Shopify posts surprise third-quarter profit

Canada’s Shopify Inc reported a surprise quarterly profit on Thursday as more subscribers and merchants signed up to use its platform, sending its U.S. listed shares up 4 percent before the bell.

The Ottawa-based company, whose software enables merchants to sell everything from infant formula to cosmetics online, said total subscription revenue in the quarter rose 46 percent to $121 million.

Expenses jumped 61 percent to $181.1 million as Shopify spent heavily to boost its market share in a competitive e-commerce industry, even opening its first bric-and-mortar store to sign up more entrepreneurs.

The company said gross merchandising volume (GMV), or the total sales by all vendors using Shopify’s software, rose 55 percent in the third quarter compared with the prior year. However, it is lower than the 56 percent jump in the second quarter.

The company, which helps e-commerce companies build their online stores, said net loss widened to $23.2 million, or 22 cents per share, in the third quarter ended Sept. 30, from $9.4 million, or 9 cents per share, a year earlier.

Excluding items, the company posted a profit of 4 cents per share, compared with a loss of 2 cents per share that analysts were expecting, according to Refinitiv data.
Revenue rose to $270.1 million from $171.5 million.