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Shopify Secures the Bag
Third-quarter results show Shopify's hustle paying off big time with revenue growing 25%.
by Tod Maffin and Steph Gunn
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Shopify’s Revenue Growth Hits Different
Shopify's third quarter was all about the comeback.
The Canadian e-commerce company reported its Q3 results yesterday, with revenue growing more than 25% year-over-year to $2.15 billion, surpassing projections.
Its free cash flow margin also climbed to nearly 20%, exceeding its previous quarterly forecast by approximately 3%.
What’s driving profits?
After unloading its unprofitable logistics division to freight company Flexport last year, Shopify’s margins have steadily improved. This shift boosted free cash flow to $421 million—a 52% increase compared to last year.
The company, which generates revenue from payments and other merchant services as well as selling software subscriptions, said its gross profit margin dipped slightly as payments volumes grew during the quarter.
Payments, the biggest source of Shopify’s revenue, is lower-margin than its software business, because Shopify pays some of what it charges merchants back out to its payments processors.
Q4 predictions
Looking ahead Shopify projects further revenue growth of 25-29% in the fourth quarter, sending its stock up more than 20% following the announcement.
Scroll limits could be coming down under.
Australia is pushing forward with new social media legislation, which will see users under 16 banned from using any social app.
This week, Australia's Prime Minister announced the next stage of the social media restrictions.
Keeping kids off the grid
He said that young people are increasingly exposed to harmful portrayals of body image and behaviour online, which are having real-world effects. As a result, the government believes limiting social media access is necessary.
While the new laws are set to face a final vote this week, many details remain unclear. The Prime Minister acknowledged the new restrictions won’t entirely prevent young people from accessing social media, comparing the new age limits to alcohol restrictions, which some minors manage to bypass.
Enforcement hurdles remain
The laws look to secure final approval soon, but challenges remain in enforcing these restrictions, given the multiple ways kids can still reach social media content online.
The proposed policy places the responsibility on platforms to enforce age limits and implement systems to block underage users, though many social platforms already have age restrictions that are often bypassed by underage users.
At what age did Ryan Kaji start his viral YouTube channel, "Ryan's World"? |
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