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Shopify Sees Sequential Slowdown in Revenue Growth; Stock Tumbles

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-- Shopify (SHOP) on Tuesday issued a second-quarter revenue outlook that implied a sequential slowdown in annual growth.

The Canada-based e-commerce platform anticipates revenue to grow at a high-twenties percentage rate on a yearly basis in the ongoing quarter. The current consensus on FactSet is for $3.42 billion. In the first quarter, revenue jumped 34% to $3.17 billion, topping the Street's view for $3.11 billion.

The second-quarter guidance assumes about a half point of foreign-exchange tailwinds, compared with a forex benefit of more than two points in the first quarter, Chief Financial Officer Jeff Hoffmeister said during an earnings call, according to a FactSet transcript.

Shares of the company fell 8.1% in Tuesday trade, taking its year-to-date loss to 27%.

Gross profit dollars are pegged to increase by a mid-twenties percentage rate for the current quarter.

"The differential in the revenue versus gross profit growth rates is driven by the continued mix shift between the growth rates of merchant solutions and subscription solutions, which is expected to narrow compared to 2025 and the continued strength of payments," Hoffmeister said.

For the March quarter, Shopify's adjusted earnings rose to $0.36 a share from $0.25 the year before. It posted a $0.45 loss on a GAAP basis. Gross profit improved 32% to $1.55 billion.

Subscription solutions revenue added 21% to $750 million in the first quarter, while merchant solutions climbed 39% to $2.42 billion. Gross merchandise volume, which represents the total dollar value of orders facilitated through the Shopify platform, advanced 35% to $100.74 billion.

"(The first quarter) continued the momentum of an outstanding 2025," Hoffmeister said on the call. "Strength was broad across merchant sizes, channels and geographies."

Price: $118.78, Change: $-8.77, Percent Change: -6.88%

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