By Emily Dattilo and Sabrina Escobar
Shopify reported quarterly revenue and earnings above Wall Street estimates, but it wasn't enough to give the stock a boost.
Shopify stock oscillated between modest gains and losses in premarket trading Tuesday.
For its fourth quarter, the e-commerce platform reported revenue of $2.81 billion, beating Wall Street's call for $2.73 billion, according to FactSet. Subscription solutions revenue increased nearly 27%, while merchant solutions revenue gained 33%.
Gross merchandise volume -- or the total value of orders processed on the Shopify platform -- was $94.46 billion, higher than analysts' forecasts of $92.79 billion.
Profit also was ahead of Wall Street expectations. Adjusted earnings of 44 cents a share were better than estimates for 43 cents. n the year-ago quarter, earnings per share were 36 cents.
For the first quarter, the company expects revenue to grow at a mid-twenties percentage rate on a year-over-year basis, while analysts had penciled in revenue increasing about 25%. The company expects operating expense as a percentage of revenue to be 41% to 42% in the period. It expects free cash flow margin in the first quarter in the mid-teens versus 22% in the fourth quarter.
"We expect the strong merchant momentum from Q4 to carry over into Q1, recognizing that Q1 is consistently our lowest GMV quarter seasonally," Shopify said in a statement.
Prior to the quarterly report, J.P. Morgan analysts Reginald Smith and Charles Pearce, who rate Shopify at Overweight with a price target of $121, weighed in on what they expected from the company in the quarter.
Shopify has set a lofty bar for itself, considering shares have soared 30% since the company reported third-quarter earnings. The S&P 500 has risen 2% over the same time period. The stock also is trading at a two-year high on the ratio of enterprise value to next 12 months of sales.
"We would be buyers on any weakness, as we are bullish on SHOP's margin expansion opportunity longer term," the analysts added.
Write to Emily Dattilo at emily.dattilo@dowjones.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
February 11, 2025 08:47 ET (13:47 GMT)
Copyright (c) 2025 Dow Jones & Company, Inc.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.