Shopify sold its logistics arm to Flexport and swung from a $3.5B loss to a $2B profit

Shopify's pandemic boom reversed in 2022: it had bought the Deliverr fulfillment network and expanded logistics just as growth slowed, and the FY2023 results release shows a 2022 net loss of $3.46 billion.

In May 2023 Shopify agreed to sell the majority of Shopify Logistics, including Deliverr, to Flexport, taking a 13% equity stake in Flexport; the sale completed on June 6, 2023, with Flexport becoming its fulfilment partner, per Shopify's announcement.

The numbers turned quickly: 2023 revenue rose 26% to $7.1 billion, net income was $132 million and free cash flow $905 million, versus negative free cash flow of $186 million in 2022. In 2024, revenue again grew 26%, net income reached $2.02 billion, free cash flow $1.6 billion and GMV $292 billion.

FY2023 revenue $7.1B (+26%) with net income $132M vs a $3.46B loss; FY2024 net income $2.02B, free cash flow $1.6B and GMV $292B.

Logistics was capital-intensive and low-margin, unlike the software core.

Flexport took over fulfilment so merchants never left the platform.

Cutting costs and headcount returned the company to GAAP profit in a year.

GMV growth reaccelerated as focus returned to commerce software.

After an acquisition binge, exiting the capital-heavy side business can restore margins and trust in the core faster than doubling down on it.

By Q4 2024 Shopify had seven straight quarters of 25%+ revenue growth excluding logistics and a 22% free-cash-flow margin, with GMV growth of 24% for the year — its fastest in three years, per its Q4 2024 results release.