Shopify NASDAQ:SHOP rose 28.34% premarket after reporting second-quarter revenue up 34% to $3.58 billion, ahead of the $3.447 billion analysts expected. Gross merchandise volume grew 32% to $115.6 billion and gross profit 31% to $1.71 billion.
Operating leverage came through. Operating income rose 68% to $488 million, while free cash flow reached $654 million at an 18% margin against 16% a year earlier. Merchant solutions revenue grew 37% to $2.78 billion and subscription solutions 22% to $802 million.
Net income was $1.50 billion, though $1.06 billion of that came from marking equity investments to market. Excluding those, net income was $439 million against $338 million. Shopify repurchased $1.42 billion of stock during the quarter. "This was a monster quarter," said President Harley Finkelstein.
For the third quarter Shopify guided revenue growth to a low-thirties percentage rate, gross profit growth to mid-to-high twenties, and free cash flow margin to the high teens to low twenties.