Shares of e-commerce software company (NYSE: SHOP) got knocked down on Tuesday after the company reported financial results for 2023 and set some guidance for the first quarter of 2024. As of 11:30 a.m. ET, Shopify stock was down 11%.

Prior to today's drop, Shopify stock was up about 50% in just three months. Investors were increasingly optimistic because revenue growth was picking back up and its profit margins were improving. Those are good things that the market expected to continue. But guidance implies a step back in its upcoming first quarter.

Excluding the negative impact from discontinued operations, Shopify's fourth-quarter revenue was up 30%, boosted by a healthy 23% year-over-year increase in gross merchandise volume (the dollar value of sales on its platform). Moreover, the company had a whopping $446 million in Q4 free cash flow, which equates to a strong margin of 21%.

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Source Fool.com