- SH.
- SHOP
Shopify Inc (TSX:SH., NYSE:SHOP) shares jumped 18% Wednesday after the e-commerce platform reported second-quarter results that topped Wall Street expectations and provided a forecast for continued double-digit growth.
The company reported revenue of $3.58 billion for the quarter ended June 30, up 34% year over year and above the $3.45 billion consensus estimate.
Adjusted earnings per share came in at $0.42, compared with expectations of $0.40.
Gross merchandise volume (GMV) rose to $115.57 billion from $87.84 billion a year earlier, while gross profit increased 31% to $1.71 billion. Operating income reached $488 million, up from $291 million in the year-ago period.
Shopify generated $654 million in free cash flow, up from $422 million a year earlier, with its free cash flow margin improving to 18% from 16%.
“This was a monster quarter: more than 30% growth in GMV AND revenue AND gross profit AND free cash flow,” Shopify president Harley Finkelstein said in a statement.
“We power every kind of business, and with AI, we’re expanding what‘s possible for all of them. No one else comes close.”
Shopify CFO Jeff Hoffmeister added that GMV growth accelerated from an already strong second quarter last year, with results across merchant sizes, channels and geographies.
He also pointed to operating leverage contributing to the company’s 18% free cash flow margin.
For the third quarter, Shopify expects revenue to grow at a low-thirties percentage rate year over year. The company expects gross profit dollars to increase at a mid-to-high twenties percentage rate, while operating expenses are projected to represent 33% to 34% of revenue.
Shopify also expects stock-based compensation of $150 million and a free cash flow margin in the high-teens to low-twenties range for the third quarter.
