Shopify (SHOP): Still Early in the Next Phase of Growth
Shopify (NASDAQ: SHOP) has already established itself as the top e-commerce platform in the U.S., with 12% market share and a user base that stretches across 175 countries. But despite its scale, we believe the next leg of growth is just beginning — and recent earnings suggest the company is executing on multiple fronts.
Revenue grew 27% year over year in Q1 2025, reaching $2.4 billion. That growth is more than just top-line momentum — operating income surged 136% to $203 million, and free cash flow hit $363 million, up from $232 million. The company also posted a 25% increase in Gross Merchandise Volume (GMV), indicating strong customer demand even in a tight retail environment.
One of the most promising parts of Shopify’s strategy is its success moving beyond its small business roots. By offering modular services like Shop Pay and competitive payment processing, it’s now landing larger enterprise clients including brands like Mattel, Steve Madden, and Spanx. This shift opens up a much wider addressable market — one that Shopify seems well-positioned to serve.
Offline sales, a key part of the company’s unified commerce strategy, are also accelerating. They rose 33% in Q1, outpacing online growth and suggesting the company’s omnichannel ambitions are working. Meanwhile, international expansion — currently just 30% of revenue — remains a long runway for future growth.
The stock is up 128% since May 1 and trading around $124.40 as of July 28, 2025. While it’s not cheap, we think the multiple is still reasonable given the combination of strong growth, improving profitability, and long-term upside from global expansion and enterprise adoption.
Shopify’s ability to adapt, scale, and deliver results across multiple revenue streams makes it a compelling candidate for long-term investors — especially those looking for exposure to the ongoing evolution of global retail.
