SHOP

ARK Invest sold 40,392 Shopify shares from its ARKK and ARKW ETFs after SHOP gained more than 25% in August. The sales came after Shopify reported strong Q2 results, including 34% revenue growth and 68% higher operating income. Shopify’s rally has made its valuation expensive, with its P/E nearing 95x. Shopify Inc. (SHOP) stock is heading for a weekly loss as investors digest profit-taking by Cathie Wood’s ARK Invest following a blockbuster August rally. ARK sold more than 40,000 shares, raising fresh questions about the stock’s valuation. Shopify stock inched 0.3% higher overnight, ahead of Thursday. SHOP stock has tumbled 7% so far this week. See what 10M+ investors are talking about. Get the Stocktwits Daily Rip for what retail is watching right now, free to your inbox ARK Investment Management sold a combined 40,392 Shopify shares through two actively managed funds, according to its Sept. 2 trade activity. The ARK Innovation ETF (ARKK) accounted for 35,322 shares, while the ARK Next Generation Internet ETF (ARKW) shed another 5,070 shares. The sales followed a powerful run for Shopify stock, which climbed more than 25% in August and traded as high as $158. The rally came after the company posted fiscal second-quarter (Q2) revenue of $3.58 billion, a 34% year-on-year increase that exceeded Wall Street's expectation of $3.4 billion, according to Fiscal.ai data. Shopify also generated $488 million in operating income, up 68% from last year. Gross merchandise volume (GMV) reached $115.57 billion, a 32% increase, while free cash flow climbed to $654 million. Its free-cash-flow margin improved to 18% from 16% a year ago. The trade activity suggests ARK is not simply sitting on the Shopify gains. ARKW and the ARK Fintech Innovation ETF (ARKF) together purchased 9,993 shares of the 3iQ Solana Staking ETF, increasing exposure to crypto-related assets. ARK also bought shares of Intellia Therapeutics Inc. (NTLA) through its genomics-focused fund, highlighting continued interest in higher-risk biotechnology opportunities. Shopify’s rapid appreciation has also pushed its valuation higher. According to Koyfin data, the stock’s trailing price-to-earnings ratio is approaching 95 times, while its enterprise value-to-sales multiple stands at 13.4 times. Investors are therefore weighing whether exceptional growth can continue to justify the premium valuation. Last week, Phillip Securities downgraded Shopify to ‘Accumulate’ from ‘Buy’ because the stock’s recent rally has made its valuation look expensive. However, the firm remained positive on Shopify’s growth and believes the company stands to benefit from the growing use of AI-powered agentic commerce. On Stocktwits, retail sentiment around the stock remained in ‘bearish’ territory with a 37% gain in message volume over the past week. SHOP stock has declined nearly 12% year-to-date. Also See: MGNI Stock Heads For Another Green Week: Analyst Says Google AdTech Ruling Opens Door To Bigger Opportunity For updates and corrections, email newsroom[at]stocktwits[dot]com Shivani Kumaresan has no position in any of the stocks mentioned in this article. StockTwits' news team content is for informational purposes only and is not intended as investment advice. For more, see our editorial policy. This article was originally published on StockTwits. Related: TSLA Stock Up 7% Ahead Of Cybercab Launch Event — Fund Manager Sees Selloff Ahead, Citing Past Patterns TSLA Stock Up 7% Ahead Of Cybercab Launch Event — Fund Manager Sees Selloff Ahead, Citing Past Patterns Pentagon Calls Anthropic A ‘Supply Chain Risk’ — A Day After Commerce Secretary Backs AI Firm

Shopify has delivered a strong 112.3% gain over the past three years, while current valuation checks point to the stock trading at a premium to what its cash flows and market multiples suggest. A 112.3% share price gain over three years means recent investors have already seen substantial value created, which raises the bar for further upside from here. The expanded partnership with Affirm through Shop Pay Installments in Australia can support expectations for ongoing commerce volume growth. Any disappointment in future cash flow delivery remains a key risk for a stock already screening as expensive. With a value score of 1 out of 6, Shopify does not screen as a clear bargain on the broad set of valuation checks. The issue now is whether Shopify's current price leaves enough room between the market valuation and the intrinsic value estimate from the Discounted Cash Flow, given how much has already been priced in over the past few years. Balance Shopify's premium pricing by scouting other ecommerce and fintech growth stories that still screen as potential value, starting with 50 high quality undervalued stocks. The Discounted Cash Flow model for Shopify starts with the cash the business is expected to generate for shareholders and works back to an estimate of what the stock might be worth today. Shopify has latest twelve month free cash flow of about $2.35b, and the model assumes that this cash flow grows over time rather than shrinking. On those projections, the DCF points to an estimated intrinsic value of around $117 per share. That is below the current share price, which implies the stock trades at roughly a 19.4% premium to this cash flow based estimate and screens as overvalued on this model. The expanded Shop Pay Installments partnership with Affirm in Australia adds a growth angle. However, the DCF outcome suggests investors are already paying up for that kind of opportunity. Overall, Shopify stock currently looks overvalued relative to what its projected cash flows support. Our Discounted Cash Flow (DCF) analysis suggests Shopify may be overvalued by 19.4%. Discover 50 high quality undervalued stocks or create your own screener to find better value opportunities. Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Shopify. P/E is a useful cross check for Shopify because the company is now producing earnings that investors can compare directly with peers. Shopify trades on a P/E of about 93.2x, which is well above the IT sector average of 20.1x and also higher than the peer group average of 53.5x. That is a sizeable premium even for a recognised ecommerce and fintech platform. The fair P/E ratio implied by the model is around 50.7x. This is the multiple that might be expected for Shopify after considering its size, margins, growth profile and risk. The current 93.2x therefore sits a long way above this level, which suggests investors are already paying up heavily for future execution. On the P/E multiple, Shopify stock currently appears overvalued compared with both its tailored fair ratio and sector benchmarks. See what the numbers say about this price — find out in our valuation breakdown. Simply Wall St Narratives pick up where the valuation checks on Shopify leave off. They spell out which future paths for growth, margins and earnings would need to hold for the stock to be worth materially more or less than today's price. Each narrative ties a specific fair value to a clear story about Shopify's potential catalysts and risks so you can track over time which version of the story is actually unfolding on the Community page. Community views on Shopify are split, with some investors seeing a rising commerce operating system story while others focus on cost pressure and crowded competition. Bull case: 45% undervalued Read the full Bull Case to see why Shopify could be undervalued Bear case: 13% overvalued Read the full Bear Case to see why Shopify could be overvalued Do you think there's more to the story for Shopify? Head over to our Community to see what others are saying! Shopify now screens as overvalued on both the Discounted Cash Flow (DCF) intrinsic value estimate and the P/E multiple checks, which points to a consistent message rather than a mixed signal. The low value score reinforces that broader valuation tests are not finding clear upside at the current price. From here, the key question is whether Shopify can deliver the growth and margin profile that would make today’s premium look reasonable rather than stretched. That depends on how well the company converts its commerce ecosystem and partnerships into durable cash flow over time. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include SHOP. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Chewy (NYSE:CHWY) primarily generates revenue by acting as an online retailer that sells roughly 100,000 unique items--including food, treats, prescribed medications, and everyday wellness supplies for domestic companion animals--supplied by thousands of partner brands across the United States. While simultaneously expanding its physical veterinary care practices into new locations and launching a consolidated private-label brand identity for pet essentials, it reported an operating margin of approximately 4.2% for the quarter ended May 3, 2026. Shopify (NASDAQ:SHOP) primarily generates revenue by providing software and related commercial services across multiple international regions, enabling global merchants to set up digital storefronts, manage physical inventory, process payments, and coordinate shipping logistics. It recently authorized an additional $3 billion for share repurchases and experienced intermittent service disruptions over the summer, while concurrently reporting an operating margin of approximately 17% for the quarter ended June 30, 2026. Revenue here refers to the standardized income-statement revenue line item. This is the most fundamental measure of a company's performance. It serves as a practical gauge of the total incoming money a business generates from its daily operations during a specific quarter before accounting for any subsequent operating costs or taxes. Data source: Company filings. Data as of Aug. 26, 2026. The relative performance of these companies' revenue largely reflects each company's addressable market. Chewy is seeing steady, but slower revenue growth in the $150 billion pet industry. However, Shopify serves the $6 trillion global e-commerce market, which is why it continues to grow revenue at higher rates. Chewy is investing to expand into other business lines, such as pet health and vet care, to maintain revenue growth. Meanwhile, Shopify has seen a slight acceleration in revenue over the last year, driven by increased shopping activity from people using AI to find products. It's unclear if Chewy will be able to meaningfully accelerate its revenue to regain the lead over Shopify in revenue size. Shopify seems to be racing ahead as it rides two major tailwinds: a growing e-commerce market and AI-driven commerce activity. The question for investors is how much growth is already priced into Shopify stock relative to Chewy's. The latter may offer better value, with the pet food retailer trading at a forward price-to-earnings ratio of about 15, while Shopify trades at much higher multiples. If Chewy can successfully expand margins through healthcare products and services, in addition to advertising, it could deliver market-beating returns. Before you buy stock in Chewy, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Chewy wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $440,710!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,335,252!* That performance is why people listen. With a track record of beating the S&P 500 by nearly 5x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 31, 2026. John Ballard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chewy and Shopify. The Motley Fool has a disclosure policy. Chewy vs. Shopify: Stable Patterns vs. Rapid Acceleration in Quarterly Revenue was originally published by The Motley Fool

