Shopify's stock fell despite beating the top line and giving strong guidance to start the year in its latest earnings.
Revenue for the final quarter of 2025 grew 31% to US$3.67 million, beating expectations of $3.59 million.
The e-commerce company also reported earnings of 48 cents per share. This was below analysts' expectations of 51 cents per share.
Shopify also announced that it expects first-quarter revenue to expand at a “low-thirties percentage range” year-over-year, which is higher than the 25.1% growth forecast by analysts, according to FactSet.
“2025 was Shopify at full throttle - driving compounding growth, while laying the rails for the new era of AI commerce,” Harley Finkelstein, President of Shopify, said.
“2026 will be the year of the builders, and we’ll be powering them - from first sale to full scale.”
The company’s board of directors also approved $2 billion in share buybacks.
Shares of software companies have sold off heavily in recent weeks as investors grew increasingly concerned about the potential threat of artificial intelligence tools.
The company has adopted AI technology and was an early partner of OpenAI when it launched its Instant Checkout feature.
It also helped Google develop a protocol for AI shopping bots to facilitate transactions across the web.
Finklestein told CNBC that some fears of an AI-driven software wipeout are overblown.
“I think there’s an incredible opportunity coming with AI, but I think you have to look at the companies that are acting as infrastructure, as platforms, vs. ones that are just features,” Finkelstein said.
“Shopify is internet infrastructure.”
According to Adobe Analytics, the company’s revenues were lifted by “record” levels of spending in the key holiday shopping period.
Adobe said online spending increased 6.8% to $257.6 billion from 1 November through 31 December, beating expectations of $253.4 billion.
The Commerce Department reported Tuesday that retail sales in December were flat after increasing 0.6% in November, capping off the year on a downbeat note after a period of otherwise solid shopping activity.
Shopify (NASDAQ: SHOP) shares closed down 6.70% to $118.71 on Wednesday, and gained 0.41% in after-market trading to $119.20. Its market cap is $154.93 billion.
