Shopify beat analysts’ estimates for quarterly revenue and profit on Wednesday, as more brick-and-mortar businesses listed on the Canadian e-commerce firm’s platform to cash in on the increase in number of people shopping online.
U.S.-listed shares of Shopify, which in May briefly became Canada’s most valuable company, rose about 7% before the bell.
Online retailers have emerged as winners from coronavirus lockdowns and retain their appeal as people prefer to shop from their homes instead of making a trip to brick-and-mortar stores due to a resurgence in infections.
In June, Walmart Inc, the world’s biggest brick-and-mortar retailer, partnered with Shopify to ramp up its efforts to capture a bigger slice of that surge.
Shopify generates revenue by selling subscription to merchants looking to join its e-commerce platform and by charging them payment processing and transaction fees, as well as for logistics services.
New stores created on the platform jumped 71% in the second quarter from the first quarter.
Shopify’s gross merchandise volume (GMV), a metric used to measure transaction volumes, more than doubled to $30.1 billion in the quarter, largely helped by food, beverages, and tobacco categories. Analysts on average had estimated $18.45 billion.
Revenue nearly doubled to $714.3 million from a year earlier, beating the average analyst estimate of $513.83 million, according to Refinitiv IBES data.
Shopify posted a net income of $36.0 million, or 29 cents per share, compared with a net loss of $28.7 million, or 26 cents per share.
Excluding items, it reported earnings of $1.05 per share, while analysts had expected a profit of 1 cent.
