Shopify Q3 2024 $SHOP (+1,18 %)
Financial performance:
- Revenue growth: Shopify achieved 26% year-over-year revenue growth in Q3 2024, reaching $2.2 billion.
- Gross Merchandise Volume (GMV): GMV increased 24% year-over-year to $69.7 billion.
- Free cash flow margin: Free cash flow margin improved to 19%, marking the fifth consecutive quarter with a double-digit margin.
Balance sheet overview:
- Total assets: As of September 30, 2024, total assets were $12.3 billion, an increase from $11.3 billion at year-end 2023.
- Cash and cash equivalents: Cash and cash equivalents amounted to USD 1.5 billion.
Details of the income statement:
- Operating profit: Operating income increased to 283 million US dollars, more than double the previous year's figure.
- Net income: Net income totaled $344 million, excluding equity investments.
Cash flow overview:
- Cash inflow from operating activities: Net cash inflow from operating activities increased to USD 423 million from USD 278 million in the previous year.
- Free cash flow: Free cash flow improved to USD 421 million.
Key figures and profitability metrics:
- Gross margin: Gross margin decreased slightly to 51.7% compared to 52.6% in the prior year.
- Operating expenses: Operating expenses accounted for 39% of revenue, with an increase of 7% year-on-year.
Segment information:
- Revenue from subscription solutions: Grew by 26% to USD 610 million.
- Revenue from dealer solutions: Also grew by 26% to 1.55 billion US dollars.
Competitive position: Shopify continues to consolidate its position as the leading commerce platform with significant growth in international markets, particularly in Europe.
Outlook and management commentary:
- Revenue growth for Q4: The company expects Q4 revenue growth in the mid to high 20% range year-on-year.
- Free cash flow margin: The margin is expected to be similar to Q4 2023 at around 21%.
Risks and opportunities:
- Opportunities: Expansion in B2B and international markets, with strong growth potential in Europe and new partnerships with enterprise-level brands.
- Risks: Potential headwinds from lower non-cash revenues from strategic partnerships and economic conditions that could affect consumer behavior.
Positives:
- Strong sales growth of 26% year-on-year.
- Significant increase in GMV of 24%.
- Expansion of the free cash flow margin to 19%.
- Successful international expansion, particularly in Europe.
- Continued investment in product innovation and operational efficiency.
Negative aspects:
- Slight decline in gross margin to 51.7%.
- Operating expenses increased by 7% year-on-year.
- Decline in non-cash income from strategic partnerships.
- Potential economic headwinds that could influence consumer behavior.
- Challenges to maintain growth in a highly competitive market.