Shopify posted another strong quarter with revenue and gross merchandise volume each climbing more than 30 per cent year over year, beating analyst forecasts. Despite the upbeat results, shares edged lower as investors took profits amid a broader market downturn.
BNN Bloomberg spoke with Tyler Radke, managing director and co-head of U.S. software equity research at Citi, who said Shopify’s accelerating growth, expanding international reach and early traction in AI-driven “agentic commerce” position it for continued strength into next year.
Key Takeaways
- Shopify’s revenue rose 32 per cent year over year, surpassing expectations of 28 per cent.
- Gross merchandise volume also climbed 31 per cent, its strongest growth since the pandemic.
- Citi says temporary loan losses were linked to merchant onboarding changes, not weakening demand.
- The firm expects sustained 30 per cent growth into 2026, driven by global expansion and AI integration.
- Shopify shares slipped slightly on market-wide profit-taking but are expected to outperform peers.
Read the full transcript below:
ROGER: We’re joined by Tyler Radke, managing director and co-head of U.S. software equity research at Citi. Tyler, thanks very much for joining us.
TYLER: Good afternoon.
ROGER: Are you surprised we’re seeing a bit of a dip? Is this just profit-taking, or is there real concern?
TYLER: I think in the broader market, you’re seeing a lot of risk-off sentiment. We had Palantir report last night — blowout numbers — and that stock is down more than seven per cent. So to us, this is some profit-taking, reflecting a broader selloff in high-valuation, momentum names.
These results were really spectacular. You saw acceleration in both revenue and GMV growth — 32 per cent GMV growth, the highest since the COVID era — and that’s against tough comparables. The company’s firing on all cylinders. I’m not sure what more people were looking for. I think it’s more a reflection of where valuation was and a difficult tape to be reporting earnings. We’re constructive on it. We’d be buyers on the pullback. We think there’s a lot of momentum ahead.
ROGER: Is there anything in there that might give pause? It seems like a good report card.
TYLER: The numbers came in above our expectations, both for the quarter and for the guide — particularly on top-line revenue. Earlier, you pointed out some higher costs, but those were mostly one-time items related to charges on loan losses. There’s some modest investment in the fourth quarter, but again, they beat revenue by five or six per cent and operating expenses came in below guidance.
This team sets an achievable bar and shows strong cost discipline. Looking ahead to next year, the model could continue to see growth acceleration. They’re leading the way in agentic commerce opportunities, which haven’t yet fully driven revenue growth. There’s more to come. They signed some big clients this quarter — Estée Lauder, for instance — and they’re seeing a lot of success moving upmarket. International growth is roughly double that of the U.S., which is also encouraging.
ROGER: You mentioned the transaction loan losses — could that be a sign of more to come, or maybe weaker sales ahead?
TYLER: It’s a good flag. We spoke with the CFO after the main earnings call this morning, and they attributed those loan losses to recent changes in merchant onboarding. They’ve been experimenting with ways to accelerate that process. They said those losses were tied to those changes and won’t continue going forward.
If it continues to rise, that would be more concerning, but we see it as a temporary issue.
ROGER: What do they need to do next quarter to maintain investor confidence?
TYLER: They’ve shown an ability to set achievable targets quarter after quarter. They just guided to mid- to high-20s revenue growth — the same guidance they gave last quarter — and then delivered 32 per cent growth. We think they’ll likely post another quarter above 30 per cent growth when they report next.
Looking to 2026, there’s a lot of excitement ahead. Wall Street is modelling around 20 per cent top-line growth, but we think it’ll be closer to 30 per cent. This compounding growth should sustain an earnings CAGR north of 25 per cent — perhaps above 30 per cent — which should allow the company to grow into its valuation.
ROGER: And when you say there’s more to come, are you referring mostly to AI?
TYLER: It’s a combination of AI and non-AI factors. International is still a small part of their business, but it’s growing almost 50 per cent. That should continue as the platform adds more cross-border capabilities and language localization.
On the AI side, this was the first full quarter with their agentic commerce product in the market. We’re seeing growing adoption of tools like ChatGPT, and as that becomes more mainstream, large brands are investing in the commerce layer — figuring out how to reach customers through these new channels. We think those efforts will start to bear fruit next year, bringing in new merchants and deeper customer engagement.
ROGER: We’re just about out of time. Your rating for Shopify?
TYLER: We’re buy-rated, and we still see healthy upside for the stock. Numbers are moving higher after today’s earnings.
ROGER: Tyler, thanks for joining us.
TYLER: Thank you.
ROGER: Tyler Radke, managing director and co-head of U.S. software equity research at Citi.
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This BNN Bloomberg summary and transcript of the Nov. 4, 2025 interview with Tyler Radke are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.
