SHOP Q2 2024 Earnings

Call Details

• Call Title: Shopify Q2 2024 Earnings Call
• Date: August 7, 2024 at 12:30 PM UTC
• Management Team:
  • Carrie Gillard (Director of Investor Relations)
  • Harley Finkelstein (President)
  • Jeff Hoffmeister (CFO)

Call Summary

Financial Performance

• Q2 GMV was $67.2B, up 22% year over year.
• Q2 revenue was $2.0B, up 21% year over year and up 25% when excluding the logistics business.
• Q2 gross profit was $1.0B, up 25% year over year, and Q2 gross margin was 51.1% versus 49.3% in Q2 2023.
• Subscription solutions revenue was $563M, up 27% year over year, and merchant solutions were $1.5B, up 19% year over year.
• Q2 operating expenses were $804M including a $55M litigation accrual reversal, and would have been $859M or 42% of revenues without the reversal.
• Operating income was $241M or 12% of revenue, and Q2 free cash flow was $333M or 16% of revenue versus 6% in Q2 2023.

Guidance

• Q3 revenue growth is expected to be in the low to mid-20s percent year over year.
• Q3 gross margin is expected to increase approximately 50 basis points from Q2 2024 due to a higher mix of subscription solutions.
• GAAP Q3 operating expenses are expected to be 41% to 42% of revenues, representing a 300 to 400 basis point improvement versus Q3 last year.
• Q3 stock-based compensation is expected to be $120M.
• CapEx will no longer be guided separately given historically low levels; the company noted an average of $4M over the past four quarters.
• Q3 free cash flow margin is expected to be similar to Q2 and the company expects to deliver double-digit free cash flow margin for the remainder of the year.