‘Solid quarterly beat’: Shopify revenue jumps by 32%

Shopify, which makes tools for businesses to build and manage their online stores, posted a 32 32 per cent jump in revenue in the third quarter. Photo by Gabby Jones/Bloomberg

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E-commerce giant Shopify Inc. continued its growth streak in the third quarter, posting double-digit increases in revenue and gross merchandise value in results released Tuesday.

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Ottawa-headquartered Shopify, which makes tools for businesses to build and manage their online stores, recorded US$2.84 billion in revenue in the quarter, an increase of 32 per cent from the year before. The company’s gross merchandise volume (GMV), which tracks the total value of goods sold through its platform, jumped 32 per cent to US$92.01 billion.

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“Q3 was a standout quarter with revenue growth and free cash-flow margins both surpassing our robust Q2 performance,” said Jeff Hoffmeister, Shopify’s chief financial officer in a statement Tuesday.

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Shopify posted a “solid quarterly beat,” RBC Dominion Securities Inc. analyst Paul Treiber wrote in a note to investors.

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The e-commerce platform this year has navigated tariff uncertainties and pulled in more merchants and more sales, boosted by new artificial intelligence–powered tools for sellers.

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“Shopify continues to benefit from healthy growth in new merchants (and) stores, with areas of strength in North America,” said Baird analyst Colin Sebastian in an October note.

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Merchant growth in the EU is also “gaining traction” and is expected to continue, said Shopify president Harley Finkelstein on Tuesday’s investors call.

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Shopify’s merchant solutions revenue grew to US$2.15 billion from US$1.55 billion, while subscription solutions jumped to US$699 million.

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The company is forecasting that revenue will grow at a “mid- to high-twenties percentage rate” and gross profit will increase at a “low- to mid-twenties percentage rate” in the fourth-quarter.

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Shopify has continued to expand its AI tools for sellers, which include features that help merchants build their online shops, write product descriptions and generate images; it has also increasingly integrated the technology into its own operations. Analysts say that Shopify’s AI play should translate into efficiencies and cost savings. The company is “establishing itself as a gatekeeper for (AI)-agent-based shopping,” Baird analyst Sebastian said last month.

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In September, Shopify announced a partnership with OpenAI Inc. on Instant Checkout, a new online shopping tool that will let ChatGPT users search for, select and buy products directly via the AI chatbot. ChatGPT said it had 700 million active weekly users as of August.

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The tie-up will allow more than one million of Shopify’s merchants to sell their goods through the chatbot. Under the terms of the deal, Shopify will continue to manage checkout payments and give OpenAI a “small fee” for purchases made via ChatGPT.

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While questions remain on the Shopify–OpenAI revenue sharing arrangement, Shopify should “ultimately… stand to benefit from the expanding agentic e-commerce ecosystem,” Samad Samana, equity analyst at Jefferies Financial Group Inc. wrote in a Monday note.