Canadian e-commerce giant Shopify beat its previous forecast for revenue growth and posted a sizable profit during the fourth quarter of 2024 following a strong holiday season that included another record-breaking Black Friday, Cyber Monday weekend.
Shopify’s revenue rose 31 percent year-over-year to over $2.8 billion during Q4, according to the company’s latest earnings report, 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.
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.
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.
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Disclosure: BetaKit majority owner Good Future is the family office of two former Shopify leaders, Arati Sharma and Satish Kanwar.
Feature image courtesy Burst.