Canadian e-commerce giant Shopify’s strong fourth-quarter earnings today have been overshadowed by reaction to the news that Kanye West was selling a Nazi t-shirt via Shopify-powered Yeezy.com.
The controversial American rapper and producer promoted his Yeezy store in an advertisement during the National Football League’s Super Bowl on Sun. Feb. 9. According to Variety, immediately after this ad aired, West replaced his Yeezy store’s previous content with a single product: a white T-shirt emblazoned with a Black swastika.
“This merchant did not engage in authentic commerce practices and violated our terms so we removed them from Shopify.”
The swastika is a symbol associated with Nazi Germany, and West’s item was labelled HH-01, which the Anti-Defamation League noted is code for “Heil Hitler.” West’s account on X (formerly Twitter) was deactivated on Mon. Feb. 9 after he posted a series of antisemitic messages to the social media platform in recent days, including posts praising former Nazi leader Adolf Hitler and declaring himself a Nazi.
West’s Yeezy store was operational yesterday. According to The Logic, Shopify was aware of the situation then and instructed support staff to give “no comment” and end chats if merchant clients asked about the firm hosting it. The store is now unavailable as of this morning. Shopify has confirmed to BetaKit that it removed the Yeezy store in a statement that was also shared with other media outlets and appears to mark its first public comments on the matter.
“All merchants are responsible for following the rules of our platform,” a Shopify spokesperson told BetaKit in a statement. “This merchant did not engage in authentic commerce practices and violated our terms so we removed them from Shopify.” Shopify did not respond to BetaKit’s other questions regarding the situation.
News of the T-shirt West was marketing and the company powering the store selling it sparked sharp criticism yesterday from former Shopify executives, including ex-senior director of investor relations and social impact Katie Keita, who argued in an X post that “humans get to define hate of other humans based on religion/ethnicity as immoral.”
Keita’s post came in response to Shopify co-founder and CEO Tobi Lütke’s 2017 comments explaining the company’s position on censoring merchants after the company faced backlash for hosting Breitbart. Shopify has long faced public criticism for providing services to stores that advocates say promote hate, including Breitbart and Libs of TikTok in 2022. Shopify has also supported the new online store of conspiracy theorist Alex Jones, who was ordered to pay over $1 billion USD in damages after US courts found he intentionally defamed relatives of school children killed in the 2012 Sandy Hook mass shooting.
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Shopify’s Acceptable Use Policy (AUP) currently states: “There are activities we don’t allow on the platform because they breach the social contract of commerce. This means you can’t call for, or threaten, violence against specific people or groups. And you can’t sell products that facilitate intentional self-harm.”
As recently as June 2024, Shopify’s AUP specifically prohibited hateful content, noting that its services may not be used “to promote or condone hate or violence against people” based on a variety of characteristics, including race, ethnicity, and religion, according to archived snapshots of the webpage via Wayback Machine. But last summer, Shopify changed the policy to remove its hateful content provision.
This controversy comes as Shopify posted strong Q4 2024 financial results that beat its previous forecast for revenue growth and included a tidy profit on the back of a strong holiday season and another record-breaking Black Friday and Cyber Monday weekend.
During its Q4 earnings call, Shopify only took questions from analysts and did not make any statements regarding Kanye West, his store, or the T-shirt. Shopify executives did not answer a question from an analyst about how artificial intelligence can help with content or listing moderation during the call “considering the controversy around the Super Bowl advertisement that took place.”
Shopify’s revenue rose 31 percent year-over-year to over $2.8 billion during Q4 after its gross merchandise volume (GMV) jumped to nearly $94.5 billion, up 26 percent compared to the fourth quarter of 2023. This surpassed Shopify’s previous forecast of revenue growth at a mid-to-high twenties percentage rate.
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The company also posted a nearly $1.3 billion profit during the fourth quarter, up from $828 million the year prior, and expanded its free cash flow margin to $611 million—or 22 percent—an increase from 21 percent in Q4 2023, and in line with its previous expectations.
Overall, Q4 2024 marked Shopify’s seventh consecutive quarter of 25 percent or greater revenue growth when excluding the sale of its logistics business in 2023. The company also expanded its free cash flow margin and saw GMV growth accelerate each quarter of last year, achieving GMV growth of 24 percent in 2024—its highest mark in three years.
“These consistent results are a testament to our strategic initiatives and operational discipline, positioning us well for continued success and growth in the future,” Shopify CFO Jeff Hoffmeister said in a statement.
Shopify stock price has been on the rise since the company’s Q3 earnings. But despite a strong fourth-quarter performance, as of time of publication, Shopify’s shares have oscillated this morning on the Toronto and New York Stock Exchanges following mixed Q1 guidance.
Q4 is typically Shopify’s highest volume quarter, while the first quarter is consistently its lowest GMV quarter seasonally. For Q1 2025, the company anticipates revenue growth at a mid-twenties percentage rate year-over-year, a free cash flow margin in the mid-teens, and gross profit dollars to grow at a low-twenties percentage rate.
Disclosure: BetaKit majority owner Good Future is the family office of two former Shopify leaders, Arati Sharma and Satish Kanwar.
Feature image courtesy Burst.