By (Reuters) -Shopify forecast fourth-quarter revenue growth above estimates on Tuesday, as the Canadian company’s focus on employing AI-powered tools attract more merchants to its e-commerce services ahead of the all-important holiday season.
Its U.S.-listed shares jumped nearly 17% in premarket trading after the company also topped analysts’ expectations for third-quarter revenue.
Shopify (NYSE:SHOP), which enables businesses to build and run online stores by providing tools for everything from creating a website to shipping products, has spruced up its services by integrating artificial intelligence-based features this year.
The company in June rolled out its AI assistant, Sidekick, which provides sellers with sales reports, data on customer behavior and helps execute tasks such as setting up discount codes, to more merchants on its platform.
Shopify has also invested in making its shipping faster and cheaper for brands on its platform by offering discounted shipping rates.
“(The third-quarter) was outstanding … As the busiest shopping season of the year for our merchants approaches, they trust Shopify to provide the tools, unmatched speed, and reliability to maximize their success,” said Shopify President Harley Finkelstein.
The company forecast current-quarter revenue would increase in a mid-to-high-twenties percentage range, while analysts expected a rise of 22.7%, according to LSEG data.
Shopify reported a 26% jump in revenue to $2.16 billion for the third quarter ended Sept. 30, compared with analysts’ average estimate of $2.11 billion, marking the ninth straight quarterly beat on sales.
Gross merchandise volume (GMV), a key metric representing the total value of orders facilitated through Shopify, jumped 24% to $69.72 billion in the July-September period.
Operating income jumped to $283 million in the quarter, from $122 million a year earlier.