By Liz Moyer
Investing.com -- Shopify (TSX:SHOP) Inc (NYSE:SHOP) beat expectations with a surprise profit and stronger than forecast revenue in the fourth quarter, but disappointed with its outlook.
The e-commerce platform for businesses posted earnings per share of 7 cents, compared with the 1 cent loss a share expected. Revenue was $1.73 billion, up from the $1.65B expected. Revenue was up 26% from the prior fourth quarter.
"The strength of our Q4 and full year performance in 2022 is a testament to the resilience of our merchants," said Harley Finkelstein, the company's president. "Despite persistent macroeconomic challenges, they continued to succeed on Shopify, growing sales and using more of our mission-critical tools to run their businesses."
Shares of Shopify fell 5.6% in after-hours trading.
The company said its 2023 financial outlook includes pricing changes to its subscription plans; the expected impact of Shopify Fulfillment Network and Deliverr; and increased personnel-related expenses. "Additionally, while our financial outlook assumes that the Covid-triggered acceleration of ecommerce continues to return to a more normalized rate of growth in 2023, there is elevated inflation and continued caution around consumer spending due to a variety of macroeconomic factors."
Its first quarter 2023 financial projections include revenue growth in the high-teen percentages over last year's first quarter and gross margin to be slightly higher than the fourth quarter gross margin. Analysts were projecting first quarter revenue of $1.48B, or a 23% gain over last year's first quarter.
Gross merchandise value in the fourth quarter was $61B, up 13% and beating expectations.
Revenue for the full year 2022 rose 21% to $5.6B.