Zohran Mamdani Wins — Why NYC’s Mayor Race Was a Referendum on Inequality
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Today's number, 1000. That's how many times a hummingbird's heart beats per minute. Only two animals have a faster recorded heart rate. They are the Etruscan shrew and also Bill Ackman right now. What do you market the bad build? If money is evil, then that building is hell. Show goes up! Sell, sell! Welcome to Profit Markets. I'm Ed Elson. It is November 5th. Let's check in on yesterday's Market Vitals. The major indices declined as AI valuation concerns dragged down tech stocks. Palantir sank 8% after Michael Burry disclosed a $900 million bet against the company. Meanwhile, Bitcoin slid 6%, dropping below $100,000 for the first time since June. The dollar hit its highest level since May, and finally, Tesla fell 5% on news that one of its largest investors
voted no to Elon Musk's $1 trillion pay package. Results of the vote will come tomorrow at the company's annual shareholder meeting. Okay, what else is happening? Sharpify posted a strong quarter of growth yesterday, but rising costs weighed on investor sentiment. Revenue rose 32% year over year, beating estimates. However, net income fell 68% as operating expenses increased significantly. Shares closed down 7% on the results. Just a reminder: what is Shopify? This is your one-stop shop platform for e-commerce. It helps you set up your website. Website and your payments and your shipping, et cetera. So if you are a small to medium-sized retail business, chances are you're using Shopify, but they are also now expanding to larger companies too.
Companies like Mattel and Luxotica and Estee Lauder, lots of large retailers. So Shopify is a juggernaut at this point, a juggernaut in e-commerce, more than $200 billion in market cap. And I am very pleased. to say that we are breaking down these Q3 earnings with the president of Shopify, Harley Finkelstein. Harley, great to have you on ProfG Markets.
Great to be here, Ed. Big fan of the show and big fan
of yours. So thanks for having me. Wow. Thank you very much. That is that is very kind coming from you. We want to uh talk through the earnings here. Um, some pretty incredible numbers. Revenue up 32%, gross merchandise volume also up 32%, $92 billion. Let's just start with like your headline takeaways on this most recent quarter for Shopify.
Yeah. Um, you know, I I I've been uh I've been doing these earnings calls for uh over ten years now since the IPO. I think this is earnings call number forty-two, maybe forty-three at this point. Um GMV obviously, you know, $92 billion is super important because it's a proxy for how well merchants are doing on Shopify. That's up 32%. What I don't think was was well understood was that that is our ninth consecutive quarter of GMV above 20%. So that I was really excited about. On the revenue side, 2.8 billion up 32% as well. That's our 10th consecutive quarter of 25% or greater top-line growth. And then free cash flow. was 18, uh 18% of revenue or about 507 million. Um, so that's 12 consecutive quarters of positive free cash flow and nine consecutive free uh nine consecutive quarters of double digit free cash flow margin.
Why does this matter? One of the things that we've been trying to uh to articulate and I hope I've done a good job of this is this this idea of like durable consistent growth that Shopify will do what we say we're going to do. Um I talked about, you know, in our last call, That we're gonna be doing something in agenda commerce. Obviously, I was able to announce uh a couple two weeks ago that that we're doing this incredible work with open AI, but also with Perplexity. So ultimately, while the numbers themselves I think are incredibly impressive and we're balancing kind of top line and bottom line. What matters to me is Shopify is a well-trusted, publicly traded company. And I think the way you do that is just to do what you say you're going to do.
From
my understanding, Shopify is investing pretty significantly into AI, RD spend up this quarter. You recently announced this integration with OpenAI. Like what does AI have to do with Shopify? How does it help the business?
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