Shopify’s Q4 2025 Earnings Report

Shopify’s Q4 Earnings Beat Expectations, But Stock Dips Amid AI Concerns and Buyback Approval

Shopify reported its fourth-quarter financial results on Wednesday, exceeding analyst expectations on revenue while also issuing strong guidance for the start of the year. However, the e-commerce giant’s stock saw a notable decline of over 10% in intraday trading.

For the fourth quarter, Shopify posted adjusted earnings per share of 48 cents, falling slightly short of the 51 cents estimated by LSEG-polled analysts. However, revenue came in at $3.67 billion, surpassing the consensus estimate of $3.59 billion.

Looking ahead to the first quarter, the Canadian e-commerce platform anticipates revenue growth in the “low-thirties percentage rate” year-over-year, a projection that outpaces the 25.1% growth forecast by FactSet analysts. The company also projected its free-cash-flow margin to be in the “low-to-mid teens” for the first quarter, a slight decrease from the previous year, which CFO Jeff Hoffmeister attributed to ongoing investments in artificial intelligence tools. In a move to bolster shareholder value, Shopify’s board of directors also authorized a $2 billion share buyback program.

The market’s reaction comes at a time when software stocks have experienced significant sell-offs in recent weeks, fueled by investor apprehension regarding the potential disruption posed by artificial intelligence. Shopify, a key player providing software infrastructure for businesses to establish and manage their online retail presence, has actively sought to position itself at the vanguard of emerging AI-driven commerce solutions. The company was an early collaborator with OpenAI on its Instant Checkout feature and played a role in Google’s development of a universal commerce protocol designed to facilitate transactions via AI shopping bots across the internet.

In an interview, Shopify President Harley Finkelstein emphasized the company’s strategic placement, stating that Shopify has “laid the rails” for AI-powered shopping and is well-positioned to capitalize on the transformative impact of AI on e-commerce. Finkelstein also expressed a view that some of the anxieties surrounding an AI-induced software sector collapse might be overstated.

“I think there’s an incredible opportunity coming with AI, but I think you have to look at the companies that are acting as infrastructure, as platforms, vs. ones that are just features,” Finkelstein remarked. “Shopify is internet infrastructure.”

The company’s revenue performance was bolstered by the crucial holiday shopping season, which saw what Adobe Analytics described as “record” spending in 2025. According to Adobe, online spending between November 1st and December 31st increased by 6.8% to $257.8 billion, exceeding its own forecast of $253.4 billion. This resilience in consumer spending occurred despite a challenging economic climate characterized by waning consumer confidence, geopolitical trade policies, and a softening job market. Official government data from the Commerce Department indicated that retail sales in December remained flat, following a 0.6% increase in November, concluding the year on a subdued note.

Shopify’s gross merchandise volume (GMV), a key metric representing the total value of merchandise sold through its platform, also exceeded analyst expectations. GMV surged by 29% year-over-year to $123.8 billion, surpassing the FactSet consensus estimate of $121.3 billion.