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Shopify earnings fall short amid ‘more normalized spending environment’


Shopify Inc. fell short of earnings expectations in its most recent quarter as its chief financial officer called out a “more normalized spending environment.”

The company, which had been a big winner in the early days of the pandemic as more consumers flocked to online shopping, posted third-quarter net income of $1.15 billion, or $9.00 a share, up from $191 million, or $1.54 a share, in the year-prior quarter. Net income in the most recent period reflected a $1.34 billion unrealized gain on equity investments.

On an adjusted basis, Shopify

earned 81 cents a share, down from $1.13 a share a year earlier and below the FactSet consensus, which called for $1.23 a share.

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Shopify’s revenue for the quarter increased to $1.12 billion from $767 million, while analysts had been looking for $1.15 billion. The company saw $336.2 million in revenue from its subscription solutions and $787.5 million from its merchant solutions.

Shares of Shopify were off 4.0% in premarket trading Thursday.

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The company’s gross merchandise volume (GMV), or the dollar value of orders facilitated through the Shopify platform, rose 35% to $41.8 billion. The company saw growing contributions from offline sales.

“As the share of GMV from offline expanded within our total GMV, it is clear that entrepreneurs are embracing a future in which retail happens everywhere,” President Harley Finkelstein said in a release.

Gross payment volume (GPV), or the amount of GMV processed through the Shopify Payments offering, reached $20.5 billion. That amounted to 49% of the GMV that Shopify processed in the quarter.

Shopify continues to anticipate that its 2021 full-year revenue growth rate will be slower than what was seen in 2020 due to “more normalized” expansion in e-commerce spending.

While the company continues to expect that the fourth quarter will be its strongest contributor to full-year revenue, it still forecasts “that the revenue spread will be more evenly distributed across the four quarters than it has been historically,” according to Shopify’s press release.

The company also acknowledged that offline and online spending could be impacted by supply constraints as well as increased materials, labor, and shipping costs. In addition, “spending on Black Friday Cyber Monday may be pulled forward” into earlier periods, the company noted in its press release, though Shopify still expects its “GMV in the fourth quarter to continue to grow substantially faster than the commerce market.”

Shares of Shopify have declined 12.5% over the past three months, as the S&P 500

has risen 3.4%.

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