Shopify Inc. (TSX: SHOP) offers a cloud-based e-commerce platform, enabling businesses to create and manage online stores. It provides tools for selling across websites, social media, marketplaces, and physical retail locations.
Financial Performance
The company has released its financial results for the second quarter ended June 30, 2025, showcasing impressive growth. Revenue rose by 31%, and the company achieved a free cash flow margin of 16%, marking the eighth consecutive quarter with double-digit free cash flow margins. A company spokesperson noted that the strong performance reflects strategic decisions made years ago and emphasized that current investments are aimed at driving the next phase of growth. They added that innovation remains a constant priority, and even with strong financials, the company continues to push boundaries in commerce.
The quarter saw accelerating growth in both gross merchandise volume (GMV) and revenue across North America, Europe, and the Asia Pacific. Europe was a key highlight, with GMV increasing by 42% year over year on a constant currency basis.
For the third quarter of 2025, the company expects revenue to grow in the mid-to-high 20% range compared to the same period last year, while gross profit is projected to increase in the low 20% range year over year.
Investment Rationale
It’s nearly impossible to talk about Canadian growth stocks without mentioning Shopify. Over the past decade, its e-commerce platform has become a key player in online retail. In the last 12 months alone, Shopify’s stock has soared more than 100%. Here’s the compelling part for investors still on the fence: even after those significant gains, the stock is still trading below its pandemic-era highs.
But this isn’t the same Shopify from a few years ago. The company has made notable strides—not only in strengthening its financials but also in expanding its reach and innovation. Shopify is pushing into international markets, rolling out AI-powered commerce tools, and developing solutions tailored to large enterprises.
In short, Shopify continues to offer tremendous long-term potential.
Recommendation
Considering the above facts, we give a “Buy” rating on the stock at the closing price of CAD203.67 as on September 15, 2025
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