Shopify’s leadership expressed confidence in continuing this growth trend, projecting revenue for the fourth quarter—traditionally the busiest due to the holiday shopping season—to increase between the mid-to-high twenties percentage range compared to the same period last year. This guidance exceeded the 23% growth that analysts had predicted, signaling that Shopify expects strong consumer spending momentum despite potential macroeconomic headwinds.

In addition to robust sales growth, Shopify saw a notable improvement in free cash flow, which rose to $421 million in the third quarter from $276 million in the same period last year. This positive cash flow indicates not only increased revenues but also more efficient operations, further strengthening investor confidence and driving up the stock. As a result, Shopify’s shares climbed as much as 27% on Tuesday before settling at $152.26 on the Toronto Stock Exchange by the end of the trading day—a 21% increase from Monday’s closing price.

Analysts reacted positively to Shopify’s performance and outlook. William Blair analyst Arjun Bhatia commented in a research note to clients that the results reflect strong execution in Shopify’s growth initiatives, adding that the company has been able to capture market share from larger, established players such as Salesforce, Adobe Magento, and Oracle. “Given the company’s positioning in the market, we believe it is a long-term winner in the space, and we continue to have a positive outlook,” Bhatia wrote. He further noted that Shopify’s ability to secure market share from these significant competitors highlights its strong value proposition, and he remains optimistic about the company’s future potential.

CFRA senior research analyst Angelo Zino also reiterated a “buy” rating on Shopify’s stock, raising his 12-month price target for the U.S.-listed shares to $135. Zino was impressed with Shopify’s guidance for the fourth quarter, particularly as it came amid concerns of slowing consumer demand and macroeconomic pressures affecting the e-commerce sector. According to Zino, Shopify is gaining momentum through a combination of expanded product offerings, geographic expansion, and growth among new and existing merchants of various sizes.

Shopify’s customer base has expanded notably, with the company attracting both new merchants and larger enterprise clients. In the third quarter, Shopify added 16 new major clients, including well-known brands such as Reebok, Brilliant Earth, Off-White, and Lionsgate Entertainment. This move underscores Shopify’s strategy to attract more complex, larger-scale businesses in addition to its traditional base of entrepreneurs and small businesses. Shopify President Harvey Finkelstein highlighted this shift during a conference call, emphasizing that the company’s platform is increasingly capable of supporting sophisticated, high-volume clients looking for robust e-commerce solutions.

Overall, Shopify’s performance and forward-looking projections demonstrate its resilience in the competitive e-commerce space and its ability to adapt to market demands, making it a top choice for investors betting on the continued growth of online shopping.