Shopify (SHOP) Stock Rises 11% After Q4 Revenue Beat and $2 Billion Buyback

TLDR

• Shopify stock jumped 11% in premarket trading despite missing Q4 earnings expectations with 48 cents per share versus 50 cents expected
• Revenue climbed 31% year-over-year to $3.67 billion, beating Wall Street’s forecast of $3.59 billion
• Gross merchandise volume surged 31% to $123.8 billion, topping the 28% growth analysts predicted
• Company announced a $2 billion stock buyback program with no quarterly or yearly minimums
• Shopify projects Q1 2026 revenue growth in the “low-thirties” percentage range, crushing analyst estimates of 25% growth

Shopify stock surged in premarket trading Wednesday after the e-commerce platform delivered mixed fourth-quarter results that included a revenue beat and announced a massive share repurchase program.

The company reported adjusted earnings of 48 cents per share for Q4, falling short of the 50-cent consensus estimate from analysts. Despite the earnings miss, investors focused on the stronger revenue performance.

Revenue totaled $3.67 billion in the quarter ended December, jumping 31% from the prior year. The figure topped Wall Street’s forecast of $3.59 billion.

Gross merchandise volume reached $123.8 billion during the holiday quarter, up 31% from $94.46 billion a year earlier. Analysts had expected a more modest 28% increase.

Shopify Inc., SHOP

Shares jumped 11% before the market opened. The stock had dropped 21% year-to-date through Tuesday’s close, caught in the broader tech selloff that has pressured high-growth names.

Strong Guidance Surprises Street

Shopify issued first-quarter guidance that exceeded expectations by a wide margin. The company forecasts revenue growth in the “low-thirties” percentage range for Q1 2026.

Analysts had been modeling 25% year-over-year growth for the quarter. The upbeat outlook signals management’s confidence despite economic headwinds.

Finance chief Jeff Hoffmeister said the company “ended 2025 with strength across all merchant sizes, regions, and channels, setting us up well for 2026.”

Consumer spending has remained resilient in the U.S., particularly among higher-income households. U.S. consumer sentiment hit a six-month high in early February, according to the University of Michigan.

AI Integration Drives Platform Growth

Shopify has doubled down on artificial intelligence tools that help merchants with tasks like analyzing sales data and setting up online stores. The AI push has attracted both small entrepreneurs and larger retailers to the platform.

The company generates revenue primarily through payment processing fees on merchant sales and subscription plans. Gross profit rose more than 25% to $1.69 billion in Q4.

Shopify expects gross profit to increase in the high-twenties percentage range in the current quarter.

The board authorized a share repurchase program of up to $2 billion. The company plans to execute buybacks using pre-arranged algorithmic trading instructions with no set quarterly or yearly minimums.

The stock had been under pressure in early 2026 despite the company’s progress integrating AI capabilities into its e-commerce platform.

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