First-Quarter Revenue Grows 47% Year on
Year
Shopify reports in U.S. dollars and in accordance with U.S.
GAAP
Shopify Inc. (NYSE:SHOP)(TSX:SHOP), a leading global commerce
company, announced today strong financial results for the first
quarter ended March 31, 2020.
"The vast majority of people are employed by small businesses,
and they struggle the most during a crisis," said Tobi Lütke,
Shopify’s CEO. "The spread of COVID-19 is going to be a tough time
for all entrepreneurs. We are working as fast as we can to support
our merchants by re-tooling our products to help them adapt to this
new reality. Our goal is that, because Shopify exists, more
entrepreneurs and small businesses will get through this."
"Now more than ever, Shopify needs to be there for our
merchants, so our focus during these challenging times is to help
solve their immediate pain points," said Amy Shapero, Shopify’s
CFO. "We are well positioned to help our merchants, particularly
given the accelerated shift to online commerce. Our strong balance
sheet provides us with the flexibility to continue investing in the
right merchant-first initiatives, supporting our merchants’ success
now and well into the future."
Impact of COVID-19
While the COVID-19 pandemic has subdued commerce globally and
especially strained small and medium-sized businesses, it has
accelerated the shift of purchase habits to ecommerce. Shopify is
uniquely positioned to help businesses of all sizes during this
time, helping entrepreneurs start online businesses, adapt to an
evolving commerce landscape, and manage through a challenging
macroeconomic environment. We introduced a number of initiatives to
support our merchants and protect our stakeholders during the
ongoing COVID-19 pandemic, including:
- An extended 90-day free trial for all new standard plan
signups.
- Availability of gift card capabilities to merchants on all
plans.
- Introduction of local in-store/curbside pickup and
delivery.
- Increased our funding commitment to Shopify Capital, as noted
below, while fast-tracking expansion to core geographies working
with partners, including in the United Kingdom and Canada where
Shopify Capital launched on March 30, 2020 and April 20, 2020,
respectively.
- Multiple online resources to support merchants, including
resources on where to secure government funding, and offering a
community forum, live webinars, online meetups, and tutorials to
help all merchants have an online presence.
The following includes some key changes we have observed in the
data patterns on Shopify’s platform, potential implications for
Shopify’s business, and actions we are taking to manage risk and
maintain strong liquidity:
- New stores created on the Shopify platform grew 62% between
March 13, 2020 and April 24, 2020 compared to the prior six weeks,
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. While this increase includes both first-time
entrepreneurs as well as established sellers, it is unclear how
many in this cohort will sustainably generate sales, which is the
primary determinant of merchant longevity on our platform. New
store creations represents merchants who have provided billing
information, which also allows them to start selling.
- While year-over-year Gross Merchandise Volume1 ("GMV") growth
accelerated in April compared with the first quarter of 2020, and
this growth was distributed over a broader base of merchants, it is
unclear how sustainable consumer spending levels will be in this
uncertain economic environment. For now, the shift of consumer
spending toward online is apparent: the number of consumers
estimated to have made a purchase for the first time from any
Shopify merchant grew 8% between March 13, 2020 and April 24, 2020,
compared to the six-week period immediately prior. Over the same
period, the number of consumers estimated to have purchased from
Shopify merchants they’d never shopped at before grew by 45%
compared to the six-week period immediately prior.
- While GMV through the point-of-sale (POS) channel declined by
71% between March 13, 2020 and April 24, 2020 relative to the
comparable six-week period immediately prior to March 13, as most
of Shopify’s Retail merchants suspended their in-store operations,
Retail merchants managed to replace 94% of lost POS GMV with online
sales over the same period. Retail merchants are adapting quickly
to social-distance selling, as 26% of our brick-and-mortar
merchants in our English-speaking geographies are now using some
form of local in-store/curbside pickup and delivery solution,
compared to 2% at the end of February.
- While new types of merchants, such as food stores, are
migrating to Shopify Plus, March and April also saw more merchants
downgrade from Shopify Plus to lower-priced plans than in January
and February.
