Shopify Sustains Rapid Growth with Revenue Up 32% and Free Cash Flow Margin of 22%
SHOPIFY INC. (SHOP) filed an SEC Form 8-K — Results of Operations and Financial Condition. Shopify Sustains Rapid Growth with Revenue Up 32% and Free Cash Flow Margin of 22% November 3, 2026 - Shopify announced today financial results for the quarter ended September 30, 2026. Shopify achieved 32% revenue growth (32% in constant currency) and a 22% free cash flow margin
How this was made
The 30-second read
Why it matters
The results highlight a 32% YoY revenue increase and a 22% free cash flow margin, signaling strong operational performance and potential for continued share price appreciation.
Market read
The earnings beat and forward guidance are likely to drive short‑term buying interest in SHOP and may lift related tech and SaaS stocks.
What to watch
Higher operating expenses or margin pressure from rising cost of goods could temper upside.
Shopify Sustains Rapid Growth with Revenue Up 32% and Free Cash Flow Margin of 22%
Revenue grew 32%, GMV grew 29%, operating income rose to $568 million from $343 million, and free cash flow was $816 million with a 22% free cash flow margin.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| GMVother | $119.1B | – | 29 % |
| GMV constant currencyother | $119.1B | – | 30 % |
| MRRother | $230M | – | – |
| RevenueGAAP | $3.74B | – | 32 % |
| Revenue constant currencyother | $3.74B | – | 32 % |
| Gross profitGAAP | $1.78B | – | 28 % |
| Gross profit constant currencyother | $1.78B | – | 28 % |
| Sales and marketing expenseGAAP | $466M | – | – |
| Research and development expenseGAAP | $497M | – | – |
| General and administrative expenseGAAP | $130M | – | – |
| Transaction and loan lossesGAAP | $120M | – | – |
| Total operating expensesGAAP | $1.21B | – | – |
| Operating incomeGAAP | $568M | – | 66 % |
| Operating income constant currencyother | $568M | – | 65 % |
| Net other expense, including taxesGAAP | −$106M | – | – |
| Net incomeGAAP | $462M | – | – |
| Net income excluding the impact of equity investmentsnon-GAAP | $584M | – | – |
| Free cash flownon-GAAP | $816M | – | – |
| Free cash flow marginnon-GAAP | 22 % | – | – |
| Net cash provided by operating activitiesGAAP | $818M | – | – |
| GAAP diluted net income per share attributable to shareholdersGAAP | $0.36 | – | – |
| Non-GAAP diluted net income per share attributable to shareholdersnon-GAAP | $0.49 | – | – |
| Non-GAAP net incomenon-GAAP | $638M | – | – |
| Weighted average diluted shares used to compute net income per share attributable to shareholdersGAAP | 1,290,726,742 | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Subscription solutionsNo segment-specific revenue driver was reported. | $836M | – | 20 % |
| Merchant solutionsNo segment-specific revenue driver was reported. | $2.91B | – | 35 % |
fourth quarter of 2026 outlook
- Revenuegrow at a low-thirties percentage rate on a year-over-year basis
- Operating expenses29% to 30% of revenue
- NoteGross profit dollars to grow at a high-twenties percentage rate on a year-over-year basis
- NoteStock-based compensation to be $155 million
- NoteFree cash flow margin to be consistent with the fourth quarter of 2025
Capital returns
- Repurchases of common stock: $(562) million
What drove it
- GMV was $119,145 million, compared with $92,013 million in the prior-year period.
- Merchant solutions revenue was $2,906 million and grew 35 % year over year.
- Subscription solutions revenue was $836 million and grew 20 % year over year.
- Revenue grew 32 % on both a reported and constant-currency basis.
- Gross profit grew 28 % on both a reported and constant-currency basis.
- Operating income grew 66 % on a reported basis and 65 % on a constant-currency basis.
Concerns
- Net other expense, including taxes, was $(106) million, compared with $(79) million in the prior-year period.
- Transaction and loan losses were $120 million.
- The company expects stock-based compensation of $155 million in the fourth quarter of 2026.
- No numerical fourth-quarter free cash flow margin target was provided.
What to watch
- Whether fourth-quarter revenue grows at the guided low-thirties percentage rate year over year.
- Whether gross profit dollars grow at the guided high-twenties percentage rate year over year.
- Operating expenses as a percentage of revenue relative to the guided 29% to 30%.
- Free cash flow margin relative to the fourth quarter of 2025.
- Stock-based compensation relative to the guided $155 million.
