Shopify Exceeds Q4 Revenue Expectations, But Profit Outlook Raises Concerns

Shopify beats holiday-quarter revenue estimates on higher consumer spending

(Reuters) - Shopify topped market estimates for sales in the holiday quarter on Tuesday, on the back of healthy consumer spending and the company rolling out AI features that have attracted more sellers to its e-commerce platform. U.S.-listed shares of the company fell 9% in premarket trading. Shopify expects its revenue to grow at a mid-twenties percentage rate in the current quarter, while analysts expect a rise of 24.4% from a year earlier to $2.31 billion according to data from LSEG. The company also expects operating expense as a percentage of revenue to be 41% to 42% in the first quarter, compared with 31.5% in the holiday quarter. Shopify has invested in building out artificial intelligence-based tools and features across its services that help sellers on its platform with tasks ranging from image generation and inventory management to gathering customer and sales data. The company also benefited from strong online sales over the holiday season, with U.S. online spending rising nearly 9% between November and December, according to data from Adobe Analytics. The Canadian company reported revenue of $2.81 billion for the fourth quarter ended December 31, compared with analysts' average estimate of $2.73 billion according to data compiled by LSEG. (Reporting by Deborah Sophia in Bengaluru; Editing by Krishna Chandra Eluri)

Shopify profit outlook underwhelms even as holiday sales top estimates

Feb 11 (Reuters) - Shopify's (SHOP.TO), opens new tab downbeat first-quarter profit outlook spooked investors on Tuesday, even as the e-commerce company posted better-than-expected holiday-quarter sales on the back of healthy consumer spending and its rollout of AI features. U.S.-listed shares of the company , having jumped 13% so far this year driven by investors' optimism around the company's revenue growth rate, fell 9% in premarket trading. Shopify has been investing heavily in building out artificial intelligence-based tools and features across its services that help sellers on its platform with tasks ranging from image generation and inventory management to gathering customer and sales data. Called 'Shopify Magic', the suite of AI features it launched in early 2023 and available across all of its subscription tiers at no additional cost, has driven more small- and medium-sized business owners to Shopify. The company also rolled out its AI assistant Sidekick to more merchants last year. Although the AI features helped Shopify post a 31% increase from a year earlier in fourth-quarter revenue to $2.81 billion, its fastest growth in at least six quarters, they have translated to higher costs for the company. Shopify expects gross profit dollars to grow at a low-twenties percentage rate in the current quarter, weaker than the 24.2% growth expected by analysts according to Visible Alpha. It expects operating expense as a percentage of revenue to be 41% to 42%, compared with 31.5% in the holiday quarter. The company's revenue forecast for mid-twenties percentage growth was also roughly in line with estimates for a 24.4% increase according to data compiled by LSEG. Gross merchandise volume, a key metric representing the total value of orders facilitated through Shopify, jumped about 26% to $94.46 billion in the quarter ended December 31. Reporting by Deborah Sophia in Bengaluru; Editing by Krishna Chandra Eluri Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Retail & Consumer

Shopify profit outlook underwhelms even as holiday sales top estimates

Feb 11 (Reuters) - Shopify's downbeat first-quarter profit outlook spooked investors on Tuesday, even as the e-commerce company posted better-than-expected holiday-quarter sales on the back of healthy consumer spending and its rollout of AI features. U.S.-listed shares of the company, having jumped 13% so far this year driven by investors' optimism around the company's revenue growth rate, fell 9% in premarket trading. Shopify has been investing heavily in building out artificial intelligence-based tools and features across its services that help sellers on its platform with tasks ranging from image generation and inventory management to gathering customer and sales data. Called 'Shopify Magic', the suite of AI features it launched in early 2023 and available across all of its subscription tiers at no additional cost, has driven more small- and medium-sized business owners to Shopify. The company also rolled out its AI assistant Sidekick to more merchants last year. Although the AI features helped Shopify post a 31% increase from a year earlier in fourth-quarter revenue to $2.81 billion, its fastest growth in at least six quarters, they have translated to higher costs for the company. Shopify expects gross profit dollars to grow at a low-twenties percentage rate in the current quarter, weaker than the 24.2% growth expected by analysts according to Visible Alpha. It expects operating expense as a percentage of revenue to be 41% to 42%, compared with 31.5% in the holiday quarter. The company's revenue forecast for mid-twenties percentage growth was also roughly in line with estimates for a 24.4% increase according to data compiled by LSEG. Gross merchandise volume, a key metric representing the total value of orders facilitated through Shopify, jumped about 26% to $94.46 billion in the quarter ended December 31. (Reporting by Deborah Sophia in Bengaluru; Editing by Krishna Chandra Eluri)

Shopify Beats Holiday-Quarter Revenue Estimates on Higher Consumer Spending

(Reuters) - Shopify topped market estimates for sales in the holiday quarter on Tuesday, on the back of healthy consumer spending and the company rolling out AI features that have attracted more sellers to its e-commerce platform. U.S.-listed shares of the company fell 9% in premarket trading. Shopify expects its revenue to grow at a mid-twenties percentage rate in the current quarter, while analysts expect a rise of 24.4% from a year earlier to $2.31 billion according to data from LSEG. The company also expects operating expense as a percentage of revenue to be 41% to 42% in the first quarter, compared with 31.5% in the holiday quarter. Shopify has invested in building out artificial intelligence-based tools and features across its services that help sellers on its platform with tasks ranging from image generation and inventory management to gathering customer and sales data. The company also benefited from strong online sales over the holiday season, with U.S. online spending rising nearly 9% between November and December, according to data from Adobe Analytics. The Canadian company reported revenue of $2.81 billion for the fourth quarter ended December 31, compared with analysts' average estimate of $2.73 billion according to data compiled by LSEG. (Reporting by Deborah Sophia in Bengaluru; Editing by Krishna Chandra Eluri)