TLDR
- Shopify reported Q4 earnings of 48 cents per share, missing the 50-cent estimate, but stock rallied 11% on revenue strength
- Q4 revenue jumped 31% to $3.67 billion, beating the $3.59 billion analyst forecast
- Gross merchandise volume rose 31% to $123.8 billion, exceeding expectations of 28% growth
- Board approved $2 billion share buyback program with no minimum requirements
- Q1 2026 revenue growth projected in “low-thirties” range versus 25% analyst estimates
Shopify shares soared in premarket trading Wednesday after the e-commerce company delivered fourth-quarter results that beat revenue expectations and unveiled a substantial buyback plan.
The company posted adjusted earnings of 48 cents per share for the quarter ended December. The figure came in below Wall Street’s consensus estimate of 50 cents.
Revenue climbed 31% year-over-year to $3.67 billion. The top-line performance exceeded analyst projections of $3.59 billion and drove the stock’s premarket gains.
Shares jumped 11% before the opening bell. The stock had declined 21% in 2026 through Tuesday’s close as tech stocks faced selling pressure.
Revenue Outlook Exceeds Expectations
Management issued first-quarter guidance that surprised investors with its strength. The company expects revenue to grow at a “low-thirties” percentage rate in Q1 2026.
Analysts had been forecasting 25% year-over-year revenue growth for the period. The bullish outlook reflects confidence in sustained merchant adoption and consumer spending.
Chief Financial Officer Jeff Hoffmeister noted the company “ended 2025 with strength across all merchant sizes, regions, and channels, setting us up well for 2026.”
Gross merchandise volume totaled $123.8 billion during the holiday quarter. The metric jumped 31% from $94.46 billion in the prior-year period, topping the 28% increase analysts anticipated.
Consumer spending has held up in the U.S. despite concerns about tariffs and inflation. Higher-income households continue driving retail sales, which benefits Shopify’s merchant base.
Buyback Program and Profit Growth
Shopify’s board authorized a share repurchase program worth up to $2 billion. The company will execute buybacks through pre-arranged algorithmic trading with no quarterly or yearly minimums.
The platform generates revenue through payment processing fees on merchant transactions and subscription plans. This model has proven resilient as e-commerce activity remains healthy.
Gross profit reached $1.69 billion in Q4, rising more than 25% from the previous year. Management expects gross profit to increase in the high-twenties percentage range during the current quarter.
Shopify has invested heavily in artificial intelligence tools that help merchants analyze data and manage their online stores. The AI features have attracted both small businesses and larger retailers to the platform.
The company’s performance demonstrates continued momentum in its core business. Revenue growth accelerated compared to recent quarters, while merchant volume showed strength across categories.
U.S. consumer sentiment reached a six-month high in early February according to University of Michigan data. Strong consumer spending in October and November supported healthy holiday sales for Shopify’s merchant network.
