Shopify Inc (NYSE:SHOP) stock fell 3.65% (As on August 3, 11:11:37 AM UTC-4, Source: Google Finance) after the company posted better than expected results for the second quarter of FY 23. Gross Merchandise Volume (“GMV”) increased 17% to $55.0 billion, an increase of $8.2 billion over the second quarter of 2022, up 18% on a constant currency basis. Merchant Solutions revenue increased 35% to $1.3 billion compared to the prior year driven primarily by the growth of GMV and continued penetration of Shopify Payments. Gross Payments Volume (“GPV”) grew to $31.7 billion, representing 58% of GMV processed in the quarter, versus $24.9 billion, or 53%, for the second quarter of 2022. Subscription Solutions revenue increased 21% to $444 million compared to the prior year primarily due to more merchants joining the platform and the pricing changes that went into effect for existing merchants in April. Monthly Recurring Revenue (“MRR”) as of June 30, 2023 increased 30% to $139 million compared to the prior year. MRR gains were driven primarily by the pricing changes that went into effect for our existing merchants in late April and continued growth in the number of Standard and Plus merchants.  Shopify Plus contributed $41 million, or 29%, of MRR compared with 31% of MRR as of June 30, 2022.

Moreover, gross profit grew 27% to $835 million, compared to the prior year. Gross margin for the quarter was 49.3% compared to 50.7% in the second quarter of 2022, driven by a higher mix of revenue from the lower margin Merchant Solutions segment, primarily from the lower margin revenue contributions from Deliverr. Adjusted operating income was $146 million, or 9% of revenue, compared with adjusted operating loss of $42 million or 3% of revenue in the second quarter of 2022. Capital expenditures were $21 million compared to $12 million in the second quarter of 2022. Free Cash Flow was $97 million or 6% of revenues, compared with negative free cash flow of $87 million or 7% of revenues in the second quarter of last year. Cash and marketable securities were $4.8 billion as of June 30, 2023.

SHOP in the second quarter of FY 23 has reported the adjusted earnings per share of 14 cents, beating the analysts’ estimates for the adjusted earnings per share of 7 cents. The company had reported the adjusted revenue growth of 31 percent to $1.69 billion in the second quarter of FY 23, beating the analysts’ estimates for revenue of $1.63 billion.