OTTAWA, Canada — Shopify Inc. defied market expectations once again in the third quarter, posting stronger-than-expected results as the global pandemic continued to push shoppers out of bricks-and-mortar stores and onto online platforms.

Revenue at Canada’s largest company by stock market value nearly doubled to $767.4 million while adjusted earnings were $1.13 per share, more than twice analysts’ estimates of 52 cents.

"The accelerated shift to digital commerce triggered by Covid-19 is continuing, as more consumers shop online and entrepreneurs step up to meet demand," Shopify President Harley Finkelstein said in the earnings statement.

Key Insights

Gross merchandise volume — a measure of product sales flowing through its platform — was $30.9 billion, an increase of 109 percent over the third quarter of last year, reflecting strong e-commerce spending by consumers.

The company continued to gain traction in new services it offers to customers. Shopify said 51 percent of eligible merchants in the US and Canada used Shopify Shipping in the third quarter of 2020, versus 45 percent in the third quarter of 2019.

Its lending business is growing as well. Merchants in the US, Canada and the UK received $252.1 million in merchant cash advances and loans from Shopify Capital in the quarter, an increase of 79 percent from the amount received by US merchants in the same quarter last year.

The company expects its model to remain popular with buyers and sellers in the pandemic but cited macro risks in its decision not to provide fourth quarter or full-year guidance.

“These include unemployment, fiscal stimulus, and the magnitude and duration of the Covid-19 pandemic, all of which may impact new shop creation on our platform and consumer spending," Shopify said.

Shopify shares were up 2.9 percent in pre-market trading at 7:52 a.m. in New York. The stock is up more than 680 percent in the past two years and had nearly tripled since the March low, as of Wednesday's close, as the pandemic accelerated the push by retailers and small businesses to move sales online.

Founded in 2004, the Ottawa-based firm’s core business is helping retailers get online quickly and cheaply. But it has expanded to offer an ever-widening suite of services, including lending, payments and shipping solutions. With a market capitalization of almost $125 billion, the company is now Canada’s largest publicly traded company.

By Danielle Bochove