PayPal lost 15% as Stripe and Advent abandoned their $50B bid, while Affirm surged 13% on record profits and a new Shopify Australia deal. Klarna jumped 5% on consolidation relief, but XLF's flat close signals these are name-specific moves, not a financials sector rotation. Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and PayPal didn't make the cut. Grab the names FREE today. Two of the biggest names in digital payments are ripping in opposite directions Friday morning, with the buy-now-pay-later cluster trading on unrelated single-name catalysts rather than a common thread. The broader financials sector is barely moving, which reinforces that this is a name-specific event and not a sector rotation. PayPal Holdings (NASDAQ:PYPL) stock is down 15% to $52.45 in early Friday trading after Bloomberg reported that Stripe and Advent International walked away from an acquisition of PayPal that had been valued at more than $50 billion. Meanwhile, Affirm Holdings (NASDAQ:AFRM) stock is up 13% to $87.56, a mirror-image move as investors reassess a competitive landscape that briefly looked like it might feature a Stripe-owned PayPal. Across the rest of the cluster, Klarna (NYSE:KLAR) stock is up 5% to $14.65 and Sezzle (NASDAQ:SEZL) stock is up 2% to $128.70, while the Financial Select Sector SPDR ETF (NYSEARCA:XLF) sits at $57.90 and is practically unchanged. The dispersion inside the buy-now-pay-later group tells you the cluster isn't trading as a bloc. Bloomberg first reported Stripe's interest in PayPal in February, and The Wall Street Journal reported in August that PayPal had found the initial bid insufficient and that the two sides were negotiating a higher price. Stripe and Advent are both privately held, so the withdrawal removes an obvious buyer without introducing any new public competitor. The takeover overhang that had lifted PayPal stock for months is gone. Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and PayPal didn't make the cut. Grab the names FREE today. PayPal stock had risen more than 40% this quarter on a combination of a second-quarter earnings beat and takeover speculation, and one of those two supports has now disappeared. PayPal stock carries a market cap of roughly $52.59 billion, close to the offer that was just withdrawn, which is what makes today's air pocket feel especially sharp. The underlying business hasn't changed: PayPal's Q2 2026 report showed non-GAAP EPS of $1.38 versus $1.2776 expected, revenue of $8.68 billion, and total payment volume of $486.45 billion, up 10%. Affirm reported fiscal fourth quarter 2026 results after Thursday's close, covering the quarter ended June 30, 2026. CEO Max Levchin described the period as "our most profitable quarter ever, even without the tax allowance release" and stated that "the company is thriving and the core business is firing on all business." Affirm also promoted Michael Linford to president, a signal that management sees the growth runway extending well beyond the current quarter. Additionally, Affirm and Shopify (NASDAQ:SHOP) announced Thursday afternoon the launch of Shop Pay Installments in Australia, powered exclusively by Affirm, marking Affirm's return to the Australian market. Shopify is a payments and commerce heavyweight, and exclusive distribution through Shop Pay is the kind of channel that peer BNPL names would struggle to replicate. The vanishing threat of a Stripe-controlled PayPal only sharpens Affirm's competitive setup heading into the holiday season. Klarna stock and Sezzle stock are both green, but neither is riding the Affirm move dollar-for-dollar. Klarna is drifting higher on relief that the biggest checkout-brand consolidation scenario is off the table for now, while Sezzle is barely participating despite operating in the same lane. Same category, different price action. The Financial Select Sector SPDR ETF sitting essentially unmoved is the tell that this isn't a sector event. Payment fintechs live inside financials for index purposes, but XLF's flat move confirms banks, insurers, and diversified financials aren't reacting. Investors sizing their exposure around today's headlines can treat these moves as idiosyncratic rather than thematic. Traders can watch for whether PayPal stock finds a floor near its pre-speculation level from earlier in the quarter, since that reference frames how much of the recent rally was fundamentals versus takeover premium. Shareholders may want to keep an eye on whether Affirm's Shopify Australia rollout produces early volume disclosures over the next few quarters. Position sizing matters more than usual on days like this. Investors chasing Affirm stock at a 13% higher price should size their exposure to survive a mean-revert session, and anyone bottom-fishing PayPal stock should scale in rather than commit full size into a name that just lost its most obvious near-term catalyst. Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and PayPal didn't make the cut. Grab the names FREE today. Contact [email protected] for any questions or corrections.

As the Q2 earnings season wraps, let’s dig into this quarter’s best and worst performers in the e-commerce software industry, including Shopify (NASDAQ:SHOP) and its peers. While e-commerce has been around for over two decades and enjoyed meaningful growth, its overall penetration of retail still remains low. Only around $1 in every $5 spent on retail purchases comes from digital orders, leaving over 80% of the retail market still ripe for online disruption. It is these large swathes of the retail where e-commerce has not yet taken hold that drives the demand for various e-commerce software solutions. The 4 e-commerce software stocks we track reported a satisfactory Q2. As a group, revenues beat analysts’ consensus estimates by 1.3% while next quarter’s revenue guidance was 3% below. Luckily, e-commerce software stocks have performed well with share prices up 10.5% on average since the latest earnings results. Starting with just three people selling snowboards online in 2004, Shopify (NASDAQ:SHOP) provides a comprehensive platform that enables merchants of all sizes to create, manage and grow their businesses across multiple sales channels. Shopify reported revenues of $3.58 billion, up 33.7% year on year. This print exceeded analysts’ expectations by 3.7%. Overall, it was a very strong quarter for the company with a solid beat of analysts’ billings and gross merchandise volume estimates. Shopify pulled off the biggest analyst estimate beat and fastest revenue growth of the whole group. Unsurprisingly, the stock is up 24.5% since reporting and currently trades at $153.54. Read why we think that Shopify is one of the best e-commerce software stocks, our full report is free. Powering over 263 million registered users worldwide with its AI-driven tools, Wix (NASDAQ:WIX) provides a cloud-based platform that helps individuals and businesses create and manage professional websites without requiring coding skills. Wix reported revenues of $563.1 million, up 14.9% year on year, outperforming analysts’ expectations by 1.9%. The business had a very strong quarter with an impressive beat of analysts’ adjusted operating income estimates and a narrow beat of analysts’ billings estimates. The market seems happy with the results as the stock is up 50.2% since reporting. It currently trades at $85.40. Is now the time to buy Wix? Access our full analysis of the earnings results here, it’s free. As a founding member of the MACH Alliance advocating for modern tech standards, Commerce (NASDAQ:CMRC) provides a SaaS platform that enables businesses to build and manage online stores, connect with marketplaces, and integrate with point-of-sale systems. Commerce reported revenues of $84.51 million, flat year on year, falling short of analysts’ expectations by 0.7%. It was a slower quarter as it posted revenue guidance for next quarter missing analysts’ expectations significantly and annual recurring revenue in line with analysts’ estimates. Commerce delivered the weakest performance against analyst estimates, weakest guidance update, and slowest revenue growth in the group. As expected, the stock is down 32.6% since the results and currently trades at $2.30. Read our full analysis of Commerce’s results here. Known for its memorable Super Bowl commercials that put it on the map, GoDaddy (NYSE:GDDY) is a domain registrar and web services provider that helps entrepreneurs establish an online presence through domain registration, website building, hosting, and e-commerce tools. GoDaddy reported revenues of $1.30 billion, up 6.6% year on year. This number met analysts’ expectations. More broadly, it was a slower quarter as it logged full-year revenue guidance meeting analysts’ expectations and annual recurring revenue in line with analysts’ estimates. GoDaddy delivered the highest guidance raise and highest full-year guidance raise among its peers. The stock is flat since reporting and currently trades at $98.99. Read our full, actionable report on GoDaddy here, it’s free. Over the past year, investors have been forced to repeatedly answer the same question: what is the market’s biggest risk? The answer has changed several times, and each shift has reshaped market leadership. Late in 2025 and early 2026, artificial intelligence became the market’s primary uncertainty. Investors questioned whether AI would erode software pricing power and weaken competitive moats as AI made it easier to replicate once-differentiated products. By the spring, technology took a back seat to geopolitics. The U.S. conflict with Iran briefly became the market’s dominant narrative, raising concerns about oil prices, inflation, and global growth. But as energy markets remained orderly and fears of a prolonged supply disruption faded, investors quickly turned their focus back to fundamentals. Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

Never miss an important update on your stock portfolio and cut through the noise. Over 7 million investors trust Simply Wall St to stay informed where it matters for FREE. Shopify stock has delivered a powerful 190.4% return over the past three years, yet both the Discounted Cash Flow (DCF) intrinsic value estimate and the market multiple checks currently point to the shares trading at a premium rather than as a clear bargain. A 190.4% gain over three years puts Shopify among the stronger performers in ecommerce related software. This raises the bar for what future cash flows need to justify the current price. Investor optimism around Shopify's AI driven products and the Shop app can support high growth expectations, but any slowdown in merchant adoption or weaker cash generation would weigh heavily on what investors are willing to pay. Shopify screens as expensive on the broader checks, with 0 of 6 valuation tests pointing to it as undervalued. For investors, the debate is whether Shopify's strong share price performance and AI growth story still leave enough value on the table at around US$154 per share. Find out why Shopify's 9.1% return over the last year is lagging behind its peers. The Discounted Cash Flow (DCF) model estimates what Shopify is worth today based on projected future cash generation. Shopify produced about $2.35b of free cash flow over the latest twelve months, and the model assumes these cash flows keep growing rather than shrinking over time. On those assumptions, the DCF points to an intrinsic value of about $115.90 per share, which compares with the current price around $154. That gap implies Shopify screens as overvalued by about 33.1% on this cash flow view. Shopify’s recent AI driven Q2 2026 performance and upbeat outlook help explain why investors are willing to pay well above what the cash flow model suggests. Overall, the Discounted Cash Flow workup indicates Shopify stock currently looks overvalued relative to its estimated intrinsic value. Our Discounted Cash Flow (DCF) analysis suggests Shopify may be overvalued by 33.1%. Discover 52 high quality undervalued stocks or create your own screener to find better value opportunities. Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Shopify. The P/E multiple is the preferred check for Shopify because it links the current share price directly to the earnings that investors are paying for. Shopify trades on a P/E of about 103.0x, which is far above the broader IT industry average of 19.0x and also well ahead of the peer group average of 57.7x. Based on the valuation model used here, a more tailored fair P/E for Shopify, given its profile, is 48.1x. The current level is more than double that fair ratio, which suggests investors are paying a sizeable premium for the company’s earnings. This premium implies the market is already factoring in strong expectations around Shopify’s AI driven tools and the Shop app. For anyone considering the stock, it means there is less room for disappointment if earnings do not keep pace with what this P/E multiple implies. On this P/E check, Shopify stock screens as clearly overvalued relative to what the model treats as a fair earnings multiple. See what the numbers say about this price — find out in our valuation breakdown. Simply Wall St Narratives pick up where the valuation puzzle around Shopify leaves off. They set out the specific growth, margin and earnings paths that would need to hold for Shopify's stock to be worth materially more or materially less than the current price, and they sit on Simply Wall St's Community page. Each one turns its view of fair value into a thesis about Shopify's business that you can watch play out over time. Community views on Shopify sit far apart, with some investors seeing a long term commerce infrastructure story and others focusing on premium risk. Bull case: 39% undervalued Read the full Bull Case to see why Shopify could be undervalued Bear case: 47% overvalued Read the full Bear Case to see why Shopify could be overvalued Do you think there's more to the story for Shopify? Head over to our Community to see what others are saying! Shopify screens as overvalued on both the Discounted Cash Flow (DCF) intrinsic value estimate and the P/E based market multiple checks, which are telling a consistent story rather than mixed signals. The current price assumes that earnings and cash generation will keep supporting a premium well above what the intrinsic value work and tailored fair P/E suggest. For you as an investor, the key question is whether Shopify can sustain the kind of growth and margin profile implied by this premium, or whether expectations eventually cool and the valuation multiple settles closer to the underlying fundamentals. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include SHOP. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Shopify’s second quarter saw a significant positive market reaction, with results surpassing Wall Street’s revenue and adjusted profit expectations. Management attributed performance to broad-based growth across merchant sizes and geographies, as well as increasing adoption of new AI-powered tools like Sidekick and the Catalog API. President Harley Finkelstein highlighted that “AI searches powered by Catalog converted twice the rate of those using scraped data,” emphasizing the growing value of Shopify’s infrastructure. Notably, gains were also tied to merchant retention and expansion into enterprise and international markets, while Shop Pay and offline point-of-sale segments showed strong momentum. Is now the time to buy SHOP? Find out in our full research report (it’s free). Revenue: $3.58 billion vs analyst estimates of $3.46 billion (33.7% year-on-year growth, 3.7% beat) Adjusted EPS: $0.42 vs analyst estimates of $0.40 (5.1% beat) Operating Margin: 13.6%, up from 10.9% in the same quarter last year Billings: $3.59 billion at quarter end, up 34.4% year on year Market Capitalization: $196.4 billion While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Ken Wong (Oppenheimer): Asked about monetizing value created by AI and agentic channels. President Harley Finkelstein noted, “Agentic transactions carry the exact economics as an online store transaction,” and emphasized that incremental AI-driven GMV directly benefits Shopify’s revenue model. Bryan Smilek (JPMorgan): Inquired about onboarding large enterprise clients and the speed of integrating major brands. Finkelstein described faster onboarding cycles, citing recent migrations like Balmain, and highlighted the platform’s appeal for brands seeking long-term, unified commerce solutions. Michael Morton (MoffettNathanson): Asked about the upper bound of Shopify’s addressable market and fit for large merchants or marketplaces. Finkelstein argued there is “no upper bound in terms of GMV,” with Shopify able to support merchants of all sizes and complexity, but noted some business models may not be a full fit yet. Adam Wood (Morgan Stanley): Requested more detail on Sidekick’s impact on merchant retention and GMV growth. Finkelstein emphasized Sidekick’s growing use cases and its role in helping merchants achieve milestones faster, leading to improved retention and expanded product attach over time. Arjun Bhatia: Asked about agentic traction and the Shop app’s evolving role. Finkelstein pointed to early but rapid growth in agentic traffic and highlighted the Shop app as a critical commerce entry point with strong GMV growth and new features like Cart Sync. In the quarters ahead, our analysts will closely monitor (1) adoption rates and incremental GMV driven by AI-powered Catalog and agentic channels, (2) expansion and usage of Shopify Payments and Shop Pay across new international markets, and (3) continued growth in enterprise and offline point-of-sale segments. The evolution of Sidekick and Shop app usage, as well as retention among newly onboarded merchants, will also be important markers for sustained performance. Shopify currently trades at $152.20, up from $123.30 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free for active Edge members). WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses. But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.

Image source: The Motley Fool. Wed, Aug. 5, 2026 at 8:30 a.m. ET Director of Investor Relations - Shane Kleinstein President - Harley Finkelstein Chief Financial Officer - Jeff Hoffmeister Need a quote from a Motley Fool analyst? Email [email protected] Shane Kleinstein: Good morning, and thank you for joining Shopify's Second Quarter 2026 Conference Call. I'm Shane Kleinstein, Director of Investor Relations. And joining us today are Harley Finkelstein, Shopify's President; and Jeff Hoffmeister, our CFO. After their prepared remarks, we will open it up for your questions. Today's call will include certain forward-looking statements that are based on assumptions and therefore, subject to risks and uncertainties that could cause actual results to differ materially from those projected. Undue reliance should not be placed on these forward-looking statements. We undertake no obligation to update or revise these statements, except as required by law. You can read about these assumptions, risks and uncertainties in our press release this morning as well as in our filings with the U.S. and Canadian regulators. We'll also speak to adjusted financial measures and other non-GAAP measures, which are not a substitute for GAAP financial measures. Reconciliations between the two are provided in our press release. And finally, we report in U.S. dollars, so all amounts discussed today are in U.S. dollars unless otherwise indicated. With that, I'll turn the call over to Harley. Harley Finkelstein: Good morning, and thanks, everyone, for joining us today. We've got another exceptional quarter to talk about here at Shopify. Here's what that looks like in the numbers. GMV was up 32% to $116 billion with broad growth across our merchant sizes, geographies and sales channels. Our revenue was up 34% to $3.6 billion, and our free cash flow margin was 18%. That's a growth rate of 30% or more across every metric. And this marks our fifth straight quarter of GMV growth above 30%. Now, of all the numbers, our GMV is the one worth repeating. Our merchants processed $116 billion this quarter. This is commerce at an extraordinary scale flowing through the platform, and it also tells us that our merchants are thriving. Okay. Now for the story behind those numbers. Since day 1, our operating principle has been simple and consistent. Shopify creates what most merchants need most of the time. And for everything else, we empower our incredible ecosystem of partners. Now I know you've all heard that before, but here's why it matters now. The principle that got us here also explains why we're able to deliver durable growth quarter-after-quarter. And it perfectly captures how we are building to win in this new era of commerce. Let me explain. First, our addressable market of most merchants is now a very large pool. Because we made it easier to start, there are now simply more merchants to serve, and the breadth of our capabilities has expanded so that merchants of all sizes now run on Shopify. Second, the range of those, most of the time merchant needs is expanding quickly. They need access to new and emerging surface areas. They need best-in-class tools that will allow them to keep pace with the rate of change in commerce. And they need it all in one place. Added complexity only reinforces the demand for a simple, unified platform that they can rely on, and that is Shopify. And here's the third critical piece. Our open ecosystem model is uniquely well suited to this agenetic era. We have always focused on most merchant needs while making the platform extensible for everything else. We build the primitives, we open them up, and we let the best developers and the best companies in the world build on top of us. In the last year, we kicked that model into a whole new gear. Some of the largest technology companies in the world like OpenAI, Google, Meta, and Microsoft, have chosen to partner with us to open more front doors for commerce. Every new surface area they build is another place our merchants can sell, all because they're on Shopify. And on top of this, the thousands of developers all over the world are embedding commerce into their own applications using the same primitives we built. Thousands of new front doors, all built on one unified foundation, the Shopify platform. Now as commerce continues to fragment, Shopify becomes an even more critical partner because we provide consistent and reliable infrastructure that makes every shopping experience feel seamless. Now whether commerce is handled by humans or agents, whether stores are built by people or AI, Shopify runs underneath it all. For 20 years, we've built a commerce operating system that takes merchants from first sale to full scale by using our partner ecosystem as an extension of our platform. That is our muscle memory. And this model will continue to service even better in this new agentic era of commerce. So let's talk more about Shopify's infrastructure, specifically what we've been building and why it matters so much. We have a very strong conviction that commerce experiences will soon be built into everywhere people are spending their time. That is why our latest product drop was called the Everywhere Edition. We are building now so our merchants are ready for the future. So let's talk about that infrastructure that unlocks commerce everywhere. First, our Catalog, which you can think of as the authoritative source of truth for AI product discovery of the world's best products and best brands. For nearly 2 years, we've been investing in the search index, ensuring over 1 billion products and 20 years of commerce experience is distilled for agents. It structures merchants product data, so every and any AI partner can access it directly, giving agents the ability to discover, understand and recommend our merchants' products. And let me say this, Catalog will be one of Shopify's most important assets for years to come. And here's why. We're seeing that AI searches powered by Catalog converted twice the rate of those using scraped data. That is because with Catalog, merchants' products show up complete, accurate, and with the right context when someone is ready to buy. Put simply, Catalog is the discovery engine for the future and Shopify built it and owns it. Next, let's talk about the Universal Commerce Protocol or UCP. We introduced UCP at the start of 2026, and already industry players across the commerce stack and beyond are converging on this unified protocol with dozens of retailers and platforms adopting it to date. And because we co-built the protocol, partners look to us to make sure it evolves in ways that represent the full diversity of commerce. So first, we built the infrastructure to unlock commerce everywhere. And