For the month of
|
August
|
|
2019
|
Commission File Number
|
001-37400
|
|
|
Shopify Inc.
|
|||
(Translation of registrant’s name into English)
|
|||
150 Elgin Street, 8th Floor
Ottawa, Ontario, Canada K2P 1L4
|
|||
(Address of principal executive offices)
|
Form 20-F
|
|
Form 40-F
|
X
|
99.1
|
Shopify Inc. – Interim Financial Statements for the Second Quarter ended June 30, 2019
|
|
|
99.2
|
Shopify Inc. – Interim Management’s Discussion and Analysis for the Second Quarter ended June 30, 2019
|
|
|
99.3
|
Shopify Inc. – Form 52-109F2 Certificate of Interim Filings by CEO (pursuant to Canadian regulations)
|
|
|
99.4
|
Shopify Inc. – Form 52-109F2 Certificate of Interim Filings by CFO (pursuant to Canadian regulations)
|
|
Shopify Inc.
|
||||
|
(Registrant)
|
||||
Date:
|
|
August 1, 2019
|
|
By:
|
/s/ Joseph A. Frasca
|
|
Name: Joseph A. Frasca
Title: Chief Legal Officer and Corporate Secretary
|
|
|
|
As at
|
||||
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||
|
Note
|
|
$
|
|
$
|
||
Assets
|
|
|
|
|
|
||
Current assets
|
|
|
|
|
|
||
Cash and cash equivalents
|
4
|
|
668,990
|
|
|
410,683
|
|
Marketable securities
|
4
|
|
1,344,341
|
|
|
1,558,987
|
|
Trade and other receivables, net
|
5
|
|
45,840
|
|
|
41,347
|
|
Merchant cash advances and loans receivable, net
|
6
|
|
115,556
|
|
|
91,873
|
|
Other current assets
|
|
|
36,438
|
|
|
26,192
|
|
|
|
|
2,211,165
|
|
|
2,129,082
|
|
Long-term assets
|
|
|
|
|
|
||
Property and equipment, net
|
|
|
84,159
|
|
|
61,612
|
|
Intangible assets, net
|
|
|
25,314
|
|
|
26,072
|
|
Right-of-use assets
|
7
|
|
98,285
|
|
|
—
|
|
Goodwill
|
8
|
|
48,375
|
|
|
38,019
|
|
|
|
|
256,133
|
|
|
125,703
|
|
Total assets
|
|
|
2,467,298
|
|
|
2,254,785
|
|
Liabilities and shareholders’ equity
|
|
|
|
|
|
||
Current liabilities
|
|
|
|
|
|
||
Accounts payable and accrued liabilities
|
|
|
142,000
|
|
|
96,956
|
|
Deferred revenue
|
5
|
|
45,707
|
|
|
39,180
|
|
Lease liabilities
|
7
|
|
5,644
|
|
|
2,552
|
|
|
|
|
193,351
|
|
|
138,688
|
|
Long-term liabilities
|
|
|
|
|
|
||
Deferred revenue
|
5
|
|
2,092
|
|
|
1,881
|
|
Lease liabilities
|
7
|
|
108,873
|
|
|
22,316
|
|
Deferred tax liability
|
|
|
1,798
|
|
|
1,132
|
|
|
|
|
112,763
|
|
|
25,329
|
|
Commitments and contingencies
|
7, 10
|
|
|
|
|
||
Shareholders’ equity
|
|
|
|
|
|
||
Common stock, unlimited Class A subordinate voting shares authorized, 100,282,712 and 98,081,889 issued and outstanding; unlimited Class B multiple voting shares authorized, 12,247,861 and 12,310,800 issued and outstanding
|
11
|
|
2,313,198
|
|
|
2,215,936
|
|
Additional paid-in capital
|
|
|
76,393
|
|
|
74,805
|
|
Accumulated other comprehensive income (loss)
|
12
|
|
3,804
|
|
|
(12,216
|
)
|
Accumulated deficit
|
3
|
|
(232,211
|
)
|
|
(187,757
|
)
|
Total shareholders’ equity
|
|
|
2,161,184
|
|
|
2,090,768
|
|
Total liabilities and shareholders’ equity
|
|
|
2,467,298
|
|
|
2,254,785
|
|
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
|
|
June 30, 2019
|
|
June 30, 2018
|
|
June 30, 2019
|
|
June 30, 2018
|
||||||||
|
Note
|
|
$
|
|
$
|
|
$
|
|
$
|
||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
||||||||
Subscription solutions
|
|
|
153,047
|
|
|
110,721
|
|
|
293,498
|
|
|
210,919
|
|
||||
Merchant solutions
|
|
|
208,932
|
|
|
134,242
|
|
|
388,963
|
|
|
248,384
|
|
||||
|
|
|
361,979
|
|
|
244,963
|
|
|
682,461
|
|
|
459,303
|
|
||||
Cost of revenues
|
|
|
|
|
|
|
|
|
|
||||||||
Subscription solutions
|
|
|
29,538
|
|
|
24,524
|
|
|
57,523
|
|
|
47,684
|
|
||||
Merchant solutions
|
|
|
127,676
|
|
|
83,484
|
|
|
239,882
|
|
|
150,822
|
|
||||
|
|
|
157,214
|
|
|
108,008
|
|
|
297,405
|
|
|
198,506
|
|
||||
Gross profit
|
|
|
204,765
|
|
|
136,955
|
|
|
385,056
|
|
|
260,797
|
|
||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
||||||||
Sales and marketing
|
|
|
119,210
|
|
|
87,487
|
|
|
224,232
|
|
|
163,271
|
|
||||
Research and development
|
|
|
85,520
|
|
|
54,305
|
|
|
161,875
|
|
|
102,021
|
|
||||
General and administrative
|
|
|
39,655
|
|
|
25,924
|
|
|
74,359
|
|
|
46,599
|
|
||||
Total operating expenses
|
|
|
244,385
|
|
|
167,716
|
|
|
460,466
|
|
|
311,891
|
|
||||
Loss from operations
|
|
|
(39,620
|
)
|
|
(30,761
|
)
|
|
(75,410
|
)
|
|
(51,094
|
)
|
||||
Other income
|
|
|
|
|
|
|
|
|
|
||||||||
Interest income, net
|
|
|
12,174
|
|
|
7,444
|
|
|
24,252
|
|
|
12,093
|
|
||||
Foreign exchange loss
|
|
|
(1,232
|
)
|
|
(636
|
)
|
|
(1,671
|
)
|
|
(854
|
)
|
||||
|
|
|
10,942
|
|
|
6,808
|
|
|
22,581
|
|
|
11,239
|
|
||||
Net loss
|
|
|
(28,678
|
)
|
|
(23,953
|
)
|
|
(52,829
|
)
|
|
(39,855
|
)
|
||||
Other comprehensive income (loss), net of tax
|
|
|
|
|
|
|
|
|
|
||||||||
Unrealized gain (loss) on cash flow hedges
|
12
|
|
6,746
|
|
|
(4,398
|
)
|
|
16,020
|
|
|
(11,232
|
)
|
||||
Comprehensive loss
|
|
|
(21,932
|
)
|
|
(28,351
|
)
|
|
(36,809
|
)
|
|
(51,087
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
Basic and diluted net loss per share attributable to shareholders
|
13
|
|
$
|
(0.26
|
)
|
|
$
|
(0.23
|
)
|
|
$
|
(0.47
|
)
|
|
$
|
(0.38
|
)
|
Weighted average shares used to compute basic and diluted net loss per share attributable to shareholders
|
13
|
|
112,013,409
|
|
|
105,978,076
|
|
|
111,470,359
|
|
|
104,127,640
|
|
|
Note
|
|
Common Stock
|
|
Additional
Paid-In Capital
$
|
|
Accumulated Other Comprehensive Income (Loss)
$
|
|
Accumulated Deficit
$
|
|
Total
$
|
||||||||
|
|
|
Shares
|
|
Amount $
|
|
|||||||||||||
As at December 31, 2017
|
|
|
99,877,688
|
|
|
1,077,477
|
|
|
43,392
|
|
|
3,435
|
|
|
(123,204
|
)
|
|
1,001,100
|
|
Exercise of stock options
|
|
|
707,866
|
|
|
10,111
|
|
|
(3,817
