Shopify issues upbeat quarterly forecasts, $2 billion stock buyback plan; shares surge

Feb 11 (Reuters) - Canada's Shopify forecast quarterly revenue well above Wall Street expectations on Wednesday, encouraged by healthy demand at retailers on the e-commerce platform, as consumer spending remained resilient despite tariff woes and rising prices.

U.S.-listed shares of the Ontario, Canada-based company SHOP.O SHOP.TO jumped nearly 12% premarket after Shopify also announced a new share buyback plan of up to $2 billion.

While U.S. President Donald Trump's tariffs, rising cost-of-living challenges, and worries over the labor market have strained shopping budgets, consumer spending has held strong in the U.S., driven primarily by higher-income households.

U.S. consumer sentiment rose to a six-month high in early February, according to the University of Michigan's Surveys of Consumers. Consumer spending also rose solidly in October and November, aiding holiday-quarter sales for retailers.

That propelled growth at Shopify, which primarily generates revenue by taking a cut of merchant sales through payment processing fees and by selling subscription plans to merchants. The company said it saw strength across all merchant sizes and regions in the holiday quarter.

Shopify has doubled down on artificial intelligence, offering tools that help sellers with a range of tasks, including analyzing sales data and setting up stores, helping it steadily attract both small-scale entrepreneurs and larger retailers.

Gross merchandise volume, or the total value of goods sold on the platform, was $123.84 billion in the holiday quarter, up from $94.46 billion in the prior year.

Shopify, which holds a more than 14% share in the U.S. e-commerce market, saw a 31% jump in holiday-quarter revenue to $3.67 billion, surpassing estimates of $3.59 billion, according to data compiled by LSEG.

It expects revenue to rise at a low-thirties percentage rate in the January-March quarter, compared with a consensus estimate of a 25.2% rise. It expects gross profit to increase in the high-twenties percentage range in the current quarter, following a 25% jump in the fourth quarter.

Its adjusted profit of 48 cents fell short of estimates of 51 cents, weighed by higher costs tied to marketing and research and development.