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Shopify tops expectations, revenue jumps 71%

Company's stock made a recovery after its business practices were called into question last fall

Shopify reported a better-than-expected fourth quarter as its revenue jumped 71% compared with a year ago.

The Ottawa-based online store platform company, which keeps its books in U.S. dollars, said it lost $3 million in the last three months of 2017.

That compared with a loss of $8.9 million a year earlier.

But revenue totalled $222.8 million, up from $130.4 million.

On an adjusted basis, Shopify said it earned $14.7 million for the quarter compared with an adjusted loss of $400,000 in the fourth quarter of 2016.

Analysts on average had expected $209.3 million in revenue, according to Thomson Reuters.

"That our merchants sold more in the fourth quarter than in all of 2015, achieving one billion dollars of this in just four days, speaks to how far we have come in the past few years," Shopify chief financial officer Russ Jones said in a statement.

"Our leadership role in commerce, together with the scale we have achieved, position us well to invest in our next phase of growth: one marked by expansion of our capabilities upmarket and down, in retail, in our ecosystem, and internationally."

Shopify recently landed a big contract with the Ontario government, which announced Feb. 13 that it would use Shopify's e-commerce platform for cannabis sales online and in stores as part of its plan to be the province's sole distributor of legal recreational marijuana.

The company's shares were down $4.89, or 2.85 per cent, to $166.60 in late morning trading on the Toronto Stock Exchange.

Shopify's stock has recovered from a steep sell-off in October 2017, sparked by allegations from high-profile short-seller Andrew Left of Citron Research. He said the company, which provides businesses with online checkout services, doesn't comply with Federal Trade Commission guidelines and suggested the stock's value is closer to US$60 before any potential FTC involvement.

Shopify CEO Tobias Lutke told investors in October the company sells an e-commerce platform -- not business opportunities -- and complies with FTC regulations.

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