Shopify Reports Second-Quarter Profit, Revenue Up 21% on AI Boost

Shopify Inc. (NYSE, TSX: SHOP) announced its financial results for the quarter ending June 30, 2024, reporting a 21% increase in revenue to $2.05 billion, which beat analysts' estimates. Adjusted for the sale of its logistics businesses, revenue saw a 25% increase. The company also reported a 25% year-over-year rise in gross profit to $2.0 billion and a doubling of its free cash flow margin to 16%. Shopify's AI-powered tools contributed to the growth by increasing the number of merchants utilizing its e-commerce services.

The company recorded a profit of $171 million, or 13 cents per diluted share, reversing a loss of $1.31 billion from the previous year, which had included a charge related to the sale of its logistics business. Subscription solutions revenue reached $563 million, while merchant solutions revenue also grew by 21%. CEO Harley Finkelstein highlighted Shopify's expanding role in global commerce and entrepreneurship. The company expects to maintain double-digit free cash flow margins for the remainder of the year and anticipates revenue growth in the low-to-mid-twenties percentage range for the third quarter.