Shopify (SHOP) opened 2026 with Q1 results that sit against a year of mixed earnings trends, with trailing 12 month revenue of US$11.6b and EPS of US$0.95, alongside a net profit margin of 10.7% compared with 22.7% a year earlier. Over recent quarters, revenue has moved from US$2.16b in Q3 2024 to US$2.36b in Q1 2025 and then to US$3.67b in Q4 2025, while basic EPS shifted from US$0.64 to a loss of US$0.53 and then to US$0.57. This sets a volatile backdrop for the latest print and leaves investors focused on whether margins can stabilise enough to support confidence in the earnings trajectory.

See our full analysis for Shopify.

With the headline numbers in place, the next step is to see how this earnings story lines up with the strongest bullish and bearish narratives around Shopify and where those storylines get challenged by the data.

Revenue climbed from US$2.4b to US$3.7b through 2025

• Total revenue moved from US$2.36b in Q1 2025 to US$2.68b in Q2, US$2.84b in Q3 and US$3.67b in Q4. This means the business exited 2025 with a larger top line than it started the year with.
• Consensus narrative highlights international expansion and AI driven tools as key supports for future revenue, and the step up to US$11.6b in trailing 12 month revenue alongside 18% forecast revenue growth gives bulls real numbers to point to, even as they need to watch how much of that growth converts into sustainable profit.

Bulls argue that these revenue trends could be the base for long run compounding if Shopify keeps widening its role in global commerce, and you can see how that argument lines up with the latest numbers in the 🐂 Shopify Bull Case

Margins slid from 22.7% to 10.7% as earnings growth turned negative

• Trailing net profit margin is 10.7% compared with 22.7% a year earlier, and trailing earnings show negative recent growth even though the 5 year earnings compound annual growth rate was 8.8% per year.
• Bears focus on this margin compression, and the bearish narrative around rising costs and competition gets support from the move from a US$1.29b net profit in Q4 2024 to US$743m in Q4 2025, which makes it harder to argue that past earnings power is intact without some improvement in profitability.
• Critics highlight that even with US$1.23b of trailing 12 month net income, the drop in margin means each revenue dollar is currently generating less profit than a year ago.
• At the same time, forecasts in the data still call for 31.41% annual earnings growth, so the bearish view is really questioning whether that step up can happen while margins are sitting well below last year.

Skeptics warn that if these lower margins persist, it strengthens the cautious case that the business may need heavier spending just to reach the earnings path analysts are using in their models, which is laid out in the 🐻 Shopify Bear Case

P/E of 114x and US$107.63 share price lean on 31.4% earnings growth forecasts

• With the stock at US$107.63, the trailing P/E multiple of 114x sits well above the IT industry average of 21x and peer average of 47.1x, while the DCF fair value in the data is US$104.04 and analyst price targets cited are clustered around US$155.82.
• What stands out is how much the current price seems to lean on the forecast 31.41% yearly earnings growth and 18% yearly revenue growth, since the trailing net margin drop to 10.7% and negative recent earnings growth give bears plenty of fuel, while bulls point to faster expected growth than the broader US market and the absence of heavy insider selling as support for paying a premium multiple.
• Consensus narrative points to rapid international expansion and a growing payments and financial ecosystem as the main reasons earnings and revenue in the models outpace US market assumptions of 16% earnings and 11.2% revenue growth.
• On the other side, valuation risk in the data is explicit, because if earnings track closer to the weaker trailing trend instead of those forecasts, a 114x P/E leaves far less room for disappointment than a stock priced near industry averages.

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Shopify on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

With bulls and bears both finding support in the recent numbers, it makes sense to move quickly and test the story against the underlying data yourself, starting with the 1 key reward and 2 important warning signs.

See What Else Is Out There

The combination of a 10.7% net margin, negative recent earnings growth and a 114x P/E leaves little room if the earnings story disappoints.

If that kind of premium and volatility makes you uneasy, it is worth balancing your watchlist with companies screened as 72 resilient stocks with low risk scores right now.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.