Shopify Announces Second-Quarter 2020 Financial Results (July 29, 2020)
Summary
Shopify's July 29, 2020 press release reports second-quarter revenue of $714.3 million, up 97%, with gross merchandise volume of $30.1 billion, up 119%. Merchant Solutions revenue rose 148% to $517.9 million and Subscription Solutions revenue rose 28% to $196.4 million. Under the heading Impact of COVID-19, Shopify says new stores created grew 71% over the first quarter, helped by an extension of the free trial on standard plans from 14 days to 90 days that ended May 31, 2020. Monthly recurring revenue was $57.0 million at June 30, 2020, up 21%.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
Full text
Shopify Announces Second-Quarter 2020 Financial Results
Second-Quarter Revenue Grows 97% on GMV Growth of 119% Year on Year
Shopify reports in U.S. dollars and in accordance with U.S. GAAP
Ottawa, Canada - July 29, 2020 - Shopify Inc. (NYSE:SHOP)(TSX:SHOP), a leading global commerce company,
announced today strong financial results for the second quarter ended June 30, 2020.
“The world is changing fast,” said Tobi Lütke, Shopify’s CEO. “With the rapid shift to online commerce, massive
disruption to conventional employment, and growing conviction that opportunity needs to be more evenly
distributed, entrepreneurship has never been more important. With all of these changes, our core principles remain
the same: everything we ship is designed to lower barriers to entrepreneurship and reduce friction wherever we can.”
“The strength of Shopify’s value proposition was on full display in our second quarter,” said Amy Shapero,
Shopify’s CFO. “We are committed to transferring the benefits of scale to our merchants, helping them sell more
and sell more efficiently, which is especially critical in this rapidly changing environment. With our strong balance
sheet and through prudent capital allocation, we remain well positioned to continue solving critical pain points for
our merchants and contribute to their success for years to come.”
Impact of COVID-19
The ongoing effect of the COVID-19 pandemic has been to accelerate the shift of purchase habits to ecommerce.
Based on data patterns monitored on Shopify’s platform, the following includes some key changes we have
observed and potential implications for Shopify’s business:
• New stores created on the Shopify platform grew 71% in Q2 2020 compared with Q1 2020, driven by the
shift of commerce to online as well as by the extension of the free trial period on standard plans from 14
days to 90 days. The 90-day free trial offer ended on May 31, 2020, with users that created stores in April
and May expected to continue converting into paid merchants through the end of August 2020. New store
creations are those that have provided their billing information so they can start selling, but for which we
do not collect a subscription fee while on a free trial.
• While data from June 15 to July 19 indicates that new stores created during the extended 90-day free trial
are converting into paid subscribers at a slightly lower rate than merchant cohorts that joined Shopify prior
to the pandemic, we expect stronger retention rates for these early 90-day trial cohorts as they tend to be
longer-tenured at the time of conversion and bring higher Gross Merchandise Volume1 ("GMV"). This may
not be indicative of go-forward cohorts, however, as a greater-than-typical proportion of new stores created
early on in this free trial period represent established businesses that were urgently transitioning to online
commerce during the initial weeks of the COVID-19 pandemic.
• Q2 2020 GMV grew 119% compared to Q2 2019 with year-on-year GMV growth accelerating in April and
May and decelerating in June and thus far in July.
• While GMV through the point-of-sale (POS) channel declined by 29% in Q2 2020 compared to Q1 2020,
as many of Shopify’s Retail merchants suspended their in-store operations in April and May, POS GMV
started to recover in June as COVID-19 restrictions eased and stores began to reopen, approaching
February levels by the end of the month and continuing to grow into July. Whether this trend will continue
is unknown given the reintroduction of lockdown measures in certain geographies as well as the uncertain
macroeconomic environment. Retail merchants continued to adapt to socially distanced selling through Q2
2020, as 39% of our brick-and-mortar merchants in English-speaking geographies are now using some
form of local in-store/curbside pickup and delivery solution, up from 26% in early May 2020 and 2% at the
end of February 2020. Additionally, Retail merchants grew online store GMV by 73% in Q2 2020 over Q1
2020.
