Key Takeaways:
- Shopify reported Q2 2026 revenue of $3.6 billion, up 34% year-over-year, with gross merchandise volume rising 32% to $116 billion.
- AI-driven traffic and orders to Shopify stores each tripled year-over-year, with 75% of AI-attributed purchases coming from outside the platform’s top 100 product categories.
- Shopify’s AI assistant Sidekick handled nearly 34 million merchant conversations in Q2, with daily active merchant usage up 3.6 times year-over-year.
Shopify reported another quarter of accelerated growth in the second quarter of 2026, and executives attributed a meaningful share of that momentum to artificial intelligence. Revenue climbed 34% to $3.6 billion, and GAAP net income increased to $1.5 billion in the second quarter of 2026, which ended June 30, up from $906 million a year prior. Gross merchandise volume rose 32% to $116 billion and free cash flow margin reached 18% in the quarter.
“This was a monster quarter: more than 30% growth in GMV and revenue and gross profit and free cash flow,” President Harley Finkelstein said in a statement. “We power every kind of business, and with AI, we’re expanding what’s possible for all of them.”
Merchant solutions revenue, which includes payments and other transaction-related income, grew 37% to $2.78 billion. Subscription solutions revenue rose 22% to $802 million. Shopify Payments penetration increased three percentage points year-over-year to 68% of global GMV, and Shop Pay GMV grew 53%. Free cash flow came in at $654 million, up from $422 million in the same period a year earlier.
Operating expenses as a percentage of revenue improved by nearly two percentage points year-over-year to 34%, reflecting what CFO Jeff Hoffmeister described as continued discipline in headcount. B2B GMV grew 76% and offline GMV grew 32%, while international GMV rose 37%.
AI Tools Built Into Shopify and Its API
Shopify has been building AI directly into its merchant-facing products for more than a year, and Finkelstein said that infrastructure is now a competitive differentiator. Central to that is Sidekick, the company’s AI business assistant, and the Shopify Catalog, a structured product data layer that Finkelstein called one of the company’s most important assets going forward.
“Shopify is probably the most AI-pilled company in the world,” Finkelstein said on the earnings call, quoting feedback he said he has received from AI model developers. “Certainly, credit to that goes to [Shopify CEO] Tobi [Lütke], who I think has been thinking about this longer than most and certainly put Shopify on the path of being AI-reflexive before almost anyone else. It’s not just what we’re using it for, it’s also how we’re using it, I think, sets Shopify apart.”
Sidekick’s daily active merchants using the tool were up 3.6 times year-over-year, and daily sessions grew 4.8 times. Merchants had nearly 34 million conversations with Sidekick in Q2 and used it to create more than 36,000 custom apps, up from 12,000 in Q1. Finkelstein said onboarding guidance from Sidekick drove an 8% increase in new merchants reaching five orders within 15 days.
On the infrastructure side, Shopify’s Catalog API allows AI agents to access product data, build carts and complete checkouts across millions of merchants. Finkelstein said the company co-developed Google’s Universal Commerce Protocol at the start of 2026, which dozens of retailers and platforms have since adopted to enable agent-driven commerce experiences.
“As commerce continues to fragment, Shopify becomes an even more critical partner because we provide consistent and reliable infrastructure that makes every shopping experience feel seamless,” Finkelstein said. “Whether commerce is handled by humans or agents, whether stores are built by people or AI, Shopify runs underneath it all.”
AI Search Is Driving New Buyers and Higher Conversion
Finkelstein said AI-driven traffic and orders to Shopify stores tripled year-over-year in Q2, and that new buyer orders from AI channels are arriving at nearly twice the rate of other channels. Conversion from searches powered by Shopify’s Catalog runs 2 times higher than those using scraped data, and about 80% higher than traditional organic search.
A specific pattern has emerged in who is benefiting most. Finkelstein said 75% of AI-attributed purchases in Q2 came from outside Shopify’s top 100 product categories, a trend he attributed to the structural advantage AI search provides for niche or specialized products.
“These are brands that also happen to make up the majority of Shopify’s merchant base, smaller businesses with specialized products built for a particular customer,” Finkelstein said.
He pointed to examples like a screen-less phone for children, reef-safe sunscreen with specific cosmetic properties and a dog harness designed for French bulldogs as products that surfaced in AI search results in ways that would be unlikely through keyword-based traditional search. Half of all AI-referred sessions are landing directly on product pages, 2.5 times the rate seen with traditional search.
Finkelstein also noted that traditional search remains strong. Search sessions are up 1.3 times over the past two years and account for roughly a third of all storefront sessions, suggesting AI search is adding to discovery channels rather than simply replacing them.
Brands Moving to Shopify
Enterprise migration activity picked up in Q2. Finkelstein named Guess, Fred Segal, Aritzia, Avon, e.l.f. Cosmetics, Claire’s, Burton and Suitsupply as brands that either chose Shopify or went live on the platform during the quarter. Luxury retailer Balmain migrated its website to Shopify in a matter of weeks, Finkelstein said on the call.
Finkelstein attributed some of that acceleration to AI-readiness. He said brands are being pushed internally to define their agentic commerce strategy, and that moving to Shopify effectively solves that problem for them.
He tied this back to a broader thesis about entrepreneurship. “I just want to start with something that I think I said last quarter on the call, which was, I said that AI is going to accelerate entrepreneurship more than any other job,” Finkelstein said. “Tobi mentioned that to me about a year ago, and I’m seeing that. I totally agree with him. We are already seeing early signs of that happening.”
Hoffmeister noted that merchants who reach $1 million in annual GMV have a 92% retention rate, which rises to 97% at $10 million. Merchants who build a second store on Shopify earn more than twice the sales per store compared to first-time founders.
What Shopify Is Guiding for Q3
For the third quarter of 2026, Shopify is guiding for revenue growth in the low 30 percentage range year-over-year. Gross profit dollars are expected to grow in the mid-to-high 20s. Operating expenses are projected to be 33% to 34% of revenue, down from 37% in Q3 of last year. Free cash flow margin is expected to be in the high teens to low 20s.
Hoffmeister noted that Shopify holds more than 14% of the U.S. ecommerce market and that, according to eMarketer, Shopify merchants have captured nearly half of all incremental ecommerce dollars in the U.S. since the start of 2025. He described that dynamic as a structural tailwind that exists independently of any AI-driven upside.
“As we enter this agentic era, any acceleration in ecommerce growth or disproportionate value to the long tail of commerce is upside to our underlying growth story,” Hoffmeister said.
