The logo of Shopify is seen outside its headquarters in Ottawa, Ontario, on Sept. 28, 2018. Shopify shares soared 20% Wednesday after the company topped analysts' estimates for the second quarter, and gave rosy guidance for the third quarter. Here's how the company did, compared with estimates from analysts polled by LSEG: Second-quarter sales surged 31% year over year to $2.68 billion, an acceleration from a year ago, when revenue expanded roughly 20%. The Canadian e-commerce company also offered third-qua ...

Financial Data and Key Metrics Changes - Shopify reported Q2 revenue of $2.7 billion, up 31% year over year, with a free cash flow margin of 16% [6][10][59] - Gross profit grew 25%, with overall gross margin at 48.6%, down from 51.1% in the prior year [54][56] - Operating income for the quarter was $291 million, representing an 11% operating income margin, compared to 9% last year [58] Business Line Data and Key Metrics Changes - Offline GMV increased by 29%, driven primarily by larger retailers joining the platform [31][49] - Merchant solutions revenue rose by 37%, while subscription solutions revenue grew by 17% [51][52] - GMV in Q2 was $88 billion, up 31%, with North America and Europe showing strong performance [47][48] Market Data and Key Metrics Changes - International GMV was up 42% year over year, with Europe leading the growth [6][36] - Cross-border GMV remained consistent at 15% of total GMV in Q2 [62] - Shopify Payments penetration reached 64%, up from 61% last year [22][51] Company Strategy and Development Direction - Shopify aims to expand its reach across all geographies, particularly in Europe, and is focused on building a unified commerce platform [6][10] - The company is investing in AI and product innovations to enhance the shopping experience and streamline operations for merchants [13][21] - Shopify is committed to supporting entrepreneurs worldwide, with a focus on international expansion and product localization [35][36] Management's Comments on Operating Environment and Future Outlook - Management noted that the merchant base has remained resilient despite macroeconomic challenges, with strong performance continuing into Q3 [60][61] - The company expects Q3 revenue growth in the mid to high 20s year over year, driven by continued growth in merchant solutions [63] - Management highlighted the importance of ongoing investments in product development and marketing to sustain growth [66][68] Other Important Information - Shopify launched several new products, including Universal Cart and CheckoutKit, aimed at enhancing the shopping experience through AI integration [15][93] - The company has expanded its payments product into 16 new countries this year, nearly doubling its market accessibility [22][24] - Shopify Capital is now available in Germany and the Netherlands, providing more merchants with access to growth funding [36][57] Q&A Session Summary Question: How would you characterize the demand in the US and any potential pull forward for consumers? - Management indicated that there has not been a significant pull forward of demand, with consistent performance observed in Q2 and July [70][72] Question: What is the status of international growth and product localization? - Management acknowledged strong international growth, particularly in Europe, and emphasized ongoing efforts to enhance product offerings for international markets [75][78] Question: How does the company view long-term growth potential? - Management expressed confidence in maintaining growth rates above 25% due to past investments and expanding product offerings [82][86] Question: Will Universal Cart and Checkout Kit be available for the holiday season? - Management confirmed ongoing development of these products, aiming for integration into AI platforms to enhance shopping experiences [90][93]

