What happened

Shares of Shopify (SHOP 0.89%) surged 17% on Thursday after the e-commerce company's third-quarter results gave investors hope that its worst losses were behind it. 

So what

Shopify facilitated $46.2 billion worth of transactions, a metric known as gross merchandise volume (GMV). That represented growth of 11% compared to the prior-year quarter.

Shopify also captured a larger share of the value transacted on its e-commerce platform by providing more services to its merchant customers. Its attach rate, or revenue as a percentage of GMV, for its merchant-solutions business rose to a record 2.14%.

Shopify President Harley Finkelstein said in a press release:

Shopify is the central nervous system that powers millions of businesses around the world ... During Q3, merchants continued to recognize Shopify's exceptional value and increased their adoption of our essential tools and innovative solutions.

The company's merchant-solutions revenue, in turn, jumped 26% to $989.9 million. Meanwhile, new customer sign-ups drove a 12% increase in its subscription-solutions revenue. In all, Shopify's total revenue rose 22% to $1.4 billion.

Still, Shopify's investments in its nascent fulfillment network and other growth initiatives took a heavy toll on its profitability. It generated an adjusted operating loss of $45.1 million compared to adjusted operating income of $140.2 million in the prior-year period.

However, Shopify's losses were better than many investors feared. Its adjusted net loss of $0.02 per share was significantly smaller than the $0.07 per share loss Wall Street projected. 

Now what

Management expects Shopify's GMV to continue to grow at a faster pace than the overall U.S. retail market in Q4. The company also expects its operating expense growth to decline compared to Q3.

According to Chief Financial Officer Amy Shapero:

The flexibility of our platform, breadth of solutions, pace of innovation, and disciplined investment approach position Shopify well to realize the enormous opportunity ahead.