Shares of the e-commerce company were up around 15 per cent in mid-day, trading at $33.38 per share on the New York Stock Exchange.
Shopify, which reports its earnings in U.S. dollars, says total sales in the third quarter of 2022 increased 22 per cent year-over-year to $1.4 billion, surpassing the $1.34 billion that analysts were expecting.
The company also reported an adjusted net loss of $30 million in the quarter, or 2 cents per diluted share, down from last year's loss of $102.8 million, or 8 cents per diluted share. Analysts had predicted a loss of 7 cents per share.
While the company reported a net loss in the quarter, Shopify president Harley Finklestein says the company remains "operationally disciplined" and focused on returning to profitability.
"If you look over the seven years since our (initial public offering), five of those years we've been profitable. We plan on becoming profitable again," he said on a conference call with analysts.
"We said this year is an investment year, but this is a company that thinks deeply about managing expenses, growing revenue. Ultimately, this is a company that likes to be profitable, and we will get back there."
While the stock was positive on the trading day, it is still down approximately 75 per cent year-to-date.
Analyst price targets for the stock range. Before the company reported earnings on Thursday, CIBC Capital Markets analyst Todd Coupland set a price target of $35 per share, RBC Capital Markets analyst Paul Treiber had a target of $55 per share, and ATB Capital Markets analyst Martin Toner set a target of $75 per share. Meanwhile, Morgan Stanley analyst Keith Weiss has a target of $40 per share.
The results follow a tumultuous period for the e-commerce retailer.
Shopify saw its business rapidly expand through the COVID-19 pandemic, adding hundreds of thousands of merchants and hiring thousands of new employees to meet the demand surge.
But the company struggled through the post-pandemic recovery amid a broader tech rout and as demand for online shopping moderated from COVID-19 highs. Shopify announced in the summer that it would lay off 10 per cent of its staff, with chief executive Tobi Lütke saying at the time that the company erred in betting the share of people making online purchases in retail would permanently jump ahead by five or 10 years.
Alicja Siekierska is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @alicjawithaj.