Canadian-listed stock sank as much as 17% as subscription sales trailed estimates
Shopify’s Canadian-listed shares had lost 1.5 percent in 2026 as of Monday’s close, and the stock sank as much as 17 percent on Tuesday after third-quarter revenue of US$3.74bn came in below the Wall Street average estimate of US$3.75bn.
Bloomberg reported the intraday fall, the biggest since May, and the year-to-date figure for the Canadian listing.
It was the Ottawa-based company’s first revenue miss since the second quarter of 2022.
CNBC put Tuesday’s decline at 8.74 percent.
Revenue rose 32 percent year over year, 32 percent in constant currency, and free cash flow margin reached 22 percent, Shopify said in its November 3 release covering the quarter ended September 30.
Bloomberg reported revenue growth above 30 percent for six consecutive quarters.
Adjusted earnings of 49 cents per share topped LSEG estimates of 46 cents, according to CNBC.
Gross merchandise volume of US$119.15bn missed analyst estimates of US$120.03bn, CNBC reported, citing StreetAccount.
Subscription gross profit of US$661m fell nearly US$20m short of the StreetAccount estimate of US$680.3m, and subscription revenue of US$836m missed the FactSet estimate of US$848.1m.
Merchant revenue and merchant gross profit both beat estimates.
“We extended our track record of consistent execution, with 32 percent revenue growth and a 22 percent free cash flow margin,” said Jeff Hoffmeister, chief financial officer of Shopify in Ottawa, in the release.
For the fourth quarter of 2026, Shopify expects revenue to grow at a low-thirties percentage rate year over year, gross profit dollars at a high-twenties percentage rate, operating expenses of 29 to 30 percent of revenue, stock-based compensation of US$155m, and a free cash flow margin consistent with the fourth quarter of 2025.
CNBC reported an LSEG estimate of 32.1 percent for fourth-quarter revenue growth.
The company’s Form 10-Q for the quarter will be filed on EDGAR and on SEDAR+, according to the release.
Bloomberg Intelligence analyst Anurag Rana said the subscription miss could be weighing on the stock, though the fourth-quarter outlook looks “bright”, with revenue growth likely above 30 percent and free cash flow margin ahead of estimates.
Vital Knowledge said in a note that the GMV miss and a mixed outlook are likely to be viewed negatively.
Heading into the quarter, Bloomberg Intelligence said, Shopify had been expected to post constant-currency revenue growth close to 33 percent, driven by heightened contributions from larger merchants.
Harley Finkelstein, president of Shopify, called the GMV results “consistent” and “durable” on CNBC’s Squawk on the Street on Tuesday, and noted it was the 13th consecutive quarter of GMV growth above 20 percent.
“We’re really proud of the print, and we’re going to keep building for the long term and ignore the noise day to day,” Finkelstein said.
Meta released its consumer-facing artificial intelligence agent Muse during the third quarter, with Shopify an early partner, CNBC reported.
Muse can browse and purchase items on Shopify’s platform within the Muse app, and customers can check out with Shop Pay.
Finkelstein addressed concerns about pricing pressure as AI agents negotiate and compare prices for users.
He said the company is “not seeing that prices are being lowered,” and that AI agents are instead driving new traffic to Shopify’s business and helping consumers find new brands and products.
Finkelstein said this is the first holiday season where AI-assisted shopping capabilities will become mainstream, pointing to the rise of personal agents.