• The migration to Shopify Plus of larger sellers continued in Q2 2020, resulting in a record quarter for new
merchant adds to Shopify Plus. A large number of merchant upgrades to Shopify Plus in Q2 2020 outpaced
the number of downgrades, which peaked in April before returning to pre-COVID levels by quarter end.
• Certain categories of GMV grew faster in Q2 2020, including Food, Beverages, and Tobacco, which
doubled during this period relative to Q1 2020.
• Shops continue to see more local customers: in English-speaking geographies, the percentage of customers
per shop coming from within 25 kilometres of the shop’s registered address increased in Q2 2020 over Q1
2020, as did the number of shops with at least one local customer, while GMV associated with 'buy online,
pickup in store' in these geographies more than doubled in Q2 2020 compared to the previous quarter.
Second-Quarter Financial Highlights
• Total revenue in the second quarter was $714.3 million, a 97% increase from the comparable quarter in
2019.
• Subscription Solutions revenue was $196.4 million, up 28% year over year, primarily due to more
merchants joining the platform.
• Merchant Solutions revenue growth accelerated for the third consecutive quarter, up 148%, to
$517.9 million, driven primarily by the growth of GMV.
1. Gross Merchandise Volume, or GMV, represents the total dollar value of orders facilitated through the Shopify platform including certain apps and channels for which a revenue-sharing arrangement is in place
in the period, net of refunds, and inclusive of shipping and handling, duty and value-added taxes.
• Monthly Recurring Revenue2 ("MRR") as of June 30, 2020 was $57.0 million, up 21% compared with
$47.1 million as of June 30, 2019. Shopify Plus contributed $16.6 million, or 29%, of MRR compared with
26% of MRR as of June 30, 2019. While growth in the quarter was impacted by the 90-day free trial on
standard plans offered from March 21 through May 31, MRR ended the quarter higher than on March 31,
benefiting from strong merchant adds in June, driven by the highest-ever number of merchants joining
Shopify Plus in a single month, and standard merchants converting in the latter half of June from the 90-
day extended free trial March cohorts and regular 14-day free trial June cohorts.
• GMV for the second quarter was $30.1 billion, an increase of $16.3 billion, or 119%, over the second
quarter of 2019. Gross Payments Volume3 ("GPV") grew to $13.4 billion, which accounted for 45% of
GMV processed in the quarter, versus $5.8 billion, or 42%, for the second quarter of 2019.
• Gross profit dollars grew 83% to $375.0 million in the second quarter of 2020, compared with
$204.8 million for the second quarter of 2019.
• Adjusted gross profit4 grew 84% to $381.4 million in the second quarter of 2020, compared with $207.3
million for the second quarter of 2019.
• Operating income for the second quarter of 2020 was $0.3 million, or 0% of revenue, versus a loss of
$39.6 million, or 11% of revenue, for the comparable period a year ago.
• Adjusted operating income4 for the second quarter of 2020 was $113.7 million, or 16% of revenue,
compared with adjusted operating income of $6.4 million or 2% of revenue in the second quarter of 2019.
Adjusted operating income excludes an impairment charge of $31.6 million dollars resulting from our
decision, announced in May 2020, to work remotely permanently. We believe the near-term costs of
reducing our leased footprint and transitioning remaining space from offices to workspace for office
hoteling and events will yield longer-term benefits, including leveling the playing field for employees who
already work from home, helping our employees stay healthy and safe, opening a diverse global talent pool,
eliminating unnecessary commutes and fast-tracking new and better ways to work together that are more
productive and rewarding.
• Net income for the second quarter of 2020 was $36.0 million, or $0.29 per diluted share, compared with a
net loss of $28.7 million, or $0.26 per basic and diluted share, for the second quarter of 2019.
• Adjusted net income4 for the second quarter of 2020 was $129.4 million, or $1.05 per diluted share,
compared with adjusted net income of $10.7 million, or $0.10 per basic and diluted share, for the second
quarter of 2019.
• At June 30, 2020, Shopify had $4.00 billion in cash, cash equivalents and marketable securities, compared
with $2.46 billion on December 31, 2019. The increase reflects $1.46 billion of net proceeds from
Shopify’s offering of Class A subordinate voting shares in the second quarter of 2020.
