In a recent appearance on Schwab Network's the Watch List with Nicole Petallides, Chris Wang provided expert insights and analysis on Shopify's (SHOP) 4th quarter earnings report.

SHOP –

  • Standout year for Shopify: 7 consecutive quarters of 25%+ revenue growth excluding logistics (4Q growth 31%)
  • The COVID pandemic has fueled new business growth with 5 million businesses formed each year since 2020
  • Free cash flow yield expanded each quarter of 2024
  • AI features are driving growth in SMB adoption

CEO Harvey Finkelstein called this a standout year for Shopify and the numbers speak for themselves; $1 trillion in cumulative GMV; 9 consecutive quarters of positive free cash flow; 875+ million unique online shoppers purchased from Shopify merchants in 2024; 200+ million of Shop Pay users. Overall the company has put up 7 consecutive quarters of 25% revenue growth excluding logistics – the 4Q revenue growth was a stellar 31%. Their market position keeps getting stronger with more than 12% of US ecommerce market share.

With over 16000 apps in their app store, Shopify offers unparalleled options for its merchants. Shopify is launching 100-150 new features and updates every 6 months.

Shopify has a breadth of AI features that go beyond Magic and Sidekick; a lot of features have rolled out with little fanfare. They have the added benefit of a gigantic app store for developers to build out features that integrate. WIX also has an app store but the breadth of widgets/plugins is a fraction of that of Shopify.

The company has many growth drivers including international, Shop Pay, offline, and B2B.