Canada's Shopify forecasts 2017 revenue above estimates

(Reuters) - Canada's Shopify Inc SHOP.TO forecast better-than-expected 2017 revenue due to higher demand for its ecommerce software, which is used to set up and manage online stores.

Canadian e-commerce company Shopify Inc logo is shown on a computer screen in the illustration photo in Encinitas, California May 3, 2016. REUTERS/Mike Blake/File Photo

U.S.-listed shares of the company SHOP.N were up 3.4 percent at $57.95 in premarket trading on Wednesday.

On an adjusted basis, the company broke even per share, while analysts were expecting a loss of 2 cents per share, according to Thomson Reuters I/B/E/S.

The company forecast full-year revenue of $580 million to $600 million, well above estimates of $563.3 million.

Merchants use Shopify’s software platform to design, set up and manage their stores across sales channels including the web, mobile devices, social media and brick-and-mortar outlets.

The company's clients include Procter & Gamble Co PG.N, Tesla Motors Inc TSLA.O and the New York Stock Exchange.

The company said more than 133,000 net new merchants began selling on Shopify last year. The company ended the year with 377,500 merchants on the platform.

Revenue from Shopify’s merchant solutions business more than doubled to nearly $74 million in the fourth quarter ended Dec. 31.

Shopify gets a bulk of its merchant solutions revenue from fees that it charges its clients, or merchants, when their customer orders are processed through Shopify’s payment system.

Revenue in the company’s subscription business, which makes money from the fees Shopify’s clients pay to use its platform, rose 62.9 percent to $56.4 million.

However, net loss widened to $8.9 million, or 10 cents per share, in the fourth quarter, from $6.3 million, or 8 cents per share, a year earlier, as costs rose.

Ottawa-based Shopify, which went public in May 2015, said revenue rose nearly 86 percent to $130.4 million.

Reporting by Komal Khettry in Bengaluru; Editing by Shounak Dasgupta