Shopify Soars on Earnings Beat, Taylor Swift Collaboration

On Thursday, Shopify (SHOP) shares surged after third-quarter earnings exceeded expectations, with record sales of Taylor Swift merchandise.

Shopify’s stock jumped by 22.36% to $59.70 per share on November 02 amid positive financial results in the September quarter. The shares shed 0.57% post-market to $59.36, although analysts expect a 1.33% surge in the upcoming session, rebounding to $60.15 apiece.

The e-commerce platform reported $56.20 billion gross merchandise volume (GMV) in Q3, up 22.00% year-over-year from $46.06 billion. Its revenue totaled $1.71 billion, 2.39% above the expected $1.67 billion, indicating a 30.00% annualized growth rate.

Shopify posted adjusted earnings per share (EPS) of $0.24, 71.43% higher than the $0.14 EPS forecast. Merchant solutions’ revenue also increased 24.00% year-over-year to $1.20 billion from $967.74 million in the same quarter a year ago.

Similarly, gross payment volume (GPV) accelerated by 54.00% to $32.80 billion from last year’s $25.00 billion. Subscription solutions’ revenue grew by 29.00% to $486.00 million, driven by pricing changes and new merchants.

As of September 30, monthly recurring revenue (MRR) rose by 32.00% to $141.00 billion from $109.30 billion. Shopify recorded a gross profit of $901 million, indicating a 36.00% year-on-year expansion from $662.50 billion.

The company earned an operating income of $122.00 million in the third quarter, partially reversing the $346.00 million operating loss in the same quarter of 2022. Free cash flow for the quarter was $276.00 million, recovering from last year’s $148.00 million negative cash flow.

Taylor Swift’s Merch Success Empowers Shopify

One of the online shop’s most notable revenue drivers for the third quarter is its collaboration with celebrity icons.

Shopify President Harvey Finkelstein said they experienced record volume sales when Taylor Swift launched her Eras Tour merch.

Additionally, the platform introduced the Shopify for Artists hub in October to help artists sell their merchandise. It integrates merch purchasing into streaming so celebrities can pitch products while entertaining their fans.

Each celebrity has been provided with a page that they can personalize to fit their brand. More importantly, Shopify takes zero commissions for any sale made through the page, maximizing profits for the artists.

Other celebs that use Shopify’s artist hub include Drake, Lady Gaga, Adele, and the Kardashian-Jenner clan.