Shopify reported a solid QQ3 2024 performance with meaningful top-line growth and improving profitability metrics, underpinned by a robust liquidity position. Revenue reached $2.162B, up 26.14% year over year and 5.72% quarter over quarter, while gross profit rose to $1.118B for a gross margin of 51.7%. Operating income was $283M and EBITDA $291M, marking a strong level of operating profitability. A notable feature of the quarter is the substantial uplift in net income to $828M, driven primarily by total other income and unusual non-operating gains of approximately $577M. This underscores the importance of evaluating earnings quality alongside headline profitability. Free cash flow was $421M and operating cash flow was $423M, supporting a net cash position of $-366M after accounting for debt, while the company held cash and short-term investments of roughly $4.895B, signaling ample liquidity to fund growth investments and strategic initiatives.
From a balance sheet and cash-flow perspective, Shopify demonstrates a conservative leverage profile with total debt of about $1.141B and a cash-rich balance sheet. The current ratio stands at 7.10, and cash ratio sits at 1.636, indicating substantial liquidity to weather macro volatility and support platform investments. On a profitability basis, gross margin of 51.7% and operating margin of 13.1% reflect a scalable SaaS/commercial platform, though the net income largely reflects non-operating items rather than core operating leverage alone. Investors should monitor the durability of underlying earnings versus this quarter’s non-operating contributions.
Looking ahead, management commentary (where available in the press materials) emphasizes continued merchant growth, platform expansion, and enhancement of payments/financing capabilities. However, valuation remains elevated relative to peers, and the sustainability of the earnings mix will be crucial for multiple expansion. Overall, the QQ3 2024 results position Shopify as a growth-enabling commerce platform with solid cash generation and a strong balance sheet, balanced by a high valuation and earnings-quality considerations.