SHOP Q3 2024 Earnings

Call Details

• Call Title: Shopify Q3 2024 Earnings Call
• Date: November 12, 2024 at 1:30 PM UTC
• Management Team:
  • Carrie Gillard (Director of Investor Relations)
  • Harley Finkelstein (President)
  • Jeff Hoffmeister (Chief Financial Officer)
  • Mikhail Parakin (Chief Technology Officer)

Call Summary

Financial Performance

• Q3 revenue was $2.2B, up 26% year over year.
• Q3 GMV was up 24% year over year, delivering the fifth consecutive quarter of GMV growth above 20%.
• Operating income was $283M, or 13% of revenue, and operating income dollars more than doubled year over year.
• Q3 free cash flow was $421M, or a 19% free cash flow margin, representing a 300 basis point expansion from Q3 of last year.
• Subscription solutions revenue increased 26% year over year and merchant solutions revenue increased 26% year over year.
• Shopify Payments penetration grew to 62% and ShopPay facilitated $17B in GMV, which was up 42% year over year.

Guidance

• Q4 revenues are expected to grow year over year at a mid to high 20s percentage rate.
• Q4 gross profit dollars are expected to grow year over year at a rate similar to Q3.
• Q4 GAAP operating expenses are expected to be 32% to 33% of revenues, representing a 300 to 400 basis point improvement versus Q4 of last year.
• Q4 stock-based compensation is expected to be approximately $120M.
• Q4 free cash flow margin is expected to be similar to Q4 2023 at 21%.
• The company stated it is on track to deliver high teens free cash flow margin for full year 2024 based on the Q4 outlook.