|
)
|
|
—
|
|
|
—
|
|
|
6,294
|
|
Stock-based compensation
|
|
|
—
|
|
|
—
|
|
|
18,247
|
|
|
—
|
|
|
—
|
|
|
18,247
|
|
Vesting of restricted share units
|
|
|
242,844
|
|
|
10,728
|
|
|
(10,728
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
Issuance of Class A subordinate voting shares, net of offering costs of $10,616
|
|
|
4,800,000
|
|
|
646,984
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
646,984
|
|
Net loss and comprehensive loss for the period
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,834
|
)
|
|
(15,902
|
)
|
|
(22,736
|
)
|
As at March 31, 2018
|
|
|
105,628,398
|
|
|
1,745,300
|
|
|
47,094
|
|
|
(3,399
|
)
|
|
(139,106
|
)
|
|
1,649,889
|
|
Exercise of stock options
|
|
|
525,391
|
|
|
15,495
|
|
|
(5,649
|
)
|
|
—
|
|
|
—
|
|
|
9,846
|
|
Stock-based compensation
|
|
|
—
|
|
|
—
|
|
|
24,817
|
|
|
—
|
|
|
—
|
|
|
24,817
|
|
Vesting of restricted share units
|
|
|
216,360
|
|
|
10,509
|
|
|
(10,509
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
Net loss and comprehensive loss for the period
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,398
|
)
|
|
(23,953
|
)
|
|
(28,351
|
)
|
As at June 30, 2018
|
|
|
106,370,149
|
|
|
1,771,304
|
|
|
55,753
|
|
|
(7,797
|
)
|
|
(163,059
|
)
|
|
1,656,201
|
|
|
Note
|
|
Common Stock
|
|
Additional
Paid-In Capital $ |
|
Accumulated Other Comprehensive Income (Loss)
$
|
|
Accumulated Deficit
$
|
|
Total
$
|
||||||||
|
|
|
Shares
|
|
Amount $
|
|
|||||||||||||
As at December 31, 2018
|
|
|
110,392,689
|
|
|
2,215,936
|
|
|
74,805
|
|
|
(12,216
|
)
|
|
(187,757
|
)
|
|
2,090,768
|
|
Adjustment related to the transition to Topic 842, Leases
|
3
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,375
|
|
|
8,375
|
|
As at January 1, 2019
|
|
|
110,392,689
|
|
|
2,215,936
|
|
|
74,805
|
|
|
(12,216
|
)
|
|
(179,382
|
)
|
|
2,099,143
|
|
Exercise of stock options
|
|
|
747,686
|
|
|
18,964
|
|
|
(6,908
|
)
|
|
—
|
|
|
—
|
|
|
12,056
|
|
Stock-based compensation
|
|
|
—
|
|
|
—
|
|
|
31,596
|
|
|
—
|
|
|
—
|
|
|
31,596
|
|
Vesting of restricted share units
|
|
|
342,152
|
|
|
30,340
|
|
|
(30,340
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
Net loss and comprehensive loss for the period
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,274
|
|
|
(24,151
|
)
|
|
(14,877
|
)
|
As at March 31, 2019
|
|
|
111,482,527
|
|
|
2,265,240
|
|
|
69,153
|
|
|
(2,942
|
)
|
|
(203,533
|
)
|
|
2,127,918
|
|
Exercise of stock options
|
|
|
738,873
|
|
|
24,173
|
|
|
(8,605
|
)
|
|
—
|
|
|
—
|
|
|
15,568
|
|
Stock-based compensation
|
|
|
—
|
|
|
—
|
|
|
39,630
|
|
|
—
|
|
|
—
|
|
|
39,630
|
|
Vesting of restricted share units
|
|
|
309,173
|
|
|
23,785
|
|
|
(23,785
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
Net loss and comprehensive loss for the period
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,746
|
|
|
(28,678
|
)
|
|
(21,932
|
)
|
As at June 30, 2019
|
|
|
112,530,573
|
|
|
2,313,198
|
|
|
76,393
|
|
|
3,804
|
|
|
(232,211
|
)
|
|
2,161,184
|
|
|
|
|
Six months ended
|
||||
|
|
|
June 30, 2019
|
|
June 30, 2018
|
||
|
Note
|
|
$
|
|
$
|
||
Cash flows from operating activities
|
|
|
|
|
|
||
Net loss for the period
|
|
|
(52,829)
|
|
|
(39,855)
|
|
Adjustments to reconcile net loss to net cash provided (used) by operating activities:
|
|
|
|
|
|
||
Amortization and depreciation
|
|
|
14,207
|
|
|
15,008
|
|
Stock-based compensation
|
|
|
70,432
|
|
|
42,116
|
|
Provision for uncollectible receivables related to merchant cash advances and loans receivable
|
6
|
|
7,539
|
|
|
4,072
|
|
Unrealized foreign exchange loss
|
|
|
1,917
|
|
|
369
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
||
Trade and other receivables
|
|
|
(20,540)
|
|
|
(16,426)
|
|
Merchant cash advances and loans receivable
|
|
|
(31,222)
|
|
|
(36,952)
|
|
Other current assets
|
|
|
(5,910)
|
|
|
(5,532)
|
|
Accounts payable and accrued liabilities
|
|
|
55,908
|
|
|
27,285
|
|
Deferred revenue
|
|
|
6,345
|
|
|
4,617
|
|
Lease assets and liabilities
|
|
|
1,555
|
|
|
2,501
|
|
Net cash provided (used) by operating activities
|
|
|
47,402
|
|
|
(2,797)
|
|
Cash flows from investing activities
|
|
|
|
|
|
||
Purchase of marketable securities
|
|
|
(1,022,814)
|
|
|
(1,297,346)
|
|
Maturity of marketable securities
|
|
|
1,249,319
|
|
|
744,406
|
|
Acquisitions of property and equipment
|
|
|
(30,437)
|
|
|
(15,107)
|
|
Acquisitions of intangible assets
|
|
|
(1,935)
|
|
|
(9,353)
|
|
Acquisition of businesses, net of cash acquired
|
|
|
(12,476)
|
|
|
(3,718)
|
|
Net cash provided (used) by investing activities
|
|
|
181,657
|
|
|
(581,118)
|
|
Cash flows from financing activities
|
|
|
|
|
|
||
Proceeds from the exercise of stock options
|
|
|
27,624
|
|
|
16,140
|
|
Proceeds from public offering, net of issuance costs
|
11
|
|
—
|
|
|
646,984
|
|
Net cash provided by financing activities
|
|
|
27,624
|
|
|
663,124
|
|
Effect of foreign exchange on cash and cash equivalents
|
|
|
1,624
|
|
|
(1,085)
|
|
Net increase in cash and cash equivalents
|
|
|
258,307
|
|
|
78,124
|
|
Cash and cash equivalents – Beginning of Period
|
|
|
410,683
|
|
|
141,677
|
|
Cash and cash equivalents – End of Period
|
|
|
668,990
|
|
|
219,801
|
|
|
|
|
|
|
|
||
Supplemental cash flow information:
|
|
|
|
|
|
||
Cash paid for amounts included in the measurement of lease liabilities included in cash flows from operating activities
|
|
|
7,209
|
|
|
—
|
|
Opening lease liabilities arising from obtaining right-of-use assets
|
|
|
103,310
|
|
|
—
|
|
Acquired property and equipment remaining unpaid
|
|
|
963
|
|
|
1,602
|
|
Capitalized stock-based compensation
|
|
|
794
|
|
|
948
|
|
1.
