SHOP: Shopify Explosive Q2 Earnings Sends Shares Skyrocketing

Aug 6 - Shopify SHOP soared nearly 20% on Wednesday to a new 52-week high after the ecommerce platform crushed second-quarter expectations. Revenue jumped 30.7% year-over-year to $2.68 billion, beating the consensus by $130 million, while gross merchandise volume climbed 31% to $87.8 billion, well above analysts' $81.7 billion forecast.

Monthly recurring revenue climbed to $185 million from $169 million a year ago, underlining the strength of Shopify's subscription services. Free cash flow reached $422 million, representing 16% of sales, and operating income hit $291 million versus the $248 million consensus. Net income surged to $906 million from $171 million a year earlier.

Shopify's finance chief highlighted accelerating growth across North America, Europe, and Asia Pacific, with European GMV expanding 42% on a constant-currency basis. Looking ahead, the company projects third-quarter revenue growth in the mid-to-high twenties and gross profit gains in the low-twenties percent range.

Investors flocked to buy shares, sending Shopify to its highest level in a year. As consumer spending shifts online globally, Shopify appears positioned to capitalize on rapid digital-commerce adoption.