Shopify's momentum as a commerce platform continues as the company reported strong fourth quarter results and has become more strategic for customers.
The company reported fourth quarter net income of $1.29 billion on revenue of $2.81 billion, up 31% from $2.14 billion a year ago. Shopify's net income was boosted by equity investments. Excluding those investments, Shopify delivered net income of $458 million.
For 2024, Shopify reported net income of $2.02 billion on revenue of $8.8 billion, up 26% from 2023.
As for the outlook, Shopify projected first quarter revenue growth in the mid-twenty percentage rate. The first quarter is typically Shopify's slowest period.
Last quarter, Shopify broke through as an all-encompassing commerce platform that appealed to both smaller and large enterprises. Harvey Finkelstein, President of Shopify, said the company in 2025 will be committed to "further establishing Shopify as the go-to commerce platform for businesses of all sizes."
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While the term "platformization" is typically associated with cybersecurity, it's beginning to apply to commerce platforms. Shopify is consolidating wallet share. Speaking on Shopify’s earnings call, Finkelstein said:
“From top sports teams to major music labels and even one of the largest window covering businesses, Shopify powers them all. This diversity isn't just impressive, it proves that Shopify is the most compelling choice for any business looking to grow quickly, reliably and at scale. In addition to new brands consistently choosing Shopify for its comprehensive enterprise level offerings, the Shop Pay Commerce component has also become a compelling entry point into the Shopify ecosystem for enterprise brands.”
Shopify touted customers such as Everlane, Aldo, Sperry. Crocs, Warner Music and a host of others. “At the high level the enterprise is migrating to Shopify. I think one of the great things we did was we created a bunch of options for them,” said Finkelstein.
But it goes a long way when customers talk up Shopify on their own calls. Commerce customers are citing Shopify as part of their transformation plans.
For instance, Bark CEO Matt Meeker said Shopify replaced a series of legacy systems and boosted its quarterly results. Meeker said:
"In late October, we transitioned all paid media traffic to our new Shopify platform. This is a big deal. While transitions of this nature inherently carry some uncertainty, I'm pleased to report that the early results have been encouraging," said Meeker. "New subscriptions grew 11% year-over-year, and we achieved this at a lower customer acquisition cost."
Meeker added that 43% of checkouts on Bark.com were via Shop Pay. "The new platform modernizes the customer experience, which we expect to continue to drive increased conversion over time," said Meeker. "We plan to migrate our remaining active subscriber cohorts from our legacy sites to the Shopify platform this quarter."
Grove Collaborative Holdings also said Shopify has been a big part of its transformation efforts. "We announced the Shopify migration, but we don't expect to be fully on the platform until early Q1. We are really excited about what that will enable," said Grove Collaborative Holdings CEO Jeff Yurcisin.
Shopify is also gaining on integrations with other commerce players. Roblox cited a Shopify integration in its most recent quarter as did Affirm and Lightspeed Commerce.
For Shopify, those customer endorsements are just the beginning to expanding the company’s footprint. Finkelstein said:
“In 2025, we will continue to invest in our core platform and in key areas like enterprise, offline and international markets as these key growth drivers are helping to fuel our top line growth and laying the groundwork for ongoing success and innovation. We are entering an exciting era of commerce driven by transformative shifts in technology like AI. I think Shopify will very much be one of the major net beneficiaries in this new AI era.”
