Shopify Announces Fourth-Quarter and Full-Year 2019 Financial Results
Fourth-Quarter Revenue and GMV Grow 47% Year on Year
GMV Exceeds $20 Billion for the Fourth Quarter and $61 Billion for 2019
Shopify reports in U.S. dollars and in accordance with U.S. GAAP
Ottawa, Canada - February 12, 2020 - Shopify Inc. (NYSE:SHOP)(TSX:SHOP), a leading global commerce company,
announced today strong financial results for the fourth quarter and full year ended December 31, 2019.
“2019 was a milestone year for us,” said Tobi Lütke, Shopify’s CEO. “We’ve earned the trust of more than one million
merchants, and we are motivated more than ever to keep lowering the learning curve so anyone, anywhere can become
an entrepreneur.”
“Shopify’s merchants had a tremendous fourth quarter, powered by our ongoing efforts to help them sell more and
manage their businesses more effectively,” said Amy Shapero, Shopify’s CFO. “Our investments to enhance our product
offerings and expand internationally are attracting entrepreneurs worldwide and helping them succeed, as demonstrated
by strong GMV growth in 2019. In 2020, we will continue to invest in our portfolio of growth initiatives to better serve
merchants and energize the flywheel well into the future.”
Fourth-Quarter Financial Highlights
•

Total revenue in the fourth quarter was $505.2 million, a 47% increase from the comparable quarter in
2018.

•

Subscription Solutions revenue grew 37% to $183.2 million. This increase was driven primarily by growth in
Monthly Recurring Revenue1 ("MRR"), largely as a result of an increase in the number of merchants joining the
Shopify platform.

•

Merchant Solutions revenue grew 53%, to $322.0 million, driven primarily by the growth of Gross
Merchandise Volume2 ("GMV").

1. 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.
2.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.

 •

MRR as of December 31, 2019 was $53.9 million, up 32% compared with $40.9 million as of December 31,
2018. Shopify Plus contributed $14.6 million, or 27%, of MRR compared with 25% of MRR as of December
31, 2018.

•

GMV for the fourth quarter was $20.6 billion, an increase of $6.6 billion, or 47%, over the fourth quarter of
2018. Gross Payments Volume3 ("GPV") grew to $8.9 billion, which accounted for a record 43% of GMV
processed in the quarter, versus $5.8 billion, or 41%, for the fourth quarter of 2018.

•

Gross profit dollars grew 42% to $263.9 million in the fourth quarter of 2019, compared with $185.7 million
for the fourth quarter of 2018.

•

Adjusted gross profit4 grew 44% to $269.9 million in the fourth quarter of 2019, compared with $187.9 million
for the fourth quarter of 2018.

•

Operating loss for the fourth quarter of 2019 was $30.1 million, or 6% of revenue, versus a loss of $9.5 million,
or 3% of revenue, for the comparable period a year ago.

•

Adjusted operating income4 for the fourth quarter of 2019 was 6% of revenue, or $28.5 million; adjusted
operating income for the fourth quarter of 2018 was 6% of revenue, or $21.4 million.

•

Net income for the fourth quarter of 2019 was $0.8 million, or $0.01 per share, compared with a net loss of $1.5
million, or $0.01 per share, for the fourth quarter of 2018.

•

Adjusted net income4 for the fourth quarter of 2019 was $50.0 million, or $0.43 per share, compared with
adjusted net income of $29.4 million, or $0.27 per share, for the fourth quarter of 2018.

•

At December 31, 2019, Shopify had $2.46 billion in cash, cash equivalents and marketable securities, compared
with $1.97 billion on December 31, 2018.

Fourth-Quarter Business Highlights
•

From the start of Black Friday in New Zealand, through the end of Cyber Monday in California, sales on
Shopify’s platform reached more than $2.9 billion, with the majority coming from mobile devices. This
compares with more than $1.8 billion in GMV for the Black Friday Cyber Monday period in 2018.

•

Shopify Fulfillment Network continued to carefully lay the foundation for timely and affordable fulfillment,
expanding its number of partners, merchants and nodes, and performing well for merchants over the busy Black
Friday Cyber Monday weekend. Shopify Fulfillment Network plans to continue its measured approach through
2020, optimizing for the merchant experience first and adding scale only at the rate at which service levels can
be maintained.

•

Shopify acquired 6 River Systems, Inc., a leading provider of collaborative warehouse solutions, and made
progress with its integration with Shopify Fulfillment Network, deploying its technology at one of our
fulfillment partner nodes subsequent to the fourth quarter.

