Shopify outdid internal revenue projections but missed analyst expectations for earnings in the final quarter of 2025, as its merchants posted strong sales through the e-commerce platform.
The Ottawa e-commerce giant announced its Q4 earnings before the markets opened today.
Several analysts upgraded ratings ahead of today’s earnings results as Shopify’s stock rallied yesterday.
In a traditionally busy quarter for retailers, Shopify posted adjusted earnings of $0.48 per share, shy of consensus estimates of $0.51, but recorded $3.67 billion in revenue, beating estimates of $3.59 billion. Revenue growth exceeded internal expectations of a mid-to-high-twenties percentage increase, hitting 31 percent for the quarter and 30 percent for the year.
The company also announced a $2-billion share repurchase program, which CFO Jeff Hoffmeister said in a statement is coming “from a position of financial and operating strength.”
Shopify saw $123.8 billion in gross merchandise volume (GMV) in the holiday quarter, making up just under a third of the $378 billion value of products sold through its merchants for the year. Annual GMV was three times that of 2020, while GMV year-over-year growth was at 29 percent. This was due in part to another record-breaking Black Friday and Cyber Monday for Shopify merchants, despite technical hiccups, with 27-percent more sales than the year before.
The company continued its streak of double-digit free cash flow margins in Q4, with $715 million free cash flow at a margin of 19 percent (in line with its previous projections). It recorded $2 billion in free cash flow at a margin of 17 percent for the year overall.
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It saw 96-percent growth in sales through its business-to-business (B2B) clients annually, which have become a key growth driver as the company targets large brands like Canada Goose and Skims. At the same time, it saw 62-percent GMV growth through its consumer marketplace app, Shop Pay.
The company is projecting continued revenue growth in the low thirties for the first quarter of 2026, but its free cash flow margin to be in the mid-to-low teens, slightly lower than Q1 of last year.
Shopify, which sells e-commerce software solutions to both small businesses and large enterprises, is Canada’s most valuable tech company, with a market cap of $224 billion CAD.
Over the past week, the company’s stock price was hit by an industry-wide slump in software stocks, triggered by fears of disruption from new AI capabilities, which expanded to broader tech volatility. Before earnings, Shopify was trading at $172.54 on the Toronto Stock Exchange, down roughly 20 percent since the beginning of 2026.
However, multiple analysts upgraded their ratings ahead of today’s earnings results as the stock rallied yesterday. Michael Morton, analyst at New York City’s MoffettNathanson, wrote in a client note that Shopify is unlikely to be affected by merchants using AI to write their own software—instead, the company will win the “AI commerce wars.”
RELATED: Shopify makes more job cuts, this time targeting partnerships team
This quarter, Shopify doubled down on building AI tools into its products for merchants. It also introduced agentic storefronts, which allow merchants to opt to sell their products through AI chatbots such as ChatGPT, Perplexity, and Microsoft Copilot.
Shopify also laid off dozens of employees in the past months, including reportedly more than 50 people in partnership roles early this year. This followed revelations that roles had been cut on Shopify’s sales team last summer related to internal fraud issues. Since then, the company overhauled how it pays its salespeople.
Disclosure: BetaKit majority owner Good Future is the family office of two former Shopify leaders, Arati Sharma and Satish Kanwar.
Feature image courtesy Shopify.