SHOP Stock Plunges 4%+ Despite Q3 Earnings Beat as Growth Accelerates - What Wall Street Missed

Shopify delivers knockout Q3 results—and gets punished for it. The market's brutal logic strikes again.

Earnings Beat, Stock Bleed

SHOP crushed Q3 expectations while accelerating growth—the exact combination investors claim to want. Yet shares tanked over 4% in Thursday's session. Because nothing satisfies the market gods quite like punishing success.

The Growth Paradox

Revenue surged past estimates. Merchant adoption hit new highs. Platform expansion continues unabated. All the metrics that typically send stocks soaring. Instead, traders found reasons to sell—proving once again that Wall Street would complain about free money being too heavy to carry.

When fundamentals no longer matter and growth becomes a liability, maybe the problem isn't the company—it's the casino mentality that's replaced actual investing.

TLDR

• Shopify reported Q3 2025 revenue of $2.84 billion, up 31.5% year-over-year.
• EPS missed expectations at $0.20 versus $0.25 forecasted.
• Q4 guidance of $3.59 billion exceeds analyst estimates by 3.1%.
• GMV rose 32% to $92 billion, signaling strong merchant activity.
• Shares traded down over 4% after results despite positive outlook.

E-commerce leader Shopify Inc. (NASDAQ: SHOP) posted upbeat Q3 2025 results, with shares closing at $172.94 and falling over 4% pre-market after reporting.

Shopify Inc., SHOP

The company’s quarterly revenue came in at $2.84 billion, a 31.5% year-over-year increase, surpassing analyst expectations of $2.76 billion.

Shopify’s GAAP earnings per share (EPS) stood at $0.20, which was 21.4% below Wall Street’s forecast of $0.25. Despite the profit miss, the strong top-line growth reinforced Shopify’s resilience in a challenging retail environment.

The company’s operating profit reached $343 million, with an operating margin of 12.1%, slightly lower than last year’s 13.1%.

Shopify, $SHOP, Q3-25. Results:

📊 Adj. EPS: $0.27 🔴
💰 Revenue: $2.84B 🟢
📈 Net Income: $264M
🔎 Shopify posted strong 32% revenue growth and 18% free cash FLOW margin—its 9th straight quarter of double-digit FCF margin. pic.twitter.com/ONgyYeYevF

— EarningsTime (@Earnings_Time) November 4, 2025

Growth Driven by Strong GMV and Customer Retention

Shopify’s Gross Merchandise Value (GMV) for the quarter hit $92 billion, exceeding analyst estimates of $89.2 billion and marking a 32% increase year-over-year. The metric indicates continued growth in online retail activity and stronger engagement from merchants.

In the past five years, Shopify has maintained a 34.2% compounded annual growth rate (CAGR) in sales—well above the software industry average. Over the last two years, revenue grew at an annualized 26.8%, signaling ongoing but slightly moderating expansion.

Q4 Outlook and Future Growth Expectations

Looking ahead, Shopify provided Q4 2025 revenue guidance of $3.59 billion at the midpoint, beating analyst expectations of $3.48 billion by 3.1%. The company anticipates 27.5% year-over-year growth next quarter, reflecting confidence in its expanding merchant base and AI-driven retail solutions.

Shopify’s free cash Flow margin improved to 17.8%, up from 15.7% last quarter, while analysts forecast 21.8% annual revenue growth over the next 12 months. The company’s market capitalization now stands at $224.8 billion, reinforcing its position as one of the most valuable e-commerce platforms globally.

Customer Efficiency and Investor Reaction

Shopify continues to show efficiency in acquiring and retaining customers. Its customer acquisition cost (CAC) payback period improved to 5.5 months, showcasing the brand’s strong reputation and differentiated product offering.

Despite the positive results, Shopify’s shares dipped 3.5% to $166.53 immediately following the announcement, as investors reacted to the EPS miss. Nonetheless, long-term returns remain impressive, with the stock up 118.9% year-over-year and 412.5% over three years, far outperforming the S&P/TSX Composite Index.

A Strong Quarter with Positive Momentum

Overall, Shopify’s Q3 2025 results highlight robust revenue and GMV growth, effective customer acquisition, and optimistic Q4 guidance. While profit margins remain under pressure, the company’s consistent execution and long-term expansion prospects continue to position it as a leading force in global e-commerce.