What happened
Shares of Shopify (SHOP -2.37%) surged 27.1% in October, according to data provided by S&P Global Market Intelligence.
Despite this surge, shares of the e-commerce company have still lost three-quarters of their value year to date.
Image source: Getty Images.
So what
During the month, Shopify delivered another pleasing set of earnings for its fiscal 2022 third quarter. The e-commerce company saw total revenue jump 22% year over year to $1.37 billion, although part of this growth was affected by foreign currency headwinds due to the strengthening of the U.S. dollar. Shopify's revenue came in better than analysts' expectations of $1.33 billion, which was probably the reason for the stock's surge.
Gross merchandise volume (GMV) increased by 11% year over year to $46.2 billion while gross payments volume on Shopify's platform rose to $25 billion from $20.5 billion a year ago. The good news is that merchant solutions revenue surged 26% year over year to $990 million as more merchants tapped into Shopify's platform to manage their businesses. Because of this, the merchant attach rate (defined as the merchant solutions revenue divided by the GMV) climbed to a high of 2.14%, significantly better than the 1.38% recorded five years ago.
Now what
Shopify is now busy integrating Deliverr, its recent acquisition, into its system and plans to launch a new fulfillment app that spans a merchant's entire supply chain. The aim is to create a unified network with Deliverr's software platform as its backbone to achieve a significant jump in the number of merchants holding inventory at Shopify's Atlanta facility. When this integration is completed, Shopify can boast an end-to-end logistics platform that connects all the nodes of a merchant's supply chain.
Meanwhile, Shopify also announced the acquisition of Remix, a 2020 start-up that developed an open-source web framework. The company intends to tap on Remix across its projects to improve its front-end web development framework that will allow merchants to build customized shopfronts. By improving its platform's interface and usability, Shopify can then attract more merchants onto its platform over time.
