Shopify Q2 2026 Earnings: $115.6 Billion GMV Fuels 34% Revenue Growth and 18% Free-Cash-Flow Margin

On August 5, 2026, Shopify reported second-quarter GMV of $115.6 billion, up 32% year-over-year, revenue of $3.58 billion, up 34%, and a free-cash-flow margin of 18%. Operating income rose 68% to $488 million. Net income was $1.5 billion — but $1.25 billion of pre-tax gains on equity investments that Shopify does not control sits behind it, and the company's own figure excluding them is $439 million. This is a quarter with two income statements in it: a commerce platform growing at 34%, and an investment portfolio that happened to be marked up.

The Headline Numbers​

Shopify Inc.'s fiscal year is the calendar year; Q2 2026 is the three months ended June 30, 2026. Every figure below is from the Form 10-Q and the 8-K earnings release cited in Sources, and the ledger period was rebuilt from the same 10-Q.

Revenue grew 34% and gross profit 31%; the gap between them is mix, covered below. The operating story is in the next four rows. Sales and marketing grew 20%, research and development 13%, general and administrative 12% — all far slower than revenue — so total operating expenses fell from 37.7% of revenue to 34.0% and operating income grew twice as fast as the top line. One line moved the other way: transaction and loan losses rose 76%, to 3.9% of revenue from 3.0%.

Below the operating line, $1,287 million of other income is larger than the $488 million the business earned. Almost all of it is a $1,249 million net unrealized gain on equity and other investments. The release subtracts those gains net of tax ($1,063 million) to reach $439 million, a figure Shopify reports because, in its words, "valuations of third parties in public and private markets are outside of our control."

Revenue Deep Dive​

Shopify reports two revenue lines, and the 10-Q's statement of operations gives the cost of each, so segment gross margin can be read straight from the filing.

Merchant solutions is where the growth is. Revenue of $2,781 million grew 37%, and the 10-Q names the driver: Shopify Payments revenue rose $624 million as the payments penetration rate reached 68% of GMV, up from 64%, so $78.1 billion of GMV ran through Shopify Payments against $56.6 billion a year earlier — 38% growth on 32% GMV growth. Merchant solutions revenue is now 2.41% of GMV, up from 2.30%.

Subscription solutions grew 22% to $802 million. The filing attributes $129 million of the increase to subscription fees, driven by higher MRR — "a higher number of merchants using our platform" and "a larger percentage of subscriptions coming from higher priced plans, such as Plus." MRR, the filing's own leading indicator, ended the quarter at $221 million, up 19%.

The mix explains the gross-margin slip. Subscription revenue earns an 80% gross margin and merchant revenue 38%, and merchant solutions went from 75.5% of revenue to 77.6%. The 10-Q says so directly: growth of merchant solutions "has caused in the past, and may cause in the future, a decline in our overall gross margin percentage." Subscription margin itself also eased, from 81.6% to 79.7%, on a $37 million increase in cloud and infrastructure costs "which includes AI-related usage." Gross profit dollars still grew 31%, which is the number the company guides on.

The Margin Story​

Read the last column first, because it is the one to distrust. Net margin was 63% in FY2021 and −62% in FY2022 on revenue that grew 21% between them. Nothing about the business did that: a $2,860 million unrealized gain on equity and other investments in FY2021 became a $2,998 million unrealized loss in FY2022. Net margin at Shopify measures the stock prices of companies it holds stakes in as much as it measures Shopify.

Operating margin is the real series, and it has a clear shape. It fell to −14.7% in FY2022 as research and development reached 27% of revenue, and to −20.1% in FY2023, when the filing records a $1,340 million impairment on the sales of Shopify's logistics businesses. Without that one charge, FY2023's operating loss of $1,418 million would have been $78 million. From FY2024 the margin is positive and rising — 12.1%, 12.7%, 13.6% this quarter — while research and development has fallen to 12.4% of revenue.

Gross margin has gone the other way, from 53.8% to 47.7%, for the mix reason above. The operating leverage is coming entirely from operating expenses growing slower than revenue.

