A maker of cloud-based e-commerce software, Shopify powers online storefronts for millions of merchants across more than 175 countries, with tools like Shopify Payments, Shopify Plus for larger businesses, and AI features such as Sidekick. It began in 2004 when founder Tobi Lütke built his own software to sell snowboarding gear online (a shop called Snowdevil), found other merchants wanted it too, and pivoted to launch Shopify in 2006. Fun fact: the company's early working name was Jaded Pixel, picked by a domain-name generator, before "Shopify" stuck.
Shopify Q2 2026 net income swung to $1.5B from a $581M loss last quarter on a $2.1B non-cash investment gain.
A $2.1 billion unrealized gain on equity investments turned the from a loss to a $1.5 billion profit. rose 34% to $3.6 billion and climbed 68% to $488 million as gross merchandise volume grew 33% and processed 67% of it. The operating engine is accelerating, but the reported net income figure is once again dominated by swings in the company's $5.4 billion investment portfolio.
Key takeaways
reached $1.5 billion, up from $906 million a year ago, driven by a $2.1 billion net gain on equity investments — a non-cash move that reversed the $1.1 billion loss recorded in Q1 2026.
rose 33.7% to $3.6 billion, with merchant solutions up 38% to $2.7 billion as GMV increased 33% to $115.6 billion and penetration reached 67%.
rose 67.7% to $488 million, and widened 2.8 points to 13.6%, as growth of 34% outpaced a 21% increase in operating expenses.
Section summaries
Management's Discussion and Analysis
Revenue rose 34% to $6.8B in H1 2026, driven by 38% growth in merchant solutions from higher GMV and Shopify Payments penetration.
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Total grew 34% to $6.8B in H1 2026, with subscription solutions up 22% to $1.6B and merchant solutions up 38% to $5.2B.
declined 0.9 points to 47.7%, held back as lower-margin merchant solutions — particularly payments — grew to 77% of total .
Transaction and loan losses rose 66% to $257 million for the first half, driven by higher volume and expanded lending services.
The company repurchased $1.9 billion in shares during the quarter under a $5 billion authorization, reducing cash and equivalents to $1.7 billion.
What changed
The equity investment result swung to a $2.1 billion gain from a $1.1 billion loss in Q1 2026, settling the question flagged last quarter about the direction of the next mark.
dipped further to 47.7% from 48.8% in Q1 2026, as merchant solutions' share of continued to climb to 77%, answering the watch on whether margin would hold near 48.8%.
Transaction and loan losses continued to rise, up 66% for the half, confirming the trajectory flagged in Q1 after the 55% increase that quarter.
The pace of share repurchases accelerated sharply, with $1.9 billion bought back in Q2 versus $514 million in Q1, drawing down cash and equivalents to $1.7 billion from $1.8 billion.
What to watch
Next quarter's equity investment result after the $2.1 billion Q2 gain, given $5.4 billion in total exposure including and private convertible notes.
Whether stabilizes or continues to decline as merchant solutions — now 77% of — and penetration stay elevated.
Transaction and loan loss trajectory after the 66% first-half increase, as volume and lending services expand.
Pace and funding of the remaining $3.1 billion authorization after $1.9 billion was deployed this quarter, reducing cash and equivalents to $1.7 billion.
GMV increased 33% to $216.3B in H1 2026, while penetration rose to 67%, processing $145.1B in GMV.
rose 32% to $3.3B, but dipped to 48% as lower-margin merchant solutions grew to 77% of total .
Operating expenses grew 21% to $2.4B, led by a 21% rise in sales and marketing and a 66% jump in to $257M.
reached $921M in H1 2026, boosted by a $146M net gain on equity investments versus a $386M loss a year ago.
The company repurchased $1.9B in shares under a $5B authorization, reducing cash and equivalents to $4.9B, while was $1.1B.
Quantitative and Qualitative Disclosures About Market Risk
Shopify faces FX, equity-investment, interest-rate, credit, and inflation risks; it uses derivatives to hedge operating-expense FX exposure.
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A 10% strengthening of all foreign currencies vs. the USD would have increased H1 2026 by $163M and by $33M, excluding hedging and demand effects.
Equity and other investments totaled $5.4B as of June 30, 2026, with $2.7B in public companies subject to market-price volatility and $1.6B in private companies measured using the .
The equity-method investment in ($559M) and convertible notes in private companies ($587M) can cause earnings volatility from fair-value changes and share of income or loss.
Cash, cash equivalents, and marketable securities of $4.9B are held for capital preservation; fixed-rate securities classified as held-to-maturity do not recognize gains or losses from interest-rate changes unless sold or impaired.
Credit risk is mitigated by dealing only with highly creditworthy banks and financial institutions, and no single merchant accounts for 10% or more of or .
The information set forth under "Note 8— Contingencies — Litigation and Loss Contingencies" to the condensed consolidated financial statements included in Part I — Item 1 of this Quarterly Report on Form 10-Q is incorporated herein by reference.
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The information set forth under "Note 8— Contingencies — Litigation and Loss Contingencies" to the condensed consolidated financial statements included in Part I — Item 1 of this Quarterly Report on Form 10-Q is incorporated herein by reference.
We are subject to various risks and uncertainties that may affect our business, results of operations and financial condition including, not limited to, those described in Part I — Item 1A "Risk Factors" in the Company's 2025 Form 10-K. Current global economic and geopolitical e…
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We are subject to various risks and uncertainties that may affect our business, results of operations and financial condition including, not limited to, those described in Part I — Item 1A "Risk Factors" in the Company's 2025 Form 10-K. Current global economic and geopolitical events and conditions may amplify many of these risks. These risks are not the only risks that may affect us. Additional risks that we are not aware of or do not believe are material at the time of this filing may also become important factors that adversely affect our business. There have been no material changes to the Company’s risk factors from those disclosed in the 2025 Form 10-K.