Second-Quarter Business Highlights
• Shopify held its first virtual company event, Shopify Reunite, where we announced new products and
features to help our merchants adapt to the future of commerce, including:
2. Monthly Recurring Revenue, or MRR, is calculated by multiplying the number of merchants by the average monthly subscription plan fee in effect on the last day of that period and is used by management as a
directional indicator of subscription solutions revenue going forward assuming merchants maintain their subscription plan the following month.
3. Gross Payments Volume, or GPV, is the amount of GMV processed through Shopify Payments.
4. Non-GAAP financial measures exclude the effect of stock-based compensation expenses and related payroll taxes, amortization of acquired intangibles and related taxes, and a real estate-related impairment
charge. Please refer to "Non-GAAP Financial Measures" in this press release for more information.
• Shopify Balance, which will give merchants access to critical financial products to start, run, and
grow their business, including the Shopify Balance Account, Shopify Balance Card, and rewards
such as cashback and discounts on everyday business spending like shipping and marketing.
Shopify Balance is expected to be available for early access later this year in the U.S.
• Shop Pay Installments, a ‘buy now, pay later’ product that will let merchants offer their customers
more payment choice and flexibility at checkout, helping merchants boost sales through increased
cart size and higher conversion. Shopify has partnered with fintech company, Affirm, to offer
Shop Pay Installments, which is expected to be available to eligible U.S. merchants starting later
this year.
• Enhanced local delivery capabilities in the Shopify Admin to allow merchants to define a local
delivery area, set local delivery fees and minimum order prices, and fulfill orders through Shopify,
Shopify POS, and mobile, and a local delivery app to create optimized delivery routes and send
customer notifications.
• Shopify continued to develop the product-market fit of Shopify Fulfillment Network, our solution to
provide merchants and their buyers with fast and affordable fulfillment. Shopify automated aspects of
merchant onboarding and order management, and continued to grow fulfillment volumes and the number of
merchants enrolled in the program relative to the first quarter of 2020.
• Shopify made the new Shopify Plus Admin generally available to all Shopify Plus merchants, enabling
them to operate their business as an organization by managing multiple stores, analytics, staff accounts,
user permissions, and automation tools like Shopify Flow in one place.
• Shopify introduced the Facebook Shops channel, enabling Shopify merchants to customize and
merchandise their storefronts within Facebook and Instagram through Facebook Shops, while managing
their products, inventory orders, and fulfillment directly within Shopify.
• Shopify launched the Walmart channel, enabling Shopify merchants to sell their products on Walmart.com.
Qualifying merchants are now able to connect their Shopify store to their Walmart Seller Account, enabling
them to quickly and easily sync their product catalog and create product listings on Walmart.com.
• Shopify launched the Shopify Tap & Chip Card Reader in Canada, bringing contactless payments hardware
to Canadian retailers using Shopify POS. The Tap & Chip Card Reader hardware device allows businesses
to offer “tap” payment options like credit and debit cards, Apple Pay, and Google Pay. Connecting with the
all-new Shopify POS software introduced in April, Shopify POS offers Canadian retailers a unified
commerce experience bridging online and offline.
• Shopify launched Shopify Shipping in Australia partnering with courier services company, Sendle.
Australian merchants can save time and money by printing Sendle labels and booking free parcel pick up
within the Shopify admin, with the benefits of affordable shipping rates, package tracking, and 100%
carbon-neutral shipping.
• Shopify Shipping adoption continued to rise, with 49% of eligible merchants in the United States and
Canada utilizing Shopify Shipping in the second quarter of 2020, versus more than 42% in the second
quarter of 2019. Shopify Shipping label adoption continued to grow in Q2 2020 as more merchants fulfilled
a greater volume of orders, as commerce shifted online.
• Merchants in the U.S., Canada, and the U.K. received $153 million in merchant cash advances and loans
from Shopify Capital in the second quarter of 2020, an increase of 65% versus the $93 million received by
U.S. merchants in the second quarter of last year. Shopify Capital has grown to approximately $1.2 billion
in cumulative capital advanced since its launch in April 2016, with approximately $166 million of which
was outstanding on June 30, 2020.