- Certain categories of GMV grew faster between March 13, 2020
and April 24, 2020, including Food, Beverages, and Tobacco, which
doubled during this period relative to the 6-weeks immediately
prior to March 13. Apparel and accessories, a historically larger
contributor to Shopify's GMV, experienced a softening in GMV in
mid-March, followed by a recovery at the end of March, which
continued into April.
- Shops are seeing more local customers: in the six-week period
since March 13, 2020, in English-speaking geographies, the
percentage of customers per shop coming from within 25 kilometres
of the shop’s registered address had increased, as had the number
of shops with at least one local customer, while local orders in
these geographies more than doubled.
- More merchants are making greater use of Shopify Capital, with
$192 million of advances and loans outstanding at March 31, 2020,
compared with $150 million at December 31, 2019. And, we announced
we have committed an additional $200 million above the March 31,
2020 level for the remainder of 2020, to increase funding of
Shopify Capital in the United States and expand Shopify Capital to
the United Kingdom and Canada, working with partners who will share
in the revenue and risk. We anticipate a portion of this funding to
go toward business continuity instead of growth activities, as we
saw merchants downgrading subscription plans and decreasing their
spend on apps in March and into April. We increased our allowance
for losses on Shopify Capital as well as on Shopify Payments at
March 31, 2020 to account for a potential increase in losses,
though the actual loss percentages in March and April were
consistent with pre-COVID levels over the past year.
- Shopify ended the first quarter of 2020 with a strong liquidity
profile with $2.36 billion in cash, cash equivalents and marketable
securities on our balance sheet. We continue to prudently manage
costs, redirecting cost savings from reduced travel, events, and
office operations toward merchant-relief initiatives, while
advancing certain investments that will serve merchants both now
and in the long-term.
First-Quarter Financial Highlights
- Total revenue in the first quarter was $470.0 million, a 47%
increase from the comparable quarter in 2019.
- Subscription Solutions revenue grew 34% to $187.6 million. This
increase was driven primarily by growth in Monthly Recurring
Revenue2("MRR"), largely as a result of an increase in the number
of merchants joining the Shopify platform, strong app growth and
Shopify Plus variable platform fee revenue growth.
- Merchant Solutions revenue growth accelerated for the second
consecutive quarter, up 57%, to $282.4 million, driven primarily by
the growth of GMV.
- MRR as of March 31, 2020 was $55.4 million, up 25% compared
with $44.2 million as of March 31, 2019. Shopify Plus contributed
$15.3 million, or 28%, of MRR compared with 26% of MRR as of March
31, 2019. MRR growth was impacted in the quarter by several
factors, including the removal by Shopify of thousands of stores
from the platform due to violations of our Acceptable Use Policy;
lighter international merchant adds; and, an uptick of subscription
cancellations and merchant downgrades to lower-priced subscription
plans in March related to COVID-19.
- GMV for the first quarter was $17.4 billion, an increase of
$5.5 billion, or 46%, over the first quarter of 2019. Gross
Payments Volume3 ("GPV") grew to $7.3 billion, which accounted for
42% of GMV processed in the quarter, versus $4.9 billion, or 41%,
for the first quarter of 2019.
- Gross profit dollars grew 43% to $257.0 million in the first
quarter of 2020, compared with $180.3 million for the first quarter
of 2019.
- Adjusted gross profit4 grew 44% to $263.8 million in the first
quarter of 2020, compared with $182.7 million for the first quarter
of 2019.
- Operating loss for the first quarter of 2020 was $73.2 million,
or 16% of revenue, versus a loss of $35.8 million, or 11% of
revenue, for the comparable period a year ago.
- Adjusted operating loss4 for the first quarter of 2020 was $7.3
million or 2% of revenue, compared with adjusted operating income
of $0.3 million or 0% of revenue in the first quarter of 2019. The
loss in Q1 2020 was the result of the first full quarter of
operating expenses associated with the acquisition of 6 River
Systems, significantly more brand spend in the first quarter of
2020 compared to the same period in 2019, and a year-over-year
increase in the allowance for potential losses related to Shopify
Payments and Shopify Capital due to the potential impact of
COVID-19.
