Shopify Inc. reported fiscal fourth quarter 2024 revenues of $2.81 Billion, representing an increase of 31% over the previous year and exceeding analyst expectations of $2.7 billion.
Shopify has now grown its revenue by more than 25% for seven consecutive quarters, except in the case of logistics.
Shopify’s shares fluctuated in the pre-market following the announcement as investors digested results.
Shopify’s stock price was close to 3% higher at the time this article was written.
Shopify’s shares are up 37% in the last 12 months.
At least two companies have raised their 2025 price target for the stock.
Shopify Q4 Earnings
The net income was $1.29billion, almost doubling the $657mil earned in previous years.
The gross merchandise volume (GMV), which is the total value of all goods sold, increased by 25.7% to $94.5 billion. Revenues from merchant solutions grew by 32.6% and reached $2.15 billion.
| Metric | Three-month period ending December 31, 2024 | Three-month period ending December 31, 2023 |
|---|---|---|
|
GMV |
94,460 | 75,125 |
| MRR | 178 | 144 |
|
Revenue |
2,812 | 2,144 |
| Gross Profit | 1,352 | 1,062 |
|
Operating Income (Loss) |
465 | 289 |
| Cash flow | 611 | 446 |
|
Revenue growth by year |
31% | 24% |
|
Margin of free cash flow |
22% | 21% |
The figures in this table are all expressed as $ millions.
The gross margin fell slightly from 49.5% to 48.1% in the same quarter last year. The gross profit increased 27% over the past year to $1.35billion.
Shopify’s free cashflow margin improved to 22 percent from 21 percent a year earlier. It generated 615 million dollars in operating cash flow as well as $611 million of free cashflow.
These results are a reflection of the critical holiday season for online businesses.
Adobe Analytics monitors the sales of retailer websites. According to Adobe Analytics’ data, online spending in November and December increased by nearly 9%, to $241.1 Billion.
The figure is slightly higher than analysts’ expectations of $240.8 Billion, which highlights the strong consumer demand during the holidays.
Guide to Shopify Q1 2020
Shopify expects a mid-twenties percent growth on an annual basis in the first quarter 2025. This is consistent with a $2.32 billion consensus estimate.
Shopify anticipates that the strong merchant momentum of the fourth quarter will continue in the first quarter despite the fact that Q1 is typically the lowest quarter for gross merchandise volume due to seasonal patterns.
In a recent press release, the company stated that it expects the momentum of the Q4 merchants to continue into the Q1 quarter. This is because Q1 has historically been our weakest GMV period.
Shopify’s outlook for the first quarter 2025 is as follows:
- Expected to grow at a rate of low 20s per cent year over year.
- Operating expenses: 41% to 42 % of revenues are projected.
- Estimated stock-based compensation of $120 Million.
- Free cash flow margin is expected to be between mid teens.
The post Shopify Stock Seesaws After Q4-Print: Here’s Why may be updated as new information is released.
