Strong holiday spending boosts Shopify (SHOP.US) Q4 performance, AI strategy leads growth into 2025.

Thanks to strong holiday shopping season consumption, Canadian e-commerce platform Shopify (SHOP.US) exceeded market expectations in the fourth quarter. The financial report shows that Shopify's fourth-quarter revenue increased by 31% year-on-year to $3.7 billion, better than the analyst's average expectation of $3.6 billion; the Gross Merchandise Volume (GMV), which measures platform transaction scale, approached $124 billion, also exceeding analyst expectations, showing sustained strong consumer spending. Operating profit was $631 million, higher than the analyst's average expectation of $588 million; net profit decreased from $1.29 billion in the same period last year to $743 million. As of the time of publication, Shopify's pre-market trading on Wednesday was up more than 11%. It is stated that 2025 is a year of rapid advancement for Shopify, as the company is laying the groundwork for the AI e-commerce era while achieving compound growth. Shopify's CFO, Jeff Hoffmeister, said, "As AI reshapes how buyers discover and purchase, we are investing in Catalog, Sidekick, Universal Commerce Protocol, and our complete e-commerce solution platform while achieving strong profit margins. By the end of 2025, we have shown strong performance in all merchant scales, regions, and channels, laying a solid foundation for 2026." Looking ahead, Shopify expects first-quarter revenue to achieve low double-digit percentage year-on-year growth, while the analyst's average expectation is a year-on-year growth of 25.2%; gross margin is expected to achieve high double-digit percentage year-on-year growth. The company also announced a stock buyback plan of up to $2 billion. Despite the economic impact of President Trump's tariff increases, challenges of rising living costs, and ongoing concerns in the labor market squeezing shopping budgets, consumer spending in the US remains strong, driven by high-income households. Consumer spending in the US in October and November of last year also grew steadily, supporting retailers' holiday season sales. Shopify's growth is thus fueled, as the company mainly earns revenue by processing fees from merchants' sales and selling subscription plans to merchants.