- Net loss for the first quarter of 2020 was $31.4 million, or
$0.27 per share, compared with a net loss of $24.2 million, or
$0.22 per share, for the first quarter of 2019.
- Adjusted net income4 for the first quarter of 2020 was $22.3
million, or $0.19 per share, compared with adjusted net income of
$7.1 million, or $0.06 per share, for the first quarter of
2019.
- At March 31, 2020, Shopify had $2.36 billion in cash, cash
equivalents and marketable securities, compared with $2.46 billion
on December 31, 2019.
First-Quarter Business Highlights
- Shopify continued to develop the product-market fit of Shopify
Fulfillment Network, its solution to provide merchants and their
buyers with fast and affordable fulfillment:
- More new merchants signed on to Shopify Fulfillment Network in
the first quarter of 2020 compared to any previous quarter since
its launch in June 2019. While we continue to optimize for the
merchant experience first, we have expanded the number of merchants
participating in Shopify Fulfillment Network.
- Shopify opened an R&D Centre in Ottawa, Canada to trial new
robotics and fulfillment technologies and initially fulfill
Canadian-based orders. We processed our first fulfillments at the
R&D Centre in April.
- Shopify is working with its fulfillment warehouse partners to
help ensure compliance with Centers of Disease Control and
Prevention best practices and the health and safety of all
warehouse employees, including following social distancing rules,
deep cleaning of warehouses, distributing work shifts over longer
periods to minimize the number of people in the warehouse at any
given time, and closure of a warehouse for a period of time as
advised by local public health authorities in the event a worker
becomes ill.
- 6 River Systems announced enhancements to its wall-to-wall
fulfillment solution, including upgrades to its collaborative
mobile robot, Chuck, which included increased capacity of workspace
on the Chuck, expanded safety compliance, and an improved user
interface. 6 River Systems also received two internationally
recognized Red Dot Awards, honouring the Chuck for outstanding
design quality in its Smart Products and Robotics categories.
- Shopify Shipping adoption continued to rise, with 46% percent
of eligible merchants in the United States and Canada utilizing
Shopify Shipping in the first quarter of 2020, versus more than 40%
in the first quarter of 2019. Shopify Shipping label adoption grew
faster than adoption of Shopify Shipping by new merchants in Q1
2020 as merchants already using Shopify Shipping printed more
labels to fulfill orders since the beginning of March,
corresponding to the rise of COVID-19 in the United States and
Canada.
- Shopify Capital issued $162.4 million in merchant cash advances
and loans in the first quarter of 2020, an increase of 85% versus
the $87.8 million issued in the first quarter of last year. Shopify
Capital surpassed the one billion dollar milestone in cumulative
capital advanced since its launch in April 2016, with $1.05 billion
advanced through first quarter 2020, approximately $192 million of
which was outstanding on March 31, 2020.
- 26,400 partners referred a merchant to Shopify over the past 12
months.
- Shopify joined the Libra Association, an independent
not-for-profit membership association collaborating to build a
simple, inclusive, and global cryptocurrency.
Subsequent to First Quarter 2020
- Shopify launched Shop, a first-of-its-kind mobile shopping app
that creates a more intuitive online shopping experience, bringing
together our expertise in commerce and proven features from Shop
Pay, our accelerated checkout, and Arrive, an app to track online
orders. Shop offers users the ability to easily discover local
businesses, receive relevant product recommendations from their
favorite brands, check out effortlessly, and track all of their
online orders. To date, Shop Pay has processed over $8 billion in
sales, while Arrive has been used by 16 million shoppers to track
their ecommerce orders.
- Shopify launched the all-new Shopify POS, a faster, more
intuitive, and more scalable POS software designed to meet the
needs of our most complex Brick-and-Mortar retailers.
- Shopify launched Shopify Payments in Austria, expanding the
availability of Shopify Payments to 16 countries.
