Shopify (NYSE: SHOP) reported its fourth-quarter earnings yesterday (11 February). As is often the case, the e-commerce enabler’s numbers were mightily impressive, sending the growth stock up 3.1%.

This brings Shopify’s five-year return to 133%!

Shopify was founded to foster entrepreneurship by helping merchants build an online store and succeed. As the company does this, it also grows, fuelled by the success it enables (the flywheel effect).

Shopify now has over 12% share of the giant US e-commerce market — second only to Amazon! And it continues to expand rapidly in Europe and Japan, with international growth exceeding 30% for the second consecutive year in 2024.

In Q4, revenue accelerated 31% year on year to $2.81bn, marking the seventh consecutive quarter of 25%+ growth (when excluding the logistics business it sold in 2023). That beat Wall Street’s expectations for $2.73bn.

Full-year revenue jumped 26% to $8.9bn, with more than 875m unique shoppers purchasing something from Shopify merchants (an incredible one in every six internet users). Meanwhile, the free cash flow (FCF) margin expanded each quarter, finishing the year at 18%, up from 13% in 2023.

A final positive thing to note here was gross merchandise volume (GMV), which rose 24% last year to just under $300bn. That was 2.4 times higher than the pandemic-fuelled online shopping boom of 2020.

As a reminder, GMV represents the total value of all transactions processed through the company’s platform. And since being founded in 2006, it has now passed the $1trn mark in cumulative GMV!

All this tells us that Shopify’s growth engine is still purring, unlike many other e-commerce firms whose growth has slowed markedly after Covid (Etsy, for example, or eBay).

Harley Finkelstein, president of Shopify, commented: “With our proven track record, the agility of our platform, and our relentless focus on merchant success, we like our odds in this evolving technology landscape, and are excited about the opportunities it brings for Shopify and our merchants.”

The company has been investing heavily in artificial intelligence (AI) products. It has created Shopify Magic, which is a suite of generative AI features that help merchants create product descriptions and transform product image backgrounds.

Additionally, it has launched Sidekick, an AI assistant that provides tailored advice and step-by-step guidance to help merchants optimise their businesses.

As a shareholder, I’m fully supportive of this relentless tech innovation. The AI features are attracting more merchants, solidifying Shopify’s position as the go-to platform for running an online store.