$SHOP earnings report

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.

Shopify reported a broad-based second quarter, with GMV of 115,567 (In US $ millions), revenue of 3,583 (In US $ millions), and gross profit of 1,708 (In US $ millions). GMV increased 32 % year over year, while revenue increased 34 % and gross profit increased 31 %. On a constant currency basis, GMV growth was 30 %, revenue growth was 33 %, and gross-profit growth was 30 %.

Merchant solutions was the larger and faster-growing revenue stream. Merchant solutions revenue was 2,781 (In US $ millions), up 37 %, while subscription solutions revenue was 802 (In US $ millions), up 22 %. MRR was 221 (In US $ millions), compared with 185 (In US $ millions) in the prior-year quarter. Management attributed GMV momentum to results across merchant sizes, channels, and geographies.

Profitability improved materially in the reported period. Operating income was 488 (In US $ millions), up 68 % from 291 (In US $ millions), while free cash flow was 654 (In US $ millions) and free cash flow margin was 18 %, compared with 422 (In US $ millions) and 16 % in the prior-year quarter. Net income was 1,502 (In US $ millions), although it included 1,063 (In US $ millions) from equity investments marked to market, net of taxes. Net income excluding the impact of equity investments was 439 (In US $ millions).

Capital allocation included repurchases of common stock of (1,420) (In US $ millions), which drove net cash used in financing activities of (1,417) (In US $ millions). Cash and cash equivalents were 1,656 (In US $ millions) as of June 30, 2026, and marketable securities were 3,291 (In US $ millions). The company also disclosed that merchant cash advance cash flows moved to investing activities starting in April 2026, affecting period-to-period cash flow presentation.

For the third quarter of 2026, Shopify expects revenue growth at a low-thirties percentage rate, gross-profit-dollar growth at a mid-to-high twenties percentage rate, operating expenses at 33% to 34% of revenue, stock-based compensation of $150 million, and free cash flow margin in the high-teens to low-twenties. The principal reported operating item requiring attention is transaction and loan losses, which were 141 (In US $ millions) versus 80 (In US $ millions) a year earlier.