Shopify Stock Is Soaring on Earnings. Shares Are Nearing Pandemic-Era Highs.

The company reported stronger-than-expected profit and revenue for the second quarter. (David Kawai/Bloomberg)

Shares of Shopify were soaring Wednesday after the e-commerce platform posted a much stronger quarterly profit than Wall Street expected. The stock is now within striking distance of its pandemic-era highs.

The company reported net income of $906 million for the second quarter, up from $171 million last year and above analysts’ consensus call of $257 million, according to FactSet.

Much of the overperformance in the second quarter appeared to be due to equity investments. Adjusted net income, which excludes gains from equity investments, totaled $338 million, short of Wall Street’s forecast of $372 million, but up from $291 million a year ago.

Revenue of $2.68 billion exceeded analysts’ expectations for $2.55 billion. Gross merchandise volume—the total value of goods sold on the Shopify platform—was $87.8 billion, up from $67.2 billion the year prior.

“Today’s results are the payoff from bold bets we made years ago,” said President Harley Finkelstein in a statement.

Shopify owns both common and supervoting stock of Affirm Holdings, and, according to Affirm’s latest proxy, Shopify controls a little more than 18% of the voting power. Affirm stock has surged 23% year to date through Tuesday’s close.

Management expects revenue to grow at a mid- to high-20s percentage rate in the third quarter from a year ago, with gross profit expected to rise at a low-20s percentage rate.

Shopify stock was climbing 19% to $151.51 Wednesday, making it the top performer in the Nasdaq 100 . Shares are now 10% off their record closing high of $169.06 on Nov. 21, 2021, according to Dow Jones Market Data.

Shopify was a beneficiary of the e-commerce boom of 2020 and 2021 driven by shut-in consumers turning to online shopping. But the stock got crushed in 2022 as the economy reopened, and the company’s sales growth slowed. Shopify stock briefly dropped below $30 in September and October of that year.

The company appears to be back on track. Shopify stock is up 43% this year, and up 137% over the last 12 months.

Write to Nate Wolf at nate.wolf@barrons.com