then we opened it up for everyone. Every Shopify merchant is UCP-ready. Agents and builders can access the product data, create carts, and even check out using the protocol. Everything flows through Shopify. So their checkout logic and fulfilling rules are perfectly preserved. Their products are also automatically listed in Catalog. And every builder can now access UCP and the Catalog API across millions of merchants so they can build commerce experiences with the same infrastructure as our major AI partners. Plus, we built our catalog the way only Shopify could, integrated with shop sign-in so agents can recognize returning buyers and surface personalized recommendations based on their purchase history. No other Catalog API can do this. And we're not just putting merchants in AI channels, we're also showing them how to win in them. In May of this year, we rolled out our new agentic section in the admin, the first cross-channel attribution for agentic selling. Merchants can manage AI channels, they can track performance, and they can get specific recommendations on what to improve, all from a single interface. Now, while the volume from agentic commerce is still small relative to our massive GMV, the growth trends are impressive, both AI-driven traffic and also orders to Shopify stores tripled year-over-year in the second quarter. New buyer orders are coming in at nearly twice the rate of other channels. And this is not just AI taking share of search. In fact, search remains one of our largest sources of buyer traffic to our merchants, and it's still growing. Traditional search sessions are up 1.3x over the past 2 years, holding roughly 1/3 of all storefront sessions. That is AI as a complement to search rather than a substitute for it. Okay. Now let's talk about agentic building. AI is not just opening up new surface areas for discovery, it is also democratizing code and software development, lowering the barriers to starting a business even further. The way entrepreneurs are pursuing new ideas, the way developers are building software, the way merchants are running their businesses, they're all being rewritten. So naturally, the tools we're arming our merchants with are also evolving at an incredible pace. And Sidekick is the prime example of this. In the second quarter, daily active merchants using Sidekick were up 3.6x year-on-year and daily sessions were up 4.8x. It handled nearly 34 million conversations, and it was used to create more than 36,000 custom apps, up from 12,000 in Q1. More merchants are using Sidekick, and they're using it far more often. That's because it's driving real value, getting new merchants to their first sale faster and helping establish merchants run smarter. Sidekick's personalized guidance for new merchants during onboarding led to an 8% increase in merchants reaching 5 orders within 15 days, and it's getting more intelligent all the time. It can now access data and take action through extensions to third-party apps like Klaviyo without the merchant ever leaving Sidekick. Now adoption is widespread across merchants of all sizes. But what's really interesting is how the value evolves as merchants grow. In a merchant's first 30 days, roughly half of their conversations with Sidekick are about store setup, design and theme configuration. Now for merchants 5 years in, that drops to about 8%, while analytics and reporting claims passed 40% as they use Sidekick as their intelligence layer to interrogate their own data and make better decisions. Same product, different job. At the same time, we built connectors to agents, including Claude, ChatGPT, Perplexity, Manus, Replit, and Vercel with our AI Toolkit. So our merchants can build on Shopify however they choose. And these are just a couple of examples. Our integrations across vibe coding platforms like Lovable, AI chat agents, and CLI IDEs show Shopify's commitment to meeting builders where they are, however they choose to get there. These tools are a real competitive advantage, and they're exclusively and seamlessly available to Shopify merchants. Interface layers are changing in the agent-first world, but Shopify is still the core commerce infrastructure underneath it all. One where every step of commerce from buying to building, from starting to scaling, moves faster and is within reach for more people. Beyond what we at Shopify are doing to move the needle for our merchants, there are early structural changes we are seeing in the market that also strengthen our position even further. First, let's look at the type of merchants benefiting from these AI shifts. Early indications show that AI search has been particularly helpful to some of the smaller brands that form the long tail of commerce. These are brands that also happen to make up the majority of Shopify's merchant base, smaller businesses with specialized products built for a particular customer. We saw that AI search was starting to disproportionately benefit the long tail in 2025. And that trend has continued, with 75% of AI-attributed orders in the second quarter coming from outside our top 100 categories in Q2. And the explanation is simple. While search engines rank by popularity against a handful of keywords, AI agents make multiple calls into Shopify's Catalog working with richer structured data to match products with the buyer's specific intent rather than just keywords. So when a buyer asks an AI assistant for the best car seat that fits 3 across the Sedan, traditional search focuses on the keyword car seat. An agent, however, understands the actual need, the dimensions, the vehicle type, and the fact that they need 3. It searches across all of those constraints at once to find the product that actually works not just the one that ranks highest. And in this world, relevancy reigns. So specific products made for a specific buyer do particularly well. Same for things like reef-safe sunscreen that doesn't leave a white cast or even the best dog harness for a French bulldog. These are real Shopify products that have benefited from the specificity of AI search in the last quarter. And this specificity is leading to better conversion for merchants. Buyer shopping journeys are being compressed as half of all AI-referred sessions are landing directly on a product description page. That is 2.5x more than what we see with traditional search. All of this is a serious tailwind for our merchants and in turn for us at Shopify. Second, as AI makes commerce more fragmented, the value of a best-in-class checkout that can sit underneath any commerce experiences grows exponentially. Our checkout is intentionally designed to look simple. One click, done. But in reality, it is anything but simple. From taxes to discounts, pre-orders to bundles, fulfillment, inventory, validation logic, payments, I could go on. There is a world of complexity that neither the merchant nor the buyer ever has to think about. But if it breaks, everything breaks with it. And every seemingly simple transaction inside of Shopify checkout is made up of countless customized logic flows. The ability to handle that complexity is what Shopify is world-class at. And the stakes only get higher as commerce expands to more surface areas and as agents start having a role in the transaction. So the agentic landscape favors Shopify's core merchant base, and it makes our checkout even more valuable. It also significantly increases the importance of trust and identity. An agent acting on a buyer's behalf needs to know who they are, how they want to pay and what rules they've set. And through Shop, we've built a buyer network of hundreds of millions of people with identity, preferences and payments working as one system. Shop app's native GMV grew over 70% in Q2. And one of my favorite features Cart Sync, represented over 30% of Shop app GMV in this quarter. That is the value of known buyers. And Shop Pay is where that trust and identity show up in conversion. In June, Shop Pay surpassed $400 billion in lifetime accelerated GMV. And as new surfaces grow, Shop Pay remains the trusted payment layer that travels with the buyer. So when you zoom out, here's what you see. A new powerful surface area for discovery that disproportionately benefits our core merchant base, a fragmented environment that needs a reliable check of sitting underneath it all to power it, a world where humans must be able to trust that an agent acting on their behalf knows them and follows the rules they have set, and a greater need all the time for a unified operating system that makes commerce everywhere, not just possible but easy. And this is what Shopify was built for. Now before I hand it over to Jeff, let me give a couple of quick highlights from across the business that fueled our growth in Q2. First, international. International GMV grew 37% in the quarter, and we launched Shopify's first local payment method offering in Mexico, and we expanded managed markets beyond the U.S. merchants for the first time, making it available to merchants in Canada and the U.K. Now let's talk about offline. Shopify point-of-sale GMV grew 32% year-over-year in Q2. And we continue to widen the gap on what sets Shopify apart, delivering our fastest-ever point-of-sale experience and deeper unified commerce capabilities. Merchants can now fulfill orders across locations, move inventories more efficiently between stores, complete returns, exchanges and new purchases within a single checkout. We're seeing particularly strong momentum with large complex retailers who are our fastest-growing segment. And this quarter, we welcomed the iconic Canadian retailer, Holt Renfrew. We powered the rollout of multiple Canada Goose locations and we expanded our relationship with the furniture retailer, Arhaus, to include their offline business. In B2B, we expanded native B2B capabilities beyond Plus for the first time, giving more merchants the ability to manage wholesale and DTC from the same Shopify admin. That means fewer separate tools, fewer custom workflows, and more of their business running through one unified system. Finally, let's talk about our growth with larger brands. Some of the biggest and some of the most important names in commerce and retail continue to move to Shopify to modernize their next chapter. This quarter alone, brands like Guess, Fred Segal, an Aritzia Company, and Avon, all chose Shopify. And e.l.f. Cosmetics, Claire's, Burton, and Suitsupply, are all now live on our platform. As I mentioned earlier, we expanded our work with Arhaus, and this is a perfect example of the power of our unified commerce offering. Arhaus started with us online, and now they're expanding into offline, B2B, and Shopify Payments. Different customer groups, different channels, different pricing models and one back end to run it all. Now here's what else really matters. Once merchants come to Shopify, they stay. Our merchant retention is something we are very, very proud of. Put simply, Shopify is a platform for brands at any stage of their life cycle. And each channel they add makes the others more powerful, embedding merchants deeper in our platform and driving more profitable growth for our company. So let me bring this back to where I started today. Shopify built what most merchants need most of the time. For everything else, we leverage our ecosystem of partners to build with us. 20 years ago, most merchants meant a much smaller group with a much smaller set of needs. But today, we power every size and every shape of commerce business. And as the merchant base has expanded, our focus has remained the same. Absorb that complexity on behalf of merchants, so they can continue to focus on what matters most to them, their products and their customers. Every time commerce gets more complex, the value of the Shopify platform increases. Today, an entrepreneur can have an idea in the morning and their first sale by the end of the day. With Shopify's AI tools helping them build their storefront, with Catalog servicing their products to buyers and Sidekick already guiding them to the next step. This is an entirely different velocity of entrepreneurship, and it's only going to continue to