--- title: "Shopify (Minutes): No tariff impact seen in May, gross margin headwinds to persist until second half" description: "Below is the earnings call $Shopify (SHOP.US) FY25Q1 Minutes. For the Quick Interpretation of the earnings report, please refer to《Shopify: "Tariff Sword" Hanging Over, Small Merchants Hurt th" type: "topic" locale: "en" url: "https://longbridge.com/en/topics/29455779.md" published_at: "2025-05-08T16:01:47.000Z" author: "[Dolphin Research](https://longbridge.com/en/news/dolphin.md)" --- # Shopify (Minutes): No tariff impact seen in May, gross margin headwinds to persist until second half **Below is the earnings call** $Shopify (SHOP.US) **Minutes for FY25Q1. For earnings analysis, please refer to《**[**Shopify: "Tariff Sword" Hanging Overhead, Small Merchants Hit Hardest?**](https://longportapp.cn/zh-CN/topics/29453031)**》** **I. Key Earnings Highlights** **1\. Revenue Performance** Total Revenue: Up 27% YoY. Merchant Solutions revenue grew 29%, driven by GMV growth and Shopify Payments penetration (reaching 64%); Subscription Solutions revenue rose 21%, fueled by merchant onboarding and Plus pricing adjustments. Monthly Recurring Revenue (MRR): Increased 21% YoY, with Plus accounting for 34% of MRR. Free Cash Flow: $363M (15% of revenue), marking seven consecutive quarters of double-digit FCF margins. **2\. GMV & Segment Growth** Total GMV: $74.8B, up 23% YoY. Offline GMV grew 23%, led by mid/large retailers; B2B GMV tripled (+109% YoY); International GMV rose 31%, with cross-border health products representing 50%. Europe: GMV +36% YoY, led by UK, Netherlands, and Germany. US: Outpaced overall US e-commerce growth for fifth straight quarter (2x+). **3\. Q2 FY25 Outlook** Revenue Growth: Mid-20s% YoY, supported by FX tailwinds and GMV momentum (macro headwinds largely offset by forex). Gross Profit: High-teens% YoY growth; margin pressure from higher Merchant Solutions mix, PayPal accounting impacts, and trial periods. OpEx: 39-40% of revenue; Q1 cost drivers to persist. AI-driven efficiency gains emphasized, with disciplined hiring and high-ROI marketing spend. FCF Margin: Mid-teens% maintained, prioritizing long-term growth over short-term profit optimization. **II. Earnings Call Details** **2.1 Management Commentary** **1.** Agility & Resilience: Highlighted **Shopify's ability to adapt to macro shifts (e.g., tariffs, US-China duty policy expiry)**, balancing operational discipline with innovation. **2\. Tariff Countermeasures:** Upgraded US "Managed Markets" with automated duty calculation/compliance; launched AI tool Tariffguide.ai for real-time tariff queries. **3\. Expansion & Partnerships:** Extended European payments coverage (EU GMV growth 3x domestic). Added VF Corp (Dickies, Kipling), Follett Education (1,000+ US college bookstores). **4\. Vertical Trends:** **Apparel, beauty, home goods steady; pet supplies, art emerging as high-growth categories.** **5\. Fulfillment:** Expanded Shopify Fulfillment Network (3PL) with local warehouses to cut shipping costs/returns. Integrated Uber/DoorDash for same-day delivery. **6\. Shopify Payments:** Launched in 16 new markets (39 total). Shop Pay GMV +57% YoY ($22B+ processed). **7\. US-China Duty Impact:** Affects 1% GMV (China imports). Merchants adjusting via sourcing/pricing strategies—no broad price hikes observed. **8\. Consumer Profile:** >50% US buyers earn $100K+, with low price sensitivity. **9\. AI Efficiency:** Mandated AI tool adoption; deployed 12 AI servers to optimize search/API/store management. **2.2 Q&A** **Q: GMV sourcing/tariff risks? Balance demand vs. price hikes?** **A:** Early days—diverse merchant base mitigates risk. >50% US buyers earn $100K+. April/May trends strong; guidance accounts for macro. **Q: Chinese merchant impact?** **A:** GMV remains robust; tariff effects unclear. No China-specific data. **Q: SMB/enterprise pipeline amid uncertainty?** **A:** SMBs steady. Enterprises fleeing legacy platforms (38-39% outperform broader e-commerce). Tariff tools built in days. **Q: AI spend vs. FCF margin discipline?** **A:** AI is cultural DNA (e.g., new MCP servers). Marketing flexibly adjusted to ROI. **Q: Trial/marketing target segments?** **A:** Performance-based spend across geos/verticals. **Q: LLM partnerships—traffic source shifts?** **A:** Shopify aims to be "retail OS" wherever commerce occurs (AI shopping = major opportunity). **Q: Gross margin pressure duration?** **A:** Subscription margins ~80% stable. Merchant Solutions mix (PayPal, one-time adjustments) weighs—new products need scale. **Q: POS differentiation vs. Clover/Square?** **A:** Multi-location features outpace rivals. SI partnerships accelerate distribution. **Q: AI agents—threat to Shop Pay?** **A:** Opportunity—more channels = more complexity Shopify solves. Platform built for uncertainty. **Disclosures:** [**Dolphin Research Disclaimer**](https://support.longbridge.global/topics/misc/dolphin-disclaimer) ### Related Stocks - [SHOP.US - Shopify ](https://longbridge.com/en/quote/SHOP.US.md) --- > **Disclaimer**: This article is for reference only and does not constitute any investment advice.