Shopify Q4 Revenue Strong, Faces Q1 Margin Concern

Shopify Inc. reported a strong performance for the fourth quarter of 2024, with revenue increasing 31% to US$2.8 billion, exceeding analysts' expectations of US$2.73 billion. The company's net income rose significantly to US$1.29 billion from US$657 million the previous year. However, the projected free cash flow margin for the first quarter of 2025, expected to be in the mid-teens, caused an initial drop in stock value. Shopify anticipates first-quarter revenue growth in the mid-20% range, a slowdown from the previous quarter's 31% rate. Despite concerns over short-term guidance, analysts remain optimistic, citing the company's strategic initiatives and successful AI feature rollout. Overall, Shopify's long-term growth trajectory remains positive.