• Approximately 30,300 partners referred a merchant to Shopify over the past 12 months.
• Shopify published our 2019 Sustainability Report and the 2019 Economic Impact Report, which together
showcase the economic, environmental, and social impact of Shopify and our global ecosystem. Between
2016 and 2019, businesses built on Shopify generated $319 billion in global economic activity, with $136
billion in 2019 alone compared to $91 billion 2018. To help address the environmental costs associated
with this economic activity, in 2019, Shopify became carbon-neutral by offsetting our own CO2 emissions
generated since we started operations. Starting in 2020, Shopify also began mitigating emissions from
ecommerce shipments through Shop Pay and our Offset app.
Subsequent to Second-Quarter 2020
• Shopify announced a partnership with the Government of Canada through the ‘Go Digital Canada’ program
to bring thousands of small Canadian businesses online and help them adapt to a digital economy.
Launched July 15, the program includes equipping businesses with the guidance, tools and resources they
need to bring their business online, and initially offering eligible Canadian small businesses free email
marketing, a free Tap and Chip reader and access to POS Pro, and a 90-day extended free trial.
• Shopify announced that Shopify Payments will be available to Shopify’s U.S. merchants through Buy on
Google, the search engine’s native checkout option. Combining the best in search with the best in
commerce enables Shopify merchants to benefit from the speed, transparency, and reliability of Shopify
Payments when their shoppers Buy on Google, while retaining the ability to view, manage, and track orders
and payments all in one place.
• Shopify Studios is expected to debut its first series with a major television network. Premiering in August
on Discovery and streaming on DiscoveryGO is I Quit, a premium docuseries featuring real-life
entrepreneurs who give up their “9-5” jobs to focus 100% on launching their own businesses. With mentors
who will advise them along the way – including Shopify’s Harley Finkelstein – these risk-takers will
engage in a year-long inspirational journey, living out the thrills, hurdles and hard work of authentic
business ownership.
Financial Outlook
The COVID-19 pandemic has accelerated the growth of ecommerce, shifting a larger share of retail spending to
online commerce, a trend we believe will persist. While COVID-19 has significantly influenced online store creation
and consumer spending behaviour, the magnitude and duration of its future impact remain uncertain in view of the
greater likelihood of an extended global recession. As a result, Shopify is not providing a financial outlook for Q3
2020 or for full year 2020.
Shopify expects entrepreneurs to continue to recognize the importance of multi-channel selling and direct-to-
consumer fulfillment, and for consumer concerns about COVID-19 to drive further adoption of digital commerce
while reinforcing the behaviour of buyers already shopping online. We are therefore closely monitoring the
following external factors:
• The impact rising unemployment has on new shop creation on our platform and consumer spending.
• Consumer spending habits and trends for both discretionary and non-discretionary goods as shelter-in-place
directives remain in a state of flux.
• The rate at which brick-and-mortar merchants adopt and retain a multichannel sales approach.
Shopify remains uniquely positioned to level the playing field for entrepreneurs during this period of rapid change in
the retail landscape. Our merchant-first business model and strong balance sheet enable us to continue building a
leading global commerce operating system that allows merchants to act nimbly and adapt their businesses to this
new reality.
Quarterly Conference Call
Shopify’s management team will hold a conference call to discuss our second-quarter results today, July 29, 2020, at
8:30 a.m. ET. The conference call will be webcast on the investor relations section of Shopify’s website at
https://investors.shopify.com/news-and-events/default.aspx#upcoming-events. An archived replay of the webcast
will be available following the conclusion of the call.
Shopify’s Second-Quarter 2020 Interim Unaudited Condensed Consolidated Financial Statements and Notes and its
Second Quarter 2020 Management's Discussion and Analysis are available on Shopify’s website at
www.shopify.com and will be filed on SEDAR at www.sedar.com and on EDGAR at www.sec.gov.
About Shopify
Shopify is a leading global commerce company, providing trusted tools to start, grow, market, and manage a retail
business of any size. Shopify makes commerce better for everyone with a platform and services that are engineered
for reliability, while delivering a better shopping experience for consumers everywhere. Headquartered in Ottawa,
Canada, Shopify powers over one million businesses in more than 175 countries and is trusted by brands such as
Allbirds, Gymshark, PepsiCo, Staples and many more. For more information, visit www.shopify.com.