accelerate. It doesn't matter whether commerce is built by a person or an agent. It doesn't matter whether a transaction starts on a store, in an app, a chat or an interface that hasn't even been invented yet. The underlying needs of merchants do not change. Products need to be discovered, inventory needs to be accurate. Checkout needs to work seamlessly and payments need to move. And the infrastructure underneath it all needs to be fast, reliable and infinitely scalable. And that's what we do at Shopify. And with that, I'll turn the call over to Jeff. Jeff Hoffmeister: Thanks, Harley. It was an incredible quarter. Q2 represented a continuation of what we've seen for several quarters now, broad-based growth across the business. Strength in GMV flowed through all of our financial results. We achieved greater than 30% growth in each of GMV, revenue, gross profit, operating income, and free cash flow. Q2 marks the fifth consecutive quarter with constant currency GMV growth of 29% to 30%. A tight band, and importantly, even as our scale has grown and the year-over-year comps have gotten tougher, we have consistently delivered these growth rates. The durability of our growth is driven by one of the most powerful dynamics of our model, our cohorts. Newer cohorts continue to outperform, while older ones keep growing. That strength compounds over time as our older cohorts generate multiples of their first year GMV. For example, our Q1 2015 cohort now has a quarterly GMV that's 5x its initial size, implying a compound annual growth rate 3x that of the overall commerce markets growth rate over the same period. This is the mission of Shopify. We make it easy for anyone with an idea and the courage to start the business. It's why we cast a wide net in bringing merchants to the platform. This approach is a feature, not a bug. Through that wide aperture, we find, nurture and build for merchants, many of whom go to do millions and then hundreds of millions in GMV. And the ones that scale, stay. Over the last 5 years, merchants who reach $1 million in annual GMV had a 92% retention. That jumps at 97% at a $10 million annual GMV. A lot of entrepreneurs are serial entrepreneurs. So even if their first business doesn't make it, Shopify still supports the next one. Merchants who build a second shop on Shopify, on average earn more than twice the sales per shop compared to first-time founders. That is how our cohort strategy work. We give every entrepreneur a shot, arm them with tools to build and watch the winners compound their success. But it's not as simple as just offering tools. We offer a breadth of products in an integrated platform to simplify the complex backdrop of commerce. And every piece of that solution makes the others more powerful. GMV drives payments revenue but also informs our capital offers. Checkout fuels buyer identity, and that identity benefits advertising precision. And every transaction sharpens the data underneath all of it. Last year, we surpassed $1 trillion in Q1 of GMV facilitated by our platform. Then this past quarter, we also passed that threshold for gross payments volume through Shopify Payments. That is a data foundation underneath everything I just described. It's less about any single capability, but rather how they lead together and inform and enhance each other. This is a magic of combining the bravery and vision of entrepreneurs with the power and capabilities of the Shopify platform. And when merchants win, so do we. Now let's take a closer look at our second quarter results. Q2 GMV was $116 billion, representing year-over-year growth of 32%. On a constant currency basis, GMV grew over 30%, accelerating on top of a very strong 29% prior year comp, diving deeper into GMV from a few different angles, first by merchant size. Consistent with trends for several quarters, we've had broad-based growth across merchant sizes. The $25 million in greater band is the fastest-growing, albeit off of a smaller base. The $2 million to $25 million cohort continues to contribute the most incremental GMV and we are still growing the space with the majority of the growth coming from existing shops graduating up into this band. Moving to regions, North America GMV grew 28%, and Europe grew 34% on a constant currency basis. The contribution to GMV growth from new merchants and same-store sales remain relatively balanced and in line with multi-quarter trends. Finally, turning to channels. Offline GMV was up 32%. B2B GMV grew 76%, all a continuation of prior quarter strong trends. Now looking at revenue. Q2 revenue grew 34% or 33% on a constant currency basis, clearly surpassing expectations. Merchant Solutions revenue grew 37%, driven primarily by the strength in GMV and increased payments penetration, which grew 3 points year-over-year, reaching 68% of our global GMV. We see clear runway on payments penetration, both domestically and abroad. This past quarter, we launched Shopify Payments in the UAE, bringing to 40 the number of countries where we have payments available. Penetration in Europe increased by more than 350 basis points year-over-year, even as many of the countries we serve launched only last year. We also continue to add more and more local and regional payment methods, including, for example, our additions this past quarter in Mexico. As of Q2, we also now dynamically surface the most relevant payment methods for buyers. Doing this helps eliminate reasons for buyers to ever abandon their checkout, creating better conversion. Shop Pay GMV grew 53% year-over-year. In Q2, we made more local payment methods available to consumers within Shop Pay. This continues our 2-part strategy of adding more local payment methods to Shopify Payments and then making more of those available within Shop Pay. More choice and payment method availability means fewer drop-offs to guest checkout, and helps drive Shop Pay usage. Shop Pay also allows buyers to choose to finance their purchases and Shop Pay installments continues to gain share. Each of these make Shop Pay a better consumer experience and a more complete wallet with additional ways to pay, helping drive consumer adoption. Subscription Solutions revenue grew 22%, the largest contributor to the growth was monthly subscriptions for our standard plans, as we saw a strong quarter of merchant net adds in Standard. We also saw relatively equivalent-sized dollar growth in Plus subscriptions and variable platform fees, which were driven by the higher GMV. Q2 MRR grew 19% year-over-year, with continued growth across each of Standard, Plus and point-of-sale plans. Plus MRR represented 34% of MRR, also growing 19% year-over-year. Bringing these all together, our revenue beat in the second quarter stemmed from three key areas where we outperformed, broad-based GMV outperformance, higher-than-expected payments penetration and strength in other Merchant Solutions, primarily from our partner rev shares and financial services. Now turning to our profitability. Merchant Solutions gross profit grew 39%, with gross margin up slightly from last year. Margin pressure from increased payments volume was more than offset by growth in higher-margin revenue streams. Also, to my earlier comments regarding local payment methods, our payments gross margins are generally higher in international markets due to the greater prevalence of debit transactions and lower interchange fees. Subscription Solutions gross profit grew 19% with gross margins just under 80%, in line with our Subscription Solutions gross margins in Q1. As a reminder, the vast majority of AI costs related to merchant use of Sidekick appear in Subscription Solutions gross profit. We were able to hold gross margins at a relatively consistent level quarter-over-quarter while Sidekick usage scaled, which reflects some cost efficiencies and support as well as our ability to continue providing merchants unique AI solutions like Sidekick, while diligently managing cost. We are big believers in Sidekick and the value that it can deliver to merchants. We believe these types of investments in our platform will translate into more merchants joining the platform, and those merchants have an even greater success. That translates to more gross profit for us, but more importantly, it is helping our merchants accelerate their businesses. Now looking at operating expenses, which were 34% of revenue, a nearly 4-point improvement from Q2 last year. This reflects continued leverage as we grew gross profit dollars faster than our expenses, primarily by maintaining our discipline in headcount, sales and marketing, R&D, and G&A as a percentage of revenue each improved year-over-year. This operating leverage provides the financial flexibility to continue to invest in our platform, including in our internal AI capabilities. We've moved from a place of just reflexive use of AI to a place of AI leverage. Our AI philosophy is straightforward. Maximum leverage paired with thoughtful cost management. We use the best model for the job, frontier intelligence where it matters, less expensive models where it doesn't. We believe widespread adoption of AI tooling already is and will continue to yield benefits in the quality of our output. Looking more closely at our OpEx. Sales and marketing in Q2 was less than 14% of revenue, approximately a 160-basis point improvement year-over-year, even as we funded additional dollars into our merchant acquisition efforts. On R&D, the majority of our internal AI spend is allocated here. So you've seen a modest uptick in year-over-year growth. Overall, we've driven substantial leverage in R&D as a percentage of total revenue, and we'll continue to be disciplined in managing the spend. Transaction loans and losses came in at 3.9% of revenue. It will scale with volumes in our payments, capital, and credit products. Capital was a larger driver this quarter, while loss rates and payments and credit are both at normalized levels. Each of these products continues to grow well, and we are constantly improving our measurement and forecasting to keep loss rates low as adoption grows. And finally, our Q2 free cash flow margin was just over 18%, exceeding our outlook. This represents roughly 1.5 points of year-over-year margin expansion after excluding the benefit of the accounting change in merchant cash advances that we mentioned last quarter. This free cash flow margin expansion was primarily the flow-through of our operating margin expansion, partially offset by about 1 point of increased taxes compared to last year. With that, let's move to our Q3 outlook. We expect Q3 revenue growth in the low 30s year-over-year. The expected sources of growth are consistent with the drivers that we saw in Q2, broad-based across geographies, merchant sizes and channels. We do not expect any significant FX impact. We expect our gross profit dollars to grow in the mid- to high 20s. The differential in the revenue versus gross profit growth rates is driven by the same factors as the second quarter. The continued mix shift between the growth rates of merchant solutions and subscription solutions, and the continued strength of payments. We expect operating expenses in Q3 to be 33% to 34% of revenue, reflecting continued leverage and meaningful improvement compared to the 37% we delivered in Q3 of last year. We expect our Q3 free cash flow margin to be in the high teens to low 20s, inclusive of less than 1 point of tailwind from the accounting change in merchant cash advances. Bringing it all together, when I look ahead, our runway is long. Even though Shopify represents over 14% of the U.S. e-commerce market, our margins take a disproportionate share of the growth. According to eMarketer, since the start of 2025, Shopify merchants have captured nearly half of all incremental e-commerce dollars in the U.S. Early results internationally near that trajectory albeit earlier in their maturation. That's headroom in both the U.S. and globally. Absent any other growth drivers, these are already strong, structural and persistent tailwinds in the base case. And as we enter this agentic era, any acceleration in e-commerce growth or disproportionate value to the long tail