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Shopify's (SHOP) Q4 Earnings to Gain From Strong Merchant Base

Shopify SHOP is expected to have benefited from its expanding merchant base in fourth-quarter 2023, set to be reported on Feb 13.

Accelerated adoption of Shopify products such as Shop Pay, Shop Pay Installments, Shopify Markets Pro, Shopify POS and Shopify Balance is likely to have driven the company’s top line in the to-be-reported quarter.

Click here to know how Shopify’s overall fourth-quarter results are likely to be.

Strategic Integrations Boost Prospect

Increased focus on expanding its merchant base is anticipated to have aided Shopify’s fourth-quarter 2023 performance.

SHOP’s initiatives to offer the most seamless, secure and efficient checkout experience for merchants have been a catalyst. It has more than 400 checkout apps in the App Store support.

Shopify Inc. Revenue (TTM)

Shopify Inc. Revenue (TTM)

Shopify Inc. Revenue (TTM)

Shopify Inc. revenue-ttm | Shopify Inc. Quote

The growing adoption of Shopify Pay, which has more than 100 million buyers, has been a key catalyst. The general availability of Shopify Markets Pro in the third quarter is noteworthy. This is expected to boost Gross Merchandise Volume (GMV) in the fourth quarter.

In the third quarter of 2023, GMV rose 22% year over year, reaching $56.2 billion. Moreover, gross payment volume (GPV) reached $32.8 million, constituting 58% of GMV. The trend is likely to have continued in the to-be-reported quarter.

The Zacks Consensus Estimate for GMV is pegged at $71 billion, indicating 16.4% year-over-year growth. The consensus mark for GPV is pegged at $41.58 billion.

What Do the Estimates Say?

The Zacks Consensus Estimate for fourth-quarter earnings is pegged at 31 cents per share, unchanged over the past 30 days. Shopify reported earnings of 7 cents per share in the year-ago quarter.

For the fourth quarter of 2023, Shopify expects revenue growth in the high teens on a year-over-year basis. Adjusting for a 400-500 bps headwind related to the divestiture of the logistics business, revenues are expected to grow in the low-to-mid-twenties on a year-over-year basis.

The consensus estimate for fourth-quarter revenues is currently pegged at $2.07 billion, indicating growth of 19.21% from the figure reported in the year-ago quarter.

Zacks Rank & Upcoming Earnings to Watch

Shopify currently sports a Zacks Rank #1 (Strong Buy).

Investors are eagerly waiting for the upcoming earnings of BlackLine BL, GoDaddy GDDY and Zillow ZG, each carrying a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

BlackLine, GoDaddy and Zillow are set to report their quarterly earnings on Feb 13.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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