Shopify (NYSE:SHOP) provides a range of software and services that help merchants operate across physical and digital channels. The company's comprehensive approach to commerce has been a significant growth driver, and Shopify powers over 1.7 million businesses worldwide. As a result, the stock is up 980% over the last three years.

In this Backstage Pass video, which was recorded Oct. 29, 2021, Motley Fool contributors Nick Rossolillo and Brian Withers discuss Shopify's third-quarter earnings, and they hit on why the long-term investment thesis is still intact.

Nicholas Rossolillo: Shopify. I think this is my favorite e-commerce stock. Period. But it's so much more than that though anymore. Just such an incredible company. I don't want to talk about the analysts' expectations because, at the end of the day, this is still a young company. I believe it's still early on in its growth story, so I think the analysts' expectations are all over the board and not revealing both.

But third-quarter revenue, $1.12 billion, up 46% year-over-year. Remember this is building on top of just absolute booming sales last year in this pandemic, so it's an incredible number to compound on top of the doubling of the business last year. Free cash flow. Shopify is also profitable now, profitable business. That for the longest time that was the knock against the company for a lot of investors, it's not profitable. Therefore, I'm not interested in it. Not the case anymore. They generated $219 million in free cash flow through the first nine months of this year; that's up 51% year-over-year.

I'll just point out that that's in spite of the company's still funneling a lot of extra cash back into the business -- specifically into that Shopify Fulfillment Network they announced a couple of years ago. That's like e-commerce infrastructure, warehouses, and all the stuff that supports it to move things, to move stuff from one point to another, get it delivered when you order it online. Massive amount of money that is taking to build that. In spite of that, Shopify's increasingly profitable, fantastic balance sheet.

Some of the specific business highlights from the last quarter, they said they launched Shopify Markets. That's the cross-border system. They had signed an agreement with a company called Global-E that had an IPO earlier this year that helps enable merchants to sell in different countries. They launched that, no doubt that was a result of that agreement with Global-E.

They also launched Shopify Balance. It's basically a basic digital banking product. They deepened their integration with TikTok and have TikTok Shopping. They launched a Spotify sales channel, they said just last week, and still building that fulfillment network. So much stuff going on here, so much more than e-commerce anymore. Sure, it's a software company, but Shopify can help emerge and do it all from managing the website itself, to point-of-sale systems, digital advertising, integrations with other sites, shipping, you name, it's here. This is just really cool stuff and the company just doesn't fail to impress quarter-to-quarter.

Brian Withers: I love that you included some of the highlights of things that they released this quarter. I've been excited about balance. I think they announced that was coming about a year ago, so it's finally good to get that out to merchants.

My favorite part of the Shopify earnings release is not necessarily the numbers. I actually skipped down past numbers. Then every single time they talk about business highlights or things that they are innovating on, and that section is as long or longer than the numbers section. It's been like that every single quarter and that's why Shopify is such a great holding for me.

Nicholas Rossolillo: It's incredible. It's just an absolute innovation factory right now in the e-commerce space. One take on the stock itself, I cite valuation as a concern, but it's not really a concern, but I just pointed out because I think a lot of investors have gotten stuck in this trap in the last year.

The valuation is high. So, if you buy or add to it right now, and the stock underperforms in the next year or two or whatever, pick your short-term time period, don't associate stock performance over the short-term with the quality of the business. This is still a young company growing at a fast pace, doing some cool stuff, the long-term outlook remains unchanged regardless of what the short-term stock price might do.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.