SHOP's Subscriptions Solutions Gain Momentum: A Sign of More Upside?

Shopify SHOP is benefiting from its Subscription solutions segment, which continues to drive steady growth and enhance its overall business model. Subscription solutions revenues in the second quarter of 2025 were $656 million and accounted for 24.5% of Shopify’s total revenues.

On a year-over-year basis, Subscription solutions revenues increased 16.5%. Growth was primarily fueled by a larger percentage of subscriptions coming from higher-priced plans and higher variable platform fees.  

Another factor contributing to the momentum is Shopify’s decision to extend its paid trial period back to three months for standard plans. This approach gives merchants more time to explore the platform’s full capabilities, increasing the likelihood of launching successful businesses.

Shopify’s platform supports merchants of all sizes, from small businesses to large enterprises, ensuring broad adoption of its Subscription solutions. The company’s success in attracting enterprise merchants, such as Canada Goose and Starbucks, in the second quarter of 2025, further underscores its ability to cater to diverse markets and business sizes. 

In the second quarter of 2025, Monthly Recurring Revenue (MRR) was $185 million, which increased 9.5% on a year-over-year basis.  Increased Monthly Recurring Revenue was driven by new merchants joining the platform and existing merchants upgrading to higher-tier plans like Shopify Plus. Plus, accounted for 35% of MRR in the second quarter of 2025.

SHOP Faces Stiff Competition

SHOP faces stiff competition in the e-commerce space from companies like Commerce.com CMRC (formerly known as BigCommerce) and Wix.com WIX.

Commerce.com, formerly known as BigCommerce, is expanding its footprint in the e-commerce industry, offering solutions like BigCommerce, Feedonomics, and Makeswift to help businesses innovate, scale, and thrive in modern e-commerce. Commerce.com’s Subscription solutions remain a core driver, reflecting the company’s ability to meet the evolving needs of businesses in the e-commerce space. In the second quarter of 2025, Subscription solutions revenue was $63.7 million, up 3% year over year.

Wix.com offers solutions that enable businesses, organizations, professionals, and individuals to develop customized websites and application platforms and grow their online presence. Wix.com’s growth in the number of registered users and premium subscriptions has been a major growth driver. In the second quarter of 2025, Wix.com reported Creative Subscriptions revenue of $345.5 million, which was up 11% year over year.

SHOP’s Share Price Performance, Valuation, and Estimates

Shopify shares have risen 29.1% year to date, outperforming the broader Zacks Computer & Technology sector’s return of 11.8%. The Zacks Internet Services industry has increased 8% in the same time frame.

SHOP Stock's Performance

SHOP stock is trading at a premium, with a forward 12-month Price/Sales of 14.71X compared with the sector's 9.75X. SHOP has a Value Score of F.

Price/Sales (F12M)

The Zacks Consensus Estimate for third-quarter 2025 earnings is pegged at 34 cents per share, which has declined by a penny over the past 30 days. This represents a 5.56% year-over-year decrease.

The consensus mark for 2025 earnings is pegged at $1.44 per share, which has increased 2.8% over the past 30 days, suggesting 10.77% year-over-year growth.

Shopify Inc. Price and Consensus

Shopify Inc. price-consensus-chart | Shopify Inc. Quote

SHOP currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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