Strong revenue growth and a continued AI focus weren’t enough to assuage Shopify investors today, with shares falling nearly 10 percent as the company posted a net loss.
The Ottawa-based e-commerce giant posted a $581-million USD ($790-million CAD) net loss in the first quarter of this year, compared to a $682-million USD loss in the same quarter last year. This was largely due to the $941-million loss (marked to market, post-tax deduction) on Shopify’s equity investments, without which it would have reported net income of $360 million.
Harley Finkelstein, Shopify
“AI is now Shopify’s native language. We bet early on AI and forced its adoption.”
At the same time, Shopify’s revenue exceeded analyst expectations. It hit $3.17 billion USD in revenue, a 34-percent increase from $2.36 billion in the same quarter last year, as the company grew both its subscription solutions and merchant solutions businesses. Gross merchandise volume (GMV), a measure of Shopify merchant sales, exceeded $100 billion USD for the second consecutive quarter. Its free cash flow margin was at 15 percent, consistent with that of last year.
Shopify said it’s projecting revenue growth of 25 to 29 percent next quarter, which is a slowdown from its previous forecast of low-thirties revenue growth last quarter.
The earnings report comes after some executive departures and layoffs. Last week, chief design officer Carl Rivera announced he was leaving after more than seven years at the company. In a statement to BetaKit, a Shopify spokesperson said Rivera’s departure was a “personal decision” and that the design team has a “bench of exceptional leaders ready to carry it forward.” Two other team leads also announced their departures: Cauê Guerra, director of engineering for growth platforms and revenue, and Andrius Baranauskas, director of product for Shop wallet.
Shopify also confirmed it has cut jobs on its operations team, which The Logic reported affected more than 30 roles. “Operations remains an important part of Shopify, and these changes give the team clearer ownership, more consistency, and a higher bar as we build for what’s ahead,” a spokesperson told BetaKit. The layoffs follow cuts on Shopify’s partnerships team in January and job cuts in November.
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Tech stocks, including Shopify, have had a rough year amid investor uncertainty about AI disrupting traditional software businesses. Before reporting earnings this morning, Shopify shares on the Toronto Stock Exchange were down 19 percent on the year. However, it remains Canada’s most valuable tech company, with a market cap of over $200 billion CAD.
Shopify has embraced AI, both mandating its usage internally and building toward the technology transforming online shopping. It has leaned into positioning ChatGPT and other chatbot interfaces as “storefronts” where consumers will do most of their shopping in the future. Large tech firms and Shopify partners like OpenAI, Google, and Microsoft appear to view agentic commerce as a potentially lucrative path to monetizing their chatbots.
Shopify president Harley Finkelstein said on an earnings call Tuesday morning that in the first quarter, AI-driven traffic to Shopify stores has grown eightfold year-over-year, while orders from AI-powered searches increased nearly 13 times. Finkelstein added that AI now writes more than 50 percent of Shopify’s code.
“We’re not approaching a new era anymore. We are already in it,” Finkelstein told investors on an earnings call this morning. “In 2026, AI is now Shopify’s native language. We bet early on AI and forced its adoption.”
The Information reported that Shopify has been securing more money transmitter licenses in US states in a potential bid to broaden its FinTech offerings for merchants. “Obtaining licenses will allow us to keep building on our existing tools that help merchants run their business,” a spokesperson said.
With files from Alex Riehl. Feature image courtesy Shopify.
Disclosure: BetaKit majority owner Good Future is the family office of two former Shopify leaders, Arati Sharma and Satish Kanwar.
Feature image courtesy Shopify.