Shopify (NASDAQ:SHOP) soared in pre-market trading on Wednesday after delivering second-quarter results that comfortably exceeded Wall Street expectations, with strong revenue growth, higher profitability and an optimistic outlook for the months ahead.
Shares jumped around 26% before the opening bell as investors welcomed accelerating momentum across the company’s core business.
Revenue and earnings beat expectations
For the quarter ended June 30, Shopify reported revenue of $3.58 billion, ahead of analysts’ consensus estimate of $3.45 billion. Revenue increased 34% year over year from $2.68 billion.
Adjusted earnings per share came in at $0.42, exceeding market expectations of $0.40.
Gross merchandise volume (GMV) climbed 32% year over year to $115.6 billion, while free cash flow rose to $654 million from $422 million a year earlier, resulting in an 18% free cash flow margin.
Management highlights AI-driven growth
Shopify President Harley Finkelstein said the company delivered outstanding performance across all of its major financial metrics.
“This was a monster quarter: more than 30% growth in GMV AND revenue AND gross profit AND free cash flow,” said Harley Finkelstein, President of Shopify. “We power every kind of business, and with AI, we’re expanding what’s possible for all of them.”
Strong guidance supports investor confidence
Looking ahead, Shopify expects third-quarter 2026 revenue to grow at a low-thirties percentage rate compared with the same period last year.
The company also forecasts gross profit dollars to increase at a mid-to-high twenties percentage rate. The midpoint of approximately 27.5% is slightly below the 31% growth reported during the second quarter.
Management expects free cash flow margin to remain in the high-teens to low-twenties range.
Merchant Solutions continues to drive growth
Merchant Solutions revenue increased 37% year over year to $2.78 billion, while Subscription Solutions revenue rose 22% to $802 million.
Operating income climbed 68% to $488 million, compared with $291 million in the same period last year.
Chief Financial Officer Jeff Hoffmeister said the company continued to see broad-based strength across merchants of all sizes.
“GMV growth accelerated on top of last year’s already strong Q2 with solid results across all merchant sizes, channels, and geographies,” said Jeff Hoffmeister, Chief Financial Officer. “Alongside this momentum, we continue to drive operating leverage, which flowed through to 18% free cash flow margins.”
Shopify stock price
