Shopify Inc (TSX:SH., NYSE:SHOP) shares were down nearly 13% on Wednesday, even as the e-commerce platform reported fourth-quarter revenue and earnings per share that exceeded analyst expectations.
For Q4 2025, Shopify posted revenue of $3.67 billion, above the $3.59 billion consensus, marking a 31% increase year-over-year. Adjusted earnings per share came in at $0.57, beating the $0.51 estimate.
Gross merchandise volume (GMV) rose 31% to $123.841 billion, while free cash flow totaled $715 million, representing a 19% margin.
The stock’s decline reflected investor disappointment after a prolonged rally, with expectations stretched following Shopify’s recent growth run.
"2025 was Shopify at full throttle — driving compounding growth, while laying the rails for the new era of AI commerce," said Harley Finkelstein, President of Shopify. "2026 will be the year of the builders, and we'll be powering them — from first sale to full scale."
The results underscore strong underlying business momentum across both subscription and merchant solutions, even as gross margin pressures continue.
Looking ahead, Shopify expects revenue growth in the low-thirties percentage range for the first quarter of 2026, with gross profit rising in the high-twenties percentage range and free cash flow margin in the low-to-mid teens.