Shopify (TSX: SHOP) this morning released its third quarter financial results for 2021, reporting revenue of $1.1 billion, an improvement of 46% on a year over year basis. Net income for the quarter meanwhile amount to $1.1 billion as well, which was primarily driven by unrealized gains on investments.
Revenue for the quarter was largely made up to Merchant Solutions at $787.5 million, and subscription solutions of $336.2 million, which improved 51% and 37% year over year, respectively. On a quarter over quarter basis, results improvement marginally, with total revenues growing from $1,119.4 million to $1,123.7 million.
The big news the company highlighted here was gross merchandise volume, or GMV, which hit $41.8 billion, an improvement of $10.8 billion on a year over year basis. “It took 15 years for our merchants to get to $200 billion in cumulative GMV, and just 16 months to double that to $400 billion,” commented Harley Finkelstein, president of Shopify.
Gross profit during the quarter hit $608.9 million for the quarter, a 50% improvement from the year ago period, but a decline from $620.9 million in the second quarter.
Operating expenses meanwhile increased dramatically on a quarter over quarter basis, climbing from $481.4 million in Q2 to $613.0 million in Q3, resulting in an operating loss of $4.1 million, compared to an operating income of $129.4 million in the previous quarter. Results here were down on a year over year basis as well, with the year ago period seeing $50.6 million in operating income. Included in the loss was a $30.1 million lease agreement termination following the decision to permanently work remotely.
Despite the negative operating income, the company overall posted a positive net income of $1,148 million for the quarter, largely the function of a $1,340.8 million unrealized gain on investments.
In terms of outlook, the company remained vague. Instead, they stated that they expect revenue to grow rapidly, but slower than in 2020. They also expect Q4 to “contribute the largest share of full-year revenue, and that the revenue spread will be more evenly distributed across the four quarters than it has been historically.”
Shopify last traded at $1,681.67 on the TSX.
Information for this briefing was found via Sedar and Shopify. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.