11:31 AM EDT, 08/07/2025 (MT Newswires) -- Shopify's ( SHOP ) strong Q2 results, with revenue and gross merchandise value both growing by 31% year-over-year, were driven by strong international expansion, enterprise adoption, and offline retail growth, Morgan Stanley said in a report Thursday.

Shopify ( SHOP ) reported Q2 non-GAAP earnings of $0.35 per share on revenue of $2.68 billion, beating analyst expectations of $0.29 and $2.55 billion, respectively.

The company's international expansion also proved a major growth engine, with international gross merchandise volume increasing by 42% in constant currency, led by strong performance in Europe, Morgan Stanley said.

"The company has added 16 new countries for payments this year, as well as further product innovation spreading into international markets," it added.

Enterprise growth remained robust, with new clients such as Starbucks ( SBUX ) , Canada Goose (GOOS), and Michael Kors joining the platform, the report said.

In addition to its online growth, Shopify ( SHOP ) saw a 29% year-over-year GMV increase from offline retail, a result of its updated Point of Sale systems. This "converged commerce" strategy was a key factor in Canada Goose moving its online retail and 50 physical stores to the Shopify ( SHOP ) platform, Morgan Stanley said.

The e-commerce company's management expressed confidence in its trajectory, stating that "we are still in the early stages of what we will achieve," the report said.

Morgan Stanley maintained an overweight rating on Shopify ( SHOP ) and raised its price target to $165 from $112.

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