|
Nature of Business
|
2.
|
Basis of Presentation and Consolidation
|
3.
|
Significant Accounting Policies
|
|
Three months ended
|
||||||||||||
|
June 30, 2019
|
|
June 30, 2018
|
||||||||||
|
GAAP Amounts As Reported
$ |
Exchange Rate Effect
(2)
$ |
At 10% Stronger CAD Rate
(3)
$ |
|
GAAP Amounts As Reported
$ |
Exchange Rate Effect
(2)
$ |
At 10% Stronger CAD Rate
(3)
$ |
||||||
|
(in thousands)
|
||||||||||||
Revenues
|
361,979
|
|
657
|
|
362,636
|
|
|
244,963
|
|
407
|
|
245,370
|
|
Cost of revenues
|
(157,214
|
)
|
(946
|
)
|
(158,160
|
)
|
|
(108,008
|
)
|
(845
|
)
|
(108,853
|
)
|
Operating expenses
|
(244,385
|
)
|
(7,359
|
)
|
(251,744
|
)
|
|
(167,716
|
)
|
(7,596
|
)
|
(175,312
|
)
|
Loss from operations
|
(39,620
|
)
|
(7,648
|
)
|
(47,268
|
)
|
|
(30,761
|
)
|
(8,034
|
)
|
(38,795
|
)
|
|
Six months ended
|
||||||||||||
|
June 30, 2019
|
|
June 30, 2018
|
||||||||||
|
GAAP Amounts As Reported
$ |
Exchange Rate Effect
(2)
$ |
At 10% Stronger CAD Rate
(3)
$ |
|
GAAP Amounts As Reported
$ |
Exchange Rate Effect
(2)
$ |
At 10% Stronger CAD Rate
(3)
$ |
||||||
|
(in thousands)
|
||||||||||||
Revenues
|
682,461
|
|
1,208
|
|
683,669
|
|
|
459,303
|
|
740
|
|
460,043
|
|
Cost of revenues
|
(297,405
|
)
|
(1,860
|
)
|
(299,265
|
)
|
|
(198,506
|
)
|
(1,666
|
)
|
(200,172
|
)
|
Operating expenses
|
(460,466
|
)
|
(18,292
|
)
|
(478,758
|
)
|
|
(311,891
|
)
|
(14,502
|
)
|
(326,393
|
)
|
Loss from operations
|
(75,410
|
)
|
(18,944
|
)
|
(94,354
|
)
|
|
(51,094
|
)
|
(15,428
|
)
|
(66,522
|
)
|
4.
|
Financial Instruments
|
|
Level 1
$ |
|
Level 2
$ |
|
Level 3
$ |
|||||||||
|
Carrying Amount
|
Fair Value
|
|
Carrying Amount
|
Fair Value
|
|
Carrying Amount
|
Fair Value
|
||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||
Cash equivalents:
|
|
|
|
|
|
|
|
|
||||||
Repurchase agreements
|
—
|
|
—
|
|
|
30,000
|
|
30,006
|
|
|
—
|
|
—
|
|
Marketable securities:
|
|
|
|
|
|
|
|
|
||||||
U.S. term deposits
|
127,500
|
|
129,215
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
U.S. federal bonds
|
319,446
|
|
320,018
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
Canadian federal bonds
|
19,931
|
|
19,931
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
Corporate bonds and commercial paper
|
—
|
|
—
|
|
|
877,464
|
|
881,191
|
|
|
—
|
|
—
|
|
Derivative assets:
|
|
|
|
|
|
|
|
|
||||||
Foreign exchange forward contracts
|
—
|
|
—
|
|
|
4,120
|
|
4,120
|
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||
Liabilities:
|
|
|
|
|
|
|
|
|
||||||
Derivative liabilities:
|
|
|
|
|
|
|
|
|
||||||
Foreign exchange forward contracts
|
—
|
|
—
|
|
|
316
|
|
316
|
|
|
—
|
|
—
|
|
|
Level 1
$ |
|
Level 2
$ |
|
Level 3
$ |
|||||||||
|
Carrying Amount
|
Fair Value
|
|
Carrying Amount
|
Fair Value
|
|
Carrying Amount
|
Fair Value
|
||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||
Cash equivalents:
|
|
|
|
|
|
|
|
|
||||||
Commercial paper
|
—
|
|
—
|
|
|
4,994
|
|
4,994
|
|
|
—
|
|
—
|
|
Repurchase agreements
|
—
|
|
—
|
|
|
60,000
|
|
60,005
|
|
|
—
|
|
—
|
|
Marketable securities:
|
|
|
|
|
|
|
|
|
||||||
U.S. term deposits
|
127,500
|
|
128,241
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
U.S. federal bonds
|
230,898
|
|
231,299
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
Canadian federal bonds
|
19,967
|
|
19,962
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
Corporate bonds and commercial paper
|
—
|
|
—
|
|
|
1,180,622
|
|
1,182,437
|
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||
Liabilities:
|
|
|
|
|
|
|
|
|
||||||
Derivative liabilities:
|
|
|
|
|
|
|
|
|
||||||
Foreign exchange forward contracts
|
—
|
|
—
|
|
|
12,216
|
|
12,216
|
|
|
—
|
|
—
|
|
|
Three months ended
|
|
Six months ended
|
||||||||
|
June 30, 2019
$ |
|
June 30, 2018
$ |
|
June 30, 2019
$ |
|
June 30, 2018
$ |
||||
Balance, beginning of the period
|
1,214
|
|
|
2,136
|
|
|
1,023
|
|
|
1,642
|
|
Provision for uncollectible receivables
|
569
|
|
|
259
|
|
|
1,285
|
|
|
753
|
|
Write-offs
|
(212
|
)
|
|
—
|
|
|
(737
|
)
|
|
—
|
|
Balance, end of the period
|
1,571
|
|
|
2,395
|
|
|
1,571
|
|
|
2,395
|
|
|
Three months ended
|
|
Six months ended
|
||||||||
|
June 30, 2019
$ |
|
June 30, 2018
$ |
|
June 30, 2019
$ |
|
June 30, 2018
$ |
||||
Balance, beginning of the period
|
44,757
|
|
|
34,473
|
|
|
41,061
|
|
|
32,046
|
|
Deferral of revenue
|
27,167
|
|
|
21,509
|
|
|
36,178
|
|
|
28,410
|
|
Recognition of deferred revenue
|
(24,125
|
)
|
|
(19,319
|
)
|
|
(29,440
|
)
|
|
(23,793
|
)
|
Balance, end of the period
|
47,799
|
|
|
36,663
|
|
|
47,799
|
|
|
36,663
|
|
|
|
|
|
|
|
|
|
|
|
||
Current portion
|
|
|
|
|
45,707
|
|
|
35,029
|
|
||
Long term portion
|
|
|
|
|
2,092
|
|
|
1,634
|
|
||
|
|
|
|
|
47,799
|
|
|
36,663
|
|
|
June 30,
2019
|
|
December 31, 2018
|
|
December 31, 2017
|
|||
|
$
|
|
$
|
|
$
|
|||
Merchant cash advances and loans receivable, gross
|
121,819
|
|
|
94,612
|
|
|
49,143
|
|
Allowance for uncollectible merchant cash advances and loans receivable
|
(6,263
|
)
|
|
(2,739
|
)
|
|
(2,042
|
)
|
Merchant cash advances and loans receivable, net
|
115,556
|
|
|
91,873
|
|
|
47,101
|
|
|
Three months ended
|
|
Six months ended
|
||||||||
|
June 30, 2019
|
|
June 30, 2018
|
|
June 30, 2019
|
|
June 30, 2018
|
||||
|
$
|
|
$
|
|
$
|
|
$
|
||||
Balance, beginning of the period
|
4,263
|
|
|
2,681
|
|
|
2,739
|
|
|
2,042
|
|
Provision for uncollectible merchant cash advances and loans receivable
|
4,466
|
|
|
2,490
|
|
|
7,539
|
|
|
4,072
|
|
Merchant cash advances and loans receivable charged off, net of recoveries
|
(2,466
|
)
|
|
(1,240
|
)
|
|
(4,015
|
)
|
|
(2,183
|
)
|
Balance, end of the period
|
6,263
|
|
|
3,931
|
|
|
6,263
|
|
|
3,931
|
|
|
Three months ended
|
|
Six months ended
|
||
Operating lease expense
|
3,895
|
|
|
7,533
|
|
Variable lease expense, including non-lease components
|
3,083
|
|
|
6,307
|
|
Total lease expense
|
6,978
|
|
|
13,840
|
|
Fiscal Year
|
Operating Leases
|
|
Remainder of 2019
|
7,692
|
|
2020
|
23,798
|
|
2021
|
31,264
|
|
2022
|
35,985
|
|
2023
|
39,826
|
|
Thereafter
|
361,477
|
|
Total future minimum payments
|
500,042
|
|
Minimum payments related to leases that have not yet commenced
|
(139,669
|
)
|
Minimum payments related to variable lease payments, including non-lease components
|
(208,025
|
)
|
Imputed interest
|
(37,831
|
)
|
Total lease liabilities
|
114,517
|
|
10.
