Shopify 4Q Profit, Revenue Top Views on the Back of Strong GMV

By Adriano Marchese

Shopify on Tuesday reported a profit and better-than-expected revenue in the fourth quarter thanks to more products being sold through its platform and said that it expects better revenue growth this year.

The ecommerce giant swung to a profit of $657 million, or 51 cents a share, compared with a loss of $623.7 million or 49 cents a share, in the comparable quarter a year ago.

Adjusted earnings were 34 cents a share. According to FactSet, analysts were expecting 30 cents a share.

Revenues topped expectations for the quarter, rising to $2.14 billion to from $1.73 billion. Analysts were expecting a rise to $2.08 billion. This was made up of subscription solutions which rose to $525 million from $400 million and merchant solutions, its largest segment, that saw revenue grow to $1.62 billion from $1.34 billion.

Shopify also credited the rise to a 23% growth in gross merchandise volume, the total amount of sales made through its platform, which reached $75.1 billion in the period.

Looking ahead, Shopify said it expects revenue to grow at a low-twenties percentage rate on a year-over-year basis from the $7.06 billion generated in 2023.

It also expects operating expense dollars to be up in the low-teens percentage rate compared with this fourth quarter, and said that stock-based compensation will likely be $105 million.

Free cash flow as a percentage of revenue is expected to be in the high-single digits, which will improve sequentially every quarter throughout the year, it added.

Write to Adriano Marchese at adriano.marchese@wsj.com

(END) Dow Jones Newswires

February 13, 2024 07:46 ET (12:46 GMT)

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