Shopify Technology Inc. shares were surging in Thursday trading after the e-commerce company notched a smaller loss than anticipated and forecast that its operating-expense growth rate will fall sequentially in the current quarter.
For the third quarter, Shopify posted a comprehensive loss of $187.3 million, or 12 cents a share, whereas it notched a comprehensive income of $1.14 billion, or 90 cents a share, in the year-ago quarter. After adjustments, Shopify SHOP, +17.86% SHOP, +18.02% lost 2 cents a share, while it had posted 8 cents in earnings a year before. Analysts tracked by FactSet were expecting a 7-cent loss on the basis of adjusted earnings per share.
Despite the loss, Chief Executive Harley Finkelstein offered some reassuring words about the future.
“We plan on becoming profitable again,” he said on the earnings call, according to a transcript provided by Sentieo/AlphaSense. “We said this year as an investment year, but this is a company that thinks deeply about managing expenses, growing revenue… Ultimately, this is a company that likes to be profitable, and we will get back there.”
The stock was up more than 18% in Thursday afternoon activity.
Revenue rose to $1.37 billion from $1.12 billion and topped the FactSet consensus, which was $1.34 billion. Gross merchandise volume increased 11% to $46.2 billion, while analysts tracked by FactSet were anticipating $46.9 billion.
For the full year, Shopify expects that revenue and gross merchandise volume will be “more evenly distributed across the four quarters, similar to 2021,” according to its release. The company also anticipates that growth in gross-profit dollars “will meaningfully trail revenue growth” given a larger mix of merchant-solutions revenue as well as “the dilutive impact of Deliverr,” a fulfillment-technology acquisition.
Additionally, Shopify noted in its outlook that it expects operating-expense growth for the fourth quarter to “sequentially decelerate” on a year-over-year basis relative to the third quarter.
Shopify has had a rough year, with shares down 75% as the company adjusts to e-commerce trends that have failed to match the company’s more upbeat predictions from earlier in the pandemic. The company announced in July that it would lay off about 10% of its staff.
Investors will get another read on how the e-commerce landscape is faring as Amazon.com Inc. AMZN, -4.56% is set to deliver results after Thursday’s closing bell.
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