SHOP Shopify posted strong Q1 results with revenue up 27% year-over-year to $2.36 billion, beating estimates by $30 million. It marked the eighth straight quarter of 25%+ growth when excluding the impact of selling off its logistics unit. Gross merchandise volume (GMV) rose 23% to $74.75 billion, slightly below expectations.However, results were weighed down by a nearly $1 billion unrealized loss on equity investments tied to weaker stock performance from partners like Affirm, Global-E, and Klaviyo. Without that, net profit would’ve totaled $226 million. On the plus side, free cash flow margin rose to 15%, up from 12% last year.
For Q2, Shopify expects revenue growth in the mid-20% range, in line with Q1. However, gross profit growth is projected to land in the high-teens due to a shift in revenue mix toward lower-margin Merchant Solutions. That’s slightly below Wall Street’s 20% forecast.
President Harley Finkelstein flagged potential headwinds from the end of the “de minimis” rule, which had let imports under $800 enter the U.S. without tariffs. While only about 1% of GMV is directly exposed, analysts remain cautious as trade policy uncertainty and rising costs could pressure smaller merchants who rely on Chinese suppliers.