Financial Outlook
On April 1, 2020, Shopify suspended the financial expectations
it had provided on February 12, 2020 for the full year 2020, as our
financial results for the rest of the year are contingent on the
duration and scope of the COVID-19 pandemic and the economic impact
of actions taken in response, all of which are unknown. Given the
increased uncertainty in the macroeconomic environment, including
the greater likelihood of an extended global recession, Shopify is
closely monitoring the following external factors:
- The impact rising unemployment has on new shop creation on our
platform and consumer spending.
- The rate at which consumer spending habits transition to online
shopping for both discretionary and non-discretionary goods.
- The ability of brick-and-mortar retail merchants to shift sales
online.
Shopify is leveraging our merchant-first business model and
strong balance sheet to adjust our 2020 plans to address these
changes. This includes redirecting spend from certain areas, such
as brand and marketing, to product initiatives that directly
support our merchants’ ability to adapt to an emerging environment,
one where we believe multi-channel selling and direct-to-consumer
fulfillment are more important than ever. Given our existing focus
on these areas, the recent acceleration in the shift of retail
spending toward ecommerce, and the central role our software plays
in merchants’ businesses, which enables us to rapidly read and
respond to trends on their behalf, we believe Shopify has a unique
opportunity to improve the economic lives of merchants and their
buyers in this difficult environment and position our company for
the future of commerce.
Quarterly Conference Call
Shopify’s management team will hold a conference call to discuss
our first-quarter results today, May 6, 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 First-Quarter 2020 Interim Unaudited Condensed
Consolidated Financial Statements and Notes and its First 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 (loss) income,
non-GAAP operating expenses, adjusted net income (loss) and
adjusted net income (loss) per share are non-GAAP financial
measures that exclude the effect of stock-based compensation
expenses and related payroll taxes and amortization of acquired
intangibles. Adjusted net income (loss) and adjusted net income
(loss) per share also exclude taxes 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 "continue", "will", "enable", "plans", "improve",
"anticipate", "increase", "advance", "support", 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) merchant acquisition
and retention; (iii) managing our growth; (iv) our history of
losses; (v) our limited operating history; (vi) our ability to
innovate; (vii) the security of personal information we store
relating to merchants and their customers and consumers with whom
we have a direct relationship; (viii) a disruption of service or
security breach; (ix) our potential inability to compete
successfully against current and future competitors; (x)
international sales and the use of our platform in various
countries; (xi) the reliance of our growth in part on the success
of our strategic relationships with third parties; (xii) our
potential failure to effectively maintain, promote and enhance our
brand; (xiii) our use of a single cloud-based platform to deliver
our services; (xiv) our potential inability to achieve or maintain
data transmission capacity; (xv) our reliance on a single supplier
to provide the technology we offer through Shopify Payments; (xvi)
payments processed through Shopify Payments; (xvii) our potential
inability to hire, retain and motivate qualified personnel; (xviii)
serious errors or defects in our software or hardware or issues
with our hardware supply chain; (xix) 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 (xx) 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.
- Gross Merchandise Volume, or GMV, represents the total dollar
value of orders processed on the Shopify platform and on 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 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.
- Gross Payments Volume, or GPV, is the amount of GMV processed
through Shopify Payments.
- Non-GAAP financial measures exclude the effect of stock-based
compensation expenses and related payroll taxes as well as
amortization of acquired intangibles and related taxes. Please
refer to "Non-GAAP Financial Measures" in this press release for
more information.
Shopify Inc.