Financial Data and Key Metrics Changes - Shopify reported Q2 revenue of $2.7 billion, up 31% year over year, with a free cash flow margin of 16% [5][8][57] - Gross profit grew 25%, exceeding expectations, with overall gross margin at 48.6%, down from 51.1% in the prior year [52][54] - Operating income for the quarter was $291 million, representing an 11% operating income margin, compared to 9% last year [56] Business Line Data and Key Metrics Changes - GMV in Q2 was $88 billion, up 31%, with offline GMV increasing by 29% [46][29] - Merchant solutions revenue increased by 37%, driven primarily by GMV growth, while subscription solutions revenue grew by 17% [49][50] - The Shop app saw a 140% year-over-year growth in native GMV, indicating strong engagement [26] Market Data and Key Metrics Changes - International GMV was up 42% year over year, with Europe leading the growth [5][34] - Cross-border GMV remained consistent at 15% of total GMV in Q2 [60] - Shopify Payments penetration reached 64%, up from 61% last year, indicating strong adoption [22][49] Company Strategy and Development Direction - Shopify is focused on expanding its reach internationally, particularly in Europe, and enhancing its product offerings to support merchants [5][34] - The company is investing in AI-driven commerce solutions, including the launch of Universal Cart and CheckoutKit, to enhance the shopping experience [12][91] - Shopify aims to build a unified commerce platform that integrates online and offline sales channels [4][32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of their merchant base amid changing economic conditions, noting strong performance in both North America and Europe [58][59] - The company anticipates continued growth in Q3, with revenue growth expected in the mid to high 20s year over year [61] - Management highlighted the importance of ongoing product innovation and market expansion as key drivers of future growth [85][86] Other Important Information - Shopify has expanded its payments product into 16 new countries this year, nearly doubling its market accessibility [21] - The company has introduced a USDC stablecoin option for payments, enhancing flexibility for merchants [23] - Shopify's capital business continues to grow, with new tools providing merchants more financing options [55] Q&A Session Summary Question: How would you characterize the demand in the US and any potential pull forward due to tariffs? - Management noted no significant pull forward in demand, with consistent performance observed in Q2 and July, indicating strong business health [69][71] Question: What is the status of international growth and localization for merchants? - Management highlighted ongoing product updates and successful expansion into new countries, with significant growth in international GMV, particularly in Europe [74][76] Question: How does the company view long-term growth potential? - Management expressed confidence in maintaining growth rates above 25%, driven by past investments and new product offerings [81][84] Question: Will Universal Cart and Checkout Kit be available for the holiday season? - Management confirmed ongoing development of these products, emphasizing their importance in enhancing the shopping experience through AI integration [89][91]

Core Viewpoint - Shopify reported strong second-quarter earnings, exceeding market expectations for both revenue and third-quarter guidance, leading to a significant pre-market stock price increase of up to 17% [1]. Financial Performance - Second-quarter revenue grew by 31% year-over-year to $2.68 billion, surpassing analyst expectations of 25% [2]. - Gross Merchandise Volume (GMV) reached $87.84 billion, up from $67.25 billion in the previous year, indicating robust growth across all regions [2]. - Monthly Recurring Revenue (MRR) increased to $185 million from $169 million year-over-year [2]. - Gross profit rose to $1.30 billion, compared to $1.05 billion in the same quarter last year [2]. - Operating income improved to $291 million from $241 million year-over-year [2]. - Free cash flow increased to $422 million, up from $333 million, maintaining a free cash flow margin of 16% [2]. Regional Performance - The company noted accelerated growth in GMV and revenue across North America, Europe, and Asia-Pacific, with Europe showing particularly strong performance, achieving a 42% increase in GMV on a constant currency basis [2]. Future Outlook - Shopify expects third-quarter revenue growth to be in the range of 25%-30%, exceeding analyst expectations of 22% [2]. - Projected gross profit growth is anticipated to be between 20%-25%, also above the market consensus of 17% [2]. - Free cash flow margin is expected to be between 15%-20% [2]. Market Reaction - Following the earnings report and positive outlook, Shopify's stock price rose by 16% in pre-market trading, reaching $147.3 [3].

