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FILE PHOTO: The logo of Shopify is seen outside its headquarters in Ottawa, Ontario, Canada, September 28, 2018. REUTERS/Chris Wattie
(Reuters) - Shopify Inc raised its 2019 earnings forecast and posted a surprise quarterly profit on Tuesday on strong demand for its software that helps retailers sell goods online, sending its shares up 7 percent to a record high.
The company has stepped up its spending to stay ahead in a competitive market by launching a new line of point-of-sale hardware and plans to roll out Shopify Pay to rival Alphabet Inc’s Google Pay and Apple Inc’s payments services.
Shopify, founded a little over a decade ago as an online store to sell snowboard equipment, makes its money by charging online merchants a monthly fee for using its technology and helping them run their online businesses.
The company, which counts Kylie cosmetics, Nestle SA and Unilever Plc among its 800,000 customers, also hopes to boost its merchant database under its premium “Shopify Plus” offering.
The Ottawa-based company said it now expects full-year adjusted operating income of $20 million to $30 million, above the $10 million to $20 million it forecast earlier.
Revenue is expected in the range of $1.48 billion to $1.50 billion, also above the $1.46 billion to $1.48 billion it estimated earlier.
However, net loss widened to $24.1 million from $15.9 million a year earlier, as costs surged 50 percent to $216.1 million.
Excluding items, the company earned 9 cents per share, compared with a loss of 5 cents estimated by analysts, according to IBES data from Refinitiv.
Revenue for the quarter rose to $320.5 million, beating estimates of $309.4 million.
Reporting by Ahmed Farhatha in Bengaluru; Editing by Anil D'Silva