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Shopify SHOP reported first-quarter 2025 non-GAAP earnings of 25 cents per share, which missed the Zacks Consensus Estimate by 3.85%. The figure jumped 25% year over year.
Revenues of $2.36 billion surpassed the Zacks Consensus Estimate by 1.32%. The top line soared 26.8% year over year.
Following first-quarter 2025 results, SHOP shares were down 2% at the time of writing this article. Shopify shares have declined 11.6% year to date, outperforming the Zacks Computer and Technology sector’s fall of 9.1%.
Shopify Inc. Price, Consensus and EPS Surprise
Shopify Inc. price-consensus-eps-surprise-chart | Shopify Inc. Quote
SHOP’s Top Line Rides on Growing Merchant Base
Gross Merchandise Volume (GMV) in the first quarter was $74.75 billion, which increased 22.8% year over year. Same-store sales growth from existing merchants, a higher number of merchants on SHOP’s platform, and strong growth in Europe drove GMV in the reported quarter. Offline GMV increased 23% year over year while B2B GMV jumped 109%. International GMV grew 31% year over year, with Europe’s GMV increasing 36% year over year.
Shopify is benefiting from strong growth in its merchant base. Merchant solutions revenues in the first quarter were $1.74 billion and accounted for 73.7% of Shopify’s total revenues. On a year-over-year basis, merchant revenues increased 29%, driven by strong GMV and increased penetration of Shopify payments.
Shopify Payments’ GMV penetration hit 64% in the first quarter of 2025. Shop Pay GMV increased 57% year over year, and it processed more than $22 billion in GMV. Shop App native GMV jumped 94% year over year and 84% sequentially.
Subscription solutions revenues in the first quarter were $620 million and accounted for 26.3% of Shopify’s total revenues. On a year-over-year basis, subscription solutions revenues increased 21.3%.
Monthly Recurring Revenue (MRR) in the first quarter was $182 million, which increased 20.5% on a year-over-year basis. Plus category accounted for 34% of MRR in the reported quarter, unchanged sequentially.
SHOP’s Operating Expenses Rise Y/Y
In the first quarter of 2025, gross profit was $1.17 billion, up 22.2% year over year. Subscription Solutions’ gross profit grew 19% year over year, while Merchant Solutions’ gross profit grew 24%.
Total operating expenses were $966 million, up 10.9% year over year. As a percentage of revenues, total operating expenses declined 590 basis points (bps) to 40.9%.
Sales & Marketing (S&M) expenses increased 12.2% year over year to $405 million. As a percentage of revenues, S&M expenses decreased 220 bps year over year to 17.2%
Research & Development (R&D) expenses increased 12.5% year over year to $377 million. As a percentage of revenues, R&D expenses decreased 200 bps year over year to 16%.
General & Administrative (G&A) expenses decreased 12.1% year over year to $109 million. As a percentage of revenues, G&A expenses decreased 200 bps to 4.6%.
Consequently, SHOP reported an adjusted operating income of $329 million, up 63.7% year over year.