Shopify Inc. reported quarterly earnings Thursday well beyond analyst forecasts – including its largest profit ever – but investors gave the news a cool reception, reflecting outsized expectations built into its lofty stock price.
Shopify’s shares, which had gained more than 150 per cent in 2020, lost nearly 5 per cent after the company cautioned investors not to expect this year’s huge pandemic-related gains to continue.
Shopify said in a release that the pandemic has created distorting effects on the economy and that near-term demand for its services depend on external factors “that are particularly fluid” including unemployment, fiscal stimulus, consumer spending and the scope and length of the crisis.
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“While demand for subscriptions remains higher than pre-COVID levels, we do not expect the year-on-year [recurring revenue increases] in Q4 to match” third-quarter levels, chief financial …