hopify just turned 20. The company Tobi Lütke spun out of a snowboard shop called Snowdevil in 2006 is now processing more than $100 billion of merchant sales in a single quarter and running at a $13B+ revenue run rate. Most software companies that old are coasting on installed base and slowly declining. Shopify just put up its fastest growth in over four years.
Q1 revenue hit $3.17B, up 34% year over year. That’s the strongest quarterly growth Shopify has posted since the pandemic surge, and it happened in year 20, not year 5. GMV crossed $100 billion in a single quarter for the first time ($100.7B, up 35%). Free cash flow margin held at 15%.
Durable doesn’t have to mean slow.
Here are 5 interesting learnings.
1. Growth Accelerated in Year 20. To a Stunning 34%
Companies generally decelerate as they scale. The law of large numbers makes 30%+ growth rare at $11B+ in revenue. Shopify accelerated instead. Revenue grew 34% in Q1 2026, up from 27% a year earlier, going from $2.36B to $3.17B. The growth rate went up in year 20, not down.
The growth is broad-based across geographies, merchant sizes, and channels, and nearly 90% of Q1 revenue came from merchants who have been on the platform more than a year.
2. Payments and “Merchant Solutions” Are Now 76% of Revenue. Subscriptions Are Just 24%.
The subscription business (the monthly plans merchants pay for) grew 21% to $750M. Merchant solutions, which is mostly payments, lending, and financial products, grew 39% and now makes up 76% of total revenue. Subscription is down to 24% of the mix, from 26% a year ago.
Shopify makes roughly 3x more money when its merchants succeed than it does selling them software. The subscription is the wedge. The business is taking a cut of the $100B+ in commerce flowing through the platform. Shopify Payments alone processed $67B in GMV, up 41%, and now handles 67% of all GMV on the platform.
For founders building in B2B + AI: the highest-growth revenue is usage-based and success-based, not seat-based. Shopify figured this out a decade ago. The model where you grow when your customer grows is the one compounding fastest right now.
3. MRR Grew 16%. Total Revenue Grew 34%.
Look only at Shopify’s MRR and you’d think this was a 16% grower. MRR hit $212M, up 16% year over year. That’s the classic SaaS metric, the recurring subscription base.
Total revenue grew 34%, more than double the MRR growth rate. The gap is success-based revenue: payments, Shop Pay, Capital, the revenue that scales with merchant volume rather than merchant count.
At scale, a headline recurring metric can understate the actual business when you’ve built variable, success-based revenue on top of it. Investors anchored on Shopify’s MRR for years and underestimated the company. The merchants stayed, and Shopify monetized their growth far beyond the subscription.
4. B2B GMV Grew 80%. The “DTC Snowboard Shop” Is Now an Enterprise Commerce Platform.
Shopify started as the easiest way for a solo creator to sell handmade goods. Twenty years later, B2B GMV grew 80% in the quarter, and the merchant list reads like a Fortune 500 roster: Meta, SKIMS, Vuori, Supreme, plus newer additions like Lands’ End, rag & bone, and Balmain Paris.
Shopify Plus, the enterprise tier priced at several times the standard plans, now drives 35% of MRR, up from 34% a year ago. The same platform that runs a one-person store is running global enterprise commerce, and the enterprise side is growing faster.
Shopify moved upmarket without abandoning its base or rebuilding its product. The wedge stayed the same. The merchants got bigger. Very few companies pull that off across two decades.
5. AI Is Now a Real COGS Line. And Shopify Is Leaning Into It Anyway.
Shopify is one of the first at scale to disclose that AI usage is now a measurable cost of goods sold, and to argue that’s a good thing.
On the earnings call, management noted subscription gross margin held at 80%, with scale efficiencies partially offset by rising LLM costs driven by merchant usage of Shopify’s AI products. Their view: the more merchants use AI products, the more data Shopify gets, and the better the outcomes. They expect LLM costs to keep climbing.
The investment is converting. Shopify’s Catalog product has structured over 1 billion products, and traffic from Catalog-powered AI searches converts at 2x the rate of general AI searches. As agentic commerce (purchases made by AI agents on behalf of buyers) becomes real, the platform with structured product data and 20 years of commerce intelligence has an edge.
For founders: AI gross margin compression is coming for anyone serving real usage. The winners won’t be the companies that avoided the cost. They’ll be the ones who turned that usage into a data and outcomes advantage.
A Few More Things Worth Knowing
- The GAAP “loss” is noise. Shopify reported a $581M net loss, but that was driven by a $1,061M paper loss on equity investments. Strip that out and net income was $360M. Operating income nearly doubled to $382M from $203M.
- They’re buying back stock. Shopify authorized a $2B share repurchase program, the first in company history, which is a notable signal from a company that historically reinvested everything.
- Tobi still runs it. Through dual-class shares, Lütke holds majority voting control while owning roughly 7% of the economics. Twenty years in, it’s still founder-led.
- The stock fell anyway. Despite the beat, shares dropped ~8.7% pre-market on concerns about rising transaction and loan losses ($116M, up from $75M) and operating expense growth. Even great quarters get punished when the bar is this high.
The Real Takeaway After 20 Years
The story everyone tells about software right now is the bifurcation: AI-native companies growing 200-400% while legacy seat-based businesses decline. Shopify is the counterexample that matters. It’s 20 years old, it sells software, and it’s growing 34% and accelerating.
What it figured out, long before the current AI cycle, is that durable and fast aren’t a tradeoff when you build success-based revenue on top of a recurring base. Shopify wins when its merchants win, and it monetizes that far beyond a monthly subscription. Twenty years in, that model is still accelerating.
