In the world of “forever” growth stocks, Shopify (TSX:SHOP) continues to be a top pick of mine. Indeed, that’s despite the pain we’ve seen in top software names of late.
A leading e-commerce platform provider with impressive growth potential over the long term, I think the thesis is relatively easy to understand for investors looking for a top-notch Canadian growth stock. That said, let’s dive into some specifics as to why this is a stock worth considering as a long-term buy and hold within a tax-free savings account (TFSA).
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A cash flow machine
Shopify is quietly turning into the kind of cash machine long-term investors dream about. Indeed, this kind of growth still continues while the company disrupts a key high-growth market, in the world of online commerce.
Companies all around the world are looking to enhance their brick-and-mortar offerings with online sites. Shopify makes the process seamless, charging transaction fees over and above a minimum sales window. Thus, the better companies do, the better Shopify (and its investor base) do over time. That’s the kind of scalable software-as-a-service (SaaS) business model I like to see.
In 2025, revenue climbed about 30% to roughly US$11.6 billion, with record quarterly sales of over US$3 billion in Q4. Personally, these results highlight to me the high-quality growth engine under the hood, which appears to be firing on all cylinders again.
At the same time, free cash flow topped US$2 billion for the year, translating to a healthy 17% margin. And perhaps even more importantly, the company’s Q4 free cash flow margin reached 19%, marking 10 straight quarters of double‑digit free cash flow margins. For a so‑called “tech stock,” that level of consistent cash generation is exactly what TFSA investors should want to see.
Strong fundamentals and tailwinds
Importantly, Shopify doesn’t look like a one‑trick pony on the growth front. Merchant Solutions revenue grew 35% in Q4 2025 as merchants leaned further into Shopify Payments and related services. That’s while Subscription Solutions still grew 17%, supported by higher‑tier plans and platform fees.
Additionally, monthly recurring revenue hit US$205 million, sporting double‑digit growth, and Plus merchants now contribute over a third of that base, underscoring a stickier, higher value customer mix. That blend of transaction-driven upside and recurring, subscription-like revenues provides a solid fundamental backbone for a forever‑style TFSA holding.
For those looking to profit off of rising gross merchandise value in this space, Shopify is a no-brainer add on recent weakness, such as the decline we’ve seen of late.