second quarter 2026
Filed Aug 5, 2026Shopify Delivers Big: 30%+ Growth Across GMV, Revenue, Gross Profit, and Free Cash Flow
GMV, revenue, gross profit, operating income, and free cash flow all increased year over year, while Shopify guided to low-thirties revenue growth and high-teens to low-twenties free cash flow margin for the third quarter of 2026.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| GMVother | 115,567 (In US $ millions) | – | 32 % |
| MRRother | 221 (In US $ millions) | – | – |
| RevenueGAAP | 3,583 (In US $ millions) | – | 34 % |
| Gross profitGAAP | 1,708 (In US $ millions) | – | 31 % |
| Operating incomeGAAP | 488 (In US $ millions) | – | 68 % |
| Net IncomeGAAP | 1,502 (In US $ millions) | – | – |
| Net income excluding the impact of equity investmentsnon-GAAP | 439 (In US $ millions) | – | – |
| Free cash flownon-GAAP | 654 (In US $ millions) | – | – |
| Free cash flow marginnon-GAAP | 18 % | – | – |
| Sales and marketing expenseGAAP | 498 (In US $ millions) | – | – |
| Research and development expenseGAAP | 445 (In US $ millions) | – | – |
| General and administrative expenseGAAP | 136 (In US $ millions) | – | – |
| Transaction and loan lossesGAAP | 141 (In US $ millions) | – | – |
| Total operating expensesGAAP | 1,220 (In US $ millions) | – | – |
| Net other income, including taxesGAAP | 1,014 (In US $ millions) | – | – |
| Equity investments, marked to market, net of taxesnon-GAAP | 1,063 (In US $ millions) | – | – |
| Net cash provided by operating activitiesGAAP | 658 (In US $ millions) | – | – |
| Capital expendituresnon-GAAP | (4) (In US $ millions) | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Subscription solutionsSubscription solutions revenue increased from 656 (In US $ millions) in the three months ended June 30, 2025. | 802 (In US $ millions) | – | 22 % |
| Merchant solutionsMerchant solutions revenue increased from 2,024 (In US $ millions) in the three months ended June 30, 2025. | 2,781 (In US $ millions) | – | 37 % |
third quarter of 2026 outlook
- RevenueRevenue to grow at a low-thirties percentage rate on a year-over-year basis
- Gross marginGross profit dollars to grow at a mid-to-high twenties percentage rate on a year-over-year basis
- Operating expensesOperating expenses as a percentage of revenue to be 33% to 34%
- NoteStock-based compensation to be $150 million
- NoteFree cash flow margin to be in the high-teens to low-twenties
Capital returns
- Repurchases of common stock: (1,420) (In US $ millions)
What drove it
- GMV was 115,567 (In US $ millions), up 32 % year over year and up 30 % year over year on a constant currency basis.
- Revenue was 3,583 (In US $ millions), up 34 % year over year and up 33 % year over year on a constant currency basis.
- Merchant solutions revenue increased 37 % year over year, compared with 22 % growth for subscription solutions revenue.
- Gross profit increased 31 % year over year, while operating income increased 68 % year over year.
- Free cash flow was 654 (In US $ millions) and free cash flow margin was 18 %.
Concerns
- Transaction and loan losses were 141 (In US $ millions), compared with 80 (In US $ millions) in the three months ended June 30, 2025.
- Reported net income included 1,063 (In US $ millions) of equity investments, marked to market, net of taxes. Net income excluding the impact of equity investments was 439 (In US $ millions).
- Cash flows associated with merchant cash advances were reclassified from operating activities to investing activities starting in April 2026.
What to watch
- Whether third-quarter revenue grows at a low-thirties percentage rate on a year-over-year basis.
- Whether third-quarter gross profit dollars grow at a mid-to-high twenties percentage rate on a year-over-year basis.
- Operating expenses as a percentage of revenue relative to the guided 33% to 34%.
- Stock-based compensation relative to the guided $150 million.
- Free cash flow margin relative to the guided high-teens to low-twenties range.
- Transaction and loan losses and the cash flow effects of loans and merchant cash advances.
