Shopify Inc. Q4 and Full Year 2024 Financial Results

Shopify Inc., a leading commerce technology company, has released its financial results for the fourth quarter and full year ending December 31, 2024. The company demonstrated robust performance across key financial metrics, driven by strong merchant success and strategic initiatives.

Financial Highlights

For the fourth quarter of 2024, Shopify reported a revenue of $2.81 billion, marking a 31% year-over-year increase. The company's gross profit for the quarter was $1.35 billion, up from $1.06 billion in the same period last year. Operating income also saw a significant rise to $465 million, compared to $289 million in Q4 2023. Free cash flow for the quarter was $611 million, with a free cash flow margin of 22%.

On an annual basis, Shopify's revenue grew by 26% to $8.88 billion in 2024, with a gross profit of $4.47 billion. The company achieved an operating income of $1.08 billion, a substantial improvement from a loss of $1.42 billion in 2023. Free cash flow for the year was $1.60 billion, with a free cash flow margin of 18%.

Business and Operational Highlights

Shopify's Gross Merchandise Volume (GMV) for Q4 2024 was $94.46 billion, a 26% increase from $75.13 billion in Q4 2023. The company's Monthly Recurring Revenue (MRR) also grew to $178 million, up from $144 million in the previous year. For the full year, GMV reached $292.28 billion, a 24% increase from $235.91 billion in 2023.

Notably, Shopify crossed the $1 trillion milestone in cumulative GMV and reported a 33% growth in international revenue and offline revenue. The company also saw a significant increase in B2B GMV, which grew by over 140%.

Strategic Initiatives and Corporate Developments

Shopify's strategic initiatives have been pivotal in driving its growth. The company has focused on improving profitability, achieving 12 consecutive quarters of positive free cash flow. Shopify's operating income in 2024 was $1.1 billion, a 12-fold increase from 2020. The company also generated $1.6 billion in free cash flow in 2024.

Additionally, Shopify has expanded its market presence, with over 875 million unique online shoppers purchasing from Shopify merchants in 2024. The company also reported that Shop Pay GMV grew by 50%, and its US ecommerce market share exceeded 12%.

Management's Perspective

Harley Finkelstein, President of Shopify, expressed satisfaction with the company's performance, stating, "2024 was a stand-out year for Shopify. We seized every opportunity to fuel our growth and it showed in the results quarter after quarter." Jeff Hoffmeister, Chief Financial Officer, added, "We are thrilled with our strong performance in Q4, wrapping up an outstanding 2024. These consistent results are a testament to our strategic initiatives and operational discipline."

Future Outlook

Looking ahead to Q1 2025, Shopify expects revenue to grow at a mid-twenties percentage rate year-over-year, with gross profit dollars growing at a low-twenties percentage rate. The company anticipates operating expenses as a percentage of revenue to be between 41% and 42%, with stock-based compensation of $120 million. Free cash flow margin is expected to be in the mid-teens.

SEC Filing: SHOPIFY INC. [ SHOP ] - 8-K - Feb. 11, 2025