Shopify (NYSE: SHOP) Posts 34% Revenue Growth and 32% GMV Gain in Q2 2026

Shopify (NYSE: SHOP) reported second-quarter 2026 revenue of $3.58 billion, a 34% year-over-year increase (33% in constant currency), while gross merchandise volume grew 32% to $115.6 billion from $87.8 billion in the year-ago period. Shares gained 17.74% on Wednesday, August 5, while the S&P 500 rose 0.22%.

Q2 2026 Key Results

• Revenue: $3.58 billion, up 34% year-over-year from $2.68 billion; subscription solutions contributed $802 million and merchant solutions contributed $2.78 billion
• Gross profit: $1.71 billion, up from $1.30 billion in Q2 2025, representing a Q2 gross margin of 47.7%
• Operating income: $488 million, compared with $291 million in the prior-year quarter
• Free cash flow: $654 million, yielding an 18% free cash flow margin, up from 16% in Q2 2025
• Monthly recurring revenue (MRR): $221 million, up from $185 million a year earlier

What Drove the Results

Merchant solutions revenue of $2.78 billion grew substantially from $2.02 billion a year ago, reflecting broad adoption across merchant sizes, geographies, and sales channels. Subscription solutions revenue of $802 million rose from $656 million, supported by MRR growth of 19.5% year-over-year to $221 million. Net income on a GAAP basis reached $1.50 billion for the quarter, but this figure includes $1.06 billion in equity investment gains marked to market; net income excluding that impact was $439 million, compared with $338 million in Q2 2025.

Operating expenses totaled $1.22 billion, up from $1.01 billion in Q2 2025, with transaction and loan losses rising to $141 million from $80 million. The company repurchased $1.42 billion of common stock during the quarter, a financing outflow that drove a net decrease in cash and cash equivalents over the period.

Q3 2026 Outlook

Shopify issued third-quarter 2026 guidance calling for revenue growth at a low-thirties percentage rate year-over-year, gross profit dollar growth at a mid-to-high twenties percentage rate, operating expenses as a percentage of revenue in the range of 33% to 34%, stock-based compensation of $150 million, and free cash flow margin in the high-teens to low-twenties range.

Wall Street View

Analyst sentiment heading into the print skewed positive, with the consensus standing at Strong Buy or Buy from the majority of covering firms as of early August. The Q3 guidance figures and the acceleration in GMV growth provide concrete metrics for analysts to update forward models, though specific revised price targets were not available in the source data at the time of publication.

Investor Takeaway

The Q2 results confirm that both top-line growth and free cash flow conversion improved simultaneously, with free cash flow margin expanding to 18% from 16% a year ago even as the company absorbed higher transaction and loan loss provisions of $141 million. The $1.42 billion share repurchase completed in the quarter represents a capital return that reduces share count, adding a potential per-share earnings benefit that is separate from the operating results. Q3 guidance anchored at low-thirties revenue growth suggests management does not expect the Q2 acceleration to fully carry forward, a consideration investors will weigh against the valuation.