Group 1: Earnings Performance - Shopify reported quarterly earnings of $0.35 per share, exceeding the Zacks Consensus Estimate of $0.28 per share, and up from $0.26 per share a year ago, representing an earnings surprise of +25.00% [1] - The company posted revenues of $2.68 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 5.47%, compared to year-ago revenues of $2.05 billion [2] - Over the last four quarters, Shopify has surpassed consensus EPS estimates two times and topped consensus revenue estimates four times [2] Group 2: Stock Performance and Outlook - Shopify shares have increased approximately 19.4% since the beginning of the year, outperforming the S&P 500's gain of 7.1% [3] - The company's earnings outlook, including current consensus earnings expectations for upcoming quarters, will be crucial for investors [4] - The current consensus EPS estimate for the coming quarter is $0.35 on $2.63 billion in revenues, and $1.40 on $10.86 billion in revenues for the current fiscal year [7] Group 3: Industry Context - The Internet - Services industry, to which Shopify belongs, is currently in the bottom 38% of over 250 Zacks industries, indicating potential challenges [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact stock performance [5] - The favorable estimate revisions trend ahead of the earnings release has resulted in a Zacks Rank 1 (Strong Buy) for Shopify, suggesting expected outperformance in the near future [6]

Shopify Performance & Growth - Shopify Q2 2025 revenue reached $2.7 billion, a 31% year-over-year increase[9] - Cumulative Gross Merchandise Volume (GMV) since Shopify's inception is $1.2 trillion[9] - GMV in Q2 2025 was $75 billion, up 50% year-over-year[30] - Shopify's US ecommerce market share is greater than 12%[9] - Shopify has millions of merchants across 175+ countries[9] Shopify Payments & GMV - Cumulative GMV through Shop Pay since 2017 is $252 billion[29] - Shopify Payments penetration continues to increase, reaching 64% of GMV in Q2 2025[102] - Offline revenue in 2024 was $588 million, with 33% offline revenue growth[69] - Cumulative offline GMV since the launch of Shopify POS is over $100 billion[71] Shopify Ecosystem & Global Expansion - Shopify has over 16,000 apps in its App Store[47] - Shopify paid out $1.0 billion to partners for apps benefiting merchants in the last 12 months (as of December 31, 2024)[47] - International revenue growth since 2020 is 3.1x, representing 30% of the revenue mix[75,77]

Shopify shares jumped after last quarter’s revenue and its third-quarter outlook beat expectations https://t.co/kUROrOVoqY ...

格隆汇8月6日｜Shopify(SHOP.US)盘前涨幅扩大至17%，公司预计三季度营收同比增速将达25%-29%。 ...

格隆汇8月6日｜Shopify第二季度营收26.8亿美元，市场预估25.5亿美元；订阅收入6.56亿美元，市场预 估6.591亿美元；营业利润2.91亿美元，市场预估2.477亿美元。 ...

[Q2 2025 Financial Results Overview](index=1&type=section&id=Q2%202025%20Financial%20Results%20Overview) Shopify's **Q2 2025** achieved strong **revenue growth** and consistent **free cash flow margins**, fueled by strategic investments and accelerated regional performance [Executive Summary & Key Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Key%20Highlights) **Shopify** reported an exceptional **Q2 2025**, achieving **31% revenue growth** and a **16% free cash flow margin**, marking eight consecutive quarters of double-digit **free cash flow margins**. Management attributed this success to strategic investments and noted accelerating **GMV** and **revenue growth** across key regions, particularly Europe [Overall Performance & Management Commentary](index=1&type=section&id=Overall%20Performance%20%26%20Management%20Commentary) **Shopify** delivered strong **Q2 2025** results with significant **revenue growth** and consistent **free cash flow margins**. Management emphasized the payoff from past strategic investments and highlighted accelerating growth in **GMV** and **revenue** across North America, Europe, and Asia Pacific, with Europe showing particular strength - **Shopify** achieved **31% revenue growth** and **16% free cash flow margin**, marking eight consecutive quarters of double-digit **free cash flow margins**[1](index=1&type=chunk) - **GMV** and **revenue growth** rates accelerated in North America, Europe, and Asia Pacific, quarter over quarter. Europe was a particular source of strength, where **GMV** grew **42%** on a **constant currency basis**[2](index=2&type=chunk) [Selected Business