Shopify’s Q1 2025 Net Loss Swells 150%, Undermining Revenue and Cash Flow Gains

Shopify (TSX: SHOP) has reported Q1 2025 results: revenue surged 27% YoY to $2.36 billion, led by merchant solutions, which jumped 29% to $1.74 billion, while subscription solutions increased 21% to $620 million.

Gross profit rose 22% to $1.17 billion, with gross margin stable at roughly 49.5%. Operating expenses grew 11% to $966 million, led by higher sales and marketing spend ($405 million, up from $361 million) and R&D investments ($377 million, up from $335 million).

Operating income more than doubled to $203 million from $86 million. However, the net loss ballooned to $682 million, compared to $273 million in Q1 2024—driven largely by $908 million in equity writedowns.

Stripping out equity investment impacts, adjusted net income came in at $226 million, up 57% from $144 million last year. CFO Jeff Hoffmeister emphasized this non-GAAP perspective, noting the volatility of third-party equity valuations has “little analytical or predictive value regarding our ability to drive operational results.”

Net cash from operating activities increased 54% to $367 million. Free cash flow reached $363 million—up 56% year-over-year—pushing Shopify’s free cash flow margin to 15%, compared to 12% in Q1 2024.

However, Shopify’s cash and cash equivalents dropped to $1.31 billion from $1.5 billion at year-end, primarily due to aggressive capital deployment—$805 million in loan originations and a $56 million business acquisition—despite $1.33 billion in maturing securities.

Gross merchandise volume reached $74.75 billion, up 23% from $60.86 billion last year, while monthly recurring revenue increased to $182 million from $151 million.

For Q2 2025, Shopify expects mid-20s revenue growth and high-teens gross profit growth year-over-year. Operating expenses are forecast to remain stable at 39–40% of revenue, while free cash flow margins are projected to stay in the mid-teens.

Shopify last traded at $131.29 on the $TSX.


Information for this story was found via the sources and the companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Video Articles

Gold/Silver: People Can Still Lose Money In This Bull Market!? | Rick Rule

He Said $300 Silver!? | Peter Krauth

Dollar Will Collapse, Gold and Silver Are the Only Safe Havens | Jim Rogers

Recommended

Nova Scotia Bans Forest Access to Prevent Wildfires

Cardiol Therapeutics Releases Positive Topline Results From Phase II Clinical Trial

Related News

Shopify Reaches US$1-Billion Revenue Mark In Q2 2021

Shopify Inc. (TSX: SHOP) reported today its financial results for Q2 2021, generating US$1.1 billion...

Wednesday, July 28, 2021, 11:49:00 AM

Shopify Reports Q1 2021 Revenue Of US$988.6 Million

Shopify Inc. (TSX: SHOP) reported today its financial results for Q1 2021, indicating they generated...

Wednesday, April 28, 2021, 09:56:22 AM

Shopify Jumps 28% After Announcing 20% Job Cuts, Sale Of Delivery

Shopify Inc. (NYSE: SHOP), a burgeoning competitor to Amazon, is selling the two largest elements...

Thursday, May 4, 2023, 11:06:03 AM

Shopify Posts Q3 2021 Revenues Of $1.1 Billion, Marginally Improving From Q2

Shopify (TSX: SHOP) this morning released its third quarter financial results for 2021, reporting revenue...

Thursday, October 28, 2021, 08:57:00 AM

Shopify CEO Tobi Lütke Wants Financial Analysts To Be Held Accountable

Tobias Lütke, founder and CEO of Shopify, Inc. (TSX: SHOP), took to Twitter to ponder...

Tuesday, May 10, 2022, 04:28:00 PM