Shopify’s Q3 Merchants are Likely to Slightly Decline

Analysts at RBC Capital provided their views on Shopify Inc. (NYSE:SHOP), noting that data from BuiltWith suggests Shopify’s merchants are likely to slightly decline in Q3, similar to year-to-date trends.

RBC capital’s analysis of BuiltWith data for July and August shows that merchants on Shopify are likely to decline 3% quarter-over-quarter in Q3. This is similar to Q2, where BuiltWith showed that Shopify’s merchants fell 2% quarter-over-quarter.

Despite total merchants declining slightly this year, the company has achieved MRR growth through the uptake of higher-priced plans. Data suggests Shopify Plus merchants are tracking to increase 11% quarter-over-quarter in Q3. Similarly, Shop Pay penetration according to BuiltWith data is now 62%, up from 58% in Q2. Higher Shop Pay penetration is driving faster GPV growth relative to GMV growth and helps lift Shopify’s take rate.

While share price volatility may persist in the near term, the analysts believe Shopify is one of the most compelling growth stories in their coverage.