Shopify Q4 Earnings Miss Estimates, Revenues Increase Y/Y

Core Insights - Shopify reported fourth-quarter 2025 non-GAAP earnings of 38 cents per share, missing the Zacks Consensus Estimate by 7.32%, while revenues of $3.67 billion surpassed estimates by 2.55%, marking a year-over-year increase of 30.6% [1][9] Revenue Performance - Gross Merchandise Volume (GMV) in Q4 was $123.84 billion, up 31.1% year over year, with offline GMV increasing by 29% and B2B GMV surging 84%. International GMV grew by 50%, with Europe’s GMV rising 45% year over year [2] - Merchant solutions revenues reached $2.89 billion, accounting for 78.8% of total revenues, with a year-over-year increase of 34.9% driven by strong GMV and increased penetration of Shopify payments [3] - Subscription solutions revenues were $777 million, making up 21.2% of total revenues, with a year-over-year increase of 16.7% [4] Profitability Metrics - Gross profit for Q4 was $1.69 billion, reflecting a 25.2% year-over-year increase, although gross margin contracted by 200 basis points to 46.1% due to a mix shift from higher-margin Subscription Solutions to lower-margin Merchant Solutions [5] - Merchant Solutions' gross profit increased by 30%, while Subscription Solutions' gross profit grew by 18%, with respective gross margins of 36.8% and 81% [6] Operating Expenses - Total operating expenses were $1.06 billion, up 19.7% year over year, with Sales & Marketing expenses increasing by 24.4% to $433 million, R&D expenses rising by 11.1% to $390 million, and G&A expenses surging by 11.6% to $125 million [7] - Despite the increase in operating expenses, as a percentage of revenues, total operating expenses declined by 260 basis points to 28.9% [8] Future Guidance - For Q1 2026, Shopify expects revenues to grow at a low-30% rate year over year and gross profit to grow at a high-20% rate year over year, with GAAP operating expenses as a percentage of revenues projected to be in the 37-38% range [11]