Shopify plunges ~19% on pace for its largest daily drop on record as Q3 GMV and subscription revenue miss
What happened
Shopify reported Q3 results before the bell on Nov. 3 with 32% revenue growth to $3.74 billion and adjusted EPS of $0.49, beating the $0.47 consensus, but investors fixated on two misses: gross merchandise volume of $119.2 billion (up 29% YoY) fell short of the ~$120.1 billion expected, and Subscription Solutions revenue of $836 million missed the $850.2 million estimate. Merchant Solutions revenue rose 35% to $2.91 billion, free cash flow surged 61% to $816 million with a 22% margin (up from 18%), and operating income rose 66% to $568 million. The stock sank ~19% to ~$127 in premarket trading, on pace for its largest daily percentage decrease on record per Dow Jones Market Data. Management guided Q4 revenue to grow at a low-30% rate (broadly in line with the ~$4.76B consensus), gross profit to grow at a high-20% rate, and opex at 29-30% of revenue.
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Start your free 14-day trialWho’s affected
- Shopify (SHOP): plunged ~19% to ~$127 in premarket/early trading, breaking below a 151.29 cup-with-handle buy point and its 50-day moving average; direct hit to a ~$160B e-commerce platform name.
- Software/e-commerce peers: read-through risk for other high-multiple commerce and SMB software names priced on GMV re-acceleration.
- Consumer discretionary: the GMV slowdown from 31% to 29% growth flags softer merchant/consumer transaction momentum heading into the holiday quarter.