Shares of e-commerce giant Shopify Inc. slumped by about nine per cent on Tuesday morning after the company posted first-quarter revenue growth but flagged a slowdown in growth ahead. The Ottawa-based company reported revenue of US$3.17 billion for the three months ending March 31, a 34 per cent increase from US$2.36 billion a year ago, beating analyst expectations. The growth was largely boosted by its merchant solutions business.
Key Financial Highlights
Shopify's gross merchandise value (GMV) — the total value of goods sold on its platform — rose 35 per cent year over year to US$100.7 billion. This marked the fourth consecutive quarter that Shopify's year-over-year GMV growth exceeded 30 per cent. Merchant solutions revenue jumped to US$2.42 billion from US$1.74 billion, while subscription solutions revenue grew to US$750 million from US$620 million.
The company recorded a net loss of US$581 million in the first quarter, improving from a US$682 million loss in the same period last year.
Growth Outlook and Analyst Reactions
Shopify said it expects revenue to continue growing over the next three months, but "at a high-20s percentage rate on a year-over-year basis," while gross profit will expand at a mid-20s percentage rate. This slowing growth rate led investors to sell off shares.
Kevin Krishnaratne, an analyst at the Bank of Nova Scotia, said Shopify's second-quarter guidance was "appropriately set, but likely conservative." Royal Bank of Canada analyst Paul Treiber noted that Shopify's guidance metrics are "above consensus, except free cash flow."
AI Disruption Concerns
Shopify stock has tumbled more than 20 per cent in 2026, reflecting investor concerns over artificial intelligence disruption. Despite this, the company is trying to position itself as a leader in agentic AI shopping and aims to help its millions of merchants sell more via AI.
