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- Shopify's second act
Hey!
Originally built to support a snowboard shop, Shopify has grown into a leading global commerce platform. It now powers millions of merchants across 175 countries, processes hundreds of billions in GMV, and has become one of the most important companies in global commerce.
But here's what makes Shopify's story remarkable: while many companies plateau after finding their niche and reaching scale, Shopify keeps expanding its TAM. It’s going after the enterprise segment, expanding into offline retail, and pushing aggressively into international markets.
This puts Shopify on a collision course with some of tech's biggest names, Adobe, Salesforce, and SAP, but with one decisive advantage: speed. Shopify and its Fintech partners, Stripe, Affirm, and Global-E, can ship faster, iterate more quickly, and serve customers with less friction.
And in a world where commerce is increasingly software-defined, that might be the most powerful edge of all. Let’s dive in!
Jevgenijs
p.s. if you have feedback, just reply to this email or ping me on X/Twitter
Shopify is a Canadian e-commerce platform founded in 2006 in Ottawa by Tobias Lütke, Daniel Weinand, and Scott Lake. Originally built to support their own snowboard shop, Shopify has grown into a leading global commerce solution for online and in-store retailers. The company $SHOP ( ▼ 0.45% ) went public in 2015, and its stock is up 4,075% (yes, four thousand percent) since the IPO.
Image source: Investor Overview - Q4 2024
“From local start-ups landing their very first sale to global brands pushing billions in GMV, merchants everywhere are choosing Shopify. I'm especially proud to share that in the U.S. alone, Shopify is now over 12% of the e-commerce market share. And we continue to grow rapidly in places like Europe and Japan.”
Shopify has evolved from a basic online store builder into a full-featured commerce platform, offering everything from multi-channel marketing and payments to consumer and merchant lending, as well as point-of-sale tools. Its regular Shopify Editions updates showcase the company’s continuous product innovation across all merchant segments.
Image source: Shopify Investor Overview - Q1 2025
Shopify now serves “millions of merchants” in 175 countries. The company last disclosed its exact merchant count in 2021, reporting 2.06 million. However, based on its Gross Merchandise Volume (GMV) growth since then, the current number of merchants is likely approaching 3 million. Half of those merchants are based in North America, 30% in Europe, and the remaining 20% are spread across other regions.
Image source: Investor Overview - Q4 2024
In 2024, Shopify reported $292 billion in GMV (the value of goods and services sold by merchants using the Shopify platform), up 24% from a year ago. GMV grew at a 37% CAGR over the past 5 years, from 2019 to 2024, and a 55% CAGR over the past 10 years, from 2014 to 2024.
Data source: Shopify IR website
Growth in merchants and GMV has driven revenue expansion, with the company reporting $8.9 billion in revenue in 2024, up 26% from 2023. If analysts’ projections for 2025–2027 materialize, Shopify is on track to achieve a 23x increase in revenue over the decade (2017-2027).
Data source: Shopify IR website + Koyfin (estimates)
“On this very call 1 year ago, we laid out very clear goals, and then we set out, and we absolutely crushed them. We delivered 24% GMV growth, 26% revenue growth and an 18% free cash flow margin. This is not just Shopify doing well, this is Shopify operating as a growth company at peak performance.”
In May 2023, Shopify abandoned its plan to build a fulfillment network, which was a drag on the company’s free cash flow as it required heavy investments in building warehouse facilities. Since then, the company has demonstrated its ability to achieve both growth and profitability. In 2024, Shopify reported an 18% free cash flow margin and expects to maintain this level going forward.
Data source: Shopify IR website + Koyfin (estimates)
“As we move into 2025, and as I mentioned on our last call, we believe the free cash flow margin profile that we have achieved in 2024 strikes the right balance between profitability and investing in building the best products for our merchants today and into the future.”
