In another strong financial period, Shopify Inc. says revenue for the third quarter ended Sept. 30 grew 26% year over year to $2.16 billion as gross merchandise value on its globally deployed ecommerce platform rose 24% to $69.72 billion.

Harley Finkelstein, president, Shopify Inc.

“Q3 was outstanding, further establishing Shopify as a leader in power commerce anywhere, anytime,” boasted president Harley Finkelstein. Jeff Hoffmeister, chief financial officer, added that Q3 marked Shopify’s “sixth consecutive quarter of greater than 25% revenue growth, excluding logistics.”

But when looking at Shopify’s market segments, much faster growth came from its B2B market, where activity on Shopify’s platform by manufacturers and distributors drove a 145% increase in GMV. The company didn’t specify the B2B GMV figure, but Finkelstein said B2B offers a significant market opportunity and is one of Shopify’s main long-term growth drivers along with international commerce and point-of-sale systems for omnichannel retailers.

On the Q3 earnings call, he asserted that B2B is “huge,“ adding, “I think there’s like a $14 billion total addressable market — we’re already seeing our B2B GMV double since last year,” according to a Seeking Alpha transcript.

Shopify sharpens its B2B focus

While Shopify is known for its market strength among entrepreneurs and growing online and omnichannel retailers, Finkelstein and other executives say it has been gaining ground among larger and more established B2B as well as retail organizations deploying its enterprise-level functionality in Shopify Plus.

The B2B market, however, presents additional challenges.

Still, that’s an area Shopify says it’s working on to build on its B2B momentum.

Shopify rolls out new B2B features

“In B2B, we continue to set new records for monthly GMV highs, with September marking our largest single month ever,” Finkelstein said on the earnings call, adding, “We are positioning ourselves to keep breaking these records, especially with new enhancements … including Shopify Flow automation templates that streamline B2B workflows and improvements to tax collection and conversion tracking.

“While much of our growth to date stems from our existing merchant base, in Q3 we also broke into new territories in industrial, hardware and automotive vehicles and parts — sectors that haven’t historically considered Shopify. Now, they’re not just considering us, they’re committing to us.”

Finkelstein went on to note that, in Q3, Shopify made available several new “major” B2B features, such as product bundles in customer orders and the ability of a seller to “assign a sales staff to particular B2B customers” through Shopify Flow.

“Historically, we really focused on existing direct-to-consumer brands on Shopify that also had a strong B2B or wholesale practice that felt like low-hanging fruit for us,” Finkelstein said. “We are now beginning to see merchants that are specifically and exclusively B2B wholesale merchants come to Shopify for our B2B product.”

Shopify bolsters its net income

For the third quarter ended Sept. 30, Shopify reported:
⦁ Revenue increased 26.1% year over year to $2.16 billion.
⦁ Gross merchandise value grew 24.0% to $69.72 billion.
⦁ Gross profit increased 24.0% to $1.12 billion.
⦁ Income from operations increased 32.0% to $283 million.
⦁ Net income rose 15.3% to $828.0 million.

For the nine months ended Sept. 30, Shopify reported:
⦁ Revenue increased 23.4% year over year to $6.07 billion.
⦁ Gross profit increased 27.2% to $3.1 billion.
⦁ Income from operations was $610 million, compared with a loss of $1.71 billion.
⦁ Net income was $726 million, compared with a loss of $525 million.

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. [email protected].

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