Shopify (SHOP): A few points to note about the Q4 2024 performance

Shares of Shopify Inc. (NYSE: SHOP) were down over 2% on Wednesday. The stock has gained 16% over the past one month. The ecommerce company delivered a strong performance for the fourth quarter of 2024, with year-over-year growth in revenue and profits, and meaningful traction across many areas of its business.

Revenue and earnings growth

Shopify generated revenue of $2.81 billion in Q4 2024, up 31% year-over-year, marking the seventh consecutive quarter of pro forma revenue growth of 25% or greater. GAAP earnings per share jumped 94% to $0.99 while adjusted EPS grew 29% to $0.44 compared to last year.

Strong business performance

In Q4, gross merchandise volume (GMV) increased 26% YoY to $94.5 billion, marking the sixth consecutive quarter of GMV growth above 20%. This growth was driven by a rise in the number of merchants on Shopify’s platform, along with same-store sales growth from existing merchants and continued strength in international markets. GMV outside North America grew 33% in Q4.

Shopify saw revenue growth across both its segments during the fourth quarter of 2024. Revenues in Subscription Solutions increased 27% while Merchant Solutions revenue grew 33% YoY. This growth was driven by an increase in the number of merchants on the platform, strength in GMV, and increased penetration of Shopify Payments.

In Q4, $61 billion of GMV was processed on Shopify Payments, which was up 35% from last year. Payments penetration hit 64% in the quarter. The growth in gross payments volume (GPV) was driven by an increase in the number of merchants choosing Payments, strong performance of merchants who use Payments, and higher penetration of Shop Pay, which reached 41% of GPV.

Monthly recurring revenue (MRR) grew 24% YoY to $178 million in Q4, driven by growth in the standard, offline, and Plus categories. All three categories saw an increase in the number of merchants.

Outlook

For the first quarter of 2025, Shopify expects revenue to grow at a mid-twenties percentage rate YoY, and gross profit dollars to grow at a low-twenties percentage rate YoY.