Shopify Inc. ( SHOP ) shares are on the move following a strong earnings report and an optimistic outlook for third-quarter 2024. Here’s what you need to know.

Q2 Earnings Recap: Shopify ( SHOP ) reported a strong second quarter, with revenue growing 21% year-over-year to $2.05 billion, beating the analyst consensus estimate of $2.01 billion. Adjusting for the sale of its logistics businesses, revenue grew by 25% year-over-year. The company also reported an adjusted EPS of 26 cents, surpassing the analyst estimate of 20 cents.

For the third quarter of 2024, Shopify ( SHOP ) expects revenue to grow at a low-to-mid-twenties percentage rate on a year-over-year basis. The company anticipates a 50 basis point improvement in gross margin compared to second-quarter 2024 and projects GAAP operating expenses to account for 41% to 42% of revenue.

Related Link: Shopify ( SHOP ) Q2 Earnings: Revenue And EPS Beat, Gross Merchandise Volume Up 22%, Strong Q3 Outlook And More

“We drove strong growth in GMV, revenue, and gross profit, all amidst a mixed consumer spend environment, continued to take share and concurrently expanded our free cash flow margin,” said Jeff Hoffmeister, CFO of Shopify ( SHOP ).

To revive growth, Shopify’s President, Harley Finkelstein, has committed to substantial marketing investments, even if it affects profit margins.

What Else: Reginald L. Smith and Charles Pearce from J.P. Morgan commented on Shopify’s second-quarter 2024 performance, noting that the company’s revenue growth exceeded the important 20% threshold, with profit margins expanding sequentially.

They highlighted that GMV and GPV decelerated modestly sequentially but remained strong. Monthly recurring revenue (MRR) increased by 12% sequentially, signaling that recent price increases or new additions are performing better than expected.

SHOP Price Action: Shopify ( SHOP ) shares were up by 20.4% at $65.31 at the time of writing, according to Benzinga Pro.

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