Shopify shares drop as earnings miss and cautious outlook weigh on sentiment
Published: 09:58 08 May 2025 EDT
Shopify Inc (TSX:SH., NYSE:SHOP) shares were down nearly 5% on Thursday morning after the Canadian e-commerce platform missed Wall Street expectations for first-quarter earnings and issued a tepid outlook that disappointed investors.
The company posted adjusted earnings of $0.25 per share, below analysts’ expectations, while revenue rose 27% year-over-year to $2.36 billion, slightly ahead of estimates.
A net loss of $682 million was driven primarily by a $1 billion unrealized loss on equity investments, overshadowing otherwise solid operational performance.
“Our Q1 results confirm that we are delivering both growth and profitability at scale,” president Harley Finkelstein said. “Businesses perform better on Shopify, regardless of market conditions.”
Gross merchandise volume (GMV) rose 23% to $74.8 billion in the quarter, while payment volume climbed 31% to $47.5 billion. Shop Pay, the company’s proprietary payment service, processed $22 billion in GMV, marking a 57% jump from a year earlier.
CFO Jeff Hoffmeister called it “another very strong quarter,” citing the 27% revenue growth and “continued margin strength” as evidence of Shopify’s operational discipline and focus on merchants.
Still, the company’s forecast for the second quarter left some investors wanting. Shopify said it expects revenue to grow at a “mid-20s” percentage rate year-over-year, roughly in line with the first quarter but only slightly above analysts’ estimate of 23%. Gross profit dollars are projected to rise in the high-teens percentage range.
