Shopify Inc (NASDAQ:SHOP) stock tanked after the company reported fiscal first-quarter 2026 results on Tuesday.

The company's quarterly revenue growth of 34.32% year-over-year (Y/Y) to $3.17 billion beat the analyst consensus estimate of $3.08 billion. 

The e-commerce platform company reported adjusted EPS of 36 cents, topping the analyst consensus estimate of 33 cents.

Key Metrics

The adjusted net income was $360 million compared to $226 million a year ago.

Gross merchandise volume increased 34.77% Y/Y to $100.74 billion. However, growth in constant currency was 30% due to the impact of fluctuations in foreign exchange rates.

Merchant solutions revenue increased 39.08% Y/Y to $2.42 billion. Subscription solutions revenue rose by 20.97% Y/Y to $750 million.

The quarter's gross margin was 48.77%, compared to 49.53% in the same quarter last year. Gross profit grew 32.25% Y/Y to $1.55 billion.

Shopify generated $481 million in operating cash flow and $476 million in free cash flow for the quarter. The free cash flow margin remained steady Y/Y at 15%.

Executive Commentary

Shopify President Harley Finkelstein said the company has entered the AI era with strong, durable growth and two decades of commerce intelligence, positioning it uniquely and setting up that advantage to compound through 2026.

CFO Jeff Hoffmeister said first-quarter performance showed broad-based growth across geographies, merchant sizes, and channels, with GMV exceeding $100 billion. He added that the platform's durability supports continued strategic investment in merchant tools and internal capabilities to drive innovation and faster execution.

Outlook

Shopify expects second-quarter 2026 revenue growth in the high twenties on a Y/Y basis.

It implies revenue of roughly $3.403 billion to $3.457 billion, versus an analyst consensus estimate of $3.398 billion. The company projects a free cash flow margin in the mid-teens. 

SHOP Price Action: Shopify shares were down 12.86% at $111.15 at the time of publication on Tuesday, according to Benzinga Pro data.

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