Shopify (SHOP) reported fourth-quarter results above market estimates on Tuesday amid double-digit gross merchandise volume gains, while the e-commerce platform's revenue growth outlook for the ongoing period indicated an expected slowdown on a sequential basis.

The Canada-based company anticipates revenue to grow at a mid-20% rate year over year for the first quarter of 2025, while the current consensus on FactSet is for sales of $2.31 billion. In the previous quarter, the group logged revenue of $2.81 billion, representing a gain of 31% from the prior-year period and topping the Street's view for $2.72 billion.

Shopify expects the "strong merchant momentum" from the fourth quarter to carry over into the current three-month period, despite the first quarter being "consistently" its lowest gross merchandise volume, or GMV, period seasonally, it said in a statement.

The company's guidance reflects the lapping of leap day, foreign-exchange headwinds and "some level of conservatism," Wedbush Securities said in a client note. The brokerage has an outperform rating on Shopify's stock.

Shopify posted adjusted earnings of $0.44 a share for the December quarter, up from $0.34 a year earlier, just ahead of the average analyst estimate of $0.43. "We are thrilled with our strong performance in (the fourth quarter), wrapping up an outstanding 2024," Chief Financial Officer Jeff Hoffmeister said in the statement.

Subscription solutions revenue jumped 27% to $666 million buoyed by an increase in the number of merchants on the platform and price hikes, among other factors, Hoffmeister said during an earnings call, according to a FactSet transcript. Merchant solutions climbed 33% to $2.15 billion driven by continued GMV strength and "increased penetration of Shopify payments," according to Hoffmeister.

GMV inclined 26% to $94.46 billion, representing its "highest quarterly" rate since the COVID-19 pandemic, boosted mainly by same-store sales growth from the company's existing merchants, Hoffmeister said on the call.

For the ongoing quarter, the company expects gross profit dollars to grow at a low-20% rate. Operating expenses as a percentage of revenue are pegged at 41% to 42%. "We are encouraged by the strength of (the fourth-quarter) results and believe Shopify is well positioned to deliver operating margin expansion this year," Wedbush said.