The penetration rate of Shopify Payments as a percentage of GMV was 60% compared to 56% in Q4 of 2022. Several factors drove the quarter’s higher gross payments volume compared to the prior year, including the strong performance of those merchants utilizing Shopify Payments, an increasing percentage of which are Shopify Plus, more merchants across the globe adopting payments, greater penetration of Shop Pay and continued growth of our point-of-sale solution. These were partially offset by our GMV mix shifting to EMEA where we have lower GPV penetration than North America. It is important to remember that Q4 is a quarter which traditionally sees the highest percentage of revenue from payments. For the year, GPV penetration was 58% up from 54% in 2022.
Subscription Solutions revenue was $525 million, up 31% over Q4 of 2022, primarily driven by the growth in the number of merchants and, to a lesser extent, the impact from the pricing increases on our Standard plans. This combined strength across Merchant Solutions revenue and Subscription Solutions revenue generated our first quarter of greater than $2 billion in revenue. Q4 MRR was $149 million, up 35% year-over-year. We saw growth year-over-year in MRR across each of Standard, Plus, and Off-line point-of-sale. The strength stem from increases in the number of merchants in each of the three categories, combined with, for Standard, the pricing change that we implemented last year for Plus, growth from both first-time Shopify merchants starting on Plus and existing merchants upgrading from one of our Standard plans to Plus, with Plus representing 31% of MRR for Q4 of this year, consistent with Q3.
And for point-of-sale, which was up 46%, driven by both improvements in our go-to-market strategy and our new retail plan, which, as a reminder, is our new plan for retail first businesses that primarily sell through brick-and-mortar, but which also won a simple online presence. Similar to our year-over-year results, MRR increased in each of the three categories on a sequential quarter-over-quarter basis as well, largely from growth in the number of merchants in each group. In Q4, our attach rate was 2.85%, which is in line with Q4 of 2022 and up year-over-year when considering the impact of the sale of our logistics business. Key drivers of attach rate expansion in the quarter were the continued gains in GPV penetration, higher subscription revenues and greater product adoption led by Markets and Shop Cash.
The quarterly sequential decline in our attach rate, as we have consistently experienced in prior years is primarily driven by Q4 being more heavily weighted to payments revenues from the strong holiday season. Moving to gross profit. Gross profit was $1.1 billion for the quarter, up 33% year-over-year, outpacing revenue growth and delivering our first quarter of gross profit dollars above $1 billion in a single quarter. Gross margin for Subscription Solutions was 81.5% compared to 78.5% in Q4 of 2022. The increase was driven primarily by pricing changes on Standard plans and, to a lesser extent, continued support efficiencies. Gross margin for Merchant Solutions was 39.2% compared to 36.3% in Q4 of 2022. Our improvement in gross margins for Merchant Solutions was primarily due to the absence of logistics, which was dilutive to margins.
When excluding the impact of logistics, our Merchant Solutions gross margin was down year-over-year with the key factors being growth of our lower-margin Shopify Payments business and a decrease in some higher-margin partnership revenue, with both of those impacts being partially offset by growth in our Shopify Tax product and other higher-margin products within Merchant Solutions. This brings our overall Q4 gross margin of 49.5% compared to 46% in the prior year and in line with the outlook we provided on the last earnings call. For the full year, gross margin was 49.8%, up from 49.2% in 2022, primarily driven by the absence of logistics, the pricing changes on Standard plans and support efficiencies partially offset by the continued growth in our lower-margin payments business.
Operating expenses were $773 million for the quarter down 22% compared to Q4 of 2022, down 1% quarter-over-quarter and in line with our guidance from our last earnings call. The decline year-over-year was primarily due to the sale of the logistics business, lower head count and the lack of a real estate impairment charge, which we had in the prior year, partially offset by increases in marketing spend, primarily in performance marketing, both offline and online to further support our key growth initiatives. Operating income for the quarter was $289 million or 13.5% of revenues, up from Q3 operating income of 7%. Stock-based compensation for Q4 was $103 million in line with our Q3 SBC also of $103 million. Capital expenditures were $2 million for the quarter.