Performance Information](index=1&type=section&id=Selected%20Business%20Performance%20Information) Key financial metrics for **Q2 2025** demonstrated robust year-over-year growth across **GMV**, **MRR**, **Revenue**, **Gross Profit**, **Operating Income**, and **Free Cash Flow**, with **revenue growth** rate increasing by **10 percentage points** Selected Business Performance (Q2 2025 vs. Q2 2024) | Metric | June 30, 2025 (US $ millions) | June 30, 2024 (US $ millions) | YoY Growth | | :--- | :--- | :--- | :--- | | GMV | 87,837 | 67,245 | 30.6% | | MRR | 185 | 169 | 9.5% | | Revenue | 2,680 | 2,045 | 31.0% | | Gross profit | 1,302 | 1,045 | 24.6% | | Operating income | 291 | 241 | 20.7% | | Free cash flow | 422 | 333 | 26.7% | | YoY revenue growth rate | 31% | 21% | +10 p.p. | | Free cash flow margin | 16% | 16% | 0 p.p. | [Company Information](index=2&type=section&id=Company%20Information) This section details **Shopify** as a leading global commerce company, highlighting its platform and extensive merchant reach across **175+** countries [About Shopify](index=2&type=section&id=About%20Shopify) **Shopify** is a leading global commerce company that provides essential internet infrastructure, offering tools for businesses of all sizes to start, scale, market, and run their retail operations. Its platform is engineered for speed, customization, reliability, and security, serving millions of businesses in over **175** countries - **Shopify** is a leading global commerce company providing essential internet infrastructure for commerce, offering trusted tools to start, scale, market, and run a retail business of any size[8](index=8&type=chunk) - **Shopify** powers millions of businesses in more than **175** countries and is trusted by numerous global brands[8](index=8&type=chunk) [Financial Outlook](index=2&type=section&id=Financial%20Outlook) This section outlines **Shopify's Q3 2025 financial outlook** and includes disclaimers regarding forward-looking statements and associated risks [Q3 2025 Outlook](index=2&type=section&id=Q3%202025%20Outlook) For **Q3 2025**, **Shopify** expects **revenue growth** in the mid-to-high twenties percentage range year-over-year, with **gross profit** dollars growing at a low-twenties percentage rate. **Operating expenses** are projected to be **38%** to **39%** of **revenue**, stock-based compensation at **$130 million**, and **free cash flow margin** in the mid-to-high teens Q3 2025 Financial Outlook | Metric | Q3 2025 Outlook | | :--- | :--- | | Revenue growth (YoY) | Mid-to-high twenties percentage rate | | Gross profit dollars growth (YoY) | Low-twenties percentage rate | | Operating expense as % of revenue | 38% to 39% | | Stock-based compensation | $130 million | | Free cash flow margin | Mid-to-high teens | [Forward-Looking Statements](index=9&type=section&id=Forward-Looking%20Statements) This section contains a standard disclaimer regarding forward-looking statements, highlighting that actual results may differ materially from projections due to various known and unknown risks. These risks include economic conditions, consumer spending, international trade impacts, reliance on third-party cloud providers, cybersecurity threats, and software defects. Investors are cautioned against undue reliance on these statements - Forward-looking statements, including **financial outlook** for the next fiscal quarter, are based on current projections and expectations but are subject to known and unknown risks[20](index=20&type=chunk) - Risks that may cause actual results to differ materially include economic conditions, consumer spending, international trade, reliance on third-party cloud providers, cyberattacks, and software defects[20](index=20&type=chunk) [Condensed Consolidated Financial Statements](index=3&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents **Shopify's** unaudited condensed consolidated financial statements, including operations, balance sheets, and cash flows for **Q2 2025** [Condensed Consolidated Statement of Operations](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Operations) **Shopify's Q2 2025** Statement of Operations shows total revenues of **$2,680 million**, a **31%** increase year-over-year, driven primarily by merchant solutions. **Gross profit** rose to **$1,302 million**, and **net income** significantly increased to **$906 million**, largely due to a positive **net other income (expense)** including taxes Condensed Consolidated Statement of Operations (Q2 2025 vs. Q2 2024) | Metric (US $ millions) | June 30, 2025 | June 30, 2024 | YoY Change | | :--- | :--- | :--- | :--- | | **Revenues** | | | | | Subscription solutions | 656 | 563 | +16.5% | | Merchant solutions | 2,024 | 1,482 | +36.6% | | **Total Revenues** | **2,680** | **2,045** | **+31.0%** | | Cost of revenues | 1,378 | 1,000 | +37.8% | | **Gross profit** | **1,302** | **1,045** | **+24.6%** | | Total operating expenses | 1,011 | 804 | +25.7% | | **Operating income** | **291** | **241** | **+20.7%** | | Net other income (expense), including taxes | 615 | (70) | N/A | | **Net income** | **906** | **171** | **+430%** | | Net income excluding the impact of equity investments | 338 | 291 | +16.2% | - **Net other income (expense)**, including taxes, significantly contributed to the **net income** increase, encompassing interest income, gains/losses on **equity investments** and other investments, foreign exchange, and income taxes[11](index=11&type=chunk) [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of **June 30, 2025**, **Shopify's total assets** increased to **$14,561 million** from **$13,924 million** at **December 31, 2024**, driven by growth in current assets, particularly **marketable securities** and loans. **Total shareholders' equity** also grew to **$12,124 million** Condensed Consolidated Balance Sheets (June 30, 2025 vs. December 31, 2024) | Metric (US $ millions) | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | **Total Assets** | **14,561** | **13,924** | **+637** | | Current assets | 8,001 | 7,254 | +747 | | Long-term assets | 6,560 | 6,670 | -110 | | **Total Liabilities** | **2,437** | **2,366** | **+71** | | Current liabilities | 2,078 | 1,956 | +122 | | Long-term liabilities | 359 | 410 | -51 | | **Total Shareholders' Equity** | **12,124** | **11,558** | **+566** | - **Cash and cash equivalents** increased to **$1,542 million** from **$1,498 million**, while **marketable securities** grew to **$4,278 million** from **$3,981 million**[13](index=13&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) **Shopify's Q2 2025 cash flow** statement shows **net cash provided by operating activities** increased to **$428 million**. Investing activities resulted in a reduced net cash outflow of **$252 million**, and financing activities provided **$44 million**. Overall, **cash**, **cash equivalents**, and restricted cash increased by **$233 million**, ending the period at **$1,542 million** Condensed Consolidated Statements of Cash Flows (Q2 2025 vs. Q2 2024) | Metric (US $ millions) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | 428 | 340 | | Net cash used in investing activities | (252) | (424) | | Net cash provided by financing activities | 44 | 3 | | Effect of foreign exchange on cash | 13 | (1) | | Net increase (decrease) in cash, cash equivalents and restricted cash | 233 | (82) | | Cash, cash equivalents and restricted cash – end of period | 1,542 | 1,541 | - A significant net gain on **equity investments** and other investments (**$-682 million**) in **Q2 2025**, compared to a loss (**$76 million**) in **Q2 2024**, impacted **operating cash flow** adjustments[14](index=14&type=chunk) [Non-GAAP Financial Measures & Analysis](index=7&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Analysis) This section details **Shopify's** non-GAAP financial measures, including **free cash flow**, **net income excluding equity investments**, and **constant currency analysis** [Free Cash Flow Reconciliation](index=7&type=section&id=Free%20Cash%20Flow%20Reconciliation) **Shopify's free cash flow** for **Q2 2025** increased to **$422 million** from **$333 million** in **Q2 2024**, maintaining a consistent **16% free cash flow margin**. This non-GAAP measure is calculated by subtracting **capital expenditures** from **net cash provided by operating activities** Free Cash Flow Reconciliation (Q2 2025 vs. Q2 2024) | Metric (US $ millions) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | 428 | 340 | | Less: capital expenditures | (6) | (7) | | **Free cash flow** | **422** | **333** | | Revenue | 2,680 | 2,045 | | **Free cash flow margin** | **16%** | **16%** | - **Free cash flow** and **free cash flow margin** are non-GAAP financial measures provided to help investors understand operating results and