Shopify Inc. marked its fifth consecutive quarter in which revenue and gross merchandise value (GMV) each grew more than 20% in its fiscal Q3, which ended Sept. 30, 2024.

At the same time, operating income more than doubled year over year while free cash flow margin expanded to 19%.

In North America, 117 of the Top 2000 online retailers use Shopify as their ecommerce platform. The Top 2000 is Digital Commerce 360’s database of the largest online retailers in the region by their annual ecommerce sales. In 2023, those 117 online retailers combined for more than $9.72 billion in web sales.

Shopify revenue and GMV keep rising in Q3

In Q3 2024, Shopify revenue reached about $2.2 billion, growing 26% year over year. That’s the highest revenue in a single quarter to date for the company.

It was also the sixth consecutive quarter of revenue growth greater than 25%, excluding logistics, chief financial officer Jeff Hoffmeister told investors on the earnings call.

He attributed that growth to:

• The company’s GMV growth
• Subscription Solutions revenue growth (up 26% year over year)
• The impact of shortened paid trials
• Shopify Plus pricing changes
• Increased payments penetration, which reached 62% in the quarter

Also in Q3 2024, Shopify GMV grew to about $69.72 billion, up from about $56.21 billion in the same period of 2023.

Shopify processed $43 billion of GMV via Shopify Payments in Q3. That’s 31% higher than the prior-year period. It’s also a greater percentage of GMV in Q3 2024 (62%) than the same quarter in 2023 (58%), Hoffmeister said.

Shop Pay facilitated $17 billion in GMV during the quarter, Finkelstein said. That’s 42% year-over-year growth.

Shopify offline GMV — through the company’s point-of-sale system — grew 27% year over year in Q3 and has more than doubled in the past three years.

Meanwhile, Shopify B2B GMV grew 145% year over year in Q3, which marks five consecutive quarters of triple-digit growth, Finkelstein told investors. September marked the company’s largest single month to date for B2B GMV, he added.

“We are positioning ourselves to keep breaking these records,” he said.

Additionally, Shopify international GMV growth in Q3 outpaced North America, growing more than 30%. In Europe, specifically, Shopify GMV grew more than 35% in Q3. Hoffmeister said the company’s largest markets in the region continued to gain traction.

Those largest markets are:

• France
• Germany
• The Netherlands
• The United Kingdom

Shopify brings in new CTO

In late August, Shopify announced the onboarding of its new chief technology officer, Mikhail Parakhin. Shopify has tasked him with overseeing its engineering and data organizations. He previously led Microsoft’s AI advancement, building consumer and enterprise-facing products like Copilot.

“In just over two months since he joined us, he has already made a significant impact, enhancing our products and pushing us forward,” Finkelstein told investors on the Q3 earnings call.

New Shopify features in Q3 2024

During the quarter, Shopify and PayPal announced an expansion of their partnership. Through the partnership, PayPal became an additional online credit and debit card processor for Shopify Payments through PayPal Complete Payments.

“This latest update in the U.S. builds on the partnership in 2022, when PayPal teamed up with Shopify to introduce Shopify Payments in France,” PayPal said in a statement at the time.

Other new features include:

• Shopify Flow. A low-code workflow automation app. Finkelstein said it helps merchants build custom automations, including 304 new actions, that help merchants to more efficiently run their businesses. It enables merchants to update products, process customer form submissions, edit orders and more, Finkelstein said.
• Shopify Inbox. An artificial intelligence-based feature that suggests replies to consumer inquiries based on each merchant’s unique store information, Finkelstein said. He added that it makes it easier for merchants to respond quickly and accurately to consumer inquiries.
• Shopify Tax. The feature allows merchants to automate their preparation, filing and remittance of sales tax returns from within the Shopify software.

“Let’s be honest,” Finkelstein said. “Nobody starts a business with the goal of focusing their time on sales tax compliance or inventory management.”

And regarding Shopify Tax, he added that “taxes do not get simpler just because you cross borders. … We saw a clear opportunity to tackle the complexities of cross-border commerce head on.”

As a result, Shopify extended its Tax product to merchants in the entire European Union and in the United Kingdom.

Percentage changes may not align exactly with dollar figures due to rounding. Check back for more earnings reports. Here’s last quarter’s update on Shopify revenue and GMV.

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