TLDR
- Shopify stock climbed 11% premarket Wednesday after posting Q4 revenue of $3.67 billion, up 31% year-over-year
- Adjusted earnings came in at 48 cents per share, below the 50-cent Wall Street consensus
- Gross merchandise volume increased 31% to $123.8 billion, surpassing analyst expectations of 28% growth
- Company unveiled a $2 billion stock buyback program with no minimum purchase requirements
- First-quarter revenue growth forecast at “low-thirties” percentage rate versus 25% analyst consensus
Shopify shares rocketed higher in premarket action Wednesday after the e-commerce platform reported fourth-quarter results that topped revenue forecasts despite an earnings shortfall.
The company delivered adjusted earnings of 48 cents per share for Q4. The result missed analyst expectations of 50 cents per share.
But investors focused on the revenue performance. Shopify posted $3.67 billion in quarterly revenue, marking 31% growth from the year-ago period and beating the Street’s $3.59 billion estimate.
The stock jumped 11% before the market opened. Shopify had tumbled 21% year-to-date through Tuesday as tech stocks faced widespread pressure.
Merchant Volume and Guidance Impress
Gross merchandise volume hit $123.8 billion during the holiday quarter. The figure represented 31% growth from $94.46 billion in the prior year, exceeding the 28% increase analysts had projected.
The platform’s strength came as U.S. consumer spending remained resilient. Higher-income households continued purchasing despite economic concerns about tariffs and rising prices.
Management delivered first-quarter guidance that blew past Wall Street forecasts. Shopify expects revenue to grow in the “low-thirties” percentage range for Q1 2026.
Analysts had penciled in 25% year-over-year revenue growth for the period. The upbeat forecast suggests management sees continued momentum in merchant adoption and transaction activity.
CFO Jeff Hoffmeister said the company “ended 2025 with strength across all merchant sizes, regions, and channels, setting us up well for 2026.”
Buyback and Profitability Metrics
Shopify’s board greenlit a share repurchase program of up to $2 billion. The company plans to execute the buybacks using algorithmic trading instructions without quarterly or yearly minimums.
The announcement came as the stock trades well below its 2026 highs. The buyback signals management’s confidence in the business outlook and commitment to returning capital to shareholders.
Gross profit reached $1.69 billion in the fourth quarter, climbing more than 25% from last year. Management projects gross profit will grow in the high-twenties percentage range during the current quarter.
Shopify generates revenue primarily through two channels. Payment processing fees take a cut of each merchant transaction, while subscription plans provide recurring revenue from merchants using the platform.
The company has ramped up its artificial intelligence capabilities to attract merchants. AI-powered tools help sellers analyze sales data, optimize inventory, and set up online stores more efficiently.
U.S. consumer sentiment rose to a six-month high in early February according to University of Michigan data. Consumer spending posted solid gains in October and November, supporting healthy holiday quarter results for Shopify merchants.
The platform serves merchants across all size categories, from individual entrepreneurs to major retailers. This diversified merchant base helps insulate Shopify from weakness in any single segment.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
