Shopify Inc. (NYSE: SHOP) said on Wednesday that its profit and revenue in the fiscal fourth quarter came in significantly better than expected. The company, however, said that growth in 2021 is likely to lose some pace. Shopify said on Wednesday:
“Our outlook coming into 2021 assumes that as countries roll out vaccines in 2021 and populations are able to move about more freely, the overall economic environment will likely improve, some consumer spending will likely rotate back to offline retail and services, and the ongoing shift to eCommerce, which accelerated in 2020, will likely resume a more normalised pace of growth.”
Shopify’s Q4 financial results versus analysts’ estimates
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Shopify said that its net income in the fourth quarter printed at £96.30 million that translates to 71.47 pence per share. The Ottawa-headquartered company had reported a sharply lower £2.96 million of net income in the same quarter last year or 0.72 pence per share. Shopify’s earnings report comes only a day after its stock rallied to a record high as Susquehanna analyst raised his price target by 37%.
Adjusted for one-time items, Shopify earned £1.14 per share in Q4 versus the year-ago figure of 31.04 pence per share. The Canadian multinational recorded £705.81 million of revenue in the recent quarter that represents a massive 93.6% annualised growth.
According to FactSet, experts had forecast the company to register £659.17 million of revenue in the fourth quarter. Their estimate for adjusted per-share earnings stood at a lower 91 pence. In comparison, Shopify had noted £148.08 million of net income in the prior quarter (Q3).
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Other prominent figures in Shopify’s earnings report
At £201.70 million, subscriptions revenue in Q4 jumped 52.6% on a year over year basis versus £191.30 million expected. Merchant solutions revenue came in at £504.11 million – a 116.9% increase from last year. FactSet Consensus for revenue from this segment stood at a lower £468.23 million.
Shopify slid roughly 6% in premarket trading on Wednesday and lost another 2% on market open to trade at a per-share price of £980.35 per share. In March 2020, it was exchanging hands at a significantly lower £233 per share.
Shopify performed massively upbeat in the stock market last year with an annual gain of close to 175%. At the time of writing, the Canadian multinational e-commerce company is valued at about £120 billion and has a price to earnings ratio of 868.65.