared with analysts' expectations of 23%. The stock rose more than 14% before the market opened on Tuesday. It has gained about 23% this year as of Monday's close.

To fuel growth, Shopify President Harley Finkelstein has been aggressively investing in marketing, even if it hurts margins.

After focusing mainly on small businesses for years, Shopify has been attracting big clients such as Toys "R" Us. The company believes large retailers will help it grow faster than relying on existing small businesses.

Third-quarter gross merchandise volume (GMV) reached US$69.7 billion, up 24% from a year ago, topping the US$67.8 billion expected by Wall Street.

Shopify also provides tools ranging from creating websites to delivering products to help businesses establish and operate online stores. This year, the company has refined its services by integrating artificial intelligence features.

It launched Sidekick, an artificial intelligence assistant, in June to provide sales reports, customer behavior data and help execute tasks such as setting discount codes to a broader range of merchants on its platform.

Finkelstein said the company helped small and medium-sized businesses build online stores, and merchants are expected to continue relying on its tools as the crucial holiday shopping season approaches.

However, Shopify abandoned plans to build a logistics business, which could have helped its development by selling more services to existing customers.

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