Shopify beats earnings forecast but warns of slower growth amid Trump tariffs and trade policy shifts

Shopify outpaces Q1 earnings but tariff uncertainty clouds forecast

Canadian e-commerce giant Shopify reported better-than-expected earnings in its first-quarter results, but issued a cautious growth outlook for Q2, triggering a 5 per cent drop in its share price during early trading on Thursday, May 8. The company's results and guidance come as US-China trade tensions resurface under renewed Trump-era tariffs, shaking investor confidence across the e-commerce sector.

Here’s how Shopify performed in Q1:


Revenue: $2.36 billion vs. $2.33 billion expected



Adjusted EPS: 39 cents vs. 26 cents expected



Gross Merchandise Volume (GMV): $74.75 billion, just shy of $74.8 billion estimates

Also read: Uber reports strong Q1 despite revenue miss, forecasts resilient demand with robust gross bookings outlook

While Shopify surpassed revenue and earnings forecasts, it predicted gross profit to grow at a high-teens percentage rate in Q2 — slightly below analyst expectations of 20.1 per cent. The company also projected mid-twenties revenue growth for the next quarter, compared to Wall Street's 22 per cent forecast.

Trump’s tariffs cast a shadow over e-commerce outlook

Shopify, which powers online storefronts and offers services like advertising and payment processing tools, faces indirect exposure to geopolitical policies. President Donald Trump’s sweeping tariffs — now totaling 145 per cent on Chinese imports — have closed a trade loophole that previously exempted sub-$800 shipments from China from US duties.

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Despite this, Shopify’s leadership appears unshaken. President Harley Finkelstein told investors the de minimis exemption closure would not have a “meaningful impact” on business, noting that only around 1 per cent of the company’s GMV involves imports previously covered by the exemption.

“We haven’t seen broad-based price increases among sellers,” Finkelstein said. “We believe this helps insulate our merchants from some of the potential swings in pricing or other market factors, as higher-income consumers tend to be less price sensitive.”

Finkelstein emphasized that over 50 per cent of Shopify’s US buyers have household incomes above $100,000, giving the company some cushion against cost-related churn.

Shopify bets on resilient consumer base and local commerce tools

In response to rising e-commerce tariffs and policy shifts, Shopify has been rolling out features to strengthen its merchant ecosystem. Earlier this year, the company introduced a “Buy Local” tool enabling customers to filter and shop from businesses within their home country. This strategic move could help Shopify reduce reliance on global supply chains and mitigate tariff exposure.

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While Shopify’s subscription solutions revenue came in at $620 million — slightly under the $621.5 million projected — the broader 27 per cent revenue growth shows the platform’s continued appeal amid market turbulence.

Other e-commerce companies are also reacting to the trade shakeup. Amazon recently cited “tariff and trade policies” as a concern in its softer Q2 guidance, while Etsy said it remains “nimble” in response to the uncertainty. Etsy’s CFO Lanny Baker noted that their direct tariff exposure is low, echoing similar sentiments to Shopify’s position.

As the Canada-US tech corridor adapts to unpredictable global trade policies, Shopify is leaning on its core strengths: scalable software, affluent customers, and a flexible merchant network. Whether that will be enough to power continued momentum remains to be seen.