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Shopify Inc. surpassed the US$1-billion level in sales for 2018 and has promised more fast-paced growth in 2019 despite revealing that its customer count expanded at a decelerating rate last year.

The Ottawa software company beat earnings expectations and its own forecasts on Tuesday, and said it expects revenue to increase by upward of 36 per cent this year. But the stock traded down after a strong run so far this year as some analysts pointed to a couple of soft spots in its fourth-quarter numbers.

Read more: Shopify’s stock price 'just doesn’t matter much’: Q&A with Tobi Lutke

Shopify said it generated US$343.9-million in revenue for the period ended Dec. 31, up 54 per cent over the same quarter a year earlier, and higher than consensus estimates of US$327-million. The company, which now employs 4,000 people, generated US$1.07-billion in revenue for the year, while growing faster than any other subscription software firm that had reached that size, chief executive Tobi Lutke said.

“We tend to not spend a lot of time celebrating victories, especially financial ones, but that’s a pretty stunning statistic,” Mr. Lutke said in an interview. The company also said it expects to generate revenue of US$1.46-billion to US$1.48-billion this year, but some analysts expect the company will exceed its full-year forecast, as it has in each of the three previous years.

The company, whose 820,000 merchant customers use its online platform to run their web-based and physical store operations, posted a net loss of $1.5-million, about half the level of the previous year’s loss. However, analysts were watching for the company’s non-GAAP adjusted operating income, which was US$20-million, or 10 per cent above what the company had forecast.

Shopify said 24 per cent of its merchants are now outside of its core English-speaking markets of North America, Britain and Australia, up from 21 per cent a year earlier, after efforts to translate its platform into six languages, including German, French and Japanese. In addition, the company said the 5,300 customers for its Shopify Plus offering – an expanded version of its platform for larger customers, including big names such as Johnson & Johnson, Unilever and fashion brand Jones New York – now account for an increasing share of the gross merchandise value, or sales booked by customers using its platform. The company is also increasing revenues from new services in recent years, including merchant financing, shipping and fraud protection.

But Raymond James analyst Brian Peterson cited slower growth in the number of merchants using the platform – 211,000 added in 2018 compared to 232,000 a year earlier – as a reason the stock traded slightly down for most of the day before closing up 1.4 per cent on the NYSE. The company also indicated margins may not improve in 2019 as it spends on international expansion, brand awareness on mass market channels and to increase its product offering.

Chief financial officer Amy Shapero dismissed concerns, saying: “We feel like we have a strong and healthy and growing total addressable market …this isn’t just about merchant adds.” She said the company’s investments this year "will help us continue to grow at strong rates well into the future.”

“I think we’re in the very early innings" of a long period of sustained growth for the company, National Bank analyst Richard Tse said.

One big question about Shopify’s future centres on its nearly US$2-billion in cash and marketable securities. Ms. Shapero said spending plans “will likely include mergers and acquisitions if we see an attractive opportunity to accelerate our road map.”

Mr. Lutke acknowledged in an interview that his company, which to date has only made modest-sized acquisitions, had the capability to make a $1-billion acquisition. But he said he would be “very cautious” about considering such a large transaction. “One thing we will not do is corporate M&A big-game hunting, which some companies seem to be engaged in,” he said. “That turns you into a different kind of company than we are.”