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Earlier last month, Ontario-based Shopify (NYSE: SHOP) announced its quarterly results that outpaced market expectations. Despite the growing economic uncertainty, Shopify continues to invest in product upgrades to help merchants grow their business on its platform. As the recessionary conditions put pressure on the growth of e-commerce, Shopify’s investment in merchant-focused products will help it continue to grow.
 

Shopify’s Financials

Shopify’s third quarter revenues grew 22% to $1.4 billion, ahead of the analyst estimates of $1.33 billion. Net loss was $158.4 million, compared with a net income of $1.1 billion a year ago. Non-GAAP loss per share was $0.02, compared to the market’s forecast of earnings of $0.07 cents per share.

By segment, subscription revenues grew 12% to $376.3 million. Merchant solutions revenue rose 26% to $989,9 million.

Among other metrics, gross merchandise volume (GMV) rose 10.5% to $46.2 billion versus the market growth estimate of 11.6%. Gross Payments Volume (GPV) grew to $25 billion, compared to a market estimate of $43.3 billion.

Shopify did not provide a forecast for the quarter.
 

Shopify’s Growth Focus

With the opening of the economies after the pandemic, e-commerce growth has slowed down. But global economies are now facing the issues of rising prices and a looming recession. Shopify hopes to address these conditions by remaining focused on upselling products to merchants, which will help build strong buyer relationships. To drive this objective, it launched its new first-in-class mobile hardware device, Point-of-Sale (POS) Go. POS Go will help merchants meet consumers wherever they are, however they want to purchase, from curb to counter. Merchants will be able to close sales anywhere and take payments securely and smoothly. Within the first three weeks since launch, POS Go has seen strong adoption among both new and existing merchants.

Shopify believes that the more merchants invest in multichannel sales, the more successful they will become in building brand value among their consumers. It is helping merchants build their connection with their customers through Shopify Audiences. Since its launch this summer, Audience helps Plus merchants find high-intent customers, improve conversion rates, and drive return on ad spend.

Another recent release for Merchants was Shopify Markets Pro, a cross-border solution that has been built on top of Markets. By integrating global use features with the base capabilities of Shopify Markets, such as the Translate and Adapt app, Markets Pro will make it easier for merchants to accelerate their global expansion to over 150 countries without increasing their operational costs, risks, or complexity. Merchants will be able to add languages to their stores, leverage automatic translations, create localized buyer experiences with prepaid duty, and even offer express international shipping.

International retailers outside of North America account for 45% of all merchants in the last quarter. Shopify continues to expand its geographic reach, and recently launched Shopify Payments in Finland, Switzerland, and Portugal. It also launched Shopify Capital in Australia and Shopify Shipping in Italy and France. Shopify point-of-sale with integrated payments was released in Singapore and Finland, bringing the total number of countries where merchants can use its point-of-sale offering to 14.

Meanwhile, Shopify continues to build out its Shopify fulfillment network (SFN). Last quarter, it completed the rollout of Shop Promise to all SFN merchants. Shop Promise is a consumer-facing badge that indicates fast and reliable delivery across Shopify’s online store and other popular direct-to-consumer channels. It has helped accelerate sales as participating merchants increased buyer conversion by up to 9% during the initial rollout. In September, SFN saw over two-thirds of domestic packages delivered within two business days. All new SFN merchants are now automatically qualified to display the Shop Promise badge. Shopify believes that Shop Promise’s impact on merchant value will continue to increase as it evolves and matures.

Its stock is trading at $32.24 with a market capitalization of $40.6 billion. It had touched a 52-week high of $176.29 in November last year and a 52-week low of $23.63 in October.

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