While Merchant services drive most of the revenue for Shopify, in reality, subscriptions have a much larger contribution margin. Indeed, in 2022, on $5.6 billion in revenue, merchants’ services generated $1.6 billion in gross profits. On $1.49 billion in revenues, subscriptions generated over a billion dollars in gross profits. In short, subscriptions have a low cost of revenue compared to merchant services. Thus subscriptions carry a gross profit margin of over 77%, vs. a gross margin of almost 39% for merchant services.