Shopify announces Q3 2023 financial results, with profits soaring to $718 million

It is learned that on November 2, Shopify released its third-quarter financial report for 2023. Data showed that Shopify turned losses into profits in the third quarter due to the significant effect of the continued cost reduction strategy and the increase in revenue brought by investment in artificial intelligence.

According to data, in the third quarter ending at the end of September, Shopify's total revenue increased 25% year-on-year to US$1.71 billion, exceeding analysts' average estimate of US$1.67 billion. Profits soared to US$718 million. In the second quarter, Shopify reported a loss of US$1.31 billion.

In May, Shopify announced a plan to lay off 20% of its employees, about 2,300 people. Shopify also sold its two acquired logistics startups, Deliverr and 6RiverSystems, to freight service provider Flexport and British grocery delivery company Ocado Group, respectively.

After implementing a series of cost-cutting and efficiency-enhancing measures, Shopify's costs in the third quarter fell by nearly 23% year-on-year.

This year, Shopify has also launched a number of AI tools, such as ShopifyMagic, a set of artificial intelligence tools that can write product descriptions, email subject lines and titles for merchants' listings. In recent months, the suite has also added Sidekick, a chatbot that automatically responds to customer questions.

Shopify Magic is part of Shopify's long-term strategy to attract more merchants on its platform who are willing to pay higher prices for its services. In January, Shopify also increased the price of its Shopify Plus plan for the first time.

In the third quarter, Shopify's subscription solution revenue increased to $486 million from $377 million a year ago, and total merchant solution revenue also increased from $989 million to $1.23 billion, a year-on-year increase of 21%. In contrast, Amazon's third-party seller service revenue increased 19.8% year-on-year in the third quarter.

Not only that, Shopify is also increasing its cooperation with brands to drive growth in product sales.

In July, pop star Taylor Swift launched her Eras tour merchandise on Shopify, and the company saw a surge in sales and site visits on the day of the launch. This summer, Shopify partnered with Toronto rapper Drake to place a giant QR code at his concerts, directing fans to win prizes and purchase Drake-branded merchandise through the Shop app.

In addition, French fashion brand Pucci, cosmetics brand Anastasia Beverley Hills and singer Jennifer Lopez's beauty company are also on Shopify's list of partner brands.

Editor✎ Ashley/

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