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Shopify (SHOP) to Report Q3 Earnings: What's in the Offing?
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Shopify Inc. (SHOP - Free Report) is scheduled to report third-quarter 2019 results on Oct 29.
Notably, the company has surpassed the Zacks Consensus Estimate for earnings in the trailing four quarters, with an average positive surprise of 217.62%.
Q3 Estimates
For third-quarter 2019, Shopify projects revenues in the range of $377 million to $382 million. The Zacks Consensus Estimate for revenues is currently pegged at $384.05 million, suggesting growth of 42.2% from the year-ago quarter.
Further, the Zacks Consensus Estimate for earnings is pegged at 11 cents, unchanged over the past 30 days. The figure indicates an improvement of 175% from year-ago earnings of 4 cents.
Q2 Performance at a Glance
Shopify had delivered second-quarter 2019 adjusted earnings of 14 cents per share, which beat the Zacks Consensus Estimate by a whopping 366.7%. Moreover, the figure soared 600% from year-ago earnings of 2 cents.
Total revenues surged 48% from the year-ago quarter to $362 million, outpacing the Zacks Consensus Estimate by 3.25%.
Let’s see how things are shaping up prior to this announcement.
Factors Likely to Influence Q3 Results
Robust adoption of Shopify’s easy-to-use upgrades and new merchant-friendly applications is anticipated to reflect in the top line.
We expect the momentum witnessed by Shopify Payments, Shopify Ping, Shopify Capital and Shopify Shipping to have continued in the to-be-reported quarter. Moreover, increasing initiatives to strengthen presence in the international market is likely to have contributed to the third-quarter performance.
An expanding merchant base is likely to have bolstered Gross Merchandise Volume (GMV) and Monthly Recurring Revenue (MRR) metrics and consequently revenues from Merchant Solutions and Subscription Solutions, respectively.
Notably, the Zacks Consensus Estimate for revenues from Merchant Solutions currently stands at $222 million, indicating growth of 48.5% from the year-ago quarter.
Moreover, the consensus mark for revenues from Subscription Solutions currently stands at $162 million, suggesting an improvement of 34.4% from the year-ago reported figure.
In the quarter under review, the company launched first chat function, Shopify Chat, to enable merchants to have conversation with customers in real-time. Notably, Shopify Chat can be enabled quickly with Shopify Ping. Moreover, Shopify had enabled merchants to connect with customers through Apple Business Chat via Shopify Ping, in the recent past.
Incremental adoption of the new service is expected to have aided merchants in expanding business with engaging experience, which is anticipated to get reflected in the third-quarter top line.
The company also teamed up with Beautycon Festival LA 2019, which is likely to have bolstered merchants, looking to market wellness and beauty brands.
The company also enhanced online platform with new points of presence (PoPs) to better address the routing and accelerate accessibility of connections to Shopify stores. This is likely to have enhanced customer engagement, consequently merchant revenues. This is expected to have benefited the top line.
Additionally, Shopify is expected to have benefited from incremental adoption of “all-new Shopify Plus,” Dynamic Checkout, Centralized Marketing Dashboard, Fraud Protect and Shopify AR solutions, in the to-be-reported quarter.
Further, Shopify has been working on extending language capabilities beyond English. The focus on local languages is expected to have helped the company in bolstering international presence.
Moreover, adoption of latest “multi-currency feature” aimed at enabling merchants to sell products in several currencies and receive payments in their respective local currency, is expected to have bolstered “all-new Shopify Plus” revenues.
However, stiff competition from Amazon (AMZN - Free Report) , eBay, Square (SQ - Free Report) , Facebook’s Instagram Checkout, among others, are likely to have affected Shopify’s third-quarter performance. In a bid to maintain competitive position in the e-commerce market, Shopify is increasing investments on product development, fulfillment network, infrastructure and platform. These are anticipated to have limited margin expansion in the third quarter.
Noteworthy Developments in Q3
In the third-quarter, Shopify announced the acquisition of 6 River Systems, provider of warehouse technology, for roughly $450 million. The deal is anticipated to boost growth of the company’s fulfillment network.
The company also rolled out new features on its platform with an aim to aid vendors sell hemp-derived and hemp Cannabidiol (CBD) products across brick-and-mortar or online retail locations. This is expected to aid Shopify expand merchant base looking to sell CBD products amid growing safety concerns.
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Image: Bigstock
Shopify (SHOP) to Report Q3 Earnings: What's in the Offing?
