Toronto, September 22, 2025 – Shopify Inc., the e-commerce giant based in Canada, is hogging the limelight before its third-quarter earnings announcement on Thursday, with analysts projecting a blowout 28 per cent. Revenue growth to $ 2.2 billion this year.
The outlook of the Montreal-based company, powered by its strong holiday season preparations, artificial intelligence-driven merchant solutions, and a flurry of small-business adoption, is giving hope to the entire tech industry.
Shopify (TSX: SHOP) stocks rose 1.8 per cent to $152.40 as the S&P/TSX Composite approached breaking down to 30,000, up 0.6 per cent to 29,920 in midday trading, highlighting its contribution to market growth as a market compelled to ride the wave of recent Bank of Canada rate cuts.
The profit outlook is expected against the greater e-commerce revival. U.S. back-to-school sales reached an all-time record of $100 billion last quarter, an outlook spreading northwards.
Shopify, which supports more than 2 million merchants in the world, has taken advantage, with its Shopify Magic pack AI capabilities that automate product description and customer service, powering a 15 per cent increase in platform interactions.
Shopify CEO Tobi Lutke wrote in a recent blog post that it is not only enabling creators to make sales but also enabling them to grow in a smooth way. International expansion in Europe and Asia is expected to give Gross merchandise volume (GMV) a 22 per cent increase to $65 billion in Q3 to counter weaker consumer business in North America.
This follows off a blistering Q2 in which revenue was 5 per cent above estimates and free cash flow reached half a billion, enabling share buybacks worth a billion dollars. RBC Capital Markets analysts increased their price target to $170, which was based on the observation that Shopify has a market share of 35 per cent in the e-commerce platforms in North America.
As the take rate of the company, or the percentage charged on transactions, rises to 2.8 per cent due to an increase in the previous year, profitability ratios are improving: adjusted EBITDA margins are projected to grow to 18 per cent, up 14 per cent in 2024.
Earnings Catalysts: AI Innovation and Merchant Momentum
Shopify is a company that is driven by relentless innovation. Shopify Sidekick, an AI-driven merchant chatbot, has reduced support tickets by 40 per cent, which can be used to grow. Early adopters exhibit a 25 per cent acceleration in onboarding, which is indicative of new users who comprise 60 per cent of emerging markets such as India and Brazil.
The double-digit quarter-to-quarter growth in offline sales through Shopify devices went 30 per cent higher, and digital and physical sales have been merged into one. The subscription solution, which is the main source of steady revenue, is expected to increase by 32 per cent to reach approximately $550 million, with basic plans being upgraded to higher levels at unprecedented rates.
Shopify Plus, which is aimed at business clients such as Mattel and Gymshark, has increased to 15,000 customers (previously 12,000) and the average revenue per user of their clients is over 50,000 annually.
According to one company spokesperson, the ecosystem is coming of age, with annual sales in apps developed by our partners running to $10 billion. This is an important network effect because third-party developers provide 70 per cent of platform functionality.
Risks? Currency headwinds of a stronger loonie would eat 2 per cent of the reported numbers, and there is the threat of competition due to Amazon storefront tools. However, the gross margins of Shopify (75) offer a cushion, and its carbon-neutral business attracts environmentally conscious stores, taking 20% of Gen Z merchants.
TSX Tech Rally: Shopify Leads the Charge
The TSX information technology segment is lighting up as a result of Shopify, which is up 1.2 per cent today, and it has contributed 40 per cent of the entire 25 per cent gain in the index.
Constellation Software (TSX: CSU) and OpenText (TSX: OTEX) were not far behind, with their shares increasing by 1.4% and 1.1%, respectively, as investors bet on artificial intelligence and the use of the cloud. The weighting of the sector currently at 9% (twice that of 2020) reflects the shift of Canada to digital exports, which reached 150 billion last year.
The wider market moods are positive following the Bank of Canada’s September 17 interest rate cut of 2.5%, the first time in half a year. A 48 per cent probability of further reduction on October 29 moves money markets towards making borrowing easier for tech start-ups and increasing valuation.
The tech sub-index of TSX should be traded at 28 times forward earnings, which is a fair price considering the forecasted average of 20 per cent growth. Similarly, in tandem, BlackBerry (TSX: BB) announced its QNX Neptune auto infotainment software update and struck agreements with two automotive giants; its shares rose 2.5 per cent to $4.20. The cybersecurity division announced a 12% increase in the backlog to $ 950 million, which is a good indication of connected car resilience.
Global Footprint: Finding Your Way in Trade Winds
The international expansion of Shopify is a two-edged sword. U.S. sales, which are 55 per cent of total, enjoyed tariff-free flows under USMCA, but one-third of eligible EU exports now lack duty waivers, according to recent research – a hole that Shopify compliance tools hope to fill. In China, JD.com collaborations have increased the number of merchants signed up by two times, as APAC revenue hit 15% of the mix.
Sustainability is one more distinction: the promise of Shopify to offset all the emissions of merchants by 2030 has gained the loyalty of such brands as Allbirds. Employee numbers hit a plateau of 8,500 following pandemic hiring, and churn has hit historic lows due to remote-first policies.
Investor Lens: To Buy the Dip or Ride the Wave?
There is a bullish Wall Street consensus where 85% of the analysts rate the stock a buy, and the average target is 165, meaning an 8% upside. The options flow is showing strong call purchasing at the 160 strike, which is betting a post earnings pop.
Shopify has a more growth-oriented profile than a yield to dividend hunters, but since it has a huge $4 billion cash base, it allows opportunistic M&A, such as the 2020 acquisition of Deliverr, to enhance logistics.
Retailing to the U.S. (down only 0.1% in August) and spending on advertisements (on the defensive due to uncertain election results) are also headwinds. Any guidance miss will cause a 10 per cent pullback; however, history sides with bulls: Shopify has topped estimates in 18 of the past 20 quarters.
Forward View: Holidays and Beyond
Gazing at the Black Friday-Shopify Super Bowl, the company anticipates $200 billion of seasonal GMV, growing by 25 per cent, fueled by one-click checkout and social commerce connections with TikTok and Instagram. In the long term, CEO Lutke sees a potential of a 1 trillion addressable market as e-commerce taps 30 per cent of the worldwide retail by 2030.
Shopify is the embodiment of Canada’s technological dream: groundbreaking, scalable, and unapologetically global, as the TSX approaches a record. The print on Thursday might further entrench its unicorn position and bring new money into digital wunderkinds on Bay Street. To merchants, it is a high conviction game in a softening world–where the score is not hard but soft.
