Shopify Q2 Earnings: Analysts Expect Earnings Beat Amid Merchant Growth Focus

Shopify is set to report Q2 earnings on August 6th. Analysts expect an earnings beat, driven by merchant growth and increasing adoption of the company's commerce solutions. Investors will focus on these key metrics as Shopify continues to expand its e-commerce platform.

Shopify Inc. (SHOP) is scheduled to release its second-quarter 2025 earnings on August 6. Analysts are anticipating an earnings beat, driven by strong merchant growth and increasing adoption of the company's commerce solutions. Investors will closely monitor key metrics as Shopify continues to expand its e-commerce platform.

For the to-be-reported quarter, Shopify expects revenues to grow at a mid-twenties percentage rate on a year-over-year basis. The Zacks Consensus Estimate for revenues is currently pegged at $2.54 billion, suggesting growth of 24.25% from the year-ago quarter’s reported figure [1].

The consensus mark for earnings is pegged at 28 cents per share, unchanged over the past 30 days and indicating 7.69% growth from the figure reported in the year-ago quarter. Shopify’s earnings have beaten the Zacks Consensus Estimate in three of the trailing four quarters, with an average earnings surprise of 14.87% [1].

Key factors to note for SHOP’s Q2 include strong growth in its merchant base, which drove a Gross Merchandise Volume (GMV) of $74.75 billion in the first quarter of 2025, an increase of 22.8% year over year. The Zacks Consensus Estimate for second-quarter 2025 GMV is currently pegged at $81 billion, indicating 20.8% year-over-year growth [1].

Shopify's ability to consistently deliver GMV growth of more than 20% for seven consecutive quarters underscores the strength of its platform. Additionally, the growing usage of Shop Pay and new launches such as Shopify Balance for Plus and flexible payment options in Shopify Credit are expected to have improved cash flow management, driving more merchant adoption [1].

However, challenging macroeconomic uncertainties, persistent inflation, and cautious consumer spending remain headwinds. Ongoing tariff uncertainties also pose a concern [1].

SHOP shares have gained 11.5% year to date (YTD), outperforming the Zacks Computer & Technology sector’s rise of 9.1% and the Zacks Internet Services industry’s growth of 1.4%. Shopify shares have outperformed industry peers, including Alphabet GOOGL and Eventbrite EB, with Alphabet and Eventbrite shares losing 0.1% and 31.9%, respectively [1].

Despite the strong performance, SHOP stock is trading at a premium with a forward 12-month Price/Sales of 12.74X compared with the industry’s 5.14X, Alphabet’s 6.40X, and Eventbrite’s 0.67X [1].

Shopify’s long-term prospects are strong, given its growing merchant base and expanding partner base. Merchant solutions revenues in the first quarter were $1.74 billion and accounted for 73.7% of Shopify’s total revenues. On a year-over-year basis, merchant revenues increased 29%, driven by strong GMV and increased penetration of Shopify payments [1].

The company’s rich partner ecosystem, which includes partnerships with TikTok, Roblox, PayPal, Snap, Pinterest, Criteo, IBM, Cognizant CTSH, Alphabet’s cloud computing platform Google Cloud, and Adyen, is expected to expand its merchant base further in the to-be-reported quarter [1].

Shopify’s partnership with Cognizant and Alphabet’s Google Cloud aims to help retailers modernize their commerce platforms and deliver personalized, real-time shopping experiences. This collaboration supports retailers in scaling globally and unlocking new business value through advanced technologies like generative AI [1].

In conclusion, Shopify is benefiting from strong growth in its merchant base and expanding footprint. Its focus on improving its client base is a key catalyst. Shopify currently sports a Zacks Rank #1 (Strong Buy) [1].

References:
[1] https://www.nasdaq.com/articles/should-you-buy-sell-or-hold-shopify-stock-q2-earnings