What Shopify (SHOP)’s Strong Q3 Revenue Growth and Lower Profits Means for Shareholders

• Shopify reported its third-quarter 2025 earnings, posting sales of US$2.15 billion and revenue of US$2.84 billion, both significantly higher than the previous year, though quarterly net income fell to US$264 million from US$828 million in the prior period.
• Despite the drop in net income, Shopify's continued robust revenue growth showcases its ability to expand within the fast-evolving global e-commerce sector.
• We’ll explore how Shopify’s strong revenue gains this quarter influence its investment narrative, especially as e-commerce demand remains high.

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Shopify Investment Narrative Recap

To own Shopify shares, you typically need faith in a future where the company remains a core enabler of online commerce, expanding its merchant ecosystem and product suite as digital retail grows worldwide. The latest earnings show strong revenue momentum but a sharp drop in net income, which highlights how profit volatility remains the key near-term issue, this quarter alone does not meaningfully change that the most important catalyst is Shopify’s ability to sustain high top-line growth, while the greatest risk remains margin compression from broader competition and pricing pressure.

Among recent announcements, Shopify’s new partnership with The Estee Lauder Companies stands out, tying directly into its move upmarket and push for unified, omnichannel commerce. While this alliance is scheduled to begin rolling out in 2026, it signals Shopify’s ongoing focus on larger brands and advanced retail technologies, a trend closely tied to the company’s growth narrative and platform strength.

However, with revenue expansion comes real exposure to competitive and regulatory hurdles that investors should consider, particularly as...

Read the full narrative on Shopify (it's free!)

Shopify's narrative projects $18.5 billion revenue and $2.7 billion earnings by 2028. This requires 22.6% yearly revenue growth and a $0.4 billion increase in earnings from $2.3 billion today.

Uncover how Shopify's forecasts yield a $165.87 fair value, a 4% downside to its current price.

Exploring Other Perspectives

Twenty-four different fair value estimates from the Simply Wall St Community range from US$82 to US$200 per share. These diverging views reflect uncertainty as Shopify faces rising competition, a factor that may affect both growth outlook and long-term valuation.

Explore 24 other fair value estimates on Shopify - why the stock might be worth as much as 16% more than the current price!

Build Your Own Shopify Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Shopify research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.
• Our free Shopify research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Shopify's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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