AI Takeaway
Shopify delivered strong Q1 2026 results with revenue surging 34.3% YoY to $3.17B and operating income nearly doubling to $382M, though a $581M net loss persisted primarily due to non-cash investment-related charges.
Revenue
$3.17B
++34.32% YoY
EPS (Basic)
$-0.45
++15.09% YoY
Gross Margin
48.8%
-0.76% YoY
Operating Income
$382M
++88.18% YoY
Filed · Source: SEC EDGAR 10-Q filing
Total revenue grew 34.3% year-over-year to $3.17B in Q1 2026, up from $2.36B in Q1 2025, reflecting continued merchant adoption and expansion of Shopify's commerce platform across subscription and merchant solutions segments.
Source: Source: 10-Q Financial Data, Income Statement
Operating income surged 88.2% YoY to $382M, with operating margin expanding approximately 345 basis points to 12.1% from 8.6%, demonstrating meaningful operating leverage as revenue growth outpaced expense growth.
Source: Source: 10-Q Financial Data, Income Statement
Gross margin declined modestly by approximately 76 basis points to 48.8% from 49.5%, as cost of revenue grew 36.4% — slightly faster than revenue growth of 34.3% — suggesting some mix shift toward lower-margin merchant solutions.
Source: Source: 10-Q Financial Data, Income Statement & Key Ratios
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Upgrade to unlockDespite strong operating performance, Shopify reported a net loss of $581M in Q1 2026, largely attributable to non-cash fair value changes in equity investments. These mark-to-market swings can create significant volatility in reported earnings and may obscure underlying business performance for investors.
Source: Source: 10-Q Financial Data, Income Statement & Net Margin
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Upgrade to unlockReported EPS of $0.36 versus the $0.34 analyst consensus — a +6.8% beat for Q1 FY2026.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $3.17B | $2.36B | +34.32% |
Cost of Revenue | $1.62B | $1.19B | +36.36% |
Gross Profit | $1.55B | $1.17B | +32.25% |
Operating Income | $382M | $203M | +88.18% |
Net Income | $-581M | $-682M | +14.81% |
EPS (Basic) | $-0.45 | $-0.53 | +15.09% |
EPS (Diluted) | $-0.45 | $-0.53 | +15.09% |
R&D Expense | $437M | $377M | +15.92% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $14.12B | $13.4B | +5.38% |
Current Assets | $8.49B | $7.45B | +14.10% |
Current Liabilities | $1.37B | $2.01B | -31.76% |
Stockholders' Equity | $12.5B | $11.05B | +13.12% |
Cash & Equivalents | $1.85B | $1.31B | +41.18% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $481M | $367M | +31.06% |
Investing Cash Flow | $310M | $-619M | +150.08% |
Financing Cash Flow | $-485M | $59M | -922.03% |
Share Buybacks | $491M | $0 | — |
D&A | $7M | $8M | -12.50% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Gross Margin | 48.8% | 49.5% | -0.76% |
Operating Margin | 12.1% | 8.6% | +3.45% |
Net Margin | -18.3% | — | — |
ROE | -4.6% | — | — |
ROA | -4.1% | — | — |
Current Ratio | $6.196 | — | — |
Shopify reported Q1 2026 revenue of $3.17B, up 34.3% year-over-year, and operating income of $382M, up 88.2% YoY. However, the company posted a GAAP net loss of $581M (-$0.45 EPS) primarily due to non-cash fair value changes in equity investments.
Shopify's $581M net loss in Q1 2026 was driven by non-cash charges, likely related to mark-to-market changes in equity investment holdings, rather than operational weakness. The company's operating income was a positive $382M, reflecting healthy underlying business performance.
The key takeaways are: revenue grew 34.3% to $3.17B, operating margin expanded to 12.1% from 8.6%, and operating cash flow rose 31.1% to $481M. Shopify also initiated $491M in share buybacks and ended the quarter with $1.85B in cash, signaling financial confidence.
Shopify is operationally profitable with $382M in operating income and a 12.1% operating margin, but not yet GAAP net profitable, reporting a $581M net loss due to non-cash investment-related charges. Operating cash flow of $481M confirms the core business generates real cash.
Shopify's financial health appears strong: it holds $1.85B in cash, has a current ratio of 6.2x (meaning it can easily cover short-term obligations), and stockholders' equity of $12.50B. The balance sheet is well-capitalized and the company generated $481M in operating cash flow during the quarter.