[Moo Brief] Shopify soars 18% after beating Q2 earnings: is the e-commerce giant making a comeback?

On August 7, Canada's leading e-commerce giant Shopify announced its Q2 2024 financial report, surpassing expectations in operating indicators. By the market close on August 7, $Shopify (SHOP.US)$ reached $63.89, a 17.83% increase, while $Shopify Inc (SHOP.CA)$ surged 17.85% to $87.87. Additionally, $Shopify (SHOP.US)$ 's transaction volume reached $3.288 billion, ranking 14th in the U.S. stock market, with a 228.22% increase compared to the previous day. The trading volume for the day was 49.98 million.

🌠 Overall, $Shopify Inc (SHOP.CA)$'s core operating indicators for payment and subscription businesses outperformed expectations, with the subscription business showing particularly strong results. Effective cost control contributed to higher-than-expected profits. The detailed points are as follows:

❹ In terms of expenses, $Shopify Inc (SHOP.CA)$ 's significantly lower-than-expected expenditures contributed substantially to profit release. The total operating expenses amounted to approximately $800 million, $100 million lower than market expectations. Marketing expenses were $30 million lower than expected, and management expenses were significantly reduced YoY to only $60 million, which was $70 million lower than expected.

$Shopify Inc (SHOP.CA)$ , established in 2004, is a leading global commerce company. However, amidst a sluggish global economy and pressure from e-commerce giants $Amazon (AMZN.US)$ and payment platform $PayPal (PYPL.US)$ , its revenue fell short of expectations last year. $Shopify Inc (SHOP.CA)$ downsized by over 2,000 positions and underwent a major strategic shift, selling off most of its logistics department and agreeing to allow merchants to use $Amazon (AMZN.US)$ 's "Buy with Prime" service for package delivery. The Q2 financial report also serves as confirmation of the success of these strategies, signaling a gradual turnaround for the company.

Before the 10-for-1 stock split in June 2022, Shopify's stock price had once surged to $1,500, but is currently in a lower range, presenting an opportunity for bottom fishing. Additionally, to serve its core customers, small and medium-sized businesses, $Shopify Inc (SHOP.CA)$ continues to innovate. The company launched several new loan products for merchants earlier this year, announced more new AI features, and made an additional investment of $260 million in its global logistics platform. CEO Finkelstein believes there is significant growth potential in Europe, where GMV growth has surpassed that of the North American market. $Shopify Inc (SHOP.CA)$ has a great deal of room to grow internationally given the substantial worldwide e-commerce market and Shopify's still-relatively-low presence in the global retail sales market.