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Shopify Second-Quarter Results Top Street Views Amid Robust Growth Across Key Metrics

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Shopify Second-Quarter Results Top Street Views Amid Robust Growth Across Key Metrics

Shopify (SHOP) reported second-quarter earnings above Wall Street's expectations on Wednesday, while the Canada-based e-commerce platform recorded annual growth of more than 30% each in its revenue, gross merchandise volume and gross profit metrics.

The company posted adjusted earnings of $0.42 a share for the June quarter, up from $0.35 the year before, topping the FactSet-polled consensus of $0.40. Net income rose to $1.16 per share from $0.69, defying the Street's view for a decline to $0.31.

Revenue jumped 34% to $3.58 billion, surpassing the average analyst estimate of $3.45 billion. "This was a monster quarter: more than 30% growth in GMV and revenue and gross profit and free cash flow," President Harley Finkelstein said in a statement.

The stock surged 16% in Wednesday trade.

GMV, which represents the total dollar value of orders facilitated through the Shopify platform, advanced 32% to $115.57 billion, amid "solid results across all merchant sizes, channels and geographies," according to Chief Financial Officer Jeff Hoffmeister. Gross profit climbed 31% to $1.71 billion.

Subscription solutions revenue rose 22% to $802 million in the second quarter, while merchant solutions soared 37% to $2.78 billion.

For the third quarter, Shopify expects revenue to grow at a low-thirties percentage rate year over year from $2.84 billion reported a year earlier. The Street is looking for revenue of $3.60 billion. Gross profit dollars are pegged to increase by a mid-to-high twenties percentage rate, according to the company.

RBC Capital Markets said last month that it believed third-quarter consensus estimates were conservative. The brokerage also estimated Shopify's guidance to come in slightly above consensus for the ongoing quarter, supported by sustained growth momentum, artificial intelligence cost management and conservative market expectations.

Shopify expects third-quarter operating expenses to be 33% to 34% of revenue, compared with 37% in the year-ago period, reflecting continued operating leverage, Hoffmeister said during an earnings call, according to a FactSet transcript.

Price: $145.78, Change: $+22.48, Percent Change: +18.23%

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