What to Expect From Shopify's (SHOP) Q3 Earnings

Shopify (SHOP) reports third-quarter results before the market opens on Tuesday, 3 November, with a call at 8:30 a.m. ET. The company, whose software runs online stores for millions of businesses, has a hard act to follow.

Last quarter revenue rose 34% from a year earlier to $3.58 billion, well above the $3.43 billion analysts expected, according to Zacks data cited by the AP. Adjusted EPS of 42 cents beat the 39-cent forecast. GMV, the value of everything sold through Shopify’s stores, rose 32% to $115.6 billion. “This was a monster quarter,” President Harley Finkelstein said in the results release. The stock soared 17.0% on 5 August.

What analysts expect

Analysts expect revenue of $3.74 billion, up 31% from $2.84 billion a year ago, and adjusted EPS of 45 cents, up from 34 cents, according to Zacks via Yahoo Finance. TradingView’s consensus, which doesn’t name its provider, is a little lower on sales, at $3.70 billion, and 46 cents a share, measured against the same 34 cents a year ago.

Both fit Shopify’s own forecast, which calls for revenue growth “at a low-thirties percentage rate.” The company also guided gross profit to grow at a “mid-to-high twenties” rate and a free cash flow margin “in the high-teens to low-twenties.”

What to watch

• GMV growth. It rose 32% last quarter, or 30% excluding currency moves. It’s the clearest read on how much Shopify’s merchants are selling going into the holidays.
• Gross profit against revenue. Shopify’s guidance has gross profit growing more slowly than sales, so each dollar of revenue earns a little less. Investors will look for that gap to narrow, not widen.
• Shopping through AI chatbots. Shopify has partnerships with OpenAI, Google parent Alphabet (GOOGL), Meta Platforms (META) and Microsoft (MSFT), Zacks noted. On 28 October it launched shop.dev, which gives any AI agent or app one connection to its catalog of more than a billion products and to its checkout, the same ones behind ChatGPT, Copilot and Meta’s Muse. Any sign that these sales are adding up will count.

How the stock has done

Shopify slipped 0.8% on Thursday to $166.89. The stock is up 3.7% this year and 12.5% over the past month, and it sits 6.9% below its 52-week closing high of $179.22 from 12 October. It has risen 35.4% since the close before its last report, by our count, so the bar for this one is higher.