of commerce is upside to our underlying growth story. With that, I'll turn the call back over to Shane for your questions. Shane Kleinstein: Thanks, Jeff. We'll now take your questions before turning the call back to Harley for some final words. [Operator Instructions] Our first question will come from Ken Wong from Oppenheimer. Hoi-Fung Wong: Harley, you touched on a lot of key points in terms of AI driving the commerce platform forward clearly providing a ton of value to your customers. How are you thinking about potentially harvesting some of that value back to Shopify? Or is the intent still to kind of open the doors as wide as possible to bring in as many merchants as you can? Harley Finkelstein: Thanks for the question, Ken. I mean, look, when it comes to monetization, the focus is very simple here. We unlock more places for our merchants to sell. And when we earn on those sales the way we always have. We think -- you've seen this, of course, but the agentic transactions carry the exact economics as an online store transaction. There's no new fees. There's no separate pricing. But more agenetic GMV, it means more Shopify revenue, and that's the model and it's been working really well for almost 2 decades. I will say -- I mentioned in my earlier comments, that we are seeing incremental dollars flow through agentic. I know there are some questions on the last call about whether or not it was taken away from search, but search is growing incredibly well. Agentic has really taken off now. But the other thing that I think is incredibly important is when you look actually at where -- what is happening here, I mean, 75% of AI-attributed purchases in Q2 were from outside the top 100 categories, meaning a standing desk for a small apartment or I mentioned a car seat that fits 3 across the sedan. These are real Shopify products discovered because an AI agent understood what the buyer actually needed. And that's a structural advantage for these small specialized independent businesses. And that's -- I mean, that's our base. That's our sweep spot. So we think that these trends suggest that merchants on Shopify will disproportionately benefit from this new surface area. And as they grow, we grow with them. Shane Kleinstein: We'll take our next question from Bryan Smilek at JPMorgan. Bryan Smilek: Great. Harley, I'll steal your words, a great monster guide of 30% revenue growth. Definitely wanted to dig in more on the enterprise side. Can you just talk about the ability to onboard new enterprises quicker and truncate that selling cycle? And I guess what's next on the product road map here where you can lift and shift that GMV target from $100 million-plus to north of $200 million over time? Harley Finkelstein: I'll tell you something sort of in almost real time. I woke up this morning to an e-mail from Balmain, one of the most iconic, legendary retailers in Europe, luxury retailer in Europe, saying that they migrated to Shopify in a matter of weeks. Balmain.com is now fully launched. So let me maybe start at the top. Shopify -- Merchants on Shopify are simply better positioned than those that are not. And that is true of businesses of all sizes. We think, in particular, you've seen this and I've said this on the call, but you've seen the velocity here. Larger merchants are now choosing Shopify at a higher clip. They see that there is enormous and often invisible complexity. I think the fact that speed to market, this all-in-one platform, this velocity of innovation, but also, I think our pole position on agentic commerce, there's no custom stack or legacy platform can match that. So what these larger brands are looking for is they want a future-proofed commerce partner. They don't want to have to think about ever migrating again. The olden days of enterprise e-commerce, every couple of years, you have to sort of migrate to a new platform. That's not the case with Shopify. And so they want to kind of go -- we sort of jokingly refer to as their final migration, and that road leads directly to Shopify. What you're also seeing is some of these less modern brands, more iconic brands that have been around for a long time, Barnes & Noble or Claire's or Suitsupply or Guess Jeans or Avon, coming to Shopify as well. It's important they come to us, but the best part about this model around enterprise commerce is once they come to us, they stay. And we've seen that with brands that have both started on Shopify or migrated early to Shopify, like Alo or Vuori or FIGS. They come to us, and they continue to stay here. I mentioned Arhaus on the call in my prepared remarks, because actually that's a really important point. We're really getting -- we're seeing a lot of success right now in the sort of cross-sell motion where they come to us for one particular channel, online store, for example, that's the on-ramp in. And then over time, they really migrate towards this unified commerce platform with Shopify. And so in the case of Arhaus, we are moving well beyond just e-com to point-of-sale into things like B2B and obviously agentic. So I think the commerce landscape has shifted. I think enterprise -- large enterprise brands see Shopify as the very best option. And we've built our team and our sales function around getting them to launch much faster than pretty much anyone else. And that will continue, whether that's a migration of inventory or SKUs or it's helping them understand how to modernize their stack. We feel like we really have nailed how to get more large merchants onto Shopify faster. And then again, once they come to Shopify, they stay with us. Shane Kleinstein: We will now take a question from Mike Morton at MoffettNathanson. Michael Morton: If we could maybe follow up on those comments, Harley. The question we get a lot is, for your total addressable market, what is serviceable? And we'd love to know, is there an upper bound on a GMV per merchant? Or is there maybe a business model, like marketplaces that you don't think are a right fit for Shopify over the long term? Would love to know how much of the TAM you think is serviceable. Harley Finkelstein: I mean, that's part of, I think, the magic -- the secret sauce or the magic sauce to Shopify, which is that we want to make sure that anyone who is starting a business at their mom's kitchen table uses Shopify. We know not all will succeed, but what we've seen over 20 years, that the ones that do stay with us indefinitely, and over time, they take more and more of our solutions. So we become -- we start by being important, we become incredibly important as they grow. At the same time, getting more of these General Motors, for example, or Amer Sports, which owns Wilson and Salomon and Peak Performance, getting more of these more established retailers to come on, Burton Snowboards is something I think that Tobi has probably been salivating over since he started Snowdevil before Shopify. The fact that we're getting these as well suggests to us that there is no necessarily upper bound. There are some merchants that just -- it doesn't make sense. And there's not that many, but there are times where we may look at a particular type of business model and say, this just doesn't -- a full migration to Shopify may not make sense just yet. So that's where these things like Shop Pay as a commerce component really plays a great role. We'll say to them, look, start with Shop Pay, even if it's a marketplace, use it. We think you're going to see a conversion uplift. You're going to see this accelerated checkout experience that is going to be far better than whatever you have. It's a major draw. And then once they begin to work with us, we can begin to evaluate how do we create this sort of cross-sell with them or how do we get them take on more. But in terms of upper bound, I don't think it's a GMV issue. We have merchants that are doing billions of dollars with a very, very small team. So there's no upper bound in terms of GMV. Complexity, I think we've gotten really good at. There is something for everyone now, whether that's headless or it's a commerce component. And again, we start with them early on, figure out how we can be very valuable, kind of underpromise but overdeliver to them in that first component. And over time, in the case of Arhaus or in the case of Canada Goose, we see them just taking more of our services. So I think -- I don't think there's an upper bound. I will say also on the international side, that's also where I think we are still underpenetrated. I think we've captured less than 1% of global retail sales. And in the core geographies where we operate, the opportunity is still massive, but I still think we are -- I mean, my team hears me gripe about this all the time. I think we are underpenetrated internationally, and it's growing. I mean, obviously, we saw revenue grow. GMV was up 37% internationally this quarter. But there's just -- there's a lot more we can be doing there because I think that is -- we are less known there than we are in our core geos. Shane Kleinstein: Thanks, Mike. We'll take our next question from Terry Tillman at Truist Securities. Terrell Tillman: Harley, Jeff and Shane, can you all hear me okay? Harley Finkelstein: Yes. Terrell Tillman: Awesome. So it's a multi-part question. On Shopify Catalog, I mean, how often is this actually now being a primary driver of demand gen and actually getting the new merchant? And the second part of this is, Harley, let's go back a couple of years to COVID. There was a lot of folks that said, "Hey, I want to take my own destiny in my own hands, I'm an entrepreneur, I'm a builder." This feels like we're having another moment here. How does this compare to that moment in terms of this kind of builder economy around AI? Harley Finkelstein: Thanks for the question. I mean, look, in terms of Catalog, this is real. I mean, if you just look at conversion of our Catalog -- Shopify Catalog versus general search conversion is 2x. I mean, so I'm comparing Catalog to just scraping a bunch of products. So that's a 2x increase. When you zoom it even further, conversion from AI search runs nearly 80% higher than traditional organic search as well. So I mentioned this on the call, but Catalog is the most important inventory of products that consumers want. And we've built it in a way that has super high fidelity, that knows -- I don't know if you tuned in to Editions.dev 2 weeks ago, but we talked about these like taste-driven attributes that we're now building in to Catalog, things like, is it formal enough for a wedding? Is it great -- does it have a breathable fabric? What's the wrinkle tendency? Are these sneakers suitable for an endurance run? These are -- these sort of taste-driven attributes are things you can only get with Catalog. So number one, I think consumers are finding -- we have the data to back it up. Traffic on agentic is 3x year-on-year. Orders are up 3x as well. And then if you look at new buyers, new buyer orders from AI channels on Shopify are like 2x versus other channels. So one, we are already seeing -- even though it's small relative to a very large GMV, we're already seeing agentic start to really expand the discovery of these products. That's on the consumer side. On the merchant side, yes, I mean, I meet these very large retailers and the executive teams there literally every single week. Every one of them is being pushed to figure out what their agentic strategy is. By coming to Shopify, we take their agentic strategy off their plate. We make it so that they are the best positioned of any company. And so I think we talk about Catalog from the consumer perspective quite a bit, but it also is a driver to use -- to come to Shopify. On the second piece, yes, I mean, certainly, you'll remember sort of the COVID run, we saw entrepreneurship exploding. People were using entrepreneurship to either supplement their income or if they lost their job to find new income. Right now, when you look at things like Sidekick, it is remarkable how well that's going. I mean, Sidekick in particular -- and again, Sidekick is different for every stage of merchant, but it is becoming a bigger part of how merchants build and run