Shopify says it beat revenue expectations and boosted free cash flow margin in its second-quarter earnings, as the e-commerce company forecasts continued growth on increased demand for AI-driven shopping.
On Wednesday, the Ottawa-founded e-commerce giant released its latest financial results, which show growing revenue by 34 percent year-over-year to reach $3.58 billion USD ($5 billion CAD), beating Wall Street estimates. At the same time, Shopify saw its gross profit, free cash flow, and gross merchandise volume—a measure of its online merchants’ transactions—grow by more than 30 percent compared to Q2 2025.
Shopify’s net income came in at $1.5 billion USD, compared to $906 million USD during the same period last year. Gross profit hit $1.7 billion USD, compared to $1.3 billion USD last year. The jump in earnings comes after a $581-million USD net loss last quarter, mainly due to its equity investments. Tech stocks, including Shopify, have had a rough year, thanks mainly to investors’ fears about AI disrupting traditional software businesses. Before the market opened on Wednesday, Shopify shares on the Toronto Stock Exchange were down roughly 20 percent since January. However, it remains Canada’s most valuable tech company, with a market cap of over $200 billion CAD, and its share price rose by 15 percent in pre-market trading Wednesday morning, Reuters reported.
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Shopify has embraced AI, both mandating its use internally and toward agentic commerce externally, with chatbot interfaces working as “storefronts” where customers can make purchases. Last quarter, Shopify said that AI-driven traffic to its online stores had grown significantly year-over-year, while orders from AI-powered searches increased nearly 13 times. The AI push appears to be working out well for merchants, who saw their gross transaction volume hit $115 billion USD, compared to $87.8 billion USD in the same period last year.
The company also shipped a number of AI product updates for its merchants this quarter, including an AI-powered marketing “autopilot,” improved order fulfillment workflow, and integration of the Sidekick AI assistant into more third-party apps. In addition, Shopify added options for purchase pickups and returns.
Shopify ended the quarter with $1.66 billion USD in cash and equivalents on its balance sheet. Next quarter, the company is forecasting a revenue growth rate in the low thirty percent range, gross profit in the mid-to-high twenties, and continued free cash flow margin growth in the high teens to low twenties.
Disclosure: BetaKit majority owner Good Future is the family office of two former Shopify leaders, Arati Sharma and Satish Kanwar.
*Feature image courtesy Shopify. *