By

Reuters

Published

November 5, 2025

Shopify on Tuesday projected strong revenue growth for the crucial holiday shopping season, as sellers on its platform benefited from consumer demand defying U.S. import tariffs and price hikes.

Reuters

While the tariffs have strained retailers heading into the holiday season, merchants are still spending on Shopify’s e-commerce tools thanks to the company’s efforts to integrate AI features and roll out upgrades that make it easier for sellers to manage their businesses.

The new AI features have been especially helpful for the small- and medium-sized businesses that make up a large portion of Shopify’s client base, helping them cut costs by using AI for tasks such as setting up discounts or creating sales reports.

Shopify’s AI assistant Sidekick is “quickly becoming the default way merchants get things done”, Shopify president Harley Finkelstein said on an earnings call.

While those investments from Shopify are boosting its revenues, they are pressuring the company’s profits. Overall third-quarter gross margin was 48.9%, shrinking from 51.7% last year, due in part to a surge in expenses related to research and development, and marketing.

An increase in costs tied to AI usage, as well as Shopify’s international expansion plans, also weighed on its margins.

Shares of the company fell about 3% in morning trade, following a nearly 60% rise in value this year.

“Our investments in marketing are driving merchant adoption across verticals, across industries, across geographies … So we’re going to keep spending money where it makes sense. That being said, we have very tight guardrails to make sure that we do have the appropriate returns,” Finkelstein said.

Shopify said it saw strong trends in Europe, and that about half of its total gross merchandise volume (GMV) dollar growth in the quarter came from international markets. GMV refers to the total value of products sold on the platform.

It expects revenue to rise in the mid-to-high-twenties percentage range in the fourth quarter, compared with analysts’ average estimate for a 23.4% increase, according to data compiled by LSEG.
 

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