(Reuters) - Shopify Inc (SHOP.TO) (SHOP.N) on Thursday raised its full-year revenue forecast and reported a better-than-expected quarterly profit, as the Canadian e-commerce company’s investments to attract customers paid off.
“While I think Canadian consumers and businesses have been slightly slower to pick up e-commerce, I think that is changing rapidly and the growth rates indicate that,” Chief Operating Officer Harley Finkelstein told Reuters, adding that it caters to about 50,000 merchants in Canada.
The strategy seems to be paying off for Shopify, which sells everything from cosmetics to consumer electronics.
Shopify has also launched new features in its online stores, such as enabling customers to design and update their stores or display 3-D images of their products, as it looks to compete with Amazon.com (AMZN.O) and eBay (EBAY.O).
The company, which listed on the Toronto Stock Exchange just a little over four years ago, now has a market valuation of more than C$50 billion, above that of Canadian Imperial Bank of Commerce (CM.TO), one of Canada’s top-five banks.
“While consistent execution is driving results, what’s also clear is an expanding addressable market that’s increasingly scaling as Shopify adds complementary solutions and services, the most notable being Shopify’s pending Fulfillment Network,” National Bank of Canada analyst Richard Tse said.
Shopify said in June it plans to spend over a billion dollars to build and operate its fulfillment network in the United Stated over the next few years.
The Ottawa-based company now expects full-year revenues between $1.51 billion and $1.53 billion, above its previous range of $1.48 billion to $1.50 billion.
Gross merchandise volume (GMV), a widely watched figure for the e-commerce industry’s performance, rose 51% to $13.8 billion in the second quarter.
The company’s net loss widened to $28.7 million, or 26 cents per share, in the quarter ended June 30, from about $24.0 million, or 23 cents per share, a year earlier, as costs and expenses ticked up.
Excluding items, it earned 14 cents per share, handily beating the average analysts’ estimate of 2 cents, according to IBES data from Refinitiv. The company has beat estimates every quarter since listing.
Revenue surged nearly 48% to $362 million, also beating estimates of $349.95 million.
Reporting by Shradha Singh in Bengaluru; Editing by Shailesh Kuber