Non-GAAP Financial Measures
To supplement our consolidated financial statements, which are prepared and presented in accordance with United
States generally accepted accounting principles ("GAAP"), Shopify uses certain non-GAAP financial measures to
provide additional information in order to assist investors in understanding our financial and operating performance.
Adjusted gross profit, adjusted operating income, non-GAAP operating expenses, adjusted net income and adjusted
net income per share are non-GAAP financial measures that exclude the effect of stock-based compensation
expenses and related payroll taxes, amortization of acquired intangibles and a real estate-related impairment charge.
Adjusted net income and adjusted net income per share also exclude tax effects related to non-GAAP adjustments.
Management uses non-GAAP financial measures internally for financial and operational decision-making and as a
means to evaluate period-to-period comparisons. Shopify believes that these non-GAAP measures provide useful
information about operating results, enhance the overall understanding of past financial performance and future
prospects, and allow for greater transparency with respect to key metrics used by management in its financial and
operational decision making. Non-GAAP financial measures are not recognized measures for financial statement
presentation under U.S. GAAP and do not have standardized meanings, and may not be comparable to similar
measures presented by other public companies. Such non-GAAP financial measures should be considered as a
supplement to, and not as a substitute for, or superior to, the corresponding measures calculated in accordance with
GAAP. See the financial tables below for a reconciliation of the non-GAAP measures.
Forward-looking Statements
This press release contains certain forward-looking statements within the meaning of applicable securities laws,
including statements regarding Shopify’s planned business initiatives and operations and financial outlook, the
performance of Shopify's merchants, the impact of Shopify's business on its merchants and other entrepreneurs, and
economic activity and consumer spending. Words such as “believe”, "continue", "will", "enable", "support",
“allow”, and "expect" or similar expressions are intended to identify forward-looking statements.
These forward-looking statements are based on Shopify’s current projections and expectations about future events
and financial trends that management believes might affect its financial condition, results of operations, business
strategy and financial needs, and on certain assumptions and analysis made by Shopify in light of the experience and
perception of historical trends, current conditions and expected future developments and other factors management
believes are appropriate. These projections, expectations, assumptions and analyses are subject to known and
unknown risks, uncertainties, assumptions and other factors that could cause actual results, performance, events and
achievements to differ materially from those anticipated in these forward-looking statements. Although Shopify
believes that the assumptions underlying these forward-looking statements are reasonable, they may prove to be
incorrect, and readers cannot be assured that actual results will be consistent with these forward-looking statements.
Actual results could differ materially from those projected in the forward-looking statements as a result of numerous
factors, including certain risk factors, many of which are beyond Shopify’s control, including but not limited to: (i)
uncertainty around the duration and scope of the COVID-19 pandemic and the impact of the pandemic and actions
taken in response on global and regional economies and economic activity; (ii) shifting our operations to be “digital-
by-default”; (iii) merchant acquisition and retention; (iv) managing our growth; (v) our history of losses; (vi) our
limited operating history; (vii) our ability to innovate; (viii) the security of personal information we store relating to
merchants and their customers and consumers with whom we have a direct relationship; (ix) a disruption of service
or security breach; (x) our potential inability to compete successfully against current and future competitors; (xi)
international sales and the use of our platform in various countries; (xii) the reliance of our growth in part on the
success of our strategic relationships with third parties; (xiii) our potential failure to effectively maintain, promote
and enhance our brand; (xiv) our use of a single cloud-based platform to deliver our services; (xv) our potential
inability to achieve or maintain data transmission capacity; (xvi) our reliance on a single supplier to provide the
technology we offer through Shopify Payments; (xvii) payments processed through Shopify Payments; (xviii) our
potential inability to hire, retain and motivate qualified personnel; (xix) serious errors or defects in our software or
hardware or issues with our hardware supply chain; (xx) evolving privacy laws and regulations, cross-border data
transfer restrictions, data localization requirements and other domestic or foreign regulations may limit the use and
adoption of our services; and (xxi) other one-time events and other important factors disclosed previously and from
time to time in Shopify’s filings with the U.S. Securities and Exchange Commission and the securities commissions
or similar securities regulatory authorities in each of the provinces or territories of Canada. The forward-looking
statements contained in this news release represent Shopify’s expectations as of the date of this news release, or as
of the date they are otherwise stated to be made, and subsequent events may cause these expectations to change.
