Shopify shares drop after Q3 revenue miss
4.4 Markets Shopify shares plunged after Q3 results narrowly missed revenue and GMV expectations, despite 32% growth and improved profitability. The stock dropped up to 19% premarket and closed down 5–8.8%.
Shopify's stock saw a sharp decline after its third-quarter financial results. While the company reported a robust 32% year-over-year revenue increase to $3.74 billion and notable improvements in profitability—including a 22% free cash flow margin and a 75% rise in net income—it narrowly missed consensus revenue estimates. Additionally, gross merchandise volume (GMV) and subscription revenue came in weaker than expected. This modest miss against high market expectations triggered a significant selloff, with shares dropping as much as 19% premarket and closing down between 5% and 8.8%, trading around $142–$148. Over the past month, the stock has lost about 11%, though it remains up over the previous six months. Analysts suggest the market's reaction may be exaggerated, as Shopify's fourth-quarter guidance still projects growth in the low-thirties percentage range. The main disappointment centered on subscription revenue and GMV, key metrics for evaluating the platform's growth outlook, despite otherwise strong financial performance.
