Shopify Projects Higher Revenue on Strong Customer Demand

(Reuters) – Shopify estimated third-quarter revenue above market expectations on Wednesday, citing robust demand from merchants for its e-commerce services despite tariff concerns, driving its U.S. shares up 16% premarket.

The positive estimate comes as a welcome relief amid investor fears about President Donald Trump's shifting trade policies, which have left many retail enterprises unclear about demand, manufacturing, sourcing, and operating expenses.

Shopify has previously stated that sellers are still joining up for its services, and the business also benefits from investments in artificial intelligence-powered tools that assist merchants with activities such as creating shop websites, generating graphics and discount codes, and collecting sales data. 

Last week, e-commerce behemoth Amazon also posted good retail earnings, claiming that it had yet to witness a reduction in demand or a significant spike in prices.

Shopify's sales growth rates increased quarter after quarter in regions such as North America, Europe, and Asia Pacific, according to the business.

Shopify stated in May that the expiration of de minimis in the United States, a trade exemption that allowed retailers to import low-cost goods from China tariff-free, would have little impact on its business. Only 1% of its total gross merchandise volume, or the total value of things sold on the site, is tied to China.

According to data provided by LSEG, the Ontario, Canada-based corporation expects sales to grow at a mid- to high-twenties percentage rate in the July-September quarter, while analysts expected a growth of 21.54%.

Shopify's second-quarter revenue was $2.68 billion, up 31% from the previous year and higher than analysts' average expectation of $2.55 billion. Gross merchandise volume increased to $87.84 billion from $67.25 billion in the previous year.
(Deborah Sophia and Kritika Lamba reported from Bengaluru; Arun Koyyur and Devika Syamnath edited.)