Shopify undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of
new information, future events or otherwise, except as may be required by law.
CONTACT:
INVESTORS: MEDIA:
Katie Keita Rebecca Feigelsohn
Senior Director, Investor Relations Communications Manager
613-241-2828 x 1024 416-238-6705 x 302
IR@shopify.com press@shopify.com
SOURCE: Shopify
Shopify Inc.
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)
(Expressed in US $000’s, except share and per share amounts, unaudited)
Three months ended Six months ended
June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019
$ $ $ $
Revenues
Subscription solutions 196,434 153,047 384,043 293,498
Merchant solutions 517,907 208,932 800,299 388,963
714,341 361,979 1,184,342 682,461
Cost of revenues
Subscription solutions 44,400 29,538 82,112 57,523
Merchant solutions 294,907 127,676 470,246 239,882
339,307 157,214 552,358 297,405
Gross profit 375,034 204,765 631,984 385,056
Operating expenses
Sales and marketing 144,850 119,210 299,712 224,232
Research and development 133,227 85,520 249,623 161,875
General and administrative 83,307 34,922 128,149 65,225
Transaction and loan losses 13,366 4,733 27,449 9,134
Total operating expenses 374,750 244,385 704,933 460,466
Income (loss) from operations 284 (39,620) (72,949) (75,410)
Other income 4,084 10,942 17,193 22,581
Income (loss) before income taxes 4,368 (28,678) (55,756) (52,829)
Recovery of income taxes 31,630 — 60,325 —
Net income (loss) 35,998 (28,678) 4,569 (52,829)
Other comprehensive income (loss) 10,653 6,746 (5,980) 16,020
Comprehensive income (loss) 46,651 (21,932) (1,411) (36,809)
Net income (loss) per share
attributable to shareholders:
Basic 0.30 (0.26) 0.04 (0.47)
Diluted 0.29 (0.26) 0.04 (0.47)
Shares used to compute net income
(loss) per share attributable to
shareholders:
Basic 118,740,645 112,013,409 117,773,612 111,470,359
Diluted 122,749,980 112,013,409 121,919,207 111,470,359
Shopify Inc.
Condensed Consolidated Balance Sheets
(Expressed in US $000’s except share amounts, unaudited)
As at
June 30, 2020 December 31, 2019
$ $
Assets
Current assets
Cash and cash equivalents 1,882,362 649,916
Marketable securities 2,118,593 1,805,278
Trade and other receivables, net 106,409 90,529
Merchant cash advances, loans and related receivables, net 166,495 150,172
Income taxes receivable 49,173 —
Other current assets 66,162 48,833
4,389,194 2,744,728
Long-term assets
Property and equipment, net 95,506 111,398
Intangible assets, net 151,254 167,282
Right-of-use assets 126,213 134,774
Deferred tax assets 24,407 19,432
Goodwill 311,865 311,865
709,245 744,751
Total assets 5,098,439 3,489,479
Liabilities and shareholders’ equity
Current liabilities
Accounts payable and accrued liabilities 240,996 181,193
Income taxes payable 1,062 69,432
Deferred revenue 67,455 56,691
Lease liabilities 10,993 9,066
320,506 316,382
Long-term liabilities
Deferred revenue 6,866 5,969
Lease liabilities 142,128 142,641
Deferred tax liabilities — 8,753
148,994 157,363
Commitments and contingencies
Shareholders’ equity
Common stock, unlimited Class A subordinate voting shares
authorized, 108,221,159 and 104,518,173 issued and outstanding;
unlimited Class B multiple voting shares authorized, 11,874,317
and 11,910,802 issued and outstanding 4,859,950 3,256,284
Additional paid-in capital 73,578 62,628
Accumulated other comprehensive income (loss) (4,934) 1,046
Accumulated deficit (299,655) (304,224)
Total shareholders’ equity 4,628,939 3,015,734
Total liabilities and shareholders’ equity 5,098,439 3,489,479
Shopify Inc.
