SHOP Q4 2024 Earnings

Call Details

• Call Title: Shopify Q4 2024 Earnings Call
• Date: February 11, 2025 at 1:30 PM UTC
• Management Team:
  • Carrie Gillard (Director of Investor Relations)
  • Harley Finkelstein (President)
  • Jeff Hoffmeister (Chief Financial Officer)

Call Summary

Financial Performance

• Q4 revenue was $2.8B, up 31% year-over-year.
• Full-year revenue was $8.9B, up 26% year-over-year.
• Q4 GMV increased 26% year-over-year and full-year GMV was reported just shy of $300B.
• Q4 free cash flow was $611M, or 22% of revenue, and full-year free cash flow was $1.6B, up 77% year-over-year with an 18% free cash flow margin for the year.
• Operating income for the year surpassed $1B, compared with a previous peak of $269M in 2021.
• Q4 merchant solutions revenue increased 33% year-over-year while subscription solutions revenue increased 27% year-over-year.
• Shopify payments processed $61B of GMV in Q4, which represented 64% of GMV in the quarter versus 60% in Q4 2023.
• Q4 MRR was up 24% year-over-year with Plus representing 33% of MRR for the quarter.

Guidance

• Shopify expects Q1 revenue growth to be in the mid-20s year-over-year.
• Shopify expects Q1 gross profit dollars to grow in the low 20s year-over-year.
• Shopify expects Q1 operating expenses to be 41% to 42% of revenues, representing a 500 to 600 basis point improvement from Q1 last year.
• Stock-based compensation is expected to be $120M in Q1.
• Shopify expects Q1 free cash flow margin to be in the mid-teens, up from 12% in Q1 last year.
• Shopify expects subscription solutions growth to be negatively impacted in the near term by the shift to three-month paid trials, particularly in Q1 and Q2.
• Shopify expects merchant solutions to grow faster than subscription solutions in 2025 driven by payments strength and broader product adoption.
• Shopify does not expect substantive pricing changes in 2025 relative to recent pricing actions.