By Sabrina Escobar and Mackenzie Tatananni

Shopify stock fell Thursday after the e-commerce platform posted a wider quarterly loss than a year ago and saw a slight slowdown in merchant volume growth.

The company's quarterly net loss widened to $682 million from a loss of $273 million in the year-ago period. Adjusted net income, which excludes losses from equity investments, was $226 million, up from $144 million in 2024.

Operating income was $203 million, up from $86 million a year ago.

First-quarter revenue of $2.36 billion was in line with Wall Street forecasts, according to FactSet. Gross merchandise volume, which measures the total value of goods sold on Shopify's platform, was $74.8 billion; that roughly aligned with estimates but decelerated from the previous quarter's $94.5 billion.

For the second quarter of 2025, Shopify said it sees revenue growing at a mid-20s percentage rate from the previous year, and gross profit growing at a high-teens percentage rate. Operating expenses should represent 39% to 40% of revenue, the company said.

The outlook factors in macroeconomic uncertainties, including tariffs, executives said. But they noted that potential headwinds will largely be offset by more favorable foreign exchange rates.

"We're, of course, monitoring for potential slowdowns, but our data through April shows little evidence of that," said Harley Finkelstein, Shopify's president.

Shares were down 4.8% to $90 Thursday morning, while the benchmark S&P 500 was up 0.4%. The shares fell as much as 10% in premarket trading, but have since pared their losses. Shopify stock is down 15.5% this year.

The stock's move reflects the market's assessment that guidance was "a touch soft, but implies general stability," wrote J.P. Morgan analyst Reginald Smith in a note Thursday morning.

Charlie Miner, an analyst at the consulting firm Third Bridge, agreed. Though profitability seemed to struggle this quarter, it was driven by investment losses and "holds little relevance to Shopify's long-term fundamentals," which remain "firmly intact," he said.

Another factor driving shares lower Thursday is continued uncertainty over Shopify's exposure to Chinese imports, which are subject to the current 145% tariff rate. While Shopify has been trying to lure bigger retailers onto its platform, a good chunk of its clients are still smaller merchants. Investors are worried those businesses could feel the effects of tariffs and other changes to trade policy -- including the closing of a loophole that allowed parcels valued at less than $800 to enter the U.S. tariff-free -- more acutely.

On Thursday, Shopify said only 1% of its gross merchandise volume was related to imports from China subject to the exemption. Executives declined to give more precise details on total exposure to Chinese imports.

They did say, however, that cross-border orders comprised 15% of Shopify's gross merchandise volume in the quarter.

The company said it has also added new tools to its platform that should help U.S. merchants adapt to the shifts in trade policy "within hours."

These include a duties calculator and an AI application that provides tariff rates based on product descriptions and country of origin. Shopify is trying to make it easier for consumers to shop locally by inserting a feature that allows buyers to filter merchandise by country.

Write to Sabrina Escobar at sabrina.escobar@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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May 08, 2025 10:56 ET (14:56 GMT)

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