Q4 free cash flow was $446 million or 21% of revenue. The outperformance in GMV in the quarter drove the higher free cash flow margin. For the year, we achieved a 13% margin, growing both free cash flow dollars and free cash flow margin sequentially every quarter of 2023. We have now delivered five consecutive quarters of positive free cash flow with no expectation for this trend to change. Turning to our balance sheet. Our cash and marketable securities balance was $5.0 billion as of December 31st, and we had a net cash position of $4.1 billion after consideration of the outstanding convertible notes. In Q4, we invested $260 million in Flexport via convertible note as part of Shopify’s continued partnership with the Flexport team. Before turning to our outlook, a few comments on our perspectives underpinning our expectations for 2024.
From a macro perspective, we expect the same resiliency from our merchants and their buyers that we experienced in 2023. We expect our existing merchant cohorts to continue to deliver strong growth, coupled with our ambitions to continue to add more new merchants of all sizes, from entrepreneurs to large enterprises and channels, including off-line and B2B. In 2024, we plan to remain disciplined on head count growth and continue to find more ways to use AI and automation to be even more efficient operationally. We will lean into growth opportunities and provide the essential go-to-market support while continuing to execute with the operational discipline that we demonstrated this past year in order to deliver a compelling mix of growth and profitability.
Last week, we updated our Plus pricing. This marks the first change to our plus pricing in 6 years. We believe that we still offer by far the best value in the industry for the powerful, innovative and reliable tools that we’ve built for our merchant success. These changes went into effect for new merchants on February 8th, and it goes into effect on May 8th for existing merchants that don’t choose to lock in a three-year contract at the existing 2023 rates. Therefore, we expect more of the financial impact from these changes to occur in the second half of the year. Keeping all this in mind, let’s now turn to outlook. Our expectations for the first quarter of 2024 are as follows. First, on revenue. We expect our merchant momentum from Q4 to carry over into Q1, recognizing that Q1 is consistently our lowest quarter seasonally.
We expect Q1 revenue growth in the low 20s on a GAAP basis which translates into a year-over-year growth rate in the mid to high 20s when excluding the 500 to 600 basis point impact from the sale of our logistics business. Q1 thereby would mark the fourth consecutive quarter where our year-over-year revenue growth would be above 25% ex-logistics. Q1 gross margin is expected to increase approximately 150 basis points over Q4, which is the same Q4 to Q1 margin uplift that we saw in the prior year. The largest component of the increase is the expected higher mix of subscription solutions revenue in Q1. We believe that our Q1 operating expense dollars on a GAAP basis will be up at a low teens percentage rate compared to our Q4 operating expense dollars of $773 million.
The two primary drivers of the increase relative to the fourth quarter are marketing and employee-related expenses. These two items represent the significant majority of the increase and are roughly evenly balanced with marketing being a slightly larger contributor. In terms of marketing, the two areas, in particular, where we are leaning in this quarter are performance marketing and point-of-sale. Within performance marketing, our team has unlocked some opportunities to reach potential customers at highly attractive LTV to CAC and paybacks. In fact, tactics that we’ve implemented on some channels earlier this year including through the enhanced use of AI and automation have improved paybacks by over 30%, enabling us to invest more into these channels while still maintaining our operating discipline on the underlying unit economics.
For our off-line point-of-sale business, our results demonstrate the traction we are gaining with off-line growth continuing to outpace online growth and representing a significant addressable market for us. We want to be the clear leader in unified commerce. We consider both of these opportunities to be ones that we want to seize and in the best interest of supporting our growth products and simply the smart thing to do for our business. On employee expenses, two components, payroll taxes and compensation. Payroll taxes will increase over Q4 given the normal annual front-loading of some types of payroll taxes, specifically social security and Canadian employer contributions, which are not ratable throughout the year. Head count is expected to be flat Q4 versus Q1.
