Shopify Stock Is Sliding On Q2 Results: What's Going On?

Shopify Inc SHOP shares are volatile in Wednesday’s after-hours session on the heels of the company’s second-quarter results. Here’s a rundown of the report. 

What Happened: Shopify said second-quarter revenue increased 31% year-over-year to $1.69 billion, which beat the consensus estimate of $1.62 billion. The e-commerce platform company reported adjusted quarterly earnings of 14 cents per share, which beat analyst estimates of 6 cents per share.

Gross merchandise volume increased 17% year-over-year to $55 billion. Gross payments volume came in at $31.7 billion. Merchant solutions revenue increased 35% year-over-year. 

Free cash flow totaled $97 million in the second quarter compared to negative free cash flow of $87 million in the same quarter last year. 

“Our business momentum has led to another quarter of strong financial results. We’re not just shipping products faster, but we are also expanding our global merchant base, all while improving our ability to generate greater free cash flow,” said Harley Finkelstein, president of Shopify. 

Shopify said it expects third-quarter revenue to grow at a low-twenties percentage rate on a year-over-year basis. The gross margin is expected to be 2% or 3% higher than the second quarter gross margin of 49.3%. 

The company expects free cash flow profitability in the third quarter to be greater than the entire first half of 2023. 

Management will host a conference call to discuss these results at 5 p.m. ET.

See Also: Artificial Intelligence, AWS: What Amazon Investors Are Watching For When E-Commerce Giant Reports Q2 Earnings

SHOP Price Action: Shopify shares initially traded higher but were down 2.07% after hours at $61.14 at the time of writing, according to Benzinga Pro.

Photo: Open Grid Scheduler from Flickr.