Condensed Consolidated
Statements of Operations and Comprehensive Loss
(Expressed in US $000’s, except
share and per share amounts, unaudited)
Three months ended
March 31, 2020
March 31, 2019
$
$
Revenues
Subscription solutions
187,609
140,451
Merchant solutions
282,392
180,031
470,001
320,482
Cost of revenues
Subscription solutions
37,712
27,985
Merchant solutions
175,339
112,206
213,051
140,191
Gross profit
256,950
180,291
Operating expenses
Sales and marketing
154,862
105,022
Research and development
116,396
76,355
General and administrative
44,842
30,303
Transaction and loan losses
14,083
4,401
Total operating expenses
330,183
216,081
Loss from operations
(73,233
)
(35,790
)
Other income
13,109
11,639
Loss before income taxes
(60,124
)
(24,151
)
Recovery of income taxes
28,695
—
Net loss
(31,429
)
(24,151
)
Other comprehensive income
(loss)
(16,633
)
9,274
Comprehensive loss
(48,062
)
(14,877
)
Basic and diluted net loss per share
attributable to shareholders
(0.27
)
(0.22
)
Weighted average shares used to compute
basic and diluted net loss per share attributable to
shareholders
116,806,549
110,921,276
Shopify Inc.
Condensed Consolidated Balance
Sheets
(Expressed in US $000’s except
share amounts, unaudited)
As at
March 31, 2020
December 31, 2019
$
$
Assets
Current assets
Cash and cash equivalents
969,363
649,916
Marketable securities
1,391,209
1,805,278
Trade and other receivables, net
88,139
90,529
Merchant cash advances, loans and related
receivables, net
191,863
150,172
Income taxes receivable
28,402
—
Other current assets
58,912
48,833
2,727,888
2,744,728
Long-term assets
Property and equipment, net
116,832
111,398
Intangible assets, net
159,004
167,282
Right-of-use assets
133,786
134,774
Deferred tax assets
21,541
19,432
Goodwill
311,865
311,865
743,028
744,751
Total assets
3,470,916
3,489,479
Liabilities and shareholders’
equity
Current liabilities
Accounts payable and accrued
liabilities
214,431
181,193
Income taxes payable
1,461
69,432
Deferred revenue
62,884
56,691
Lease liabilities
9,781
9,066
288,557
316,382
Long-term liabilities
Deferred revenue
5,580
5,969
Lease liabilities
131,709
142,641
Deferred tax liabilities
4,219
8,753
141,508
157,363
Commitments and contingencies
Shareholders’ equity
Common stock, unlimited Class A
subordinate voting shares authorized, 105,327,498 and 104,518,173
issued and outstanding; unlimited Class B multiple voting shares
authorized, 11,897,199 and 11,910,802 issued and outstanding
3,333,407
3,256,284
Additional paid-in capital
58,684
62,628
Accumulated other comprehensive income
(loss)
(15,587
)
1,046
Accumulated deficit
(335,653
)
(304,224
)
Total shareholders’ equity
3,040,851
3,015,734
Total liabilities and shareholders’
equity
3,470,916
3,489,479
Shopify Inc.
Condensed Consolidated
Statements of Cash Flows
(Expressed in US $000’s,
unaudited)
Three months ended
March 31, 2020
March 31, 2019
$
$
Cash flows from operating
activities
Net loss for the period
(31,429)
(24,151)
Adjustments to reconcile net loss to net
cash (used) provided by operating activities:
Amortization and depreciation
14,366
6,832
Stock-based compensation
53,752
31,164
Provision for transaction and loan
losses
6,103
2,747
Deferred income taxes
(6,643)
—
Unrealized foreign exchange (gain)
loss
(3,779)
60
Changes in operating assets and
liabilities:
Trade and other receivables
(2,378)
(10,551)
Merchant cash advances, loans and related
receivables
(46,478)
(18,117)
Other current assets
(15,349)
(2,917)
Accounts payable and accrued
liabilities
30,621
34,321
Income tax assets and liabilities
(90,375)
—
Deferred revenue
5,804
3,696
Lease assets and liabilities
830
1,260
Net cash (used) provided by operating
activities
(84,955)
24,344
Cash flows from investing
activities
Purchase of marketable securities
(496,224)
(700,052)
Maturity of marketable securities
913,178
679,467
Acquisitions of property and equipment
(16,740)
(9,552)
Acquisitions of intangible assets
(219)
(1,440)
Acquisition of businesses, net of cash
acquired
—
(5,715)
Net cash provided (used) by investing
activities
399,995
(37,292)
Cash flows from financing
activities
Proceeds from the exercise of stock
options
19,427
12,056
Net cash provided by financing
activities
19,427
12,056
Effect of foreign exchange on cash and
cash equivalents
(15,020)
655
Net increase (decrease) in cash and
cash equivalents
319,447
(237)
Cash and cash equivalents – Beginning
of Period
649,916
410,683
Cash and cash equivalents – End of
Period
969,363
410,446
Shopify Inc.
