A slower growth outlook sent shares tumbling even as the company topped every analyst estimate
Shopify Inc. beat analyst expectations in the first quarter of 2026, but investors sold off the stock anyway, concerned by a growth slowdown that management says misreads the company's trajectory.
Shares fell roughly seven to nine percent Tuesday morning after the Ottawa-based e-commerce company guided for revenue growth “at a high-twenties percentage rate” in the second quarter — a step down from Q1's 34 percent year-over-year gain.
Shopify stock has now lost more than 20 percent in 2026, according to Financial Post, even as the company posts some of its strongest operating metrics.
Revenue for the three months ended March 31 rose to US$3.17bn from US$2.36bn a year earlier, with merchant solutions climbing to US$2.42bn and subscription solutions reaching US$750m.
The company's earnings release reports gross merchandise value hit US$100.7bn, up 35 percent — the fourth straight quarter above 30 percent — while free cash flow came in at US$476m, a 15 percent margin.
On an adjusted basis, Shopify earned 36 cents per diluted share, topping the 33-cent consensus estimate per LSEG Data & Analytics.
Net loss narrowed to US$581m, or 45 cents per diluted share, from US$682m, or 53 cents, a year earlier.
Financial Post cited Scotiabank analyst Kevin Krishnaratne describing the second-quarter guidance as “appropriately set, but likely conservative,”
RBC analyst Paul Treiber said guidance metrics were “above consensus, except free cash flow.”
President Harley Finkelstein used most of his opening remarks on the analyst call to make a single argument: Shopify is an AI company now.
Finkelstein said AI writes more than half the company's code and that share is rising “significantly.”
Developers, he added, are now “directing, reviewing and making calls” while AI handles the execution.
The outlet reported that CEO Tobi Lutke established the foundation for this shift last April, telling staff in an internal memo that AI use is a “baseline expectation” and that teams must prove AI cannot do a job before requesting new headcount.
BNN Bloomberg reported that the company embedded an AI coding tool called River into workplace communication software Slack, giving all staff direct access to their engineering conversations.
Finkelstein told analysts the tool helped Shopify ship more than 300 new products and features last year while keeping headcount flat.
CFO Jeff Hoffmeister added on the call that headcount has been “slightly down” year over year for three consecutive years and he does not expect that to change.
BNN Bloomberg reported that Shopify has built AI tools for merchants that write product descriptions and draft email subject lines, and partnered with OpenAI to let merchants sell directly through ChatGPT.
Financial Post reported the company also has integrations with Microsoft, Google, and Perplexity AI.
Speaking to CNBC, Finkelstein said orders arriving from AI searches are up 13 times year over year.
Financial Post reported that earlier this year, Shopify and Google co-developed the Universal Commerce Protocol, an open rules-based standard that connects merchants to AI-driven shopping channels.
Twenty retailers — including Walmart Inc., Wayfair Inc. and Best Buy Co. Inc. — have joined, Finkelstein said on the earnings call.
In a note cited by the same outlet, ATB Capital Markets analyst Martin Toner wrote last Friday that Shopify's ChatGPT integration has secured “a new, high-conversion distribution channel that bypasses traditional search ads” for its merchants.
Speaking to CNBC, Finkelstein said Shopify now accounts for 14 percent of US e-commerce, with cumulative GMV on the platform reaching roughly US$1.7tn.
He added that Sidekick, Shopify's merchant AI assistant, has seen usage rise four times year over year, trained on two decades of commerce data. “No one else has that,” he said.