Condensed Consolidated Statements of Cash Flows
(Expressed in US $000’s, unaudited)
Six months ended
June 30, 2020 June 30, 2019
$ $
Cash flows from operating activities
Net income (loss) for the period 4,569 (52,829)
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
Amortization and depreciation 34,297 14,207
Stock-based compensation 116,076 70,432
Impairment of right-of-use assets and leasehold improvements 31,623 —
Provision for transaction and loan losses 12,040 7,398
Deferred income taxes (13,728) —
Unrealized foreign exchange (gain) loss (1,231) 1,917
Changes in operating assets and liabilities:
Trade and other receivables (18,980) (20,540)
Merchant cash advances, loans and related receivables (22,349) (31,222)
Other current assets (20,815) (5,910)
Accounts payable and accrued liabilities 61,659 56,049
Income tax assets and liabilities (115,387) —
Deferred revenue 11,661 6,345
Lease assets and liabilities 800 1,555
Net cash provided by operating activities 80,235 47,402
Cash flows from investing activities
Purchase of marketable securities (1,970,693) (1,022,814)
Maturity of marketable securities 1,659,159 1,249,319
Acquisitions of property and equipment (25,329) (30,437)
Acquisitions of intangible assets (262) (1,935)
Acquisition of businesses, net of cash acquired — (12,476)
Net cash (used in) provided by investing activities (337,125) 181,657
Cash flows from financing activities
Proceeds from public offering, net of issuance costs 1,460,945 —
Proceeds from the exercise of stock options 37,595 27,624
Net cash provided by financing activities 1,498,540 27,624
Effect of foreign exchange on cash and cash equivalents (9,204) 1,624
Net increase in cash and cash equivalents 1,232,446 258,307
Cash and cash equivalents – Beginning of Period 649,916 410,683
Cash and cash equivalents – End of Period 1,882,362 668,990
Shopify Inc.
Reconciliation from GAAP to Non-GAAP Results
(Expressed in US $000’s, except share and per share amounts, unaudited)
Three months ended Six months ended
June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019
$ $ $ $
GAAP Gross profit 375,034 204,765 631,984 385,056
% of Revenue 53 % 57 % 53 % 56 %
add: stock-based compensation 1,188 894 2,336 1,608
add: payroll taxes related to stock-based
compensation 341 132 517 232
add: amortization of acquired intangibles 4,856 1,530 10,425 3,155
Non-GAAP Gross profit 381,419 207,321 645,262 390,051
% of Revenue 53 % 57 % 54 % 57 %
GAAP Sales and marketing 144,850 119,210 299,712 224,232
% of Revenue 20 % 33 % 25 % 33 %
less: stock-based compensation 10,613 8,409 21,820 15,244
less: payroll taxes related to stock-based
compensation 1,818 1,102 3,045 1,912
less: amortization of acquired intangibles 388 — 776 —
Non-GAAP Sales and marketing 132,031 109,699 274,071 207,076
% of Revenue 18 % 30 % 23 % 30 %
GAAP Research and development 133,227 85,520 249,623 161,875
% of Revenue 19 % 24 % 21 % 24 %
less: stock-based compensation 39,361 22,983 71,965 41,098
less: payroll taxes related to stock-based
compensation 10,464 3,465 14,281 5,273
less: amortization of acquired intangibles 58 58 116 116
Non-GAAP Research and development 83,344 59,014 163,261 115,388
% of Revenue 12 % 16 % 14 % 17 %
GAAP General and administrative 83,307 34,922 128,149 65,225
% of Revenue 12 % 10 % 11 % 10 %
less: stock-based compensation 11,162 6,982 19,955 12,482
less: payroll taxes related to stock-based
compensation 1,520 462 2,494 993
less: impairment of right-of-use assets and
leasehold improvements 31,623 — 31,623 —
Non-GAAP General and administrative 39,002 27,478 74,077 51,750
% of Revenue 5% 8% 6% 8%
Shopify Inc.
