Shopify Shares Fall 17%, Overshadowing 32% Revenue Growth in Q3
Key Facts
Shopify shares fell 17% to $130.01 in morning trading on November 3 after the company reported results for the quarter ended September 30, 2026. Revenue rose 32% year over year to $3.742 billion, while operating income was $568 million, compared with $343 million a year earlier. The share decline came despite revenue growth and improved operating income, amid concerns cited in Yahoo Finance coverage about a slowdown in subscription solutions revenue growth. The stock closed the previous session, on November 2, at $156.22. Shopify said it processed $119 billion in gross merchandise volume during the quarter, continuing to expand commerce across more platforms and agents.
Gross merchandise volume was $119.145 billion, up 29% from $92.013 billion in the third quarter of 2025. This figure measures the value of goods processed through the platform and grew at a slower pace than revenue, which increased 32% over the same period. By revenue source, subscription solutions revenue rose 20% to $836 million from $699 million a year earlier. Meanwhile, merchant solutions revenue grew 35% to $2.906 billion, compared with $2.145 billion. These figures show a divergence between subscription solutions growth and accelerating merchant solutions revenue, as market coverage focused on concerns related to subscription solutions revenue growth.
Shopify reported free cash flow of $816 million in the third quarter, with a margin of 22% of revenue, up from 18% in the same period last year. The comparison reflects an improvement in converting revenue into cash available after investments and expenses included in the free cash flow calculation. Chief Financial Officer Jeff Hoffmeister linked revenue growth with the cash margin, saying that “32% revenue growth and a 22% free cash flow margin” at this scale reflect the strength of the company’s model, its multiple growth drivers and the breadth of its target market. The quarter’s results thus combined strong revenue growth with an improved cash margin, while the investor concerns cited in coverage focused on specific growth indicators. That did not change the fact that revenue increased year over year, while the free cash flow margin rose compared with the third quarter of 2025.
In its outlook for the fourth quarter of 2026, Shopify said it expects year-over-year revenue growth at a pace in the low thirties and gross profit growth at a pace in the high twenties. It estimated operating expenses at 29% to 30% of revenue and stock-based compensation at $155 million. These projections provide the company’s indicators for the next period, including revenue growth, gross profitability and expected spending levels. The company’s management held a conference call to discuss the third-quarter results on November 3, 2026, at 8:30 a.m. Eastern Time. Those projections relate to the fourth quarter, while the reported figures cover the period ended September 30.