SHOP Q4 2023 Earnings

Call Details

• Call Title: Shopify Q4 2023 Earnings Call
• Date: February 13, 2024 at 1:30 PM UTC
• Management Team:
  • Carrie Gillard (Director of Investor Relations)
  • Harley Finkelstein (President)
  • Jeff Hoffmeister (CFO)

Call Summary

Financial Performance

• Revenue for 2023 was $7.1 billion, up 26% year over year, with Q4 revenue of $2.1 billion up 24% year over year.
• Q4 GMV was $75.1 billion, up 23% year over year, and Q4 was the highest quarterly GMV growth rate since 2021.
• Gross profit for Q4 was $1.1 billion, up 33% year over year, and this was the first quarter with gross profit dollars above $1 billion.
• Q4 free cash flow was $446 million, representing 21% of revenue for the quarter, and full-year free cash flow was $905 million.
• Operating expenses were $773 million in Q4, down 22% year over year and down 1% sequentially, driving operating income of $289 million or 13.5% of revenues.
• Cash and marketable securities were $5.0 billion as of December 31, 2023, and net cash was $4.1 billion after convertible notes.
• Q4 MRR was $149 million, up 35% year over year, and subscription solutions revenue for Q4 was $525 million, up 31% year over year.
• ShopPay facilitated $18 billion of GMV in Q4, up 58% year over year, and has processed $127 billion since launch.

ARR / Recurring Revenue Growth

• Subscription solutions revenue was $525 million in Q4, which drove MRR of $149 million for the quarter, up 35% year over year.
• Plus represented 31% of MRR in Q4, which was consistent with Q3 levels.
• Company reported that organic revenue growth excluding logistics was 30% year over year in Q4.
• Offline revenue for the year was $441 million and includes payments, offline subscriptions, and point-of-sale hardware.
• Cross-border GMV was approximately 14% of total GMV in Q4, supporting recurring revenue from international transactions.
• B2B GMV was up nearly 150% year over year in Q4, and total B2B GMV doubled in 2023, indicating rapid expansion of that recurring channel.