Shopify put worries about slowing growth to rest with a strong Q2

Revenue climbed 34% year over year to $3.6 billion, beating expectations by $140 million, while gross merchandise volume (GMV) rose 32% to $115.6 billion. Free cash flow came in at $654 million, with margins improving to 18%, up from 15% last quarter. Investors welcomed the results, sending the stock sharply higher

The strength wasn't limited to one part of the business. Growth was healthy across merchants of all sizes, different regions, and multiple sales channels. Shopify Payments accounted for 68% of GMV, up three percentage points from a year ago, while Shop Pay has now processed more than $400 billion in GMV since its launch

AI is also becoming a more meaningful driver of the business. Traffic and orders coming from AI-powered shopping experiences both tripled compared to last year. Orders placed through AI agents using Shopify's structured Catalog converted at roughly twice the rate of those relying on scraped web data. Another interesting takeaway is that 75% of AI generated orders came from outside Shopify's top 100 product categories, suggesting AI is helping smaller merchants get discovered by shoppers who might not have found them otherwise

Looking ahead, Shopify expects Q3 revenue growth in the low 30% range, comfortably ahead of the roughly 27% analysts were expecting. If achieved, it would mark the company's sixth straight quarter of more than 30% revenue growth. Management also expects free cash flow margins to improve further into the high teens to low 20% range

Just one quarter ago, investors were asking whether Shopify's rapid growth was finally fading. Q2 delivered a clear answer. Revenue and GMV continue to grow above 30%, profitability is moving in the right direction, and AI is becoming a real growth catalyst..Instead of disrupting Shopify's business, AI is starting to help merchants reach more customers and drive more sales.