The One Big Question: how much of the $1.5 billion is Shopify the business?​

The 10-Q's statement of operations answers it line by line.

The $1,250 million of investment gains is 70% of pre-tax income. The notes break it down. Equity investments with readily determinable fair values — Affirm, Global-E and Klaviyo, carried at $1,655 million, $768 million and $280 million at June 30 — recorded $731 million of net unrealized gains in the quarter. Separately, an observable price change on one private investment produced a $511 million unrealized gain, remeasured "on a non-recurring basis." Neither is cash, and the first half shows how quickly they turn: the same line for the six months is a gain of only $185 million, which means the first quarter carried a loss of more than $1 billion.

So the clean read of the business is the first row. Operating income of $488 million is a 13.6% margin, up from 10.9%, and free cash flow of $654 million exceeds it, in part because $128 million of stock-based compensation is a non-cash expense. Equity and other investments stand at $4,854 million, a third of total assets, and they will keep moving the bottom line in both directions.

The second half of the question is the line that grew 76%. The 10-Q attributes the increase in transaction and loan losses to "$41 million in losses related to lending services driven by an expansion of our offerings and programs" and $19 million from Shopify Payments on higher volume. Loans and merchant cash advances on the balance sheet grew from $1,784 million to $2,184 million in six months. Lending is merchant-solutions revenue, and this is its cost arriving on a lag.

For the third quarter the release guides to revenue growth "at a low-thirties percentage rate," gross profit dollars growing at a "mid-to-high twenties" rate, operating expenses of 33% to 34% of revenue, and a free-cash-flow margin "in the high-teens to low-twenties." Gross profit is guided to grow slower than revenue again: the mix shift continues.

Tracking a $3.6B quarter in plain text​

Double-entry forces every dollar to reconcile, which is why the Beancount ledger is the audit. The income-statement transaction below is the quarter as filed in the Form 10-Q — negative income, positive expenses, and the check that proves they sum to zero.

; Revenues: 3583 | Gross profit: 1708 | Income from operations: 488 | Net income: 1502
; Other items net to 1287 of income, posted line by line on Income:OtherNet.
; Check: -3583 + 1875 + 498 + 445 + 136 + 141 - 66 - 1 - 1249 + 22 + 7 + 273 + 1502 = 0 ✓
 
2026-06-30 * "Shopify Inc." "FY2026Q2 Income Statement"
  Income:Revenue                                 -3583 MUSD  ; total revenues: subscription solutions 802 + merchant solutions 2,781
  Expenses:CostOfRevenue                          1875 MUSD  ; cost of revenues: subscription solutions 163 + merchant solutions 1,712
  Expenses:SellingGeneralAdministrative            498 MUSD  ; sales and marketing
  Expenses:ResearchAndDevelopment                  445 MUSD  ; research and development
  Expenses:SellingGeneralAdministrative            136 MUSD  ; general and administrative
  Expenses:TransactionAndLoanLosses                141 MUSD  ; transaction and loan losses
  Income:OtherNet                                  -66 MUSD  ; interest income
  Income:OtherNet                                   -1 MUSD  ; net realized gain on equity and other investments
  Income:OtherNet                                -1249 MUSD  ; net unrealized gain on equity and other investments
  Income:OtherNet                                   22 MUSD  ; net loss on equity method investment
  Income:OtherNet                                    7 MUSD  ; foreign exchange loss
  Expenses:IncomeTax                               273 MUSD  ; provision for income taxes
  Equity:Adjustments                              1502 MUSD  ; net income offset

That block is not an illustration; it is the period that was validated with bea check and pushed to open_ledger/shopify, with every line traceable to the 10-Q's Condensed Consolidated Statements of Operations. Three modeling choices are deliberate. Sales and marketing and general and administrative are two labeled postings on one account, because the filing reports them as two captions. Transaction and loan losses gets its own account: it is a credit cost, it behaves differently from the other operating lines, and folding it into either neighbor would hide the fastest-growing expense in the business. And everything below operating income is posted line by line on Income:OtherNet, so the $1,249 million unrealized gain is one visible credit instead of a net.

