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Investing.com -- Shopify (NASDAQ:SHOP) shares shot up nearly 22% following the market open on Wednesday after the company posted better-than-expected results for the second quarter and offered a bright revenue growth outlook for the current quarter.
The company reported Q2 revenue of $2.68 billion, trumping the consensus estimate of $2.55 billion.
Merchant Solutions revenue rose to $2.02 billion, ahead of the expected $1.89 billion, while subscription revenue totaled $656 million, just under the $659.1 million forecast.
Monthly recurring revenue (MRR) stood at $185 million, missing the $192.3 million estimate.
Operating income came in at $291 million, beating the $247.7 million estimate. Total (EPA:TTEF) operating expenses were slightly above expectations at $1.01 billion, compared with the $999.6 million estimate.
Gross merchandise volume (GMV) for the quarter surged to $87.84 billion, well above the $81.65 billion consensus.
"Today’s results are the payoff from bold bets we made years ago," said Harley Finkelstein, President of Shopify. "The investments we’re making now will fuel our next chapter."
For the third quarter of 2025, Shopify said it expects revenue to grow at a mid-to-high twenties percentage rate year-over-year, with gross profit rising at a low-twenties rate. Analysts on average projected revenue growth of 21.54%, according to data compiled by LSEG.
Operating expenses are projected to represent 38% to 39% of revenue, while stock-based compensation is expected to total $130 million.
The company anticipates a free cash flow margin in the mid-to-high teens range.