A month has gone by since the last earnings report for Shopify (SHOP Quick QuoteSHOP - Free Report) . Shares have added about 7.1% in that time frame, outperforming the S&P 500.

But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Shopify due for a pullback? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent catalysts for Shopify Inc. before we dive into how investors and analysts have reacted as of late.

Shopify Q1 Earnings Beat Estimates, Revenues Rise on Strong GMV Growth

Shopify reported first-quarter 2026 adjusted earnings of 36 cents per share, beating the Zacks Consensus Estimate by 12.5%. 

Revenues of $3.17 billion surged 34.3% year over year and topped the consensus mark by 2.79%.

SHOP’s GMV Strength Reflects Broad-Based Momentum

Gross Merchandise Volume (GMV) in the quarter was $100.74 billion, up 35% year over year (30% on a constant-currency basis), marking Shopify’s second straight quarter above the $100-billion threshold.

Management highlighted that growth was broad-based across geographies, merchant sizes and channels. Europe maintained strong momentum, while North America delivered its fastest quarterly growth rate in more than four years, signaling durability in SHOP’s largest market.

Shopify’s Channels Benefit From Offline and B2B Scale

Off-line GMV rose 33% year over year, with the fastest-growing slice tied to merchants operating more than 20 stores, where location growth reached 50%. Shopify continues to push deeper into unified commerce use cases, which tends to increase platform stickiness for larger merchants.

B2B GMV increased 80% year over year, supported by growth across both new and established merchants. The company also expanded access to several B2B features across most standard subscription plans, allowing merchants to manage wholesale and direct-to-consumer operations in one place.

SHOP’s Revenue Mix Leans on Merchant Solutions Upside

Merchant Solutions revenues grew 39.1% year over year to $2.42 billion, reflecting GMV outperformance and increasing Payments penetration. 

Shopify emphasized accelerating AI adoption across the platform, with Sidekick usage rising sharply. Weekly active shops using Sidekick increased roughly fourfold year over year, and merchants built more than 12,000 custom apps in the quarter using the tool. Nearly half of Shopify Flow automations generated in the first quarter were built with Sidekick.

Shopify also pointed to early traction from AI-driven commerce discovery. AI-driven traffic to Shopify stores increased eightfold year over year, while orders from AI-powered searches rose nearly 13 times, with new-buyer orders occurring at close to twice the rate of other channels. 

Subscription Solutions revenues increased 21% to $750 million, supported by new merchant adds and upgrades as merchants scale.

Monthly recurring revenue (MRR) grew 16% year over year to $212 million. Plus MRR represented 35% of total MRR in the quarter, up from 34% a year ago, pointing to continued traction with larger, more complex merchants.

Shopify’s Payments and Shop Pay Show Continued Depth

Shopify Payments processed $67 billion of GMV in the reported quarter, up 41% year over year, with penetration reaching 67% of total GMV. Management noted that expansion across geographies remains a long-term driver, though newer European launches can temporarily weigh on global penetration metrics.

Shop Pay processed $35 billion of GMV, up 59% year over year, with growth outside the United States exceeding 70% as SHOP expands local payment method support across more markets.

SHOP’s Profitability Shows Leverage Despite Loss Provision Uptick

Gross profit was $1.55 billion, up 32% year over year. Gross margin was 48.8%, down from 49.5% reported in the year-ago quarter, reflecting mix and cost dynamics embedded in the revenue base.

Operating expenses totaled $1.16 billion, or 37% of revenues, down 4.2% year over year. Transaction and loan losses were 3.7% of revenues versus 3.2% a year ago, with management citing credit as the largest driver of the year-over-year increase.

Shopify’s Balance Sheet Highlights Liquidity and Buybacks

Shopify ended the quarter with $1.85 billion in cash and cash equivalents and $3.90 billion in marketable securities. Loans and merchant cash advances, net, were $2.10 billion, up from $1.78 billion at year-end 2025.

Net cash provided by operating activities was $481 million in the first quarter of 2026. The company also repurchased $491 million of common stock, reflecting an active approach to capital returns alongside continued investment priorities.

Shopify’s Q2 View Calls for Continued Growth and Discipline

For the second quarter of 2026, Shopify expects revenue growth in the high-twenties percentage range year over year and gross profit dollars growth in the mid-twenties. 

Operating expenses are projected at 35% to 36% of revenues, indicating continued operating leverage.

Free cash flow margin is expected to be in the mid-teens. Management also noted an accounting treatment change for merchant cash advances beginning in Q2, expected to provide an approximate 0.5-point tailwind to free cash flow margins versus the prior approach.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended upward during the past month.

VGM Scores

At this time, Shopify has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock has a grade of F on the value side, putting it in the fifth quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, Shopify has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.