(Bloomberg)—Canada-based e-commerce platform provider Shopify Inc. posted third-quarter revenue of $270.1 million, up 58% from a year earlier and ahead of the consensus estimate of $258 million.
Gross merchandise volume, which measures the total amount of sales made by all vendors on Shopify’s platform, came in at $10 billion, up 55% from a year earlier. In the second quarter, analysts were disappointed by 56% growth in the metric, a third consecutive slowdown in growth.
Adjusted net income was $4.5 million, or 4 cents a share, beating the expected loss of 4 cents a share.
Shopify’s market lead in Canadian online cannabis sales should give it a leg up as other countries begin to legalize the drug for medical and recreational use, CEO Tobias Lutke said on an earnings conference call this morning.
The e-commerce company has proven it has an ideal product for regulated industries, which require “nimbleness because compliance with laws is always changing,” Lutke said. “As more countries think about their own regulated industries, whether it’s cannabis or otherwise, we become that first phone call,” he said on the company’s third-quarter earnings call Thursday.
Shopify’s platform was widely adopted for online sales of recreational marijuana, which Canada legalized on Oct. 17. Government-run websites in several provinces including Ontario and British Columbia, as well as private companies like Canopy Growth Corp., Aurora Cannabis Inc. and Hexo Corp. use Shopify.
The Ottawa-based company was praised for the fact that its websites didn’t crash on the first day of legalization, when demand was through the roof. The Ontario Cannabis Store, for example, saw 1.3 million unique visits in the first 24 hours and received approximately 100,000 orders.
Lutke added that Shopify designed its cannabis contracts so it will “capture the upside” of gross merchandise volume, or the total amount of sales made by vendors using its platform.
Cannabis is big business in Canada. In 2017, about 4.9 million Canadians ages 15 to 64 spent an estimated $4.49 billion on cannabis for medical and non-medical purposes, according to Statistics Canada.
And cannabis is swiftly becoming a big and legal business across the globe as more regions and countries legalize it for recreational use, Cam Battley, chief corporate officer for Edmonton, Canada-based Aurora Cannabis, a licensed producer and seller of medical cannabis, told Internet Retailer earlier this year.
”It’s going to be as big globally as brewing or distilling,” he said.
Shopify said it now expects revenue of $1.05 billion to $1.06 billion for the full year, up from its earlier guidance of $1.02 billion to $1.03 billion, and ahead of analyst expectations.