Shopify Inc., the leading online shop platform provider, has announced that it exceeded profit expectations for the latest quarter and anticipates further margin improvement in the current quarter. Despite this positive news, the company’s shares experienced a slight decline during Tuesday’s premarket trading.
In the fourth quarter, Shopify achieved a net income of $657 million, equivalent to 51 cents per share. This is a significant increase from the year-ago quarter, when the company reported a net loss of $623 million, or 49 cents per share. Adjusted earnings per share also showed substantial growth at 34 cents, up from 7 cents in the same period last year. These results surpassed the FactSet consensus forecast of 30 cents.
Shopify’s revenue for the quarter reached $2.1 billion, matching the FactSet consensus and showing an impressive increase from $1.7 billion in the previous year. Additionally, the company reported a considerable acceleration in gross merchandise volume (GMV), which rose by 23% to $75.1 billion. Analysts had anticipated GMV to reach $72.2 billion.
Looking towards the future, Chief Financial Officer Jeff Hoffmeister expressed confidence in Shopify’s prospects for 2024. He stated, “For 2024, we look to build on the momentum that we achieved in 2023 and continue to deliver a strong combination of both top-line growth and profitability.”
Shopify forecasts revenue growth for 2024 at a “low-twenties” percentage rate compared to the previous year, or a “mid-to-high twenties” rate when factoring in the impact of Shopify’s sale of its logistics business. Additionally, the company expects to see a sequential improvement of 150 basis points in gross margin during the first quarter.
Despite the slight decline in premarket trading, Shopify remains optimistic about its future growth potential, aiming to maintain its position as a leader in the e-commerce industry.