Shopify stock drops despite revenue beat, $2 billion buyback

On Wednesday, Shopify announced its fourth-quarter results, showcasing impressive revenue figures that exceeded analysts' expectations. However, despite this positive news, the company's stock fell more than 3%. The Canadian e-commerce giant revealed that it anticipates first-quarter revenue growth in the low-thirties percentage range year-over-year, surpassing the 25.1% growth forecast from analysts surveyed by LSEG. Additionally, Shopify's board has greenlit a substantial $2 billion share buyback program. The surge in revenue can largely be attributed to a robust holiday shopping season, which saw "record" spending in 2025, as reported by Adobe Analytics. From November 1 to December 31, online spending rose by 6.8% to reach a total of $257.8 billion, exceeding Adobe's forecast of $253.4 billion. Despite the challenges of a weakening economy and declining consumer confidence, shoppers showed resilience during this festive period. In a related note, the Commerce Department indicated that retail sales remained flat in December, following a 0.6% uptick in November. This flat performance at the year's end contrasts with an otherwise solid shopping season. Furthermore, Shopify reported a significant rise in its gross merchandise volume (GMV), which increased by 29% year-over-year to $123.8 billion, surpassing the analysts' estimates of $121.3 billion, according to FactSet.