In the first quarter of 2026, artificial intelligence-driven traffic to Shopify stores grew eight times year over year, according to earnings results. Orders from AI-powered searches grew nearly 13 times. New buyer orders from AI searches arrived at nearly twice the rate of traditional organic search.
Together, those numbers drove Shopify’s strongest quarterly revenue growth rate in over four years. Gross merchandise volume crossed $100 billion for the second consecutive quarter.
The Agentic Commerce Bet
At the center of Shopify’s agentic strategy is the catalog. Shopify has structured more than 1 billion products with clean attributes, real-time pricing and accurate inventory, Shopify President Harley Finkelstein said during an earnings call. AI agents surface those products in seconds. Traffic from catalog-powered AI searches converts at twice the rate of general AI searches that rely on scraped or outdated data.
Shopify’s agentic plan lets any brand, Shopify merchant or not, plug into the catalog and get discovered across AI surfaces. No Shopify store required. The plan launched in March.
“In a world where real-time information is now table stakes, the edge is the insight beneath it,” Finkelstein said on the call. “And that requires a depth, not just access, but experience.”
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Shopify co-developed the Universal Commerce Protocol with Google as an open standard covering the full commerce journey, from discovery to transaction to fulfillment, across any platform. Last month, Amazon, Meta, Microsoft, Salesforce and Stripe joined the UCP Tech Council, Finkelstein said. Shopify and Google govern the protocol.
The Compounding Machine
Nearly 90% of Shopify’s Q1 revenue came from merchants on the platform for more than a year, Shopify Chief Financial Officer Jeff Hoffmeister said during the call.
“The older cohorts, even the merchants who have been on Shopify for many years, are not plateauing,” Hoffmeister said. “They continue to grow.”
New cohorts are larger than the ones before them. Same-store growth and new merchant additions contributed roughly equally to Q1 GMV growth, he said.
The greater than $25 million GMV merchant band grew the fastest in Q1, he said. Merchants doing over $100 million in annual GMV on Shopify have nearly doubled in the last two years.
In Q1 alone, Shopify signed Mulberry, Balmain, LVMH, Rag & Bone, Land’s End and BevMo, Finkelstein said during the call. Orvis, founded in 1856, is migrating to Shopify for a full unified commerce solution.
B2B GMV grew 80%. Offline GMV grew 33%. Europe GMV grew 48%, or 35% on a constant-currency basis. North America posted its strongest quarterly growth rate in over four years.
AI as Operating System
Shopify shipped over 300 products and features last year with flat headcount. AI now writes over half of its code, Finkelstein said.
Sidekick, Shopify’s AI merchant assistant, had weekly active shops up 385% year over year in Q1. Over 12,000 custom apps were created using Sidekick in Q1, up more than 200% quarter over quarter. Nearly half of all Shopify Flows generated in Q1 were built with Sidekick.
Pulse, Sidekick’s proactive suggestions feature, delivers personalized recommendations based on market trends and merchant data, then executes on the merchant’s behalf. An accessory brand in Q1 received a suggestion to build a social proof page after Pulse detected celebrity and publication endorsements, Finkelstein said. Sidekick built the page in minutes. Previously, it would have taken weeks and multiple specialists.
What Else Stood Out
- Shop App GMV grew 70% year over year in Q1. Monthly active users grew over 40%. Unique buyers purchasing directly on Shop grew over 50%. Sign In With Shop grew three times year over year and is now enabled across nearly the entire merchant storefront base.
- The number of merchants with a live Shop Campaigns ad in Q1 was up three times year over year. New channels added in Q1 include ChatGPT, Pinterest and Microsoft Monetize. For some smaller merchants, Shop Campaigns is contributing as much as a quarter of their total GMV.
- Shopify’s developer ecosystem is expanding alongside Sidekick. The app approval process now runs on AI testing, accelerating time to market. Additions.dev, Shopify’s in-person developer conference in Toronto, is already sold out.
- Beginning in Q2, Shopify is adopting a new accounting treatment for merchant cash advances prompted by regulatory changes in Canada. The transition is expected to add approximately half a point to free cash flow margins in Q2.
- Shopify Payments processed $67 billion of GMV in Q1, up 41%, reaching 67% penetration of total GMV, up three points year over year. Shop Pay processed $35 billion, up 59%. Outside the United States, Shop Pay GMV grew over 70%.
Topline Results and Outlook
Q1 2026 GMV was $101 billion, up 35%, or 30% on a constant-currency basis. Revenue was $3.2 billion, up 34%, or 32% constant currency. Merchant solutions revenue grew 39%. Subscription solutions revenue grew 21%. Gross profit grew 32%. Operating expenses were 37% of revenue, a four-point improvement from Q1 last year. Free cash flow was $476 million, a 15% margin. Monthly recurring revenue grew 16% year over year.
For Q2, Shopify guided revenue growth in the high 20s year over year, with gross profit dollars growing in the mid 20s. Operating expenses are expected to be 35% to 36% of revenue. Free cash flow margins are expected in the mid-teens. Foreign exchange tailwinds are expected to drop from over two points in Q1 to approximately half a point in Q2.
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