Shopify’s shares climbed over 20 per cent Wednesday morning, after the company posted second-quarter profit of US$906 million. REUTERS/Dado Ruvic/Illustration · Reuters / Reuters
Shopify’s (SHOP.TO) shares climbed over 20 per cent Wednesday morning after the company posted second-quarter profit of US$906 million, a sharp increase from the US$171 million it earned the same period last year.
Shopify shares ended the trading day at $212.82 per share on the Toronto Stock Exchange, a gain of more than 21 per cent.
The Ottawa-based e-commerce platform says the earnings translated to 69 cents US per diluted share. That compares to a loss of 13 cents US per diluted share a year ago.
Shopify’s market capitalization surged to $276 billion with the outsized per share gain, surpassing the Royal Bank of Canada (RY.TO) to become the most valuable publicly traded company in Canada. The results reveal Shopify’s strength in global e-commerce, driven by its international expansion, business-to-business sales and continued investment in AI.
On this morning’s earnings call, Shopify president Harley Finkelstein said offline gross merchandise value (GMV) is up 29 per cent year-over-year, while business-to-business GMV surged 101 per cent.
The company’s focus on global reach has been paying off — its international GMV was up this quarter by 42 per cent year-over-year, driven largely by its outperformance in Europe, Finkelstein says.
Quarterly revenue came in at US$2.7 billion, up 31 per cent year-over-year.
“If you take one thing away from this call, let it be this: Shopify delivers,” he said. “We do what we say we’re going to do. That consistency, follow through and growth — that is Shopify’s MO.”
Shopify CFO Jeff Hoffmeister says that while the company had factored in some potential impacts from tariffs, they ultimately didn’t materialize.
Hoffmeister adds that recent U.S. moves to expand changes to the de minimis exemption beyond China are still in the early stages. He notes that only about four per cent of Shopify’s global gross merchandise volume currently falls under that exemption, and the company hasn’t seen any significant changes in GMV from merchants affected by the end of China’s exemption in May.
The company will continue to monitor trade developments and support its sellers in a shifting regulatory environment, he says.
Ahead of Shopify’s second-quarter earnings, National Bank analyst Richard Tse described the company’s use of AI as “the most notable broad driver of growth and innovation.”
This quarter, the company rolled out several AI-driven features, including an AI-powered store builder, a universal cart that lets shoppers buy from multiple stores in one checkout, and a new product discovery tool called Catalog.