Shopify Inc. shares surged 20% on Wednesday after the Canadian e-commerce giant posted second-quarter results that beat analyst expectations and issued stronger-than-forecast guidance for the third quarter.
The performance, which Citigroup described as a “blowout,” propelled Shopify’s market capitalization to C$275 billion, reclaiming its position as Canada’s most valuable company ahead of Royal Bank of Canada.
For the second quarter, Shopify reported adjusted earnings per share of 35 cents, topping the 29-cent consensus estimate from analysts polled by LSEG.
Revenue climbed 31% year over year to $2.68 billion, surpassing forecasts of $2.55 billion. The company’s sales growth accelerated from the roughly 20% pace recorded a year ago.
Third-quarter outlook tops expectations
Shopify offered upbeat third-quarter guidance, projecting revenue growth in the “mid-to-high twenties percentage rate” year over year, compared to analysts’ expectations of 21.7% growth, according to StreetAccount.
Company executives noted that potential impacts from US tariffs, which had been factored into prior guidance, did not materialize.
“We had factored into our guidance some potential impact from tariffs, which did not materialize,” Chief Financial Officer Jeff Hoffmeister said on an earnings call.
The company also reported that it has not seen drops in US demand and witnessed market acceleration during the quarter.
President Harley Finkelstein told CNBC that Shopify’s millions of merchants “are doing really, really well” despite trade tensions, with no evidence of consumers pulling forward purchases ahead of tariff implementation.
Shopify’s gross merchandise sales (GMS) — the total value of goods sold on its platform — grew 29% year over year to $87.8 billion, topping Wall Street estimates of $81.5 billion.
The company expects operating expenses to decline slightly as a share of revenue, falling to 38%–39% in the third quarter compared to 39%–40% in the previous quarter.
AI investment fuels platform expansion
Shopify has been investing heavily in artificial intelligence to enhance its platform and attract a broader range of merchants.
In May, the company launched an “AI store builder” capable of generating online storefronts from a few keywords.
This week, it rolled out new AI tools to facilitate shopping via AI agents.
“As we continue to expand our platform’s capabilities, add new products, and build for where commerce is heading, Shopify is becoming even more compelling to a wider range of businesses than ever before,” Hoffmeister said.
Bloomberg Intelligence analyst Anurag Rana noted that Shopify has been gaining greater market share, particularly outside North America, likely driven by efforts to attract larger merchants.
Citigroup analyst Tyler Radke said Shopify “flew through” tariff and macroeconomic concerns, with accelerating revenue, higher-than-expected gross merchandise volume, and strong guidance likely easing investor concerns about the second half of the year.
While some investors were cautious heading into the quarter, analysts suggest Shopify’s performance reflects continued market share gains and resilience in global e-commerce demand.
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