Shopify Inc. headquarters signage in Ottawa on Tuesday, May 3, 2022. THE CANADIAN PRESS/Sean Kilpatrick


February 14, 2024

Shopify Inc. wrapped up 2023 on a high note, boasting robust revenue growth and profits despite ongoing consumer concerns about inflation. The Ottawa-headquartered e-commerce software provider reported a fourth-quarter profit of US$657 million, a stark improvement from a loss of US$623 million in the same period the previous year. Revenue for the quarter reached US$2.14 billion, marking a notable 24 percent increase from US$1.74 billion year-over-year.

The surge in revenue was attributed to the Black Friday-Cyber Monday weekend and the holiday season, a period when consumers were expected to exercise caution with their spending due to economic challenges. However, Shopify experienced buoyant sales throughout the season, with the four-day Black Friday-Cyber Monday period alone generating US$9.3 billion in sales, representing a 24 percent growth from the previous year.

Harley Finkelstein, the company's president, highlighted impressive statistics, noting that approximately 61 million consumers globally made purchases from brands using Shopify during the holiday period. Moreover, over 17,500 merchants made their inaugural sale during this time, while more than 55,000 merchants achieved their highest selling day ever on the platform. Finkelstein likened the significance of Black Friday and Cyber Monday to the Super Bowl for Shopify.

Despite concerns about inflation and economic uncertainties, Shopify exceeded expectations, with Finkelstein emphasizing a shift towards quality over quantity in consumer behavior. While Statistics Canada reported a 0.2 percent decline in November retail sales, Shopify's earnings painted a different picture. The company reported a profit of 51 cents US per diluted share, a significant increase from a loss of 49 cents US per diluted share in the same period of 2022.

However, Shopify's share price experienced a 12.54 percent decline, closing at $104.85, following the announcement of its earnings. Analysts attributed this decline to the company's guidance, which indicated overall revenue growth in the low-twenties percentage range year-over-year. Daniel Chan of TD Cowan noted that the market reaction was influenced by lower-than-anticipated Q1 operating margin and investor expectations for continued expansion.

The quarter also revealed positive trends in Shopify's merchant solutions revenue, which rose to US$1.62 billion, and subscription solutions revenue, which reached US$525 million. Throughout the year, Shopify expanded its global presence, adding 35 percent more merchants from outside North America. Finkelstein emphasized the company's focus on international markets, highlighting opportunities in regions like Latin America and the Asia-Pacific, where Shopify's market share remains underpenetrated. With ongoing efforts to expand its product offerings and geographical reach, Shopify aims to capitalize on untapped opportunities in the global retail landscape.

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