Shopify

Shopify’s AI-powered lending arm is expanding rapidly, with Shopify Capital growing roughly 50 percent annually over the past three years. The company now deploys algorithms to identify merchants likely to need and repay funding, replacing traditional human underwriting with automated, pre-emptive offers. Outstanding balances reached nearly US$1.8 billion last quarter, reflecting strong demand.

Revenue from lending remains modest but rising, totaling US$258 million last year, up from US$205 million. The program also drives merchant growth on Shopify’s platform. The company declined further comment, though it emphasizes access over credit scores.

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Shopify reported record fourth-quarter revenue of US$3.67 billion for 2025, surpassing analyst expectations, but missed earnings estimates, posting adjusted earnings of US$0.48 per share versus the US$0.51 consensus. Revenue rose 31 percent year over year, exceeding internal forecasts, while annual gross merchandise volume reached US$378 billion.

The Ottawa-based firm announced a US$2-billion share repurchase program and projected low-thirties revenue growth for Q1 2026. Despite strong holiday sales and accelerating AI initiatives, including agentic storefronts, shares fell more than 10 percent after the earnings call amid broader software-sector volatility and investor caution.

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Shopify has laid off at least 53 employees from its partnerships division, according to reporting by The Logic, raising questions about the e-commerce company’s future relationship with third-party agencies and app developers. Sources estimate total job cuts could reach nearly 100, roughly one-third of the team. Shopify has not disclosed figures or outlined a new strategy.

The division historically supported partners through education, deal support, and direct relationship management, distributing US$1 billion in commissions in 2024. Remaining staff face heavier workloads, while partners report reduced communication and uncertainty. Executives have signaled a growing reliance on AI tools, potentially reducing human support in partner engagement.

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Shopify has laid off a number of employees from its partnerships division as part of a restructuring, according to sources familiar with the matter. The cuts, carried out Wednesday, eliminated multiple roles and an entire team as the company revamps how it works with third-party partners. Affected staff were told their positions were being removed due to an organizational overhaul.

Shopify confirmed it is “starting a new chapter” in partnerships, with a renewed focus on initiatives such as agentic commerce. The company declined to disclose the number of layoffs. The changes follow several rounds of staff reductions in recent years, even as Shopify’s revenue and share price have continued to grow.

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Shopify is rolling out new infrastructure aimed at enabling AI-driven online shopping, launching its Universal Commerce Protocol and expanding access to its Catalog service. Developed with Google, UCP sets common standards allowing AI agents to complete retail transactions, from checkout to loyalty logins.

Shopify will also open Catalog listings to non-Shopify merchants, increasing visibility across generative AI shopping tools. Vice-president Vanessa Lee said the system lowers barriers for new entrants while preserving consumer expectations. The initiative reflects Shopify’s effort to lay groundwork for agentic commerce, a market Morgan Stanley estimates could reach US$385 billion by 2030.

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Shopify must preserve merchant records during an appeal of a tax dispute with the Canada Revenue Agency, the Federal Court of Appeal ruled. The order pauses Shopify’s practice of deleting inactive files after two years while Ottawa challenges a 2023 ruling that limited its data request.

Judge Nathalie Goyette criticized the government’s delay in seeking preservation and called its arguments unclear, questioning claims of irreparable harm. Still, she said maintaining potential evidence during an appeal serves the public interest as the CRA presses its case over merchant tax reporting continuing.

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Shopify is preparing its merchants for an era in which consumers increasingly shop through AI assistants rather than visiting traditional websites. The company introduced “agentic storefronts,” enabling chatbots such as ChatGPT, Microsoft Copilot, and Perplexity to surface products from Shopify sellers directly within conversations.

Shopify is also expanding its Sidekick assistant with customizable tools, plugins, and text-prompt design features. As more browsing shifts to AI interfaces, retailers face the risk of declining site traffic, prompting brands to adapt code for improved crawler visibility. OpenAI plans to let ChatGPT users purchase from Shopify stores, potentially taking a transaction cut.

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