Shopify Guides Softer 2Q Profitability on Cost Pressures — Update

By Adriano Marchese

Shopify's second-quarter profit outlook fell short of expectations as the company projected higher-than-anticipated operating expenses despite strong revenue growth.

The ecommerce giant has guided its second-quarter operating expenses at between 35% and 36% of revenue with gross profit dollars growing at a mid-twenties percentage rate.

The slightly higher-than-expected expenses put pressure on profitability for the second quarter, said Citi analyst Tyler Radke.

Revenue is expected to grow at a high-20s percentage rate over last year. Analysts are forecasting revenue to come in at $3.42 billion, according to FactSet, which would represent a nearly 28% rise over the prior year period.

"The company's 2Q sales guidance of high-20% growth year-over-year was slightly above consensus expectations in the mid-20s, although modestly higher-than-expected costs drove the second-quarter profitability outlook slightly below the Street," Radke said in a report.

Shares fell in Toronto by 7.6% to 160.20 Canadian dollars ($117.57).

In the first quarter, Shopify reported a net loss of $581 million, or 45 cents a share, compared with a loss of $682 million, or 53 cents a share, in the comparable quarter a year ago.

Adjusted earnings were 36 cents a share, topping expectations of 33 cents a share, according to FactSet.

Revenue rose to $3.17 billion from $2.36 billion, coming in ahead of projections of $3.12 billion. Revenue growth was made up of subscription solutions, which rose by $130 million to $750 million, and its larger segment, merchant solutions, which climbed to $2.42 billion from $1.74 billion.

Gross merchandise volume, a key metric that measures all orders processed through Shopify's platform, rose to $100.74 billion, up from $74.75 billion.

Write to Adriano Marchese at adriano.marchese@wsj.com

(END) Dow Jones Newswires

May 05, 2026 10:45 ET (14:45 GMT)