Shopify Tumbles On Weak Volume Growth From Merchants
REINHARDT KRAUSE
Shopify (SHOP) stock tumbled on Thursday after the e-commerce firm reported second-quarter revenue that topped estimates amid weaker growth in its subscription business while a key financial metric, gross merchandise volume from merchant transactions, missed.
Before the market open, Shopify reported a net income loss of $682 million versus a $273 million loss a year earlier. Also, revenue climbed 27% to $2.36 billion.
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Shopify stock analysts polled by FactSet predicted revenue of $2.334 billion.
Subscription Growth Slows
Further, Shopify said Q2 gross merchandise volume from merchant transactions rose 23% to $74.75 billion, missing estimates of $76.09 billion.
Merchant solutions revenue rose 29% to $1.74 billion vs. estimates of $1.736 billion. Subscription revenue climbed 21% to $620 million versus estimates of $629 million.
On the stock market today, Shopify stock tumbled 8.5% to 86.46.
Going into the Shopify earnings report, shares were down 10% in 2025.
For the current June quarter, Shopify said it expects "revenue to grow at a mid-twenties percentage rate on a year-over-year basis and gross profit dollars to grow at a high-teens percentage rate."
Wall Street analysts had estimated Q2 revenue growth of 22%.
Heading into the earnings report, some investors focused on the Trump administration's halt to "de minimis" tariff exemptions on cheap Chinese goods and the impact on Shopify's merchant customers. The de minimis tariff loophole has allowed Chinese online marketplaces Temu and Shein to ship products valued at less than $800 into the U.S. duty-free.
Shopify Stock: Technical Ratings
Further, Shopify sets up e-commerce websites for small businesses, and partners with others to handle digital payments and shipping.
From a technical view, Shopify stock has forged a double-bottom base, which looks sort of like the letter W. It features two distinct sell-offs. Having formed a double-bottom base, Shopify stock holds an entry point of 201, according to MarketSurge.
Meanwhile, Shopify stock holds a Composite Rating of 94 out of a best-possible 99, according to IBD Stock Check-up.
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Follow Reinhardt Krause on X, formerly Twitter, @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
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