Shopify shows strong Q2 revenue growth, ups outlook for 2019

Shopify's retail operating system continues to gain traction among merchants.

How Shopify is working to expand internationally ZDNet's Natalie Gagliordi sits down with Karen Roby from TechRepublic to talk about how Shopify is using its developer ecosystem to grow internationally. Read more: https://zd.net/2UIxrZa

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Shopify reported better-than-expected growth in the second quarter and raised its outlook for the next quarter and 2019 as the company's retail operating system continues to gain traction with merchants.

The company reported a second quarter net loss of $28.7 million, or 26 cents a share, on revenue of $362 million, up 48% from a year ago. Adjusted earnings for the second quarter were 14 cents a share.

Wall Street was expecting Shopify to report second quarter revenue of $350.5 million with non-GAAP earnings of 3 cents a share.

Shopify said its subscription revenue was up 38% as more merchants joined the platform. In addition, merchant solutions revenue was up 56% due to growth in Shopify Capital and Shopify Shipping.

The company recently concluded its Unite user conference where it launched the Shopify Fulfillment Network as well as a next-gen point-of-sale application. Shopify aims to enable smaller retailers compete with much larger competitors.

Shopify's success may also make it a target for larger tech giants such as Microsoft. See: Microsoft may be targeting the e-commerce store hosting space

As for the outlook, Shopify projected third quarter revenue of $377 million to $382 million and 2019 sales of $1.51 billion to $1.53 billion. Those projections were well ahead of Wall Street's estimates.

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