Geoffrey Seiler, The Motley Fool

Thu, May 15, 2025, 1:40 AM5 min read

• Shopify shares rallied after the U.S. and China paused most of their tit-for-tat tariffs.

• The e-commerce company continues to see solid top-line growth as it expands Shop Pay and adds new customers.

• The stock is not cheap.

• 10 stocks we like better than Shopify ›

Though its stock price dipped following the release of its first-quarter results on May 8, Shopify (NASDAQ: SHOP) shares have rallied sharply since news has come out that points to an easing of the intense trade tensions between the U.S. and China (at least for the short term). The stock is now up modestly on the year and has risen more than 80% over the past year, as of this writing.

While the e-commerce company is not directly impacted by President Donald Trump's tariffs, its core customers -- most of them small and medium-sized merchants -- are. If higher costs across the board for American consumers lead them to tighten their belts, or if tariffs cause some smaller retail merchants to close up shop, that would certainly impact Shopify's business.

As such, it should have come as little surprise that the company issued somewhat cautious guidance when it reported its Q1 earnings results. By contrast, the positive news on the trade front that has come out more recently bodes better for Shopify.

With all that in mind, is this a good time to buy the stock?

In the first quarter, Shopify's revenue jumped by 27% year over year to $2.36 billion. Its high-margin subscription revenue rose 21% to $620 million, while its merchant solution revenue soared by 29% to $1.74 billion.

Gross profit dollars rose 22% to $1.17 billion. Given the gross margin difference between its subscriptions and merchant solutions, this metric is more reflective of the company's growth. Adjusted earnings per share (EPS), meanwhile, climbed 29% to $0.44, coming in just ahead of the $0.43 consensus. Its gross merchandise volume (GMV), which is the total dollar value of the sales transacted through its platform, rose by 23% to $74.8 billion. It was the seventh straight quarter of GMV growth of 20% or more.

Data Source: Shopify. YOY = Year over year.

Business-to-business GMV was once again strong, soaring by 109% year over year. International GMV growth was 31%, with cross-border growth of 15%. Offline GMV, meanwhile, rose 23%.