Shopify on Wednesday reported fourth-quarter results that beat on the top line and gave strong guidance to start the year. The stock slid more than 10%.
Here’s how the company did, compared with estimates from analysts polled by LSEG:
Earnings per share: 48 cents adjusted vs. 51 centsRevenue: $3.67 billion vs. $3.59 billion
The Canadian e-commerce company said it expects first-quarter revenue to expand at a “low-thirties percentage rate” year over year, which is higher than the 25.1% growth forecast by analysts, according to FactSet.
Shopify projected its free-cash-flow margin to be in the “low-to-mid teens” in the first quarter, which is slightly lower than a year ago. CFO Jeff Hoffmeister told analysts that it reflects the company’s continued investment in AI tools.
The company’s board of directors also approved $2 billion in share buybacks.
Shares of software companies have sold off heavily in recent weeks as investors grew increasingly concerned about the potential threat of artificial intelligence tools.
Shopify, which sells software to help businesses launch and run their online storefronts, has tried to position itself at the forefront of emerging AI shopping tools. The company was an early partner of OpenAI when it launched its Instant Checkout feature, and it helped Google develop a protocol for AI shopping bots to facilitate transactions across the web.
Shopify President Harley Finkelstein said in an interview with CNBC’s “Squawk on the Street” on Wednesday that the company has “laid the rails” for AI shopping and is poised to benefit from how it disrupts e-commerce.
Some fears of an AI-driven software wipeout are overblown, Finkelstein said.
“I think there’s an incredible opportunity coming with AI, but I think you have to look at the companies that are acting as infrastructure, as platforms, vs. ones that are just features,” Finkelstein said. “Shopify is internet infrastructure.”
The company’s revenues were lifted by the key holiday shopping period, which saw “record” spending in 2025, according to Adobe Analytics. Online spending from Nov. 1 through Dec. 31 increased 6.8% to $257.8 billion, Adobe said, beating its forecast of $253.4 billion.
Shoppers remained resilient during the holiday shopping season despite a dour economic backdrop dominated by weakening consumer confidence, President Donald Trump’s sweeping tariff policies and a slowing job market.
The Commerce Department reported Tuesday that retail sales in December were flat after increasing 0.6% in November, capping off the year on a downbeat note after a period of otherwise solid shopping activity.
Shopify’s gross merchandise volume, or the total volume of merchandise sold on the platform, came in higher than expected. GMV surged 29% year over year to $123.8 billion, surpassing analysts’ estimated $121.3 billion, according to FactSet.
