11:18 AM EST, 11/04/2025 (MT Newswires) -- Shopify ( SHOP ) issued a revenue guidance for the ongoing quarter implying a sequential slowdown in annual growth as its gross margin fell in the third quarter despite sales and earnings topping expectations.

The Canada-based e-commerce platform is guiding fourth-quarter revenue to grow at a mid-to-high-twenties percentage rate on an annual basis. In the most recent quarter, Shopify ( SHOP ) logged revenue of $2.84 billion, up 32% year over year.

Analysts surveyed by FactSet are looking for sales of $3.44 billion in the three months to December, and were modeling for $2.72 billion in the September period.

The company is facing a tough comparison from the fourth quarter of last year, which was the highest-growth quarter in 2024, Chief Financial Officer Jeff Hoffmeister said during an earnings call, according to a FactSet transcript.

The company's Nasdaq-listed shares were down 3.5% in Tuesday trade, but are up 57% so far this year.

Gross margin in the third quarter fell to 48.9% from 51.7% a year earlier, Hoffmeister told analysts. Operating expenses rose to $1.05 billion from $835 million.

"Gross margin was down slightly year over year as a result of higher hosting costs needed to support higher merchant transaction volumes and our continued geographic expansion as well as higher (artificial intelligence) usage," Hoffmeister said.

Third-quarter adjusted earnings fell to $0.34 per share from $0.36 a year earlier, while analysts expected $0.33.

Subscription solutions revenue jumped 15% to $699 million, while merchant solutions surged 38% to $2.15 billion.

Gross merchandise volume, or GMV, climbed 32% to $92.01 billion, which Hoffmeister said is "the highest growth rate quarter that we've had since the COVID impacted growth rates of 2021."

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