Balance sheet and cash flow
- Cash and cash equivalents as of September 30, 2026: $1,868 million; December 31, 2025: $1,545 million
- Marketable securities as of September 30, 2026: $2,859 million; December 31, 2025: $4,233 million
- Trade and other receivables, net as of September 30, 2026: $483 million; December 31, 2025: $500 million
- Loans and merchant cash advances, net as of September 30, 2026: $2,350 million; December 31, 2025: $1,784 million
- Other current assets as of September 30, 2026: $226 million; December 31, 2025: $234 million
- Total current assets as of September 30, 2026: $7,786 million; December 31, 2025: $8,296 million
- Long-term assets as of September 30, 2026: $327 million; December 31, 2025: $210 million
- Deferred tax assets as of September 30, 2026: $83 million; December 31, 2025: $33 million
- Long-term investments as of September 30, 2026: $524 million; December 31, 2025: $975 million
- Equity and other investments as of September 30, 2026: $4,911 million; December 31, 2025: $4,582 million
- Equity method investment as of September 30, 2026: $538 million; December 31, 2025: $602 million
- Goodwill as of September 30, 2026: $495 million; December 31, 2025: $491 million
- Total assets as of September 30, 2026: $14,664 million; December 31, 2025: $15,189 million
- Accounts payable as of September 30, 2026: $630 million; December 31, 2025: $570 million
- Deferred tax liabilities as of September 30, 2026: $63 million; December 31, 2025: $55 million
- Other liabilities as of September 30, 2026: $1,222 million; December 31, 2025: $1,091 million
- Total liabilities as of September 30, 2026: $1,915 million; December 31, 2025: $1,716 million
- Shareholders’ equity as of September 30, 2026: $12,749 million; December 31, 2025: $13,473 million
- Total liabilities and shareholders’ equity as of September 30, 2026: $14,664 million; December 31, 2025: $15,189 million
- Net cash used in investing activities: $(60) million; prior-year period: $335 million
- Net cash used in financing activities: $(547) million; prior-year period: $24 million
- Net increase in cash, cash equivalents and restricted cash: $212 million; prior-year period: $872 million
- Cash, cash equivalents and restricted cash at end of period: $1,868 million; prior-year period: $2,414 million
Analysis
Shopify reported a strong third quarter of 2026. Revenue was $3,742 million, compared with $2,844 million in the prior-year period, with reported and constant-currency revenue growth both at 32 %. GMV was $119,145 million versus $92,013 million, while MRR was $230 million versus $193 million. The disclosed GMV growth rate was 29 % on a reported basis and 30 % on a constant-currency basis.
Merchant solutions was the larger and faster-growing revenue stream, producing $2,906 million of revenue and 35 % year-over-year growth. Subscription solutions generated $836 million and grew 20 %. Gross profit was $1,781 million, compared with $1,391 million, and grew 28 % both as reported and in constant currency. Operating income was $568 million versus $343 million, with 66 % reported growth and 65 % constant-currency growth.
Cash generation remained substantial. Net cash provided by operating activities was $818 million, compared with $513 million, while free cash flow was $816 million versus $507 million. Free cash flow margin was 22 %, compared with 18 %. The company also repurchased $(562) million of common stock during the quarter. Cash and cash equivalents were $1,868 million as of September 30, 2026, and marketable securities were $2,859 million.
The fourth-quarter outlook calls for revenue growth at a low-thirties percentage rate and gross profit dollar growth at a high-twenties percentage rate, both year over year. Shopify expects operating expenses to be 29% to 30% of revenue and stock-based compensation of $155 million. It expects free cash flow margin to be consistent with the fourth quarter of 2025, rather than providing a numerical free cash flow margin target.
Management, verbatim
Shopify is uncommonly good at operating in two realities at the same time: the world our merchants exist in today, and the one they are moving towards. Q3 is the perfect example. We powered $119 billion in GMV, while continuing to build commerce into every surface, every agent, and increasingly, everywhere.
Harley Finkelstein, President of Shopify
We extended our track record of consistent execution, with 32% revenue growth and a 22% free cash flow margin.
Jeff Hoffmeister, Chief Financial Officer of Shopify
Delivering these results at our scale speaks to the strength of our model, our multiple growth drivers, and our expanding addressable market.
Jeff Hoffmeister, Chief Financial Officer of Shopify
Not in the filing
stated, not guessed- Prior-quarter comparisons for reported operating metrics
- GAAP gross margin
- Debt balance
- Dividend information
- Numerical fourth-quarter 2026 revenue guidance
- Numerical fourth-quarter 2026 gross profit guidance
- Numerical fourth-quarter 2026 free cash flow margin guidance
- Fourth-quarter 2026 tax-rate guidance
- Previous-release outlook for comparison
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was checked against the filing text, and a metric whose value, prior period and change do not add up is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
Shopify's Q3 2026 earnings release filed via SEC Form 8‑K provides the first public disclosure of its latest financials and outlook.
Ticker impact
Shopify reported Q3 2026 results with 32% revenue growth and a 22% free cash flow margin, and provided guidance for Q4.
likely upside as market prices in the robust growth and improved cash flow
Revenue and free cash flow margins beat prior periods; guidance indicates continued high‑single‑digit growth, supporting bullish sentiment.
Market effects
E‑commerce and SaaS platforms may see broader optimism from Shopify's performance.
North American tech stocks could benefit from the upbeat earnings.
Positive data may reinforce global digital commerce growth narratives.
Counterpoint
If growth slows in Q4, the stock could face a correction despite the strong Q3.
Key entities
- companyShopify Inc.
E‑commerce platform provider reporting Q3 2026 results.