|
Commitments and Contingencies
|
|
Shares Subject to Options Outstanding
|
|
Outstanding RSUs
|
|||||||||||||||||
|
Number of Options
(1)
|
|
Weighted Average Exercise Price
$ |
|
Remaining Contractual Term (in years)
|
|
Aggregate Intrinsic Value
(2)
$ |
|
Weighted Average Grant Date Fair Value
$ |
|
Outstanding RSUs
|
|
Weighted Average Grant Date Fair Value
$ |
|||||||
December 31, 2018
|
5,476,790
|
|
|
32.96
|
|
|
6.23
|
|
|
577,731
|
|
|
—
|
|
|
2,473,665
|
|
|
92.40
|
|
Stock options granted
|
352,119
|
|
|
180.67
|
|
—
|
|
|
—
|
|
|
84.49
|
|
|
—
|
|
|
—
|
|
|
Stock options exercised
|
(1,486,559
|
)
|
|
18.58
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Stock options forfeited
|
(48,808
|
)
|
|
52.74
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
RSUs granted
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
614,788
|
|
|
194.18
|
|
RSUs settled
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(651,325
|
)
|
|
83.10
|
|
RSUs forfeited
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(102,711
|
)
|
|
103.27
|
|
June 30, 2019
|
4,293,542
|
|
|
49.83
|
|
6.44
|
|
|
1,074,757
|
|
|
—
|
|
|
2,334,417
|
|
|
121.32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Stock options exercisable as of June 30, 2019
|
2,661,818
|
|
|
20.62
|
|
5.39
|
|
|
744,065
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Six months ended
|
|||||||
|
June 30, 2019
|
|
June 30, 2018
|
|
June 30, 2019
|
|
June 30, 2018
|
|||
|
$
|
|
$
|
|
$
|
|
$
|
|||
Cost of revenues
|
894
|
|
|
584
|
|
1,608
|
|
|
1,010
|
|
Sales and marketing
|
8,409
|
|
|
5,722
|
|
15,244
|
|
|
9,760
|
|
Research and development
|
22,983
|
|
|
13,639
|
|
41,098
|
|
|
24,504
|
|
General and administrative
|
6,982
|
|
|
4,246
|
|
12,482
|
|
|
6,842
|
|
|
39,268
|
|
|
24,191
|
|
70,432
|
|
|
42,116
|
|
12.
|
Changes in Accumulated Other Comprehensive Income (Loss)
|
|
Accumulated Other Comprehensive Income (Loss)
(all amounts net of tax)
|
||||
|
Six months ended
|
||||
|
June 30, 2019
|
|
June 30, 2018
|
||
|
$
|
|
$
|
||
Balance, beginning of the period
|
(12,216
|
)
|
|
3,435
|
|
|
|
|
|
||
Other comprehensive income (loss) before reclassifications
|
10,526
|
|
|
(9,646
|
)
|
Loss (gain) on cash flow hedges reclassified from accumulated other comprehensive income (loss) to earnings were as follows:
|
|
|
|
||
Cost of revenues
|
300
|
|
|
(103
|
)
|
Sales and marketing
|
1,617
|
|
|
(576
|
)
|
Research and development
|
2,788
|
|
|
(688
|
)
|
General and administrative
|
789
|
|
|
(219
|
)
|
Other comprehensive income (loss), net of tax
|
16,020
|
|
|
(11,232
|
)
|
Balance, end of the period
|
3,804
|
|
|
(7,797
|
)
|
|
Three months ended
|
|
Six months ended
|
||||||||
|
June 30, 2019
|
|
June 30, 2018
|
|
June 30, 2019
|
|
June 30, 2018
|
||||
Basic and diluted weighted average number of shares outstanding
|
112,013,409
|
|
|
105,978,076
|
|
|
111,470,359
|
|
|
104,127,640
|
|
The following items have been excluded from the diluted weighted average number of shares outstanding because they are anti-dilutive:
|
|
|
|
|
|
|
|
|
|
|
|
Stock options
|
4,293,542
|
|
|
6,482,571
|
|
|
4,293,542
|
|
|
6,482,571
|
|
Restricted share units
|
2,334,417
|
|
|
2,716,907
|
|
|
2,334,417
|
|
|
2,716,907
|
|
Deferred share units
|
562
|
|
|
—
|
|
|
562
|
|
|
—
|
|
|
6,628,521
|
|
|
9,199,478
|
|
|
6,628,521
|
|
|
9,199,478
|
|
•
|
the continued expansion of the number of channels for merchants to transact through;
|
•
|
the achievement of innovations and enhancements to, and expansion of, our platform and our solutions;
|
•
|
our exploration of new ways to accelerate checkout;
|
•
|
our ability to make it easier for merchants to manage their storefronts via their mobile devices;
|
•
|
whether a merchant using Shopify will ever need to re-platform;
|
•
|
the continued growth of our app developer, theme designer and partner ecosystem;
|
•
|
our plan to continue making investments to drive future growth;
|
•
|
our expectation to spend $1B over the next five years to build and operate the Shopify Fulfillment Network;
|
•
|
our revenue growth objectives and expectations about future profitability;
|
•
|
plans to continue making investments to drive future growth;
|
•
|
our expectation that the continued growth of merchant solutions may cause a decline in our overall gross margin percentage;
|
•
|
our expectation that as a result of the continued growth of our merchant solutions offerings, our seasonality will continue to affect our quarterly results and our business may become more seasonal in the future, and that historical patterns may not be a reliable indicator of our future performance;
|
•
|
our plan to continue to expand sales and marketing efforts to attract new merchants, retain revenue from existing merchants and increase revenues from both new and existing merchants, including adding sales personnel and expanding our marketing activities to continue to generate additional leads and build brand awareness;
|
•
|
our expectation that the overall trend of merchant solutions revenue making up an increasing component of total revenues over time, most notably in the fourth quarter due to higher holiday volume, will continue over time;
|
•
|
our expectation that our results of operations will be adversely impacted by an increase in the value of the Canadian dollar ("CAD") relative to the USD;
|
•
|
our belief that we have sufficient liquidity to meet our current and planned financial obligations over the next 12 months;
|
•
|
our expectations regarding contractual and contingent obligations;
|
•
|
our accounting estimates and assumptions made in the preparation of our financial statements; and
|
•
|
our expectations regarding the impact of accounting standards not yet adopted.
