Shopify stock surged after the e-commerce platform provider reported second-quarter gross profit and revenue that topped estimates. The company's September quarter sales outlook handily beat views amid its expansion into enterprise and international markets.
On the stock market today, Shopify stock rocketed about 21% to near 154 in afternoon trading.
The e-commerce software maker reported Shopify earnings before the market open. On an adjusted basis, Q2 Shopify earnings rose 34% to 35 cents per share, topping estimates of 29 cent profit.
Excluding equity investments, net income rose 16% to $338 million, slightly below estimates of $350 million. Shopify said gross profit rose over 24% to $1.302 billion, topping estimates of $1.247 billion.
Also, revenue climbed 31% to $2.68 billion. Shopify stock analysts polled by FactSet predicted revenue of $2.54 billion.
International Boosts GMV Growth
Gross merchandise volume from merchant customers rose 30% to $87.84 billion, boosted by growth in Europe, topping estimates of $81.7 billion, the company said.
"Our international regions are contributing more to our growth each quarter, becoming a vital part of Shopify's mission to support entrepreneurs worldwide," said Shopify President Harley Finkelstein on the Q2 earnings call with analysts.
"In Q2, Europe led the way with strong GMV growth from both new merchants joining the platform as well as our existing merchants continuing to outperform their respective e-commerce markets. Shopify Capital is now available in Germany and the Netherlands, providing more merchants with access to growth funding."
He added that customers in Europe include Fiskars Group, owner of brands such as Wedgwood and Waterford.
Strong Q3 Revenue Guidance
For the current quarter ending Sept. 30, Shopify said it expects "Revenue to grow at a mid- to high 20s percentage rate on a year-over-year basis." Wall Street analysts had estimated Q3 revenue growth of 22%.
Meanwhile, new North America enterprise customers added in Q2 included Starbucks, Canada Goose and Burton Snowboards, the company said.
Merchant solutions revenue rose 36% to $2.024 billion, topping estimates of $1.88 billion. Subscription revenue climbed 16% to $656 million, just above estimates of $659 million.
"Shopify had a monster second-quarter delivering its largest revenue beat since 2021 and reaccelerating growth to 31% at $11 billion in annualized revenue," said William Blair analyst Arjun Bhatia in a report. "We see a durable runway for growth ahead as Shopify invests across key areas like enterprise, international, agentic commerce, business-to-business and more."
SHOP Stock: Valuation Challenging
Going into the Shopify earnings report, shares had advanced 17% in 2025. With Wednesday's gain, Shopify stock leaped over an entry point on IBD's MarketSurge.
"Valuation here is challenging," said Evercore ISI analyst Mark Mahaney in a report. "But fundamentals are intrinsically premium with 20%-plus revenue growth likely for the next three years with free cash flow margins likely rising to 20% to 25% over time. And we believe the company has significant discretion to growth-invest aggressively while maintaining this margin level."
One overhang on Shopify stock has been the Trump administration's tariff-related moves.
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Shopify Stock Technical Ratings
Further, Shopify sets up e-commerce websites for small businesses, and partners with others to handle digital payments and shipping.
Shopify stock holds a Composite Rating of 96 out of a best-possible 99, according to IBD Stock Check-Up. IBD's Composite Rating combines five separate proprietary ratings into one easy-to-use rating. The best growth stocks have a Composite Rating of 90 or better.
Meanwhile, Shopify stock holds an Accumulation/Distribution Rating of B. That rating analyzes price and volume changes in a stock over the past 13 weeks of trading. (A+ signifies heavy institutional buying; E means heavy selling. Think of a C grade as neutral.)
Follow Reinhardt Krause on X, formerly Twitter, @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
