Shopify Inc. (NASDAQ:SHOP) stock jumped after the company reported fiscal fourth-quarter 2025 results on Wednesday.
The company’s quarterly revenue growth of 30.6% year-over-year to $3.67 billion beat the analyst consensus estimate of $3.59 billion.
The e-commerce platform company reported adjusted EPS of 48 cents, missing the analyst consensus estimate of 51 cents.
Despite pressure from President Donald Trump’s tariffs, higher living costs, and labor market concerns, U.S. consumers have continued spending steadily, led mainly by higher-income households.
The University of Michigan’s Surveys of Consumers showed sentiment climbing to a six-month high in early February, while spending rose solidly in October and November, supporting strong holiday-quarter sales for retailers, Reuters reported on Wednesday.
That resilience is helping Shopify, which earns much of its revenue by collecting payment processing fees on merchant sales and selling subscription plans to businesses.
Key Metrics
The adjusted net income was $594 million compared to $458 million a year ago.
Gross merchandise volume increased 31.1% Y/Y to $123.84 billion.
Merchant solutions revenue increased 34.9% Y/Y to $2.9 billion.
Subscription solutions revenue rose by 16.7% Y/Y to $777 million.
The quarter’s gross margin was 46.1%, compared to 48.1% in the same quarter last year.
Gross profit grew 25.2% Y/Y to $1.69 billion.
Shopify generated $725 million in operating cash flow and $715 million in free cash flow for the quarter.
The free cash flow margin declined 300 bps Y/Y to 19%, marking ten consecutive quarters of double-digit free cash flow margins.
Buyback
Shopify’s Board of Directors authorized a share repurchase program of up to $2 billion.
President Harley Finkelstein said Shopify operated at full speed in 2025, delivering compounding growth while building the foundation for the next era of AI-driven commerce.
CFO Jeff Hoffmeister said the company achieved these results while investing in products such as Catalog, Sidekick, Universal Commerce Protocol, and its broader commerce platform, adding that Shopify finished 2025 with momentum across merchants of all sizes, regions, and channels, positioning it well for 2026.
Outlook
Shopify expects first-quarter 2026 revenue growth in the low thirties on a Y/Y basis, similar to the fourth quarter of 2025.
It implies revenue of roughly $3.092 billion to $3.139 billion, versus an analyst consensus estimate of $2.953 billion.
It projects a free cash flow margin in the low-to-mid teens, slightly below the first-quarter 2025 level.
Shopify expects fourth-quarter gross profit dollars to grow in the high twenties Y/Y.
SHOP Price Action: Shopify shares were up 11.60% at $142.00 during premarket trading on Wednesday, according to Benzinga Pro data, extending gains after the stock jumped 7.47% to close at $127.24 on Tuesday.
Photo by Piotr Swat via Shutterstock
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