Key Highlights

● Second-quarter revenue grew 34% year over year, or 33% in constant currency.

● Free cash flow margin was 18% in the second quarter.

● Management guided third-quarter revenue growth in the low thirties percent range.

● Third-quarter operating expenses are guided at 33% to 34% of revenue.

Shopify Inc. (NASDAQ:SHOP) described its second quarter of 2026 as one with growth above 30% in gross merchandise volume, revenue, gross profit and free cash flow. The company's outlook for the third quarter adds detail on how it expects growth, spending and cash generation to balance.

Latest Company Context

Shopify reported second-quarter results on August 5, 2026. Revenue grew 34% year over year, or 33% in constant currency. The company said GMV, revenue, gross profit and free cash flow each grew by more than 30%. Free cash flow margin was 18%.

For the third quarter, management guided to revenue growth in the low thirties percent range, gross profit dollar growth in the mid-to-high twenties percent range, operating expenses of 33% to 34% of revenue, stock-based compensation of about $150 million, and a free cash flow margin in the high teens to low twenties.

Key Business and Index Drivers

The most notable feature of the outlook is the gap between revenue growth and gross profit growth. Revenue is expected to grow in the low thirties, while gross profit is expected to grow in the mid-to-high twenties. That pattern generally points to a mix of revenue that carries lower margins, which in Shopify's case can reflect payments-related revenue growing faster than higher-margin subscription revenue.

The operating expense range gives investors a way to gauge operating leverage. If gross profit grows more slowly than revenue but expenses stay at 33% to 34% of revenue, the operating margin outcome would depend on how gross margin evolves. Shopify is a member of the Nasdaq-100, which means funds tracking that index may hold the shares; it does not imply future results.

Investors may also find it useful to compare the stock-based compensation figure with cash flow. Guidance of about $150 million of stock-based compensation is a non-cash expense, so free cash flow margin can look stronger than operating margin. At the same time, equity grants dilute existing holders over time, which some investors weigh when judging cash generation. The company's own phrasing, that growth exceeded 30% across four measures, shows the breadth of the quarter, but the third-quarter outlook suggests some deceleration in profit growth relative to revenue.

What Investors Should Watch

● Third-quarter report: The date is unconfirmed, but results will show whether revenue growth lands in the low thirties and whether gross profit tracks the mid-to-high twenties guide.

● Free cash flow margin: Guidance of high teens to low twenties compares with 18% last quarter, so reported margin may show whether cash generation is stable.

● Operating expenses: Spending within the 33% to 34% range would indicate cost discipline, while a higher ratio could weigh on operating income.

● Merchant growth drivers: Management commentary on international expansion, enterprise customers and offline retail could clarify what is behind GMV growth.

● Macro and consumer spending: Merchant sales are tied to consumer demand, so changes in spending could influence volume.

Broad Growth, Narrower Profit Gains

Shopify's second quarter showed broad-based growth, and its third-quarter outlook anticipates a continued but slightly different shape, with gross profit growing a little more slowly than revenue. The actual results could be better or worse than guided, and valuation, competition and macro conditions can all influence outcomes.