Shopify Inc. saw its U.S.-listed shares decline approximately 7% in premarket trading Tuesday, after the Canadian e-commerce software provider issued second-quarter guidance that largely met analyst expectations, failing to provide the upside investors had hoped for following a record-breaking first quarter.
For the quarter ended March 31, 2026, Shopify reported revenue of $3.17 billion, a 34% increase year-over-year. Gross merchandise volume (GMV) — the total value of transactions processed on its platform — surged 35% to $100.74 billion, marking the first time the company has crossed the $100 billion threshold in a single quarter. The company also posted a free cash flow margin of 15%.
However, operating income came in at $382 million, an 88% improvement from the prior year but still below the $420 million analysts had penciled in, according to data from LSEG. This shortfall, combined with a second-quarter revenue forecast calling for growth in the high-twenties percent — roughly in line with the 26.8% consensus — left investors wanting more.
“Shopify has entered the AI era with a clear edge,” President Harley Finkelstein said in the company’s earnings release. Chief Financial Officer Jeff Hoffmeister highlighted broad-based growth across geographies, merchant sizes, and channels, calling the $100 billion GMV milestone evidence of “the platform compounding.”
Breaking down the results, subscription solutions revenue rose 21% to $750 million, while merchant solutions — which includes payments, lending, shipping, and advertising — jumped 39% to $2.42 billion. Monthly recurring revenue reached $212 million, up from $182 million a year earlier. Shopify Payments processed $67.1 billion in GMV, representing 67% penetration, compared to 64% and $47.5 billion in the year-ago period.
Despite the revenue growth, the company recorded a net loss of $581 million, improving from a $682 million loss in the same quarter last year. The loss was driven by a $1.08 billion charge related to equity and equity-method investments. Excluding that mark-to-market adjustment, Shopify posted a net profit of $360 million.
Looking ahead, Shopify expects second-quarter revenue growth in the high-twenties percent and gross profit dollar growth in the mid-twenties. Operating expenses are forecast at 35% to 36% of revenue. The company also noted that increased AI usage is pushing up cloud and software expenses, and that a greater mix shift toward lower-margin merchant solutions could pressure gross margins.
On the capital allocation front, Shopify’s board authorized up to $2 billion in Class A share repurchases in the first quarter, with the program commencing February 17. As of the latest filing, approximately 4.21 million shares have been bought back for $514 million, leaving $1.49 billion remaining under the authorization.
Competition remains intense, with Amazon, Wix.com, and others making moves in merchant software and checkout. Shopify is expanding its enterprise merchant efforts and growing in Europe and physical retail, while also collaborating with AI firms on shopping experiences. Downside risks include consumer spending pullbacks, tariff impacts, and rising inflation, all of which could pressure transaction-driven revenue.
Management was scheduled to hold a conference call at 8:30 a.m. EDT to discuss the results, with analysts expected to focus on payments growth velocity, AI-related costs, the pace of buybacks, and why a $100 billion GMV quarter didn’t prevent the stock from sliding.