Reconciliation from GAAP to Non-GAAP Results (continued)
(Expressed in US $000’s, except share and per share amounts, unaudited)
Three months ended Six months ended
June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019
$ $ $ $
GAAP Transaction and loan losses 13,366 4,733 27,449 9,134
% of Revenue 2% 1% 2% 1%
GAAP Operating expenses 374,750 244,385 704,933 460,466
% of Revenue 52 % 68 % 60 % 67 %
less: stock-based compensation 61,136 38,374 113,740 68,824
less: payroll taxes related to stock-based
compensation 13,802 5,029 19,820 8,178
less: amortization of acquired intangibles 446 58 892 116
less: impairment of right-of-use assets and
leasehold improvements 31,623 — 31,623 —
Non-GAAP Operating expenses 267,743 200,924 538,858 383,348
% of Revenue 37 % 56 % 45 % 56 %
GAAP Operating income (loss) 284 (39,620) (72,949) (75,410)
% of Revenue —% (11)% (6)% (11)%
add: stock-based compensation 62,324 39,268 116,076 70,432
add: payroll taxes related to stock-based
compensation 14,143 5,161 20,337 8,410
add: amortization of acquired intangibles 5,302 1,588 11,317 3,271
add: impairment of right-of-use assets and
leasehold improvements 31,623 — 31,623 —
Adjusted Operating income 113,676 6,397 106,404 6,703
% of Revenue 16 % 2% 9% 1%
GAAP Net income (loss) 35,998 (28,678) 4,569 (52,829)
% of Revenue 5% (8)% —% (8)%
add: stock-based compensation 62,324 39,268 116,076 70,432
add: payroll taxes related to stock-based
compensation 14,143 5,161 20,337 8,410
add: amortization of acquired intangibles 5,302 1,588 11,317 3,271
add: impairment of right-of-use assets and
leasehold improvements 31,623 — 31,623 —
add: provision for income tax effects
related to non-GAAP adjustments (20,024) (6,609) (32,224) (11,453)
Adjusted Net income 129,366 10,730 151,698 17,831
% of Revenue 18 % 3% 13 % 3%
Shopify Inc.
Reconciliation from GAAP to Non-GAAP Results (continued)
(Expressed in US $000’s, except share and per share amounts, unaudited)
Three months ended Six months ended
June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019
$ $ $ $
Basic GAAP Net income (loss) per share
attributable to shareholders 0.30 (0.26) 0.04 (0.47)
add: stock-based compensation 0.52 0.35 0.99 0.63
add: payroll taxes related to stock-based
compensation 0.12 0.05 0.17 0.08
add: amortization of acquired intangibles 0.04 0.01 0.10 0.03
add: impairment of right-of-use assets and
leasehold improvements 0.27 0.00 0.27 0.00
add: provision for income tax effects related
to non-GAAP adjustments (0.17) (0.06) (0.27) (0.10)
Basic Adjusted Net income per share
attributable to shareholders 1.09 0.10 1.29 0.16
Weighted average shares used to compute
GAAP and non-GAAP basic net income
(loss) per share attributable to shareholders 118,740,645 112,013,409 117,773,612 111,470,359
Diluted GAAP Net income (loss) per share
attributable to shareholders 0.29 (0.26) 0.04 (0.47)
add: stock-based compensation 0.51 0.35 0.95 0.63
add: payroll taxes related to stock-based
compensation 0.12 0.05 0.17 0.08
add: amortization of acquired intangibles 0.04 0.01 0.09 0.03
add: impairment of right-of-use assets and
leasehold improvements 0.26 0.00 0.26 0.00
add: provision for income tax effects related
to non-GAAP adjustments (0.16) (0.06) (0.26) (0.10)
Diluted Adjusted Net income per share
attributable to shareholders 1.05 0.10 1.24 0.16
Weighted average shares used to compute
GAAP and non-GAAP diluted net income
(loss) per share attributable to shareholders 122,749,980 112,013,409 121,919,207 111,470,359
File and source
- File
- g12-r06.pdf
- Size
- 480,898 bytes
- SHA-256
- acce32af15a11a1aaf7b2fc44ea49edab0cf8120e0a1000bc1a1f753d074021f
- Our copy
- g12-r06.pdf
- Original
- s27.q4cdn.com