Shopify (SHOP, Financial) shares price literally jumped as high as 25% today from the open price of $88 to its new high of $112 per share after its fantastic third quarter results release.
Shopify is the leader in commerce platform for merchants of all sizes anywhere and anytime. Its third quarter demonstrating an outstanding GMV of $69.7B with $2.162B of revenue and MRR of $175M all beat the consensus expectation with gross profit of $1.11B and operating income of $283M.
For your information GMV (Gross Merchandise Volume) is the total sales volume on the Shopify platform including shipping, fees and taxes. Higher GMV indicates larger activities with increased platform usage. While MRR (Monthly Recurring Revenue) is the recurring revenue each month that Shopify generates from its subscription service. MRR provides a growth trajectory and predictable revenue streams. Both are essential for Shopify's business predictability.
The President of Shopify, Harley Finkelstein commented; “As the busiest shopping season of the year for our merchants approaches, they trust Shopify to provide the tools, unmatched speed, and reliability to maximize their success.”
Following the outstanding results in Q3, the Q4 outlook is seen as impressive by Jeffries with its Hold rating on the shares. Jeffries said that Shopify can continue to effectively and profitably scale the business. They expect the revenue to accelerate for more than 20% on a year-over-year basis with a similar percentage of gross profit to Q3 2024 with free cash flow margin to be similar to Q4 2023.
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