Shopify Inc. revenue and gross merchandise volume (GMV) both increased more than 20% in its first quarter of fiscal 2024 ended March 31. The company highlighted recent successes, even as it noted some challenges for second-quarter growth, which it expects to remain in the high teens, though down from Q1.

“You’re seeing the strongest version of Shopify in our history,” president Harley Finkelstein said in a written statement.

In North America, 117 of the Top 1000 online retailers use Shopify as their ecommerce platform. The Top 1000 is Digital Commerce 360’s database of the largest online retailers in the region by annual web sales. In 2023, those 117 online retailers combined for more than $9.72 billion in web sales.

Shopify Q1 results

In fiscal Q1, Shopify revenue grew 23% to $1.9 billion. The year-over-year growth comes out to 29% when discounting Shopify’s logistics business, which it sold off to Flexport in June. That makes Q1 2024 the fourth consecutive quarter of revenue growth of 25% or more excluding logistics, Finkelstein said in a May 8 earnings call with investors.

Shopify GMV grew 23% to $60.9 billion in Q1. That’s $11 billion more than in the year-ago period.

“Our outstanding Q1 performance is clear proof of our dedication to the new shape of Shopify, our commitment to operating with a consistent team size, and our focus on building for the long term to deliver both growth and profitability,” Finkelstein told investors. “We are building a 100-year company, and we will continue to remain fiercely agile, capitalizing on every opportunity that accelerates the success of our merchants, enables us to continue to build world-class products, and enhances operational efficiency for better returns.”

Revenue from merchant solutions products grew 20% to $1.4 billion, comprising the majority of total revenue. That growth was mostly due to growing GMV and increasing penetration from Shopify Payments. 

Meanwhile, subscription solutions revenue grew 34% to $511 million. That was due to an increase in the number of merchants using the service and price increases, Shopify said.

How Shopify used AI in Q1

The ecommerce platform provider addressed the importance of artificial intelligence (AI) in the call, too.

“Our unique position enables us to tap into the immense potential of AI for entrepreneurship and our merchants,” Finkelstein said.

He noted that the most practical uses of AI simplify operations and increase productivity. Shopify introduced Shopify Magic in January, which allows merchants to use AI to make changes to marketing, conversion and operations strategies.

“At the end of last year and early into January, we drove significant efficiency improvements in one of our primary channels in performance marketing, where teams have created and leveraged advanced models using AI and machine learning, which now allows us to target our audiences with unprecedented precision,” Finkelstein said.

He said those tools drove a nearly 130% increase in Shopify merchant ads from Q4 2023 to Q1 2024 while keeping costs down.

Shopify’s outlook for the rest of 2024

In Q2, Shopify projects growth to continue on a similar trajectory to Q1. The vendor said Q2 revenue will likely grow in the high teens year over year, and in the low- to mid-twenties range when accounting for the sale of the logistics business.

“The primary drivers of the decline quarter over quarter are the expected growth of our lower-margin payments business and lower revenue contribution from a high-margin non-cash partnership revenue agreement that we’ll have fully amortized,” chief financial officer Jeff Hoffmeister said.

However, those effects will be partially offset by price increases at both the standard and plus tiers, and decreasing the free trial period from three months to one month, he said.

Shopify Inc. earnings

For its fiscal Q1 ended March 31, Shopify reported:

• Revenue increased 23% to $1.9 billion.
• GMV grew 23% year over year to $60.9 billion.
• Merchant solutions revenue grew 20% to $1.4 billion.

Check back for more earnings reports. For reference, here’s last quarter’s update on Shopify revenue.

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