- Shopify (TSX/NYSE:SHOP), a global e-commerce stock, posted strong growth in Q2 2024 across revenue and profitability
- Revenue added 21 per cent to US$2 billion, while gross profit grew 25 per cent to US$1 billion, both on a year-over-year basis
- Shopify’s e-commerce solutions power millions of businesses in more than 175 countries
- Shopify stock is up by 18.50 per cent in the NYSE pre-market period, trading at US$64.25 per share as of 8:25 am ET
Shopify (TSX/NYSE:SHOP), a global e-commerce stock, posted strong growth in Q2 2024 across revenue and profitability.
Shopify’s Q2 2024 highlights
- Gross merchandise volume (GMV) added 22 per cent to US$67.2 billion. All results are on a year-over-year basis.
- Revenue added 21 per cent to US$2 billion, or 25 per cent after adjusting for the sale of the company’s logistics businesses.
- Merchant solutions revenue increased 19 per cent to US$1.5 billion propelled by growth in GMV and Shopify Payments.
- Gross payments volume reached US$41.1 billion or 61 per cent of GMV, up from US$31.7 billion or 58 per cent.
- Subscription solutions revenue increased 27 per cent to US$563 million thanks to more onboarded merchants and pricing increases in Shopify’s subscription plans.
- Monthly recurring revenue (MRR) as of June 30, 2024, increased 25 per cent to US$169 million thanks to growth in merchants. Shopify Plus contributed US$52 million or 31 per cent of MRR.
- Gross profit grew 25 per cent to US$1 billion, while gross margin rose to 51.1 per cent from 49.3 per cent thanks to the “lack of dilutive impact of the logistics businesses,” according to Wednesday’s news release, as well as changes in pricing plans.
- Free cash flow soared from US$97 million to US$333 million, while free cash flow margin grew from 6 per cent to 16 per cent.
- Cash and marketable securities stood at US$5 billion as of June 30, 2024, including a net cash position of US$4.1 billion.
Shopify’s outlook for Q3 2024
- Revenue growth at a low-to-mid-20s percentage rate year-over-year.
- A gross margin increase of approximately 50 basis points from Q2 2024.
- GAAP operating expenses as a percentage of revenue of 41-42 per cent.
- Stock-based compensation of US$120 million.
- A free cash flow margin comparable to Q2 2024, with management expecting to post a double-digit margin for the rest of the year.
Leadership insights
“Our Q2 results make it clear: Shopify is rapidly strengthening its position as a leading enabler of global commerce and entrepreneurship,” Harley Finkelstein, president of Shopify, said in a statement. “More and more merchants across the world are putting their trust in Shopify’s unified commerce operating system to fuel growth and simplify complex operations. We’re fully committed to executing our growth strategies and delivering immense value to our merchants for years to come.”
“We are proud to report another quarter of robust financial performance. We drove strong growth in gross merchandise volume, revenue and gross profit, all amidst a mixed consumer spend environment, continued to take share and concurrently expanded our free cash flow margin. We delivered across every metric,” said Jeff Hoffmeister, chief financial officer at Shopify. “Our results underscore our commitment to providing exceptional value to our merchants through focused operating execution and efficiency. As a high-growth global technology leader in commerce, we remain committed to leveraging our core strengths and investing in opportunities to achieve sustainable growth and long-term profitability.”
About Shopify
Shopify provides internet infrastructure for commerce. The company’s solutions power millions of businesses in more than 175 countries, including household names such as Mattel, Gymshark, Heinz, FTD, Netflix, Kylie Cosmetics, SKIMS and Supreme.
Shopify stock (TSX/NYSE:SHOP) is up by 18.50 per cent in the NYSE pre-market period, trading at US$64.25 per share as of 8:25 am ET. On the TSX, the stock last traded at C$74.56 per share.
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(Top image: Shopify)