E-commerce platform provider Shopify (NYSE:SHOP) has had quite a run since going public three years ago, gaining over 400% compared with the 30% gains of the S&P 500. Lately, though, the wind seems to have gone out of the company's sails, with the share price having fallen 25% since hitting all-time highs in late July. The biggest contributors have been the recent market rout and fears caused by Shopify's slowing growth.

Investors will be keeping a close eye on the numbers when Shopify reports third-quarter results before the market open on Oct. 25. Let's review its most recent quarter for any insights.

A laptop, a cellphone, and a tablet on a wooden desk, all showing the Shopify app.

Image source: Shopify.

Impressive growth -- if it were any other company

For the second quarter, Shopify reported revenue of $245 million, up 62% year over year, exceeding the high end of its own forecast as well as analysts' consensus estimates. While investors would be thrilled to see that type of growth from most companies, this marked the fourth consecutive quarter of declining growth for Shopify, and the lowest year-over-year increase the company has generated since its IPO.

The company reported adjusted earnings per share of $0.02, compared to a $0.01 loss in the prior-year quarter, and much better than the $0.03 loss expected by analysts. Operating losses of $31 million nearly doubled year over year, as the company continued to spend extensively on its expansion into international markets. While it boasts merchants in 175 countries, the majority of its operations are still in North America.

Shopify's growing base of recurring income was also impressive and should continue. Monthly recurring revenue (MRR) from it subscriptions segment increased to $35.3 million, up 49% year over year, while Shopify Plus, its enterprise-level solution, accounted for $8.1 million, or 23%, of MRR. Recurring revenue now accounts for 14% of the company's total sales.

One of its most ambitious undertakings is the early beta release of its platform translated into six languages: French, German, Japanese, Italian, Brazilian Portuguese, and Spanish. The company is focusing specifically on local customs and cultural nuances to ensure this initiative is a success.

Acceleration or further slowing?

For the third quarter, Shopify is forecasting revenue between $253 million and $257 million, representing year-over-year growth of 48.5% at the midpoint of its guidance. The company has made it a practice of issuing conservative guidance, so it's probably lowballing this number again. However, if Shopify's growth rate shrinks from 62% last quarter to 48% this quarter, I suspect there will be an absolute rout.

While we don't put much stock in Wall Street's quarterly whims, its expectations can help provide perspective. Analysts' consensus estimates are calling for revenue of $257.17 million, which would represent growth of 50% year over year, while looking for a loss per share of $0.02, compared with a gain of $0.05 in the prior-year quarter.

A final consideration

Shopify is a highflier with a pricey valuation, which tends to produce extensive volatility. The company has a market cap of just $13 billion. And it sports a price-to-sales ratio of 15 on a trailing-12-month basis and a more modest valuation of 13 looking ahead. Both are still frothy compared with market averages, and while this is expected of a high-growth company, it does tend to exacerbate the price swings.

The future looks bright for Shopify. As e-commerce continues to capture an even greater percentage of retail, the company is positioned to reap even further gains over the years and decades to come. Investors should take a long-term view, however, as the stock price will continue to be volatile. Brace yourself for the wild ride to continue when the company reports on Oct. 25.

Danny Vena owns shares of Shopify. The Motley Fool owns shares of and recommends Shopify. The Motley Fool has a disclosure policy.