•

Shopify launched Shopify Email, a native email marketing tool designed to enable merchants to create, run, and
track email marketing campaigns with Shopify Marketing and help them build direct relationships with buyers.

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 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 Shipping adoption continued to climb, with 45% percent of eligible merchants in the United States and
Canada utilizing Shopify Shipping in the fourth quarter of 2019, versus less than 40% in the fourth quarter of
2018.

•

Purchases from merchants’ stores coming from mobile devices versus desktop continued to climb in the quarter,
accounting for 80% of traffic and 68% of orders for the three months ended December 31, 2019, versus 78%
and 66%, respectively, for the fourth quarter of 2018.

•

Shopify Capital issued $115.9 million in merchant cash advances and loans in the fourth quarter of 2019, an
increase of 61% versus the $71.8 million issued in the fourth quarter of last year. Shopify Capital has grown to
approximately $885 million in cumulative cash advanced since its launch in April 2016 through 2019,
approximately $150 million of which was outstanding on December 31, 2019.

Full-Year Business Highlights
•

Total revenue for the full year 2019 was $1.578 billion, a 47% increase over 2018. Within this, Subscription
Solutions revenue grew 38% to $642.2 million, while Merchant Solutions revenue grew 54% to $935.9 million.

•

GMV2 for 2019 was $61.1 billion, an increase of 49% over 2018. GPV3 grew to $25.7 billion, which accounted
for 42% of GMV processed versus $16.6 billion, or 40%, for 2018.

•

Gross profit grew 45% to $865.6 million in 2019, compared with $596.3 million for 2018.

•

Adjusted gross profit4 grew 46% to $879.4 million in 2019, compared with $603.6 million in 2018.

•

Operating loss for 2019 was $141.1 million, or 9% of revenue, versus $91.9 million, or 9% of revenue, for
2018.

•

Adjusted operating income4 for 2019 was 3% of revenue, or $45.8 million; adjusted operating income for 2018
was 2% of revenue, or $16.8 million.

•

Net loss for 2019 was $124.8 million, or $1.10 per share, compared with $64.6 million, or $0.61 per share, for
2018. Net loss for 2019 includes a tax provision of $29.0 million. This provision is primarily due to a one-time
capital gain triggered in the third quarter of 2019 by the transfer of regional relationship and territory rights
from our Canadian entity to regional headquarters, which allows us to develop and maintain merchant and
commercial operations in their respective regions as we expand internationally.

•

Adjusted net income4 for 2019 was $34.3 million, or $0.30 per share, compared with adjusted net income of
$44.1 million, or $0.43 per share, for 2018.

2019 Business Highlights
Shopify grew its set of features and enhanced platform functionality in 2019, enabling more merchants around the world
to launch businesses and start selling, helping merchants sell more and sell more efficiently, and catalyzing
entrepreneurship throughout its ecosystem.

 Enabled more merchants worldwide to start selling
•

Shopify launched 13 additional native language capabilities on the platform - Traditional Chinese, Simplified
Chinese, Danish, Dutch, Finnish, Hindi, Korean, Malay, Norwegian, Portuguese, Swedish, Thai, and Turkish bringing the total number of languages available to 20.

•

Shopify launched Shopify Payments in four additional countries, expanding the availability of Shopify
Payments to 15 countries: the U.S., Canada, United Kingdom, Australia, Ireland, New Zealand, Japan,
Singapore, Hong Kong, Germany, Spain, the Netherlands, Denmark, Italy, and Sweden.

•

Shopify launched selling in multiple currencies, facilitating merchant expansion into new markets while
providing a localized buyer experience.

•

By year end 2019, 29% of our merchants were based outside our core geographies, compared with 24% in these
largely non-English-speaking markets in 2018.

Helped merchants sell more and sell more efficiently
•

Shopify launched several features in 2019, such as Shopify Email, native rich media features (video and 3D),
Shopify Chat, and order editing, and also expanded Shopify Marketing’s ad buying tools, to optimize merchant
operations, increase sales conversion, elevate the merchant brand, and deliver better buyer experiences.

•

Shopify released the Shopify Retail Kit, a suite of new brick-and-mortar hardware products that include the Tap
& Chip Reader, Dock and Stand, to help merchants deliver a better retail experience with a flexible, seamless
in-person selling solution.

•

Shopify launched Shopify Fulfillment Network, providing merchants with a network of distributed fulfillment
centers and utilizing machine learning to ensure timely deliveries and lower shipping costs, allowing merchants
to put their brand and customer experience front and