Shopify Inc. (SHOP - Free Report) is scheduled to report third-quarter 2019 results on Oct 29.
Notably, the company has surpassed the Zacks Consensus Estimate for earnings in the trailing four quarters, with an average positive surprise of 217.62%.
Q3 Estimates
For third-quarter 2019, Shopify projects revenues in the range of $377 million to $382 million. The Zacks Consensus Estimate for revenues is currently pegged at $384.05 million, suggesting growth of 42.2% from the year-ago quarter.
Further, the Zacks Consensus Estimate for earnings is pegged at 11 cents, unchanged over the past 30 days. The figure indicates an improvement of 175% from year-ago earnings of 4 cents.
Q2 Performance at a Glance
Shopify had delivered second-quarter 2019 adjusted earnings of 14 cents per share, which beat the Zacks Consensus Estimate by a whopping 366.7%. Moreover, the figure soared 600% from year-ago earnings of 2 cents.
Total revenues surged 48% from the year-ago quarter to $362 million, outpacing the Zacks Consensus Estimate by 3.25%.
Let’s see how things are shaping up prior to this announcement.
Factors Likely to Influence Q3 Results
Robust adoption of Shopify’s easy-to-use upgrades and new merchant-friendly applications is anticipated to reflect in the top line.
We expect the momentum witnessed by Shopify Payments, Shopify Ping, Shopify Capital and Shopify Shipping to have continued in the to-be-reported quarter. Moreover, increasing initiatives to strengthen presence in the international market is likely to have contributed to the third-quarter performance.
An expanding merchant base is likely to have bolstered Gross Merchandise Volume (GMV) and Monthly Recurring Revenue (MRR) metrics and consequently revenues from Merchant Solutions and Subscription Solutions, respectively.
Shopify Inc. Price and EPS Surprise
Shopify Inc. price-eps-surprise | Shopify Inc. Quote
Notably, the Zacks Consensus Estimate for revenues from Merchant Solutions currently stands at $222 million, indicating growth of 48.5% from the year-ago quarter.
Moreover, the consensus mark for revenues from Subscription Solutions currently stands at $162 million, suggesting an improvement of 34.4% from the year-ago reported figure.
In the quarter under review, the company launched first chat function, Shopify Chat, to enable merchants to have conversation with customers in real-time. Notably, Shopify Chat can be enabled quickly with Shopify Ping. Moreover, Shopify had enabled merchants to connect with customers through Apple Business Chat via Shopify Ping, in the recent past.
Incremental adoption of the new service is expected to have aided merchants in expanding business with engaging experience, which is anticipated to get reflected in the third-quarter top line.
The company also teamed up with Beautycon Festival LA 2019, which is likely to have bolstered merchants, looking to market wellness and beauty brands.
The company also enhanced online platform with new points of presence (PoPs) to better address the routing and accelerate accessibility of connections to Shopify stores. This is likely to have enhanced customer engagement, consequently merchant revenues. This is expected to have benefited the top line.
Additionally, Shopify is expected to have benefited from incremental adoption of “all-new Shopify Plus,” Dynamic Checkout, Centralized Marketing Dashboard, Fraud Protect and Shopify AR solutions, in the to-be-reported quarter.
Further, Shopify has been working on extending language capabilities beyond English. The focus on local languages is expected to have helped the company in bolstering international presence.
Moreover, adoption of latest “multi-currency feature” aimed at enabling merchants to sell products in several currencies and receive payments in their respective local currency, is expected to have bolstered “all-new Shopify Plus” revenues.
However, stiff competition from Amazon (AMZN - Free Report) , eBay, Square (SQ - Free Report) , Facebook’s Instagram Checkout, among others, are likely to have affected Shopify’s third-quarter performance. In a bid to maintain competitive position in the e-commerce market, Shopify is increasing investments on product development, fulfillment network, infrastructure and platform. These are anticipated to have limited margin expansion in the third quarter.
Noteworthy Developments in Q3
In the third-quarter, Shopify announced the acquisition of 6 River Systems, provider of warehouse technology, for roughly $450 million. The deal is anticipated to boost growth of the company’s fulfillment network.
The company also rolled out new features on its platform with an aim to aid vendors sell hemp-derived and hemp Cannabidiol (CBD) products across brick-and-mortar or online retail locations. This is expected to aid Shopify expand merchant base looking to sell CBD products amid growing safety concerns.
Zacks Rank
Currently, Shopify carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>