Shopify (SHOP) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue reached $2.4 billion, up 27% year-over-year, with GMV of $74.8 billion, up 23% YoY, and a 15% free cash flow margin, marking seven consecutive quarters of double-digit FCF margin.

• Shopify powers millions of merchants in 175+ countries, with over 12% US ecommerce market share and 875M+ unique shoppers in 2024.

• Merchant base remains highly diversified across geographies, verticals, and merchant sizes, supporting resilience and growth.

• Operational agility, rapid product innovation, and global expansion are key differentiators, with continued investment in AI and new features.

• Net loss for Q1 2025 was $682 million, primarily due to $1.02 billion in unrealized losses on equity investments.

Financial highlights

• Q1 2025 revenue: $2.4B, up 27% YoY; merchant solutions revenue up 29% to $1.74B, subscription solutions up 21% to $620M.

• Gross profit was $1.17B, up 22% YoY; gross margin was 48.1%-50%.

• Operating income was $203M (8.6%-9% margin), up from $86M in Q1 2024.

• Free cash flow was $363M, or 15% of revenue, up from $232M YoY.

• Shopify Payments processed $47.5B in Q1 2025, representing 64% of GMV.

Outlook and guidance

• Q2 2025 revenue expected to grow at a mid-twenties percentage rate YoY.

• Gross profit dollars projected to grow at a high-teens percentage rate YoY, with gross profit growth below revenue growth due to product mix.

• Operating expenses for Q2 anticipated at 39%-40% of revenue, improving leverage year-over-year.

• Free cash flow margin for Q2 expected to remain in the mid-teens.

• Management expects continued investment in growth initiatives, including AI, international expansion, and product development.