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Call sheet · Q1'26

Shopify (SHOP)

Q1'26 earnings call · held May 5, 2026 · compared with the Q4'25 call · management-credibility review
9/12
Disclosure score
2 medium, 1 low flags
Financial quality
Bottom line
The core result is 34% revenue growth and 32% gross profit growth, ahead of the prior outlook, with a 15% free cash flow margin. The next test is how much of that performance persists as the developer revenue-share comparison benefit normalizes. Credit also needs monitoring: transaction and loan losses reached 3.7% of revenue versus 3.2% a year earlier. Q2 cash-flow margin comparisons need to account for the disclosed half-point accounting benefit. Different AI-order growth bases do not prove deceleration, and a seasonal Payments mix change does not by itself establish a cap on monetization.

The 30-second version

  • Revenue and gross profit beat the prior outlook
  • Normalize the comparability benefits before projecting growth
  • Credit costs deserve attention alongside growth

What changed this quarter

MetricQ4'25Q1'26Change
Revenue (YoY growth)Q4 2025: first quarter above $3B, up 31%Q1 2026: $3.2B, up 34%Growth accelerated +300bps despite seasonal step-down in dollars
GMV (YoY growth)Q4 2025: $124B, up 31%Q1 2026: $101B, up 35%Growth accelerated +400bps on lower seasonal base
Free Cash Flow / marginQ4 2025: $715M / 19%Q1 2026: $476M / 15%, 'in line with our outlook'15% margin, within the low-to-mid-teens outlook
Merchant Solutions revenue growthQ4 2025: +35%Q1 2026: +39%+400bps acceleration
Subscription Solutions revenue growthQ4 2025: +17%Q1 2026: +21%, boosted by a disclosed one-time dev revenue-share tailwindGrowth included a developer-term comparability benefit
Shopify Payments penetration (% of GMV)Q4 2025: 68% of GMVQ1 2026: 67% of GMV, with Europe flagged as a headwind-100bps sequentially despite +3pts YoY
Operating expenses (% of revenue)Q4 2025: 29%Q1 2026: 37%, a 4-point YoY improvementNormal seasonal step-up, YoY leverage intact
MRR growthQ4 2025: +15%Q1 2026: +16%+100bps acceleration
Plus MRR as % of total MRRQ4 2025: 34%Q1 2026: 35%+100bps mix shift to larger merchants
Transaction and loan losses (% of revenue)Q4 2025: ~3%Q1 2026: 3.7%, credit the 'largest component' of the increase+70bps, credit losses widening

Accountability tracked

5 new promises made4 prior promises scored
Inside the full report
The complete write-up covers the full promise ledger with kept/missed calls, disclosure-quality scoring, the metrics-vanished check, verification items, and the questions to ask next quarter.
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Scores, kept-promise rates, and flags on this site reflect the author's opinion, applying a stated methodology to statements management made on public earnings calls. Informational and educational purposes only - not investment advice, a recommendation, or an offer to buy or sell any security. Sources believed reliable but not guaranteed; the author may hold positions in the securities discussed.

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