Shopify — Q3 2026 Earnings Summary

Financial Performance:

• Reported revenue of $3,742 million for the three months ended September 30, 2026, representing a 32% year-over-year increase (32% in constant currency) compared to $2,844 million in the prior year period.
• Gross profit reached $1,781 million, up from $1,391 million in the prior year, with a gross margin of approximately 47.6%.
• Operating income was $568 million, an increase from $343 million in the prior year.
• Net income was $462 million, compared to $264 million in the prior year; net income excluding the impact of equity investments was $584 million versus $367 million.
• Free cash flow was $816 million, up from $507 million in the prior year, resulting in a free cash flow margin of 22% compared to 18% in the prior year.
• Cash and cash equivalents stood at $1,868 million as of September 30, 2026, compared to $1,545 million at December 31, 2025.
• Loans and merchant cash advances, net, increased to $2,350 million from $1,784 million at the end of 2025.

Guidance and Future Outlook:

• For the fourth quarter of 2026, revenue is expected to grow at a low-thirties percentage rate year-over-year.
• Gross profit dollars are projected to grow at a high-twenties percentage rate year-over-year.
• Operating expenses as a percentage of revenue are forecast to be between 29% and 30%.
• Stock-based compensation is expected to be $155 million in Q4 2026.
• Free cash flow margin is expected to be consistent with the fourth quarter of 2025.

Business Segments and Product Lines:

• Subscription solutions revenue grew to $836 million from $699 million in the prior year, a 20% increase (20% in constant currency).
• Merchant solutions revenue grew to $2,906 million from $2,145 million in the prior year, a 35% increase (36% in constant currency).
• Gross Merchandise Volume (GMV) facilitated through the platform reached $119.1 billion, up from $92.0 billion in the prior year, a 29% increase (30% in constant currency).
• Monthly Recurring Revenue (MRR) increased to $230 million from $193 million in the prior year.

Market and Competitive Landscape:

• Shopify powers sales for millions of businesses across 175+ countries, including brands such as Aldo, BarkBox, Carrier, Meta, SKIMS, Supreme, and Vuori.
• Management highlighted the company's ability to operate in two realities simultaneously: the current merchant environment and the future commerce landscape, extending commerce into every surface, agent, and location.

Risks and Challenges:

• Forward-looking statements are subject to risks including the ability to maintain expected growth and manage expenses.
• Potential risks include impacts from changing economic conditions and consumer spending in key markets (United States, Europe, and globally).
• Risks also encompass international trade measures (including tariffs), adoption and impact of emerging technologies like AI, reliance on third-party service providers, cyberattacks or security breaches, and software or hardware defects.

Management Commentary and Tone:

• Harley Finkelstein, President, stated that Shopify is "uncommonly good at operating in two realities at the same time" and noted that Q3 demonstrated the company's ability to power significant GMV while building commerce into every surface and agent.
• Jeff Hoffmeister, CFO, emphasized the "consistent execution" with 32% revenue growth and a 22% free cash flow margin, attributing these results to the strength of the model, multiple growth drivers, and an expanding addressable market.

Other Key Points:

• The company repurchased $562 million of common stock during the quarter ended September 30, 2026, compared to no repurchases in the prior year period.
• Net cash used in investing activities was $60 million, driven by purchases of marketable securities ($866 million) and purchases/originations of loans and merchant cash advances ($1,700 million), partially offset by maturities of marketable securities ($1,302 million) and repayments of loans ($1,471 million).
• A small business acquisition of $5 million was recorded in the quarter.
• The conference call to discuss results was held on November 3, 2026, at 8:30 a.m. ET.
• The Form 10-Q for the quarter ended September 30, 2026, is available on the SEC and SEDAR+ websites.