Shopify (NYSE: SHOP) reported third-quarter 2025 results, delivering strong top-line performance while highlighting a widening gap between its subscription business and its faster-growing merchant services segment.

For the quarter ended September 30, Shopify reported US$2.84 billion in total revenue, up 32% year-over-year, driven by continued expansion in merchant activity and platform usage.

Within this, Subscription Solutions revenue rose 15% year-over-year to US$699 million, while Monthly Recurring Revenue (MRR) increased to US$193 million, up about 10%.

Despite the gains, subscription revenue continues to decline as a share of Shopify’s total business. According to the company’s latest 10-Q, Subscription Solutions accounted for 25% of total revenue for the first nine months of 2025, down from 28% in the same period last year. In Q3 specifically, subscriptions represented roughly 24.6% of total revenue.

Shopify did not break out how much subscription revenue came from newly acquired merchants versus existing ones upgrading or expanding. However, the earnings call offered a directional signal:
“We experienced stronger growth from existing merchants compared to new acquisitions in Q3 across all regions,” management noted.

The company attributed subscription revenue growth primarily to increased adoption of higher-priced plans — such as Shopify Plus — alongside higher variable platform fees tied to merchant activity. Shopify did not disclose churn, downgrade, or retention metrics for its Subscription Solutions segment. This limits outside visibility into the health and durability of Shopify’s recurring-revenue stream, even as subscription dollars continue to grow.

Shopify also noted that ongoing investment in AI features and infrastructure may place modest pressure on subscription margins, although subscription margins remain materially higher than those of its merchant-services segment.

Looking ahead, Shopify expects Q4 revenue growth in the mid-to-high twenties, with gross profit dollars projected to grow in the low-to-mid twenties.

INSIDER TAKE

Shopify’s subscription revenue is growing, but its strategic weight inside the business is shrinking. Subscription Solutions represented 28% of revenue last year; today, it sits closer to 25%. That shift is not because subscription performance is weak, but because Shopify’s commerce-driven revenue is expanding far faster, mathematically diluting the subscription mix.

A deeper signal is where subscription growth is coming from. The company confirmed that gains were driven “primarily by existing merchants,” not by a wave of subscription-first businesses choosing Shopify as their platform. Shopify’s merchant base is commerce-first, and most subscription innovation happens through third-party apps like Recharge, Bold, and Skio — value that lives inside Shopify’s ecosystem, not its revenue lines.

This structure limits Shopify’s ability to meaningfully expand subscription revenue as a percentage of the business unless it builds or acquires deeper subscription-native capabilities.

It’s also worth noting that Shopify does not disclose churn, retention, or downgrade metrics for its Subscription Solutions segment. While not unusual for a platform of this type, it reduces external clarity into how healthy or durable Shopify’s recurring revenue truly is.

For Shopify, the shrinking subscription mix is not inherently negative — the company is widely viewed as a high-growth commerce platform, not a subscription-first business. But for subscription-economy executives, the lesson is clear: recurring revenue becomes a dominant strategic engine only when both the product and the customer base are designed around subscription-first behaviors.

Shopify supports subscriptions, but it is still — unmistakably — a commerce platform at its core. As a result, subscription revenue will continue to function as a stabilizer, not the primary engine, of Shopify’s long-term growth.