Schwab Network on $SHOP (Nov 3, 2026)
SHOP fell about 10% on a Q3 revenue miss at 3.74 billion, though EPS of 49 cents beat 46 cents; 32% revenue growth, soft subscription revenue and GMV growth of 29% versus 31.6% were below expectations. Strong growth is judged not enough to carry the stock given its premium valuation, and whether the slowdown is one-off remains an open question ahead of the holiday quarter.
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And so first up, we're going to be talking about Shopify, which right now is down about 10%. Yeah, investors not shopping for Shopify this morning off the back of its quarterly miss and quarterly uh results I should say and that's because there was a miss in there.
So you are seeing sharers drop double digits taking Shopify negative for the year with this uh drop here.
We're shaving a little bit off of some of that pressure. Now down about 10% off the back of its quarterly results here uh for Shopify. In terms of earnings, they earned 49 cents per share.
That's where the beat was on earnings. Uh the street was looking for 46 cents.
Revenue came in at 3.74 billion. That's the miss. Investors were not expecting that.
Even though revenue did increase more than 30% year-over-year, 32% to be precise, it was short of expectations, strong growth is clearly not enough to carry uh this forward, especially when there's a premium built in there.
So sales disappointing. Where was their softness? Subscription solutions revenue that came in below expectations. That's the part of the business that charges merchants for access to Shopify's platform and tools.
Merchant solutions, that is its largest business. That was roughly in line with expectations. Gross merchandise volume, we're looking at that uh that rose about 29% there. That's the total value of purchases made through Shopify's platform. Uh there it did miss expectations.
It's a slowdown from the prior quarter because in the previous quarter we saw that number come in at 31.6%. So 29 a.5% compared to 31.6% is a step in the wrong direction in terms of the view of investors.
Um now the question from here will be is this a one-off? Is this just a quarterly you know slowdown that we're seeing? Um and what does the holiday season look like? Obviously this is crucial not just for the retailers but a name like Shopify here.
They're expecting fourth quarter revenue growth in the low 30% range. Uh they're projecting though operating expenses to come in between 29 to 30% of revenue. So this is the next big test for uh Shopify this holiday season.
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