Harley Finkelstein: 'We have 35% more merchants from outside North America launch and grow their businesses on Shopify.'
— Harley Finkelstein
03Detailed Report
SHOP
Shopify Inc
Period
Q4 2023
CurrencyUSD
Report TypeQuarterly Earnings
GeneratedJun 5, 2026
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Executive Summary
Shopify Inc (SHOP) reported a record-breaking fourth quarter in 2023, achieving $2.1 billion in revenue, representing a 24% year-over-year increase. This quarter marks the first time in Shopify's history that the company surpassed $2 billion in revenue in a single quarter. The robust performance was driven by the significant growth of its Merchant Solutions segment, which accounted for $1.6 billion in revenue, primarily driven by increased GMV (Gross Merchandise Volume) and higher penetration of Shopify Payments. With a strong focus on innovation, Shopify has launched several AI-powered tools and enhanced its platform to provide better services for merchant partners. The company's ability to attract more merchants globally, particularly in the EMEA region where it experienced 40% growth year-over-year, highlights its expanding market position and operational agility.
Key Performance Indicators
Revenue
Increasing
2.14B
QoQ: 25.09% | YoY: 23.58%
Gross Profit
Increasing
1.06B
49.50% margin
QoQ: 17.87% | YoY: 33.00%
Operating Income
Increasing
204.50M
QoQ: 67.62% | YoY: 208.34%
Net Income
Increasing
657.00M
QoQ: -8.50% | YoY: 205.18%
EPS
Increasing
0.53
QoQ: -3.64% | YoY: 208.16%
Revenue Trend
Margin Analysis
Financial Highlights
1. Revenue: $2.1 billion in Q4, up 24% YoY; annual revenue reached $7.1 billion, a 26% increase.
2. Gross Profit: $1.1 billion in Q4, 33% YoY growth, achieving a gross margin of 49.5%.
3. Operating Income: $289 million or 13.5% of revenue,
4. Free Cash Flow: $446 million in Q4, translating to a free cash flow margin of 21%.
5. Customer Growth: 35% more merchants added internationally, with significant contributions from markets outside North America.
6. Management highlighted the successful Black Friday-Cyber Monday, where over $9.3 billion in sales were processed, an increase of 24% from prior year.
7. Merchant Solutions revenue reached $1.6 billion, driven by GMV exceeding $75.1 billion in Q4, a 23% YoY increase, as more merchants utilized its platform for payments.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
2.14B
23.58%
25.09%
Gross Profit
1.06B
33.00%
17.87%
Operating Income
204.50M
208.34%
67.62%
Net Income
657.00M
205.18%
-8.50%
EPS
0.53
208.16%
-3.64%
Key Financial Ratios
Gross Profit Margin
Good
49.50%
Gross profit margin is healthy and competitive within industry standards
Operating Profit Margin
Fair
9.54%
Operating margin is moderate, room for improvement in cost management
Net Profit Margin
Excellent
30.60%
Net profit margin is exceptional, indicating strong pricing power and operational efficiency
Return on Assets
Fair
5.81%
Return on assets is acceptable but below top-tier companies
Return on Equity
Fair
7.25%
Return on equity is acceptable but below top-tier companies
Current Ratio
Strong
6.99
Current ratio indicates excellent liquidity and financial flexibility
Debt to Equity
Conservative
0.13
Debt-to-equity shows conservative leverage and low financial risk
P/E Ratio
Growth
38.11x
Elevated P/E suggests growth expectations or premium valuation
Price to Book
High Premium
11.05x
Very high premium suggests asset-light business model or lofty expectations
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