|
•
|
our ability to increase the functionality of our platform;
|
•
|
our ability to offer more sales channels that can connect to the platform;
|
•
|
our belief in the increasing importance of a multi-channel platform
that is both fully integrated and easy to use
;
|
•
|
our belief that commerce transacted over mobile will continue to grow more rapidly than desktop transactions;
|
•
|
our ability to expand our merchant base, retain revenue from existing merchants as they grow their businesses, and increase sales to both new and existing merchants;
|
•
|
our ability to manage our growth effectively;
|
•
|
our expectation that the Shopify Fulfillment Network is well positioned to improve supply chain economics and delivery for merchants by leveraging our scale with deep machine learning tools;
|
•
|
our ability to protect our intellectual property rights;
|
•
|
our belief that our merchant solutions make it easier for merchants to start a business and grow on our platform;
|
•
|
our ability to develop new solutions to extend the functionality of our platform, provide a high level of merchant service and support;
|
•
|
our ability to hire, retain and motivate qualified personnel;
|
•
|
our ability to enhance our ecosystem and partner programs, and the assumption that this will drive growth in our merchant base, further accelerating growth of the ecosystem;
|
•
|
our belief that our investments and acquisitions will increase our revenue base, improve the retention of this base and strengthen our ability to increase sales to our merchants and help drive our growth;
|
•
|
our ability to achieve our revenue growth objectives while controlling costs and expenses, and our ability to achieve or maintain profitability;
|
•
|
our belief that monthly recurring revenue ("MRR") is most closely correlated with the long-term value of our merchant relationships;
|
•
|
our assumptions regarding the principal competitive factors in our markets;
|
•
|
our ability to predict future commerce trends and technology;
|
•
|
our assumptions that higher-margin solutions such as Shopify Capital and Shopify Shipping will continue to contribute to revenues and to grow through increased adoption and international expansion;
|
•
|
our expectation that Shopify Payments will continue to expand internationally;
|
•
|
our belief that our investments in sales and marketing initiatives will continue to be effective in growing the number of merchants using our platform, in retaining revenue from existing merchants and increasing revenues from both;
|
•
|
our ability to develop processes, systems and controls to enable our internal support functions to scale with the growth of our business;
|
•
|
our ability to obtain sufficient space for our growing employee base;
|
•
|
our ability to retain key personnel;
|
•
|
our ability to protect against currency, interest rate, concentration of credit and inflation risks;
|
•
|
our assumptions as to our future expenses and financing requirements;
|
•
|
our assumptions as to our critical accounting policies and estimates; and
|
•
|
our assumptions as to the effects of accounting pronouncements to be adopted.
|
•
|
sustaining our rapid growth;
|
•
|
managing our growth;
|
•
|
our history of losses and our potential inability to achieve profitability;
|
•
|
our limited operating history in new and developing markets and new geographic regions;
|
•
|
our ability to innovate;
|
•
|
a denial of service attack or security breach;
|
•
|
payments processed through Shopify Payments;
|
•
|
our reliance on a single supplier to provide the technology we offer through Shopify Payments;
|
•
|
the security of personal information we store relating to merchants and their buyers, as well as buyers with whom we have a direct relationship;
|
•
|
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;
|
•
|
our potential inability to hire, retain and motivate qualified personnel;
|
•
|
international sales and the use of our platform in various countries;
|
•
|
our potential inability to compete successfully against current and future competitors;
|
•
|
serious software errors or defects;
|
•
|
exchange rate fluctuations that may negatively affect our results of operations;
|
•
|
our potential inability to achieve or maintain data transmission capacity;
|
•
|
the reliance of our growth in part on the success of our strategic relationships with third parties;
|
•
|
our potential failure to maintain a consistently high level of customer service;
|
•
|
our use of a limited number of data centers and a cloud-based platform to deliver our services;
|
•
|
ineffective operations of our solutions when accessed through mobile devices;
|
•
|
changes to technologies used in our platform or new versions or upgrades of operating systems and internet browsers;
|
•
|
the impact of worldwide economic conditions, including the resulting effect on spending by
small and medium-sized businesses ("SMBs")
or their buyers;
|
•
|
potential claims by third parties of intellectual property infringement;
|
•
|
our potential inability to obtain, maintain and protect our intellectual property rights and proprietary information or prevent third parties from making unauthorized use of our technology;
|
•
|
our use of open source software;
|
•
|
our potential inability to generate traffic to our website through search engines and social networking sites;
|
•
|
our potential failure to effectively maintain, promote and enhance our brand;
|
•
|
our dependence on the continued services and performance of our senior management and other key employees;
|
•
|
activities of merchants or partners or the content of merchants' shops;
|
•
|
acquisitions and investments;
|
•
|
seasonal fluctuations;
|
•
|
our reliance on computer hardware, purchased or leased, software licensed from and services rendered by third parties, in order to provide our solutions and run our business, sometimes by a single-source supplier;
|
•
|
Shopify Capital and offering financing;
|
•
|
our pricing decisions for our solutions;
|
•
|
provisions of our financial instruments;
|
•
|
our potential inability to raise additional funds as may be needed to pursue our growth strategy or continue our operations, on favorable terms or at all;
|
•
|
unanticipated changes in effective tax rates or adverse outcomes resulting from examination of our income or other tax returns;
|
•
|
new tax laws could be enacted or existing laws could be applied to us or our merchants;
|
•
|
our tax loss carryforwards;
|
•
|
our dependence upon buyers’ and merchants’ access to, and willingness to use, the internet for commerce;
|
•
|
ownership of our shares;
|
•
|
our sensitivity to interest rate fluctuations;
|
•
|
our concentration of credit risk, and the ability to mitigate that risk using third parties; and
|
•
|
the risk of inflation.