business performance in the same manner as management[23](index=23&type=chunk) [Net Income Excluding Equity Investments Reconciliation](index=7&type=section&id=Net%20Income%20Excluding%20Equity%20Investments%20Reconciliation) **Net income excluding the impact of equity investments**, a non-GAAP measure, was **$338 million** for **Q2 2025**, up from **$291 million** in **Q2 2024**. This adjustment removes the volatile gains or losses from **equity investments**, which management deems irrelevant to core operational results Net Income Excluding Equity Investments Reconciliation (Q2 2025 vs. Q2 2024) | Metric (US $ millions) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | | :--- | :--- | :--- | | Net income | 906 | 171 | | Less: equity investments, marked to market, net of taxes | 568 | (120) | | **Net income excluding the impact of equity investments** | **338** | **291** | - The impact of gains or losses on **equity investments** is excluded as it is not considered relevant to the fundamentals of **Shopify's** business, given that valuations are outside of management's control[11](index=11&type=chunk) [Financial Performance Constant Currency Analysis](index=8&type=section&id=Financial%20Performance%20Constant%20Currency%20Analysis) **Shopify** provides a **constant currency analysis** to offer a clearer comparison of period-to-period operating results by removing the impact of foreign exchange rate fluctuations. On a **constant currency basis**, **GMV** grew **29%**, **revenue** grew **30%**, and **gross profit** grew **24%** year-over-year for **Q2 2025** Financial Performance Constant Currency Analysis (Q2 2025 vs. Q2 2024) | Metric | 2025 as reported | 2024 as reported | Percentage change YoY | Constant currency impact | Percentage change YoY constant currency | | :--- | :--- | :--- | :--- | :--- | :--- | | GMV | 87,837 | 67,245 | 31% | 1,042 | 29% | | Revenue | 2,680 | 2,045 | 31% | 17 | 30% | | Subscription solutions revenue | 656 | 563 | 17% | 3 | 16% | | Merchant solutions revenue | 2,024 | 1,482 | 37% | 14 | 36% | | Gross profit | 1,302 | 1,045 | 25% | 9 | 24% | | Operating income | 291 | 241 | 21% | 8 | 17% | - This analysis helps investors understand financial and operating performance by isolating the effects of foreign exchange rate fluctuations[18](index=18&type=chunk) [Additional Information](index=2&type=section&id=Additional%20Information) This section provides supplementary information, including quarterly conference call details, regulatory filings, and definitions of key financial metrics [Quarterly Conference Call & Filings](index=2&type=section&id=Quarterly%20Conference%20Call%20%26%20Filings) **Shopify's Q2 2025** results were discussed in a conference call on August **6, 2025**, with a webcast available on their investor relations website. The company's Form **10-Q** for the quarter ended **June 30, 2025**, including unaudited financial statements, is available on **Shopify's** website and filed with US and Canadian securities regulators - A conference call to discuss **Q2** results was held on August **6, 2025**, with an archived webcast available on **Shopify's** investor relations website[6](index=6&type=chunk) - **Shopify's** Form **10-Q** for **Q2 2025**, including financial statements and MD&A, is available on www.shopify.com and filed on EDGAR and SEDAR+[7](index=7&type=chunk) [Endnotes & Key Metric Definitions](index=9&type=section&id=Endnotes%20%26%20Key%20Metric%20Definitions) This section provides definitions for key financial and operational metrics used in the report, including **Gross Merchandise Volume** (**GMV**), **Monthly Recurring Revenue** (**MRR**), and **Free Cash Flow** (**FCF**), clarifying their calculation and significance - **Gross Merchandise Volume** (**GMV**) represents the total dollar value of orders facilitated through the **Shopify** platform, net of refunds, and inclusive of shipping, handling, duty, and taxes[21](index=21&type=chunk) - **Monthly Recurring Revenue** (**MRR**) is the aggregate value of all subscription plans in effect on the last day of the period, used as a directional indicator for **subscription solutions revenue**[22](index=22&type=chunk) - **Free cash flow** is a non-GAAP financial measure calculated as **cash flow from operations** less **capital expenditures**, providing insight into operating results and business performance[23](index=23&type=chunk)