Shopify's Growth Still Looks Solid

Core Insights - Shopify's fourth-quarter financial report indicates a strong recovery trajectory, with significant year-over-year growth in key metrics, suggesting a rebound from the previous bear market [3]. Financial Performance - Total revenue for Q4 2023 was $2.14 billion, increasing to $2.81 billion in Q4 2024, representing a 31% growth and beating expectations [2]. - Adjusted earnings per share rose from $0.34 to $0.44, marking a 29% increase and also exceeding expectations [2]. - Gross merchandise value (GMV) for the full year 2024 reached $94.5 billion, a 26% increase from the previous year, with annual GMV nearing $300 billion [2][3]. - Free cash flow improved from $446 million to $611 million, reflecting a 37% increase [2]. Market Reaction - Despite surpassing expectations, Shopify's stock initially declined post-report but later recovered, indicating a potential market correction after a significant prior gain of over 50% [6][7]. Future Outlook - Shopify did not provide full-year guidance for 2025 but anticipates continued momentum in Q1 2025, with revenue growth expected in the mid-20% range and gross profit rising in the low 20% range [5]. - Operating expenses are projected to be between 41% and 42% of revenue, which is an improvement compared to historical performance [5]. Growth Areas - International revenue and offline sources both saw a 33% year-over-year increase, highlighting strong growth potential [8]. - The Shop Pay product and business-to-business segment are experiencing extraordinary gains, with gross payment volume increasing by 32% [8]. - Shopify holds a 12% market share in the U.S. e-commerce market, with over 875 million online shoppers, setting high expectations for future performance [8].