Shares of Shopify Inc (TSX:SH., NYSE:SHOP) jumped more than 20% on Wednesday after the Canadian e-commerce giant posted second-quarter results that beat Wall Street estimates and raised its outlook for the current quarter, driven by growth in global merchant activity and platform monetization.
Second-quarter revenue rose 31% to $2.68 billion, topping analysts’ average estimate of $2.54 billion, while gross merchandise volume (GMV) – a key measure of transaction activity across the platform – climbed 30.6% to $87.8 billion.
Adjusted operating income came in at $291 million, beating consensus forecasts by about $48 million.
“Shopify delivered another outstanding quarter… GMV and revenue growth accelerated in North America, Europe, and APAC,” CFO Jeff Hoffmeister said.
For the third quarter, Shopify guided for revenue growth in the mid-to-high 20s percent range year-over-year, ahead of analysts’ expectations. The company also expects gross profit to grow in the low 20s percent range and forecasted operating expenses at 38% to 39% of revenue.
Wedbush analysts said Shopify’s results were well ahead of consensus, with GMV and revenue exceeding estimates by 8% and 5%, respectively. “We are encouraged by the strength of Q2 results and believe Shopify is well positioned to deliver operating margin expansion this year,” the firm wrote in a note Wednesday.
President Harley Finkelstein said Shopify’s continued investment in innovation was paying off. “Today’s results are the payoff from bold bets we made years ago,” he said.
Shopify remains one of the leading players in e-commerce software, with analysts pointing to its pricing power, large addressable market, and expansion into payments and B2B services as drivers of long-term growth.