Shopify beat its forecasted revenue growth and posted $906 million USD as its merchant sales rose despite trade-related pressures.
The Ottawa-based e-commerce company posted 31 percent revenue growth year-over-year as its revenue hit $2.68 billion USD, above analyst estimates, according to Reuters. The $906-million USD in net income comes after a larger-than-expected $682-million USD net loss in Q1. Gross profit was $1.3 billion, up from $1.1 billion last quarter.
Shopify reported $291 million USD in operating income, an increase of nearly 19 percent year over year. It also posted a 16 percent free cash flow margin, continuing an eight-quarter double-digit streak.
Gross merchandise volume (GMV) reached $87.8 billion USD, a 16-percent increase compared to Q1 results, and with strong numbers in Europe, the company said. Shopify CFO Jeff Hoffmeister said in a press release that both GMV and revenue growth rates accelerated in North America, Europe, and Asia Pacific, quarter over quarter.
Next quarter, Shopify said it expects to hit revenue growth in the mid-to-high twenties, free cash flow margin in the mid-to-high teens, and gross profit growth in the low twenties, all on a year-over-year basis.
The earnings come as the US has escalated its trade war with Canada, hiking tariffs on goods and eliminating a key policy for small merchants. Shopify sells e-commerce software solutions to small independent businesses as well as large enterprises.
Shopify shares on the Nasdaq closed at $127 USD yesterday, up 19 percent since the beginning of the year. It rose roughly 14 percent over the same period on the Toronto Stock Exchange to close at $175 CAD.
As part of a push to integrate artificial intelligence (AI) into its services, Shopify rolled out a suite of developer tools yesterday to facilitate shopping within AI chatbots. These features include product searches with AI agents and integrating checkout directly into conversational AI chats, such as Microsoft Copilot.
Disclosure: BetaKit majority owner Good Future is the family office of two former Shopify leaders, Arati Sharma and Satish Kanwar.
Feature image courtesy Shopify.