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Shopify (SHOP) Q3 Revenue $3.74B Misses Estimates, Shares Fall 7%

Shopify (SHOP) shares dropped 7% after the company reported third-quarter results that missed key estimates. Adjusted earnings per share were 49 cents, above the expected 46 cents. However, quarterly revenue was $3.74 billion, slightly below the consensus estimate of $3.75 billion. The company also reported gross merchandise volume (GMV) of $119.15 billion, missing analyst expectations of $120.03 billion. Subscription gross profit came in at $661 million, below the estimated $680.3 million. Subscription revenue was $836 million versus an estimate of $848.1 million. Merchant gross profit and revenue, however, beat estimates. Shopify projects revenue growth in the low thirties percentage range year over year for the fourth quarter, slightly below analyst expectations of 32.1%. Shopify’s president Harley Finkelstein described the GMV growth as "consistent" and "durable," marking the thirteenth consecutive quarter with GMV growth above 20%. This earnings report shows mixed results with some missed targets, which impacted the share price negatively. For investors, the key takeaway is the near-term slowdown in subscription revenue and merchandise volume growth affecting Shopify's overall revenue trajectory.