- Shopify Inc. (SHOP) shares rose $2.14 or 1.78% to $122.04 after reporting a 31.2% year-over-year revenue increase to $2.81 billion in Q4, exceeding consensus estimates.
- The company highlighted 2024 as a standout year with seven consecutive quarters of over 25% revenue growth (excluding logistics), alongside a peak free cash flow margin of 22% in Q4, and a 24% year-over-year GMV growth, the highest in three years.
- Looking ahead to Q1 2025, Shopify expects mid-twenties revenue growth, low-twenties gross profit growth, operating expenses at 41-42% of revenue, stock-based compensation at $120 million, and free cash flow margin in the mid-teens, reflecting optimism despite seasonal GMV fluctuations.
Shopify Inc. (SHOP) shares climbed $2.14 or 1.78% to $122.04 on Tuesday, driven by a robust Q4 performance that saw revenues soar by 31.2% year-over-year to $2.81 billion, surpassing the consensus estimate of $2.73 billion. This impressive growth is part of a broader narrative of success for Shopify in 2024, where it not only achieved its seventh consecutive quarter of at least 25% revenue growth when excluding logistics but also saw its free cash flow margin sequentially increase each quarter, peaking at 22% for Q4.
Harley Finkelstein, Shopify’s President, highlighted the year’s achievements, emphasizing the company’s commitment to making entrepreneurship more accessible and establishing Shopify as the premier commerce platform for businesses of all sizes. This focus on merchant success, combined with the platform’s agility, has positioned Shopify favorably in an evolving tech landscape, with Finkelstein expressing optimism about future opportunities.
CFO Jeff Hoffmeister underscored the significance of these results, noting the acceleration in gross merchandise value (GMV) growth throughout 2024, reaching a 24% year-over-year increase, the highest in three years. This consistent performance reflects Shopify’s strategic initiatives and operational discipline, which have been pivotal in driving growth and enhancing profitability.
Looking forward, Shopify provides a cautiously optimistic outlook for Q1 2025, expecting revenue growth in the mid-twenties percentage range year-over-year, with gross profit dollars growing at a low-twenties rate. The company anticipates maintaining operational efficiency, with operating expenses expected at 41% to 42% of revenue, and stock-based compensation at $120 million. Free cash flow margin is projected to be in the mid-teens, indicating a continuation of the company’s focus on financial health and profitability amidst seasonal fluctuations in GMV.
This performance and forward-looking guidance from Shopify not only affirm its market position but also signal a strong strategy tailored to the dynamic needs of modern merchants, setting a positive tone for further expansion and innovation in the commerce sector.
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