Shopify (NYSE:SHOP) just closed out a powerhouse Q4, with revenue rocketing 31% to $2.81 billion and GMV jumping 24% to $94.4 billion. The company also expanded its free cash flow margin to 22%, marking its strongest quarter yet. But despite the impressive results, the 2025 outlook didn't exactly thrill investors. Shopify forecasted free cash flow margins in the mid-teenswell below Wall Street's expectations.
Analysts were quick to break it down. Jefferies' Samad Samana pointed out that while revenue guidance met expectations, margins fell short, reinforcing Shopify's more reserved stance. Evercore ISI's Mark Mahney echoed that view, flagging that Shopify's free cash flow forecast of $323 million to $375 million came in meaningfully below the Street's $410 million target. Even so, Shopify isn't sweating itmanagement remains bullish on strong merchant momentum heading into 2025, banking on its platform's agility and long-term growth potential.
Looking ahead, Shopify expects Q1 revenue to grow at a mid-twenties percentage rate, with gross profit dollars rising at a low-twenties pace. Operating expenses will stay elevated at 41% to 42% of revenue, signaling ongoing investment in platform expansion. The key question for investors? Whether Shopify can turn its revenue surge into stronger profitability. With tailwinds from a thriving e-commerce sector and a committed focus on merchant success, Shopify's next moves will be closely watched.
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