The balance sheet tells the same story from the other side. Between December 31, 2025 and June 30, 2026, cash and marketable securities fell from $5,778 million to $4,947 million and long-term investments from $975 million to $525 million, even though operations generated $1,139 million of cash in the half. The difference is buybacks: Shopify repurchased $1,420 million of its Class A shares in the quarter and 16.9 million shares for $1,933 million in the first half, at an average price of $114.63, under a program its board enlarged to $5 billion in the second quarter. Common stock fell from $10,376 million to $8,636 million, largely as a result. The company has no debt on the balance sheet; the convertible senior notes were gone by the end of 2025.

The one balance-sheet line that matters most is not in the house chart by name. Equity and other investments ($4,854 million) and the equity method investment ($559 million) sit inside Assets:NonCurrent:Other, itemized in the comment on that balance assertion. Together they are 37% of $14,470 million in total assets — larger than cash and marketable securities combined — and they are the source of every large swing in net income in this ledger.

The Multi-Year Arc​

Each annual row is that year's annual filing as originally filed: the audited financial statements attached to Form 40-F for FY2021 through FY2023, when Shopify reported as a foreign private issuer, and Form 10-K from FY2024. FY2021 and FY2022 were filed in thousands of dollars and are rounded to the nearest million here; the ledger keeps the three decimals.

Revenue grew every year — 21%, 26%, 26%, 30% — from $4.6 billion to $11.6 billion, a 2.5× increase in four years. Net income shows no such pattern, and in two years it has the opposite sign from operating income. FY2022 lost $3,460 million on an $822 million operating loss; FY2023 earned $132 million on a $1,418 million operating loss, because a $1,424 million unrealized gain offset the logistics impairment almost exactly. FY2025 net income fell 39% while operating income rose 37%: the investment line swung from a $988 million gain to a $186 million loss, and the filing records a $123 million realized loss on an embedded derivative.

The operating column is the one that compounds: from a $1.4 billion loss in FY2023 to a $1.5 billion profit in FY2025, with one quarter of 2026 already at a third of that.

The Verdict: Bull vs. Bear​

Bull Case

• GMV grew 32% and revenue 34%, with the release stating that GMV growth accelerated across merchant sizes, channels and geographies.
• Operating expenses fell from 37.7% to 34.0% of revenue, operating income grew 68%, and third-quarter guidance holds operating expenses at 33% to 34%.
• Payments penetration rose four points to 68% of GMV, lifting merchant solutions revenue to 2.41% of GMV.
• $654 million of free cash flow in the quarter funded a $1,420 million buyback from a debt-free balance sheet, with $3,067 million of authorization remaining.

Bear Case

• 70% of pre-tax income is investment gains, mostly unrealized, and the same line lost more than $1 billion one quarter earlier.
• Gross margin has fallen from 53.8% in FY2021 to 47.7% as lower-margin merchant solutions takes more of the mix, and the filing says to expect more of it.
• Transaction and loan losses grew 76% to 3.9% of revenue while the loan book grew 22% in six months.
• Subscription gross margin slipped almost two points on cloud costs the filing ties to AI-related usage.

Our Take: The operating business had a strong quarter and the ledger shows it where it counts — in operating income, not in the headline net income, which is mostly a portfolio mark. The number to watch next quarter is not the investment line, which nobody can forecast, but whether operating margin stays above 13.6% while transaction and loan losses keep growing faster than the revenue they come with.

Correction (2026-10-06): an earlier version of this analysis stated Q2 2026 revenue of $2,800 million and net income of $420 million, with research and development and SG&A that were fixed percentages of revenue rather than figures from the filing, an invented two-segment split, an unsourced peer comparison and a source link that did not point to a Shopify filing. Those figures were wrong. Every figure above has been re-read from the Form 10-Q and the 8-K earnings release, and the open_ledger/shopify ledger was rebuilt for FY2021 through Q2 2026 from the Form 40-F, Form 10-K and Form 10-Q filings in the same change.