Shopify Shares Drop 13% After EPS Miss Despite 31% Revenue Growth

Khac Phu Nguyen

Fri, February 13, 2026 at 4:25 AM GMT+9 2 min read

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•                                       StockStory Top Pick 
  

  SHOP

  -7.83%

This article first appeared on GuruFocus.

Shopify (NASDAQ:SHOP) reported a fourth quarter that may leave investors balancing strong top-line momentum against a narrower earnings miss. The company generated adjusted diluted earnings of 48 cents per share, falling short of the 51 cents analysts had expected, even as revenue advanced 31% year over year to $3.7 billion, ahead of the nearly $3.6 billion consensus. Gross merchandise volume reached roughly $124 billion, exceeding forecasts, and merchants posted a record $14.6 billion in sales during the Black Friday-Cyber Monday weekend, up 27% from the prior year. Still, shares, which had rallied into the print, declined 13% to $110.37 by late morning in New York, marking the steepest intraday drop since April 2025.

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Management underscored the scale of the quarter. President Harley Finkelstein told analysts that Q4 was Shopify’s first ever quarter of revenue above $3 billion, adding that the period generated more revenue than the entirety of 2020. Looking ahead, the company expects first-quarter revenue to grow at a low-thirties percentage rate, with operating expenses projected at 37% to 38% of revenue. At the same time, commentary around lower free cash flow margins in the first-quarter outlook, alongside references to tax rate dynamics and gross-margin pressure, may be contributing to the market’s reaction.

From the Street’s perspective, the broader setup could remain constructive. Colin Sebastian of Robert W. Baird wrote that while guidance elements may be pressuring the shares, the bigger picture appears more positive as Shopify consolidates e-commerce market share and positions its platform as a key enabler of agentic commerce, adding that he would be opportunistic on pullbacks. TD Cowen’s John Shao described the quarter and first-quarter guidance as strong and above consensus, and reiterated his view that Shopify could be a net beneficiary of AI rather than disrupted by it. The company also authorized a $2 billion share buyback program expected to take effect on Feb. 17, a move that may signal confidence in its longer-term trajectory even as near-term margins draw scrutiny.

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