Balance sheet and cash flow
- Cash and cash equivalents: 1,656 (In US $ millions) as of June 30, 2026; 1,545 (In US $ millions) as of December 31, 2025.
- Marketable securities: 3,291 (In US $ millions) as of June 30, 2026; 4,233 (In US $ millions) as of December 31, 2025.
- Trade and other receivables, net: 466 (In US $ millions) as of June 30, 2026; 500 (In US $ millions) as of December 31, 2025.
- Loans and merchant cash advances, net: 2,184 (In US $ millions) as of June 30, 2026; 1,784 (In US $ millions) as of December 31, 2025.
- Other current assets: 219 (In US $ millions) as of June 30, 2026; 234 (In US $ millions) as of December 31, 2025.
- Current assets: 7,816 (In US $ millions) as of June 30, 2026; 8,296 (In US $ millions) as of December 31, 2025.
- Long-term assets: 195 (In US $ millions) as of June 30, 2026; 210 (In US $ millions) as of December 31, 2025.
- Deferred tax assets: 30 (In US $ millions) as of June 30, 2026; 33 (In US $ millions) as of December 31, 2025.
- Long-term investments: 525 (In US $ millions) as of June 30, 2026; 975 (In US $ millions) as of December 31, 2025.
- Equity and other investments: 4,854 (In US $ millions) as of June 30, 2026; 4,582 (In US $ millions) as of December 31, 2025.
- Equity method investment: 559 (In US $ millions) as of June 30, 2026; 602 (In US $ millions) as of December 31, 2025.
- Goodwill: 491 (In US $ millions) as of June 30, 2026; 491 (In US $ millions) as of December 31, 2025.
- Total assets: 14,470 (In US $ millions) as of June 30, 2026; 15,189 (In US $ millions) as of December 31, 2025.
- Accounts payable: 575 (In US $ millions) as of June 30, 2026; 570 (In US $ millions) as of December 31, 2025.
- Deferred tax liabilities: 79 (In US $ millions) as of June 30, 2026; 55 (In US $ millions) as of December 31, 2025.
- Other liabilities: 1,132 (In US $ millions) as of June 30, 2026; 1,091 (In US $ millions) as of December 31, 2025.
- Liabilities: 1,786 (In US $ millions) as of June 30, 2026; 1,716 (In US $ millions) as of December 31, 2025.
- Shareholders’ equity: 12,684 (In US $ millions) as of June 30, 2026; 13,473 (In US $ millions) as of December 31, 2025.
- Net cash provided by investing activities: 571 (In US $ millions); prior year: (252) (In US $ millions).
- Net cash used in financing activities: (1,417) (In US $ millions); prior year net cash provided by financing activities: 44 (In US $ millions).
- Net decrease in cash, cash equivalents and restricted cash: (192) (In US $ millions); prior year net increase: 233 (In US $ millions).
- Cash, cash equivalents and restricted cash at end of period: 1,656 (In US $ millions); prior year: 1,542 (In US $ millions).
- Starting in April 2026, cash flows associated with merchant cash advances are presented within investing cash flows rather than operating cash flows. For the three months ended June 30, 2026, the changes resulted in a net cash use of $37 million presented in Investing activities after consideration of repayments and purchases and originations.
Analysis
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.
Management, verbatim
This was a monster quarter: more than 30% growth in GMV AND revenue AND gross profit AND free cash flow. We power every kind of business, and with AI, we're expanding what's possible for all of them. No one else comes close.
Harley Finkelstein, President of Shopify
GMV growth accelerated on top of last year’s already strong Q2 with solid results across all merchant sizes, channels, and geographies. Alongside this momentum, we continue to drive operating leverage, which flowed through to 18% free cash flow margins. Broad-based, consistent, and compounding growth with financial discipline; that’s exactly the model that we’ve been building.
Jeff Hoffmeister, Chief Financial Officer
Not in the filing
stated, not guessed- GAAP diluted net income per share
- Non-GAAP diluted net income per share
- Gross margin
- Tax rate
- Total debt
- Dividend information
- Prior-quarter comparisons for reported operating metrics
- Previous-period outlook for comparison with actual results
AlphaAI analysis generated 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 cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.