Shopify Inc (NASDAQ:SHOP) stock plummets 10.52% (As on February 12, 11:20:02 AM UTC-4, Source: Google Finance) after the company posted mixed result for the fourth quarter of FY25. Gross Merchandise Volume (GMV) in the fourth quarter was $123.84 billion, which increased 31.1% year over year. Offline GMV increased 29% year over year while B2B GMV jumped 84%. International GMV grew 50% year over year, with Europe’s GMV rising 45% year over year (35% on a constant currency basis). Merchant solutions revenues in the fourth quarter were $2.89 billion and accounted for 78.8% of Shopify’s total revenues. On a year-over-year basis, merchant revenues increased 34.9%, driven by strong GMV and increased penetration of Shopify payments. Subscription solutions revenues in the fourth quarter were $777 million and accounted for 21.2% of Shopify’s total revenues. On a year-over-year basis, subscription solutions revenues increased 16.7%. Monthly Recurring Revenue (MRR) in the fourth quarter was $205 million, which increased 15.2% on a year-over-year basis. As of Dec. 31, 2025, Shopify had cash and cash equivalents (including marketable securities) worth $5.78 billion compared with $6.35 billion as of Sept. 30. Free cash flow increased 17% year over year to $715 million. The free cash flow margin contracted 230 bps year over year to 19.5% in the reported quarter.

Moreover, in the fourth quarter of 2025, gross profit was $1.69 billion, up 25.2% year over year. Gross margin contracted 200 basis points (bps) year over year to 46.1% due to unfavorable mix shift from Subscription Solutions to Merchant Solutions and strong results from the low-margin payments business.

SHOP in the fourth quarter of FY25 has reported the adjusted earnings per share of 38 cents, missing the analysts’ estimates for the adjusted earnings per share by 7.32%, according to the Zacks Consensus Estimate. The company had reported the adjusted revenue growth of 31 percent to $3.67 billion in the fourth quarter of FY25, beating the analysts’ estimates for revenue by 2.55%. SHOP reported an adjusted operating income of $760 million, up 29.9% year over year. Operating margin contracted 10 bps year over year to 20.7%

For the first quarter of 2026, Shopify expects revenues to grow at a low-30% rate on a year-over-year basis. Gross profit is anticipated to grow at a high-20% rate on a year-over-year basis.  Free cash flow margin is expected to be in the low-to-mid teens, slightly below Q1 2025.