:Shopify forecast fourth-quarter revenue growth above estimates on Tuesday, as the Canadian company’s focus on employing AI-powered tools attract more merchants to its e-commerce services ahead of the all-important holiday season.
Its U.S.-listed shares jumped nearly 15 per cent in premarket trading after the company also topped analysts’ expectations for third-quarter revenue.
Shopify, which enables businesses to build and run online stores by providing tools for everything from creating a website to shipping products, has spruced up its services by integrating artificial intelligence-based features this year.
The company in June rolled out its AI assistant, Sidekick, which provides sellers with sales reports, data on customer behavior and helps execute tasks such as setting up discount codes, to more merchants on its platform.
“Both the beat and the forecast are very impressive … Shopify is better-positioned than other software vendors because it’s not only growing with its existing customers, but it’s adding customers in a variety of categories,” said Gil Luria, head of technology research at D.A. Davidson.
The company has looked to make shipping faster and cheaper for brands on its platform by offering discounted rates, among other efforts to win and retain customers.
It forecast current-quarter revenue would increase in a mid-to-high-twenties percentage range, while analysts expected a rise of 22.7 per cent, according to LSEG data.
“The dynamic that investors are going to walk away with, given the really strong Q3 and the optimistic Q4, is that Shopify is a share gainer,” said Oppenheimer analyst Ken Wong.
“With the rest of retail a little bit softer than anticipated, and Shopify continuing to hum along, that’s going to be the first thing that pops into people’s heads.”
Shopify reported a 26 per cent jump in revenue to $2.16 billion for the third quarter ended Sept. 30, compared with analysts’ average estimate of $2.11 billion, marking the ninth straight quarter of beat on sales.
Gross merchandise volume (GMV), or the total value of orders facilitated through Shopify, jumped 24 per cent to $69.72 billion in the July-September period.
