But the short-seller was quick to fire back. This is up from its loss per share of 2 cents from the third quarter of the previous year.
Citron's questioning of Shopify's business model amounts to "preposterous claims" by a "short-selling troll", Shopify CEO Tobias Lutke said during the company's third-quarter earnings release.
"Citron understands Shopify's platform is effective for small and medium-sized businesses to launch e-commerce platforms".
He compared the company's practices, which he called a "good ol' get-rich-quick scheme", to Herbalife, a direct-marketing company that a short-seller alleged was a pyramid scheme.
The fast-growing company's third-quarter revenue jumped 72 percent as it reported adjusted profit for the first time as a public company and raised its fourth-quarter forecasts.
"That being said, we were unimpressed by the company's response to Citron's conclusion", the statement continues. He also suggested Shopify is illegally promising business opportunities and million-dollar incomes to merchants who sign up for its services.
Shopify said it signed up another record batch of new merchants in the three months to September 30, adding to the more than half a million customers who use its commerce software.
Capella Education Company (NASDAQ:CPLA) Moves into Overbought Territory
Also, there are 0 buy, 0 sell and 0 strong sell ratings, collectively assigning a 1.8 average brokerage recommendation. The firm had revenue of $107.01 million during the quarter, compared to analyst estimates of $108.10 million.
Much of their content shows how hard - rather than easy - entrepreneurship is, he said.
Lutke said that Shopify consulted with outside legal counsel, who also believe the claims are unsubstantiated, and has not been contacted by the FTC.
The company says it lost US$9.4 million in its latest quarter as its revenue grew 72 per cent compared with the same period a year ago.
Revenue was $171.5 million, above expectations for sales of $166.4 million, according to Thomson Reuters I/B/E/S.
Shopify, which keeps its books in US dollars, says its loss for the quarter amounted to nine cents per share compared with a loss of $9.1 million or 11 cents per share a year ago when it had fewer shares outstanding.
The average estimate of 16 analysts surveyed by Zacks Investment Research was for a loss of 2 cents per share.
Subscriptions services made up $82.4 million of that, while merchant solutions added $89 million.
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