their businesses. And we are seeing that it's helping them reach early milestones faster. It's helping them make smarter decisions as they grow. It takes work off their plate. And because we have so much context, only Shopify can build something like Sidekick. And I mentioned on the call, but it's fascinating. We see that when you use Sidekick, the onboarding guidance that it gives you as you're just setting up a store, it drove like an 8% increase in new merchants reaching 5 orders within 15 days. We know that if merchants get more orders earlier on, not only they stay longer, but they tend to be more successful. So this is really helping. And I think Sidekick and all the other tools we've made available are just making entrepreneurship far more accessible. Shane Kleinstein: We'll take our next question from Adam Wood at Morgan Stanley. Adam Wood: I have a question about Sidekick, coming back to that. So again, some very, very strong data in the quarter. Could you just go into a little bit more detail? You started there talking around the benefits to merchant outcomes. But could we see how retention is happening? How GMV growth is happening? How product attach is happening where merchants using Sidekick as well as the traditional Shopify offerings? And over time, do you see that indirect monetization as the main driver? Or could those premium AI capabilities become a more direct pricing opportunity for you? Harley Finkelstein: I mean, look, we reserve the right to wake up smarter every single day. But in terms of monetization now, the business model is predicated on merchants doing well. The better merchants do, the better Shopify does and Sidekick helps with that. Now I think what sets Sidekick apart from any other agent is that it understands the merchant's products. It knows the merchant's customers, it knows their transactions, it understands their storefront, it knows the entire history of the business. And that context allows us to give advice grounded in the actual practical realities of the merchants' businesses, and they can act on it as well. But it's an advantage that actually gets stronger as Sidekick becomes connected to more of the work merchants do on Shopify. And it's because we have the merchant data and transaction history that can do it. What's really interesting is, if you look at daily active merchants using Sidekick, it grew 3x year-over-year. Daily sessions are up 4.8x. But if you actually look at what they're doing with it, merchants had nearly 34 million conversations with Sidekick in Q2, and they built 36,000 custom apps in Q2. That's up from 12,000 in Q1. So the pattern is very clear here. More merchants are using Sidekick and each merchant is finding new ways to use it. For new merchants, the first job is just getting that first sale and then the next one. And so I mentioned our onboarding is helping them get to that first 5 orders within 15 days faster. That is super important for momentum. What we also see is that as the business grows, Sidekick's role grows with it. During the merchant's first 30 days, 50% of the conversations are about store setup and design and theme configurations. But if you look at 5 years in, setup accounts for like 8% because they're already at scale, and that's where analytics and reporting make up more than 40%. So the idea is like Sidekick helps the merchant get launched. And over time, it becomes a way to understand the business to spot new opportunities to make better decisions. And we're already seeing power users, if I can use that term of Sidekick, pushing it way further into things like advanced design or content or SEO or even product creation. So the idea is, it becomes more cable inside the flow of running the business, and it's the context it has across all of Shopify that makes it possible. And so we're really, really happy with this. We think more people will find success in entrepreneurship. We think more larger merchants will also -- one of the things I get to do as part of my job is I get to meet our largest merchants. And this is sort of one of my favorite things is I often ask them how they themselves are using Sidekick if they are. The ones who use it will show me right away what you're using it. The ones who don't, I'm able to sit there at a meeting over coffee and show them, like I ask them often, what is the #1 query you have currently for your data team. And they'll say, well, I'm looking to know like what is the exact city of our -- of where most of our customers are from. And I'll say, just ask Sidekick right now, and Sidekick will pull it up within seconds. It is a mind-blowing experience for anyone who hasn't used it and the ones that start using it continue. Shane Kleinstein: Great. We'll take our next question from Deepak Mathivanan from Cantor. Deepak Mathivanan: Right. Harley, AI model capabilities continue to expand at a pretty accelerated pace and Shopify has always been at the forefront of building on these cutting-edge capabilities. Can you talk about a few areas where the recent advancements that we've seen with the Fable and GPT 5.6 series are enabling pretty good product improvements or perhaps improvements in operational capabilities for Shopify. Harley Finkelstein: I mean, look, it's -- it should be very clear now that AI is now baked into how Shopify operates. Every decision, every experiment, every merchant interaction AI is helping us get smarter. And over the past year or so, we've really moved in from experimenting with AI to just rebuilding teams and our work around what it can do. And the way we think about these models is, we use the best model for the job. We use frontier intelligence where it matters. We use less expensive models where it's simply not needed. And everything that we've done runs through an internal proxy, which gives us incredible visibility, gives us control, gives us security. And then as soon as the task becomes repeatable, we look at how to move it to a more efficient model. And actually, what's really cool is we now have a number of distilled models where we take a teacher model, usually a big frontier model, then teach it a specific use case to a smaller model, which results in much faster, less costly, and actually sometimes even better at the narrow task. So, I think Shopify is, I think many of you have heard from the leaders of these models out there, Shopify is probably the most AI-pilled company in the world. Certainly, credit to that goes to Tobi, who I think is been thinking about this longer than most and certainly put Shopify on the path of being AI reflexive before almost anyone else. But it's not just what we're using it for. It's also how we're using it, I think, sets Shopify apart. Shane Kleinstein: Great. We'll now go to Todd Coupland with CIBC. Thomas Ingham: Great. I wanted to ask about free cash flow margins. Is roughly 20% the new normal? And how should we think about the levers around that? Jeff Hoffmeister: Thanks for the question. I apologize for my voice. I'm fighting a cold. Nothing's changed, Todd, in terms of how we look at free cash flow and kind of the levers we have at our disposal. The gross margin is something where we've talked about in terms of any pressure we see on gross margin, we'll more than offset that with OpEx success. When you look at what we delivered in Q2, it was roughly 150 basis points. Ignoring the change on the MCAs, it was roughly 150 basis points above where we were last year. I don't think we can say, can we have a new normal? I would focus you on the guidance we gave for Q3. And I would tell you, we continue to drive more and more leverage through the system. Shane Kleinstein: We'll take our next question from Gabriela Borges from Goldman. Gabriela Borges: Harley, I wanted to ask you a little bit about headless, because you mentioned some of the tooling that your customers are building around the Shopify platform, for example, on Vercel. Could you talk to us a little bit about what you think is working well with the headless strategy? And the second derivative implications for your model longer term as you become more entrenched in some of this third-party tooling. Harley Finkelstein: Yes. I mean, I think what Shopify offers that no one else does or can match is this composable architecture, that if you can come and take Shopify out of the box as is, which a lot of merchants, especially enterprise merchants want. I think the days of some of these retailers, a cosmetic retailer having to have 100 engineers on staff and thinking -- and trying to keep up, I think those days are long over. I think that cosmetic retailers or brands want to focus on what they do best, which is making incredible cosmetics. And the same thing goes for any vertical. So what we try to do is, we try to create this composable architecture where you tell us how you want to build. And in some cases, they want head list. They want to use hydrogen, and that works really well for them. They want to do some very, very complex commerce experiences. In other cases, they just don't need it. Our job, though, is to provide them with effectively a bunch of -- a ton of different on-ramps into Shopify. The reason that the Shop Pay commerce component is so effective to us is because it's an easy way to get started with us. It begins as a wonderful relationship. We get to prove to these new retailers that may not know us that we are the best at what we do, and over time, they can expand to us. And the same thing goes with in terms of all these different agents or these other tools, like Vercel, for example, which are amazing tools to build these great web experiences. We want merchants to build however they want. The key though is underneath all of it sits this commerce retail operating system, which is Shopify. That's where your inventory is, that's where your transactions are, your customer data, your analytics are. We handle taxes for you and shipping for you and all the messy complexity of commerce sits underneath it. But in terms of, if there's a particular agent or an agentic application that any merchant retailer wants to use, they can do so, and they can do so because we have those extensions directly from them into Shopify. And each of them have a really great use case. But it all feeds back into centralized back office, which is Shopify. And I think that's the reason why pretty much every company, every partner, every application that helps merchants or helps a potential merchant start and get started faster, we want to partner with. And I think we have a really good history. One of the first things I did when I got to Shopify 20 years ago was work on our partnerships. We have this great history of being able to find incredible collaboration with other companies. And I think it's because we know what we're really good at and we leverage what they're really good at. Shane Kleinstein: We will now take our last question from Arjun Bhatia. Arjun Bhatia: All right. Harley, I'm curious, just it sounds like some of the agentic traction is starting to increase, still very early. But I'm curious if there's any surfaces that are worth calling out where you're seeing an uptick in transactions or usage initially? And as a sort of maybe a follow-up to that, just how do you view the Shop app sort of playing a role in this agentic commerce area? It seems like there might be a lot more room there. Harley Finkelstein: Yes. Thanks for the question. I mean, just to sort of start maybe on the agentic side. Look, it is early and the volume relative to $116 billion GMV is small, but the trends are really exciting, both in terms of growth we're seeing and the merchants we are seeing it uniquely benefit. I mentioned traffic is up 3x. I mentioned orders up 3x. New buyers from AI channels or 2x versus other channels. Conversion from our Catalog being 2x more than the general AI search is pretty remarkable. But the thing that on a very personal level, and I think at Shopify level, we're really excited about is that this is a real -- like these trends, that I mentioned earlier, the 75% of AI-attributed purchases in Q2 being from outside the top 100 categories. I'll tell you a quick example. We were