Shares of e-commerce giant Shopify plunged 9% during early trading on Tuesday following the release of its third-quarter financial results. The market reaction was driven by misses in key metrics, specifically subscription gross profit and gross merchandise volume, even though the company managed to exceed expectations for adjusted earnings per share.
In the report released before the bell, Shopify posted adjusted earnings of 49 cents per share, surpassing LSEG estimates of 46 cents. However, overall quarterly revenue came in at $3.74 billion, falling just short of the projected $3.75 billion. Looking ahead, the company forecasted year-over-year revenue growth in the low thirties for the fourth quarter, which is slightly higher than the 32.1% estimated by LSEG.
Gross merchandise volume (GMV) for the quarter reached $119.15 billion, missing StreetAccount estimates of $120.03 billion. Additionally, subscription gross profit came in at $661 million, falling nearly $20 million short of the $680.3 million analysts predicted. While merchant gross profit exceeded expectations, subscription revenue of $836 million also missed FactSet estimates of $848.1 million, though merchant revenue performed better than anticipated.
Sources: CNBC Markets.