Reconciliation from GAAP to
Non-GAAP Results
(Expressed in US $000’s, except
share and per share amounts, unaudited)
Three months ended
March 31, 2020
March 31, 2019
$
$
GAAP Gross profit
256,950
180,291
% of Revenue
55
%
56
%
add: stock-based compensation
1,148
714
add: payroll taxes related to stock-based
compensation
176
100
add: amortization of acquired
intangibles
5,569
1,625
Non-GAAP Gross profit
263,843
182,730
% of Revenue
56
%
57
%
GAAP Sales and marketing
154,862
105,022
% of Revenue
33
%
33
%
less: stock-based compensation
11,207
6,835
less: payroll taxes related to stock-based
compensation
1,227
810
less: amortization of acquired
intangibles
388
—
Non-GAAP Sales and marketing
142,040
97,377
% of Revenue
30
%
30
%
GAAP Research and development
116,396
76,355
% of Revenue
25
%
24
%
less: stock-based compensation
32,604
18,115
less: payroll taxes related to stock-based
compensation
3,817
1,808
less: amortization of acquired
intangibles
58
58
Non-GAAP Research and development
79,917
56,374
% of Revenue
17
%
18
%
GAAP General and administrative
44,842
30,303
% of Revenue
10
%
9
%
less: stock-based compensation
8,793
5,500
less: payroll taxes related to stock-based
compensation
974
531
Non-GAAP General and administrative
35,075
24,272
% of Revenue
7
%
8
%
GAAP Transaction and loan losses
14,083
4,401
% of Revenue
3
%
1
%
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
March 31, 2020
March 31, 2019
$
$
GAAP Operating expenses
330,183
216,081
% of Revenue
70
%
67
%
less: stock-based compensation
52,604
30,450
less: payroll taxes related to stock-based
compensation
6,018
3,149
less: amortization of acquired
intangibles
446
58
Non-GAAP Operating expenses
271,115
182,424
% of Revenue
58
%
57
%
GAAP Operating loss
(73,233
)
(35,790
)
% of Revenue
(16
)%
(11
)%
add: stock-based compensation
53,752
31,164
add: payroll taxes related to stock-based
compensation
6,194
3,249
add: amortization of acquired
intangibles
6,015
1,683
Adjusted Operating (loss) income
(7,272
)
306
% of Revenue
(2
)%
—
%
GAAP Net loss
(31,429
)
(24,151
)
% of Revenue
(7
)%
(8
)%
add: stock-based compensation
53,752
31,164
add: payroll taxes related to stock-based
compensation
6,194
3,249
add: amortization of acquired
intangibles
6,015
1,683
add: provision for income tax effects
related to non-GAAP adjustments
(12,200
)
(4,844
)
Adjusted Net income
22,332
7,101
% of Revenue
5
%
2
%
GAAP Net loss per share attributable to
shareholders
(0.27
)
(0.22
)
add: stock-based compensation
0.46
0.28
add: payroll taxes related to stock-based
compensation
0.05
0.03
add: amortization of acquired
intangibles
0.05
0.01
add: provision for income tax effects
related to non-GAAP adjustments
(0.10
)
(0.04
)
Adjusted Net income per share attributable
to shareholders
0.19
0.06
Weighted average shares used to compute
GAAP and non-GAAP net income (loss) per share attributable to
shareholders
116,806,549
110,921,276
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200506005253/en/
INVESTORS: Katie Keita Senior Director, Investor Relations
613-241-2828 x 1024 IR@shopify.com MEDIA: Sheryl So Senior
Communications Lead 416-238-6705 x 302 press@shopify.com
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