looking for a screen-less phone for our daughter, for our 10-year-old, and I just started putting in my own prompt to look for different products. Five years ago, I would've done that in search, and I probably would have received some big box retailer selling a bunch of different random products. Instead, I was directed to the Tin Can Phone, which is this amazing product, a Shopify merchant. The product's amazing. I never would've found it otherwise. So I think there's a real structural advantage for small, specialized independent businesses, and we're really lucky that, that is a big chunk of the Shopify merchant base. In terms of Shop, I think Shop is getting really exciting. We see it continue to grow. It's this wonderful front door for commerce. It's one of the most important ones we are building, and its becoming this daily destination for buyers with a high-intent discovery. And native GMV was up 70% year-over-year, and we're seeing things like Cart Sync represented 30% of Shop app GMV. Cart Sync is, if you haven't used it, is like magic, this idea that a shopper can move between the merchant's store and the Shop app without the cart breaking, having all your inventory filled there. It's becoming this incredibly rich experience. So, Shop app is really starting to grow. We have a lot of work there, especially as things like Catalog and the agentic application gets built into it. But I would say that both agentic and the Shop app are two major legs of our stool for the future. Maybe with that, I just take a moment to close the call. I just want to kind of start with something that, I think, I said last quarter on the call, which was, I said that AI is going to accelerate entrepreneurship more than any other job. Tobi mentioned that to me about a year ago, and I'm seeing that. I totally agree with him. We are already seeing early signs of that happening. Yes, Shopify Catalog is driving higher conversion. We are also, of course, seeing Sidekick helping merchants reach their first sale faster. But I want to zoom out from that for a second, because I think the true value of Shopify is so much bigger than any single product or feature, even any quarterly result. The value of Shopify comes from the compounding power of everything we've built over 20 years, all working together. And every new product helps our merchants succeed and drives more transactions. Every transaction gives us more signal, making our products smarter. And smarter products then drive wider adoption. As our merchants scale, Shopify becomes even more valuable to them. I think that is a very powerful flywheel. But it's powered by this durable operating model, strong operating model, and if I do say so myself, a truly world-class team. Two weeks ago, we held our annual company-wide summit in Toronto. The energy inside the company at the summit, and frankly right now, is the highest I've felt in a very long time. I've never been more proud of this team. We are the world's commerce infrastructure, and whether it's the first-time founder making their first sale, or it's the largest retailers and brands in the world, or any builder at all, these exceptional results are not the product of one quarter. They are the result of 20 years of focused, disciplined, hard work. And I've said this before, and I think it's never been more true. We are still just getting started. Thank you for tuning into the call, and we will talk to you all next quarter. Shane Kleinstein: Great. Thanks, Harley, and thanks, Jeff. This wraps our second quarter 2026 conference call. Thanks to everyone for joining us, and we look forward to speaking with you all soon. Goodbye. Before you buy stock in Shopify, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Shopify wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $403,337!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,334,946!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 12, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has positions in and recommends Shopify. The Motley Fool has a disclosure policy. Shopify (SHOP) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Achieved fourth consecutive quarter of positive net income and 11th consecutive quarter of positive adjusted EBITDA, signaling the durability of the company's operational discipline. Pivoted to a 'Nutrition-First' model, leveraging the $164 billion nutritional supplement market to acquire customers more efficiently than through digital fitness advertising alone. Successfully transitioned to the Shopify e-commerce platform, unlocking advanced funnel optimization, faster checkout via Shop Pay, and flexible bundling capabilities previously impossible on legacy systems. Expanded retail footprint to 481 Vitamin Shoppe locations and 131 Sprouts stores, with early reorder signals from Sprouts validating the brand's brick-and-mortar appeal. Inverted media allocation toward nutrition advertising to drive higher site traffic and support the growing retail presence while maintaining a lower customer acquisition cost. Modified lending agreements to secure a less restrictive covenant package, providing approximately $7 million in additional liquidity cushion to fund growth initiatives. Identified a significant growth opportunity within the GLP-1 user demographic, positioning Shakeology and 'microdose' 10-minute workouts as essential metabolic health tools for this audience. Anticipate a strategic shift in revenue mix by year-end 2026, with Nutrition expected to represent a larger percentage of the business compared to the current 60/40 Digital-to-Nutrition split. Expect accelerated retail growth in 2027 as the company becomes more integrated into major retailers' 6-to-12 month planogram reset cycles. Launching a Southern California test market for Insanity and P90X energy drinks in late Q3 or Q4 2026, supported by a top-tier national beverage distributor. Q3 2026 will mark the first clean year-over-year comparison for the new business model as the final legacy revenue from the former MLM structure burns off. Planned Q4 promotions for Black Friday and Cyber Monday will center on the new 'Insanity Unhinged' program and a corresponding pre-workout supplement launch. Free cash flow was negative $5.7 million in the first half of 2026, primarily driven by strategic inventory builds for the retail rollout and declining deferred revenue from the legacy model. Digital subscriber counts continue to face pressure from legacy file churn, though management notes that new subscriber acquisition rates have improved year-over-year. Retail expansion remains subject to retailer planogram timing, which limits management's direct control over the immediate pace of physical distribution growth. Nutrition gross margins are forecasted in the 42% to 45% range for Q3, reflecting planned promotional efforts and volume expectations during the retail scaling phase. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management clarified that Q2 traction was organic and driven by the marketing pivot, as the Vitamin Shoppe rollout only began in Q3. Future growth will be supported by new 'form factors' on Amazon, such as the 7-serve Shakeology bag priced at $34.99, which is more competitive than the previous $149 bulk offering. Store count expanded 45% from the initial 90-store test to 131 stores, driven by positive sell-through and reorders from the distributor KeHE. Management views Sprouts and Vitamin Shoppe as 'pinnacle retailers' that provide proof of concept for other major retail buyers currently evaluating the brand. The platform allows for 'harmonizing' front-end ads with landing pages, enabling the display of actual promotional prices which improves 'add to cart' rates. Management expressed high confidence in being fully optimized for the Q4 holiday season, citing the ability to rapidly iterate landing pages with specialized Shopify partners. The minimum liquidity threshold was lowered from $29.6 million to $22.5 million, granting the company more operational room to invest in growth initiatives. The amendment reflects the lender's confidence in the company's ability to generate consistent EBITDA over the last 11 quarters.

SHOP jumped 17% after Q2 revenue surged 34% to $3.6 billion, putting our 12-month price target of $155 within reach. SHOP's 48% gross margins top AMZN's retail business and its 34% revenue growth leaves BIGC's single-digit pace far behind. Bulls target $188 driven by 96% B2B GMV growth and AI commerce tools, while loan losses doubling to $141 million threaten the thesis. Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Shopify didn't make the cut. Grab the names FREE today. Shopify (NASDAQ:SHOP) just delivered the strongest earnings reaction in its recent history. Shares closed +16.98% on the Q2 print, rising from a prior close of $123.30 to $144.24. Our 24/7 Wall St. price target for Shopify is $155 over the next 12 months, implying roughly 7.5% additional upside from current levels. Our research framing leans constructive on the setup. Shopify was already showing signs of strong execution. The Q2 blowout, paired with a $1.42 billion buyback and accelerating free cash flow, transforms this into a compounding cash generator. Shopify posted Q2 2026 revenue of $3.58 billion, up 33.69% year over year, with GMV of $115.57 billion (+32%). Merchant Solutions revenue jumped 37% to $2.78 billion, operating income climbed 67.7% to $488 million, and free cash flow of $654 million represented an 18% margin. The stock rallied 20.06% over the past month but remains -10.39% YTD and 19% below its 52-week high of $182.19. The bull case rests on operating leverage. Merchant Solutions compounds at 37% while OpEx as a share of revenue stays disciplined at 33% to 34%. Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Shopify didn't make the cut. Grab the names FREE today. B2B GMV grew 96% in 2025, Shop Pay GMV rose 62%, and AI products like Sidekick and the Universal Commerce Protocol provide defensible edges as agentic commerce accelerates. The bull scenario targets a 1-year price of $187.59, a 30% return. Consensus sits at $148.39 with 10 Strong Buy ratings. Valuation is the primary risk. Shopify trades at a P/E of 143 and an implied forward P/E of 101, with a beta of 2.59. Transaction and loan losses ballooned to $141 million from $80 million a year earlier as Shopify Capital scales. Bulls counter that these losses reflect a $1.35 billion loan portfolio and remain a small fraction of GMV. After Q2 2025's +21.97% earnings spike, shares fell -5.60% over the next 30 days. The bear scenario points to $127.52. Amazon (NASDAQ:AMZN) defines the ceiling on ecommerce economics. Amazon's marketplace pressures Shopify on shipping and fulfillment, but Shopify's merchant-friendly model produces gross margins of 48.07%, well above Amazon's retail businesses. That margin gap explains why the market pays a premium P/E for SHOP and why $155 remains defensible. BigCommerce (NASDAQ:BIGC) is the closest pure-play SaaS ecommerce comp. BigCommerce grows in the single digits and trades at a fraction of Shopify's multiple. Shopify's 33.69% revenue growth and 18% FCF margin justify the spread. Against this peer set, our $155 target looks reasonable. Our 24/7 Wall St. price target of $155 reflects a business that accelerated growth, expanded margins, and returned $1.42 billion to shareholders in a single quarter. The setup looks constructive if Q3 lands inside the low-thirties revenue growth guide and FCF margins stay above 18%. The thesis weakens if loan losses continue to double year over year or if the stock retests its 52-week high without earnings support. These projections assume Shopify executes on its current strategy, with revenue compounding in the mid-twenties and FCF margins holding near 20%. Upside could come from AI-native commerce adoption and enterprise wins, while a consumer spending recession or lending losses would pressure the trajectory. The internal model's 5-year base case sits at $169.02, with a bull case of $273.21. Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Shopify didn't make the cut. Grab the names FREE today. Contact [email protected] for any questions or corrections.