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(in thousands)
|
|
(in thousands)
|
||||||||||||
Monthly Recurring Revenue
|
$
|
47,123
|
|
|
$
|
35,282
|
|
|
$
|
47,123
|
|
|
$
|
35,282
|
|
Gross Merchandise Volume
|
$
|
13,750,933
|
|
|
$
|
9,135,639
|
|
|
$
|
25,646,816
|
|
|
$
|
17,088,106
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(in thousands, except share and per share data)
|
||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Subscription solutions
|
$
|
153,047
|
|
|
$
|
110,721
|
|
|
$
|
293,498
|
|
|
$
|
210,919
|
|
Merchant solutions
|
208,932
|
|
|
134,242
|
|
|
388,963
|
|
|
248,384
|
|
||||
|
361,979
|
|
|
244,963
|
|
|
682,461
|
|
|
459,303
|
|
||||
Cost of revenues
(1)
:
|
|
|
|
|
|
|
|
||||||||
Subscription solutions
|
29,538
|
|
|
24,524
|
|
|
57,523
|
|
|
47,684
|
|
||||
Merchant solutions
|
127,676
|
|
|
83,484
|
|
|
239,882
|
|
|
150,822
|
|
||||
|
157,214
|
|
|
108,008
|
|
|
297,405
|
|
|
198,506
|
|
||||
Gross profit
|
204,765
|
|
|
136,955
|
|
|
385,056
|
|
|
260,797
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Sales and marketing
(1)
|
119,210
|
|
|
87,487
|
|
|
224,232
|
|
|
163,271
|
|
||||
Research and development
(1)
|
85,520
|
|
|
54,305
|
|
|
161,875
|
|
|
102,021
|
|
||||
General and administrative
(1)
|
39,655
|
|
|
25,924
|
|
|
74,359
|
|
|
46,599
|
|
||||
Total operating expenses
|
244,385
|
|
|
167,716
|
|
|
460,466
|
|
|
311,891
|
|
||||
Loss from operations
|
(39,620
|
)
|
|
(30,761
|
)
|
|
(75,410
|
)
|
|
(51,094
|
)
|
||||
Other income:
|
|
|
|
|
|
|
|
||||||||
Interest income, net
|
12,174
|
|
|
7,444
|
|
|
24,252
|
|
|
12,093
|
|
||||
Foreign exchange loss
|
(1,232
|
)
|
|
(636
|
)
|
|
(1,671
|
)
|
|
(854
|
)
|
||||
|
10,942
|
|
|
6,808
|
|
|
22,581
|
|
|
11,239
|
|
||||
Net loss
|
$
|
(28,678
|
)
|
|
$
|
(23,953
|
)
|
|
$
|
(52,829
|
)
|
|
$
|
(39,855
|
)
|
Basic and diluted net loss per share attributable to shareholders
|
$
|
(0.26
|
)
|
|
$
|
(0.23
|
)
|
|
$
|
(0.47
|
)
|
|
$
|
(0.38
|
)
|
Weighted average shares used to compute basic and diluted net loss per share attributable to shareholders
|
112,013,409
|
|
|
105,978,076
|
|
|
111,470,359
|
|
|
104,127,640
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
||||||||||||||
Cost of revenues
|
$
|
1,026
|
|
|
$
|
637
|
|
|
$
|
1,840
|
|
|
$
|
1,126
|
|
Sales and marketing
|
9,511
|
|
|
6,249
|
|
|
17,156
|
|
|
11,018
|
|
||||
Research and development
|
26,448
|
|
|
15,221
|
|
|
46,371
|
|
|
27,137
|
|
||||
General and administrative
|
7,444
|
|
|
4,386
|
|
|
13,475
|
|
|
7,327
|
|
||||
|
$
|
44,429
|
|
|
$
|
26,493
|
|
|
$
|
78,842
|
|
|
$
|
46,608
|
|
|
Three months ended June 30,
|
|
2019 vs. 2018
|
|
Six months ended June 30,
|
|
2019 vs. 2018
|
||||||||||||||
|
2019
|
|
2018
|
|
% Change
|
|
2019
|
|
2018
|
|
% Change
|
||||||||||
|
(in thousands, except percentages)
|
||||||||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Subscription solutions
|
$
|
153,047
|
|
|
$
|
110,721
|
|
|
38.2
|
%
|
|
$
|
293,498
|
|
|
$
|
210,919
|
|
|
39.2
|
%
|
Merchant solutions
|
208,932
|
|
|
134,242
|
|
|
55.6
|
%
|
|
388,963
|
|
|
248,384
|
|
|
56.6
|
%
|
||||
|
$
|
361,979
|
|
|
$
|
244,963
|
|
|
47.8
|
%
|
|
$
|
682,461
|
|
|
$
|
459,303
|
|
|
48.6
|
%
|
Percentage of revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Subscription solutions
|
42.3
|
%
|
|
45.2
|
%
|
|
|
|
43.0
|
%
|
|
45.9
|
%
|
|
|
||||||
Merchant solutions
|
57.7
|
%
|
|
54.8
|
%
|
|
|
|
57.0
|
%
|
|
54.1
|
%
|
|
|
||||||
Total revenues
|
100.0
|
%
|
|
100.0
|
%
|
|
|
|
100.0
|
%
|
|
100.0
|
%
|
|
|
|
Three months ended June 30,
|
|
2019 vs. 2018
|
|
Six months ended June 30,
|
|
2019 vs. 2018
|
||||||||||||||
|
2019
|
|
2018
|
|
% Change
|
|
2019
|
|
2018
|
|
% Change
|
||||||||||
|
(in thousands, except percentages)
|
||||||||||||||||||||
Cost of revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of subscription solutions
|
$
|
29,538
|
|
|
$
|
24,524
|
|
|
20.4
|
%
|
|
$
|
57,523
|
|
|
$
|
47,684
|
|
|
20.6
|
%
|
Cost of merchant solutions
|
127,676
|
|
|
83,484
|
|
|
52.9
|
%
|
|
239,882
|
|
|
150,822
|
|
|
59.0
|
%
|
||||
Total cost of revenues
|
$
|
157,214
|
|
|
$
|
108,008
|
|
|
45.6
|
%
|
|
$
|
297,405
|
|
|
$
|
198,506
|
|
|
49.8
|
%
|
Percentage of revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of subscription solutions
|
8.2
|
%
|
|
10.0
|
%
|
|
|
|
8.4
|
%
|
|
10.4
|
%
|
|
|
||||||
Cost of merchant solutions
|
35.3
|
%
|
|
34.1
|
%
|
|
|
|
35.1
|
%
|
|
32.8
|
%
|
|
|
||||||
|
43.5
|
%
|
|
44.1
|
%
|
|
|
|
43.5
|
%
|
|
43.2
|
%
|
|
|
|
Three months ended June 30,
|
|
2019 vs. 2018
|
|
Six months ended June 30,
|
|
2019 vs. 2018
|
||||||||||||||
|
2019
|
|
2018
|
|
% Change
|
|
2019
|
|
2018
|
|
% Change
|
||||||||||
|
(in thousands, except percentages)
|
|
|||||||||||||||||||
Gross profit
|
$
|
204,765
|
|
|
$
|
136,955
|
|
|
49.5
|
%
|
|
$
|
385,056
|
|
|
$
|
260,797
|
|
|
47.6
|
%
|
Percentage of total revenues
|
56.6
|
%
|
|
55.9
|
%
|
|
|
|
56.4
|
%
|
|
56.8
|
%
|
|
|
|
Three months ended June 30,
|
|
2019 vs. 2018
|
|
Six months ended June 30,
|
|
2019 vs. 2018
|
||||||||||||||
|
2019
|
|
2018
|
|
% Change
|
|
2019
|
|
2018
|
|
% Change
|
||||||||||
|
(in thousands, except percentages)
|
||||||||||||||||||||
Sales and marketing
|
$
|
119,210
|
|
|
$
|
87,487
|
|
|
36.3
|
%
|
|
$
|
224,232
|
|
|
$
|
163,271
|
|
|
37.3
|
%
|
Percentage of total revenues
|
32.9
|
%
|
|
35.7
|
%
|
|
|
|
32.9
|
%
|
|
35.5
|
%
|
|
|
|
Three months ended June 30,
|
|
2019 vs. 2018
|
|
Six months ended June 30,
|
|
2019 vs. 2018
|
||||||||||||||
|
2019
|
|
2018
|
|
% Change
|
|
2019
|
|
2018
|
|
% Change
|
||||||||||
|
(in thousands, except percentages)
|
||||||||||||||||||||
Research and development
|
$
|
85,520
|
|
|
$
|
54,305
|
|
|
57.5
|
%
|
|
$
|
161,875
|
|
|
$
|
102,021
|
|
|
58.7
|
%
|
Percentage of total revenues
|
23.6
|
%
|
|
22.2
|
%
|
|
|
|
23.7
|
%
|
|
22.2
|
%
|
|
|
|
Three months ended June 30,
|
|
2019 vs. 2018
|
|
Six months ended June 30,
|
|
2019 vs. 2018
|
||||||||||||||
|
2019
|
|
2018
|
|
% Change
|
|
2019
|
|
2018
|
|
% Change
|
||||||||||
|
(in thousands, except percentages)
|
||||||||||||||||||||
General and administrative
|
$
|
39,655
|
|
|
$
|
25,924
|
|
|
53.0
|
%
|
|
$
|
74,359
|
|
|
$
|
46,599
|
|
|
59.6
|
%
|
Percentage of total revenues
|
11.0
|
%
|
|
10.6
|
%
|
|
|
|
10.9
|
%
|
|
10.1
|
%
|
|
|
|
Three months ended June 30,
|
|
2019 vs. 2018
|
|
Six months ended June 30,
|
|
2019 vs. 2018
|
||||||||||||
|
2019
|
|
2018
|
|
% Change
|
|
2019
|
|
2018
|
|
% Change
|
||||||||
|
(in thousands, except percentages)
|
||||||||||||||||||
Other income (expenses), net
|
$
|
10,942
|
|
|
$
|
6,808
|
|
|
*
|
|
$
|
22,581
|
|
|
$
|
11,239
|
|
|
*
|
*
|
Not a meaningful comparison
|
|
Three months ended
|
||||||||||||||||||||||||||||||
|
Jun 30, 2019
|
|
Mar 31, 2019
|
|
Dec 31, 2018
|
|
Sep 30, 2018
|
|
June 30, 2018
|
|
Mar 31, 2018
|
|
Dec 31, 2017
|
|
Sep 30, 2017
|
||||||||||||||||
|
(in thousands, except per share data)
|
||||||||||||||||||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Subscription solutions
|
$
|
153,047
|
|
|
$
|
140,451
|
|
|
$
|
133,560
|
|
|
$
|
120,517
|
|
|
$
|
110,721
|
|
|
$
|
100,198
|
|
|
$
|
93,918
|
|
|
$
|
82,435
|
|
Merchant solutions
|
208,932
|
|
|
180,031
|
|
|
210,302
|
|
|
149,547
|
|
|
134,242
|
|
|
114,142
|
|
|
128,896
|
|
|
89,021
|
|
||||||||
|
361,979
|
|
|
320,482
|
|
|
343,862
|
|
|
270,064
|
|
|
244,963
|
|
|
214,340
|
|
|
222,814
|
|
|
171,456
|
|
||||||||
Cost of revenues:
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Subscription solutions
|
29,538
|
|
|
$
|
27,985
|
|
|
$
|
26,706
|
|
|
$
|
26,600
|
|
|
$
|
24,524
|
|
|
23,160
|
|
|
19,867
|
|
|
15,458
|
|
||||
Merchant solutions
|
127,676
|
|
|
112,206
|
|
|
131,413
|
|
|
93,737
|
|
|
83,484
|
|
|
67,338
|
|
|
81,802
|
|
|
55,971
|
|
||||||||
|
157,214
|
|
|
140,191
|
|
|
158,119
|
|
|
120,337
|
|
|
108,008
|
|
|
90,498
|
|
|
101,669
|
|
|
71,429
|
|
||||||||
Gross profit
|
204,765
|
|
|
180,291
|
|
|
185,743
|
|
|
149,727
|
|
|
136,955
|
|
|
123,842
|
|
|
121,145
|
|
|
100,027
|
|
||||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Sales and marketing
(1)
|
119,210
|
|
|
105,022
|
|
|
95,163
|
|
|
91,635
|
|
|
87,487
|
|
|
75,784
|
|
|
67,174
|
|
|
58,314
|
|
||||||||
Research and development
(1)
|
85,520
|
|
|
76,355
|
|
|
67,024
|
|
|
61,629
|
|
|
54,305
|
|
|
47,716
|
|
|
40,339
|
|
|
36,350
|
|
||||||||
General and administrative
(1)
|
39,655
|
|
|
34,704
|
|
|
33,014
|
|
|
27,831
|
|
|
25,924
|
|
|
20,675
|
|
|
19,745
|
|
|
18,039
|
|
||||||||
Total operating expenses
|
244,385
|
|
|
216,081
|
|
|
195,201
|
|
|
181,095
|
|
|
167,716
|
|
|
144,175
|
|
|
127,258
|
|
|
112,703
|
|
||||||||
Loss from operations
|
(39,620
|
)
|
|
(35,790
|
)
|
|
(9,458
|
)
|
|
(31,368
|
)
|
|
(30,761
|
)
|
|
(20,333
|
)
|
|
(6,113
|
)
|
|
(12,676
|
)
|
||||||||
Other income
|
10,942
|
|
|
11,639
|
|
|
7,944
|
|
|
8,184
|
|
|
6,808
|
|
|
4,431
|
|
|
3,126
|
|
|
3,296
|
|
||||||||
Net loss
|
$
|
(28,678
|
)
|
|
$
|
(24,151
|
)
|
|
$
|
(1,514
|
)
|
|
$
|
(23,184
|
)
|
|
$
|
(23,953
|
)
|
|
$
|
(15,902
|
)
|
|
$
|
(2,987
|
)
|
|
$
|
(9,380
|
)
|
Basic and diluted net loss per share attributable to shareholders
|
$
|
(0.26
|
)
|
|
$
|
(0.22
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
(0.22
|
)
|
|
$
|
(0.23
|
)
|
|
$
|
(0.16
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
(0.09
|
)
|
|
Three months ended
|
||||||||||||||||||||||||||||||
|
Jun 30, 2019
|
|
Mar 31, 2019
|
|
Dec 31, 2018
|
|
Sep 30, 2018
|
|
June 30, 2018
|
|
Mar 31, 2018
|
|
Dec 31, 2017
|
|
Sep 30, 2017
|
||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||||||||
Cost of revenues
|
$
|
1,026
|
|
|
$
|
814
|
|
|
$
|
660
|
|
|
$
|
655
|
|
|
$
|
637
|
|
|
$
|
489
|
|
|
$
|
370
|
|
|
$
|
355
|
|
Sales and marketing
|
9,511
|
|
|
7,645
|
|
|
6,641
|
|
|
6,397
|
|
|
6,249
|
|
|
4,769
|
|
|
3,182
|
|
|
2,729
|
|
||||||||
Research and development
|
26,448
|
|
|
19,923
|
|
|
16,769
|
|
|
15,669
|
|
|
15,221
|
|
|
11,916
|
|
|
10,843
|
|
|
9,324
|
|
||||||||
General and administrative
|
7,444
|
|
|
6,031
|
|
|
5,356
|
|
|
5,007
|
|
|
4,386
|
|
|
2,941
|
|
|
3,302
|
|
|
1,981
|
|
||||||||
|
$
|
44,429
|
|
|
$
|
34,413
|
|
|
$
|
29,426
|
|
|
$
|
27,728
|
|
|
$
|
26,493
|
|
|
$
|
20,115
|
|
|
$
|
17,697
|
|
|
$
|
14,389
|
|
|
Three months ended
|
||||||||||||||||||||||
|
Jun 30, 2019
|
|
Mar 31, 2019
|
|
Dec 31, 2018
|
|
Sep 30, 2018
|
|
June 30, 2018
|
|
Mar 31, 2018
|
|
Dec 31, 2017
|
|
Sep 30, 2017
|
||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Subscription solutions
|
42.3
|
%
|
|
43.8
|
%
|
|
38.8
|
%
|
|
44.6
|
%
|
|
45.2
|
%
|
|
46.7
|
%
|
|
42.2
|
%
|
|
48.1
|
%
|
Merchant solutions
|
57.7
|
%
|
|
56.2
|
%
|
|
61.2
|
%
|
|
55.4
|
%
|
|
54.8
|
%
|
|
53.3
|
%
|
|
57.8
|
%
|
|
51.9
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Cost of revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Subscription solutions
|
8.2
|
%
|
|
8.7
|
%
|
|
7.8
|
%
|
|
9.8
|
%
|
|
10.0
|
%
|
|
10.8
|
%
|
|
8.9
|
%
|
|
9.0
|
%
|
Merchant solutions
|
35.3
|
%
|
|
35.0
|
%
|
|
38.2
|
%
|
|
34.7
|
%
|
|
34.1
|
%
|
|
31.4
|
%
|
|
36.7
|
%
|
|
32.6
|
%
|
|
43.5
|
%
|
|
43.7
|
%
|
|
46.0
|
%
|
|
44.5
|
%
|
|
44.1
|
%
|
|
42.2
|
%
|
|
45.6
|
%
|
|
41.6
|
%
|
Gross profit
|
56.6
|
%
|
|
56.3
|
%
|
|
54.0
|
%
|
|
55.4
|
%
|
|
55.9
|
%
|
|
57.8
|
%
|
|
54.4
|
%
|
|
58.3
|
%
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Sales and marketing
|
32.9
|
%
|
|
32.8
|
%
|
|
27.7
|
%
|
|
33.9
|
%
|
|
35.7
|
%
|
|
35.4
|
%
|
|
30.1
|
%
|
|
34.0
|
%
|
Research and development
|
23.6
|
%
|
|
23.8
|
%
|
|
19.5
|
%
|
|
22.8
|
%
|
|
22.2
|
%
|
|
22.3
|
%
|
|
18.1
|
%
|
|
21.2
|
%
|
General and administrative
|
11.0
|
%
|
|
10.8
|
%
|
|
9.6
|
%
|
|
10.3
|
%
|
|
10.6
|
%
|
|
9.6
|
%
|
|
8.9
|
%
|
|
10.5
|
%
|
|
67.5
|
%
|
|
67.4
|
%
|
|
56.8
|
%
|
|
67.0
|
%
|
|
68.5
|
%
|
|
67.3
|
%
|
|
57.1
|
%
|
|
65.7
|
%
|
Loss from operations
|
(10.9
|
)%
|
|
(11.2
|
)%
|
|
(2.8
|
)%
|
|
(11.6
|
)%
|
|
(12.6
|
)%
|
|
(9.5
|
)%
|
|
(2.7
|
)%
|
|
(7.4
|
)%
|
Other income
|
3.0
|
%
|
|
3.6
|
%
|
|
2.3
|
%
|
|
3.0
|
%
|
|
2.8
|
%
|
|
2.1
|
%
|
|
1.4
|
%
|
|
1.9
|
%
|
Net loss
|
(7.9
|
)%
|
|
(7.5
|
)%
|
|
(0.4
|
)%
|
|
(8.6
|
)%
|
|
(9.8
|
)%
|
|
(7.4
|
)%
|
|
(1.3
|
)%
|
|
(5.5
|
)%
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
|
(in thousands)
|
||||||
Cash, cash equivalents and marketable securities
|
$
|
2,013,331
|
|
|
$
|
1,969,670
|
|
Total assets
|
2,467,298
|
|
|
2,254,785
|
|
||
Total liabilities
|
306,114
|
|
|
164,017
|
|
||
Total non-current liabilities
|
112,763
|
|
|
25,329
|
|
|
Six months ended June 30,
|
||||||
|
2019
|
|
2018
|
||||
|
(in thousands)
|
||||||
Cash, cash equivalents and marketable securities (end of period)
|
$
|
2,013,331
|
|
|
$
|
1,574,168
|
|
Net cash provided by (used in):
|
|
|
|
||||
Operating activities
|
$
|
47,402
|
|
|
$
|
(2,797
|
)
|
Investing activities
|
181,657
|
|
|
(581,118
|
)
|
||
Financing activities
|
27,624
|
|
|
663,124
|
|
||
Effect of foreign exchange on cash and cash equivalents
|
1,624
|
|
|
(1,085
|
)
|
||
Net increase in cash and cash equivalents
|
258,307
|
|
|
78,124
|
|
||
Change in marketable securities
|
(214,646
|
)
|
|
558,005
|
|
||
Net increase in cash, cash equivalents and marketable securities
|
$
|
43,661
|
|
|
$
|
636,129
|
|
|
Payments Due by Period
|
||||||||||||||||||
|
Less Than 1 Year
|
|
1 to 3 Years
|
|
3 to 5 Years
|
|
More Than 5 Years
|
|
Total
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Bank indebtedness
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Operating lease and unconditional purchase obligations
(1)
|
31,811
|
|
|
96,802
|
|
|
78,368
|
|
|
341,566
|
|
|
548,547
|
|
|||||
Total contractual obligations
|
$
|
31,811
|
|
|
$
|
96,802
|
|
|
$
|
78,368
|
|
|
$
|
341,566
|
|
|
$
|
548,547
|
|
|
Six months ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
||||||||||
|
GAAP Amounts As Reported
|
Exchange Rate Effect
(1)
|
At Prior Year Effective Rates
(2)
|
|
GAAP Amounts As Reported
|
||||||||
|
(in thousands)
|
||||||||||||
Revenues
|
$
|
682,461
|
|
$
|
392
|
|
$
|
682,853
|
|
|
$
|
459,303
|
|
Cost of revenues
|
(297,405
|
)
|
(357
|
)
|
(297,762
|
)
|
|
(198,506
|
)
|
||||
Operating expenses
|
(460,466
|
)
|
(2,046
|
)
|
(462,512
|
)
|
|
(311,891
|
)
|
||||
Loss from operations
|
$
|
(75,410
|
)
|
$
|
(2,011
|
)
|
$
|
(77,421
|
)
|
|
$
|
(51,094
|
)
|
1.
|
Review
: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of
Shopify Inc.
(the “issuer”) for the interim period ended
June 30, 2019
.
|
2.
|
No misrepresentations
: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.
|
3.
|
Fair presentation
: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.
|
4.
|
Responsibility
: The issuer's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109
Certification of Disclosure in Issuer's Annual and Interim Filings
, for the issuer.
|
5.
|
Design
: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer's other certifying officer and I have, as at the end of the period covered by the interim filings
|
6.
|
Reporting changes in ICFR
: The issuer has disclosed in its interim MD&A any change in the issuer's ICFR that occurred during the period beginning on
April 1, 2019
and ended on
June 30, 2019
that has materially affected, or is reasonably likely to materially affect, the issuer's ICFR.
|
/s/ Tobias Lütke
|
Tobias Lütke
|
Chief Executive Officer
|
1.
|
Review
: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of
Shopify Inc.
(the “issuer”) for the interim period ended
June 30, 2019
.
|
2.
|
No misrepresentations
: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.
|
3.
|
Fair presentation
: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.
|
4.
|
Responsibility
: The issuer's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109
Certification of Disclosure in Issuer's Annual and Interim Filings
, for the issuer.
|
5.
|
Design
: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer's other certifying officer and I have, as at the end of the period covered by the interim filings
|
6.
|
Reporting changes in ICFR
: The issuer has disclosed in its interim MD&A any change in the issuer's ICFR that occurred during the period beginning on
April 1, 2019
and ended on
June 30, 2019
that has materially affected, or is reasonably likely to materially affect, the issuer's ICFR.
|
/s/ Amy Shapero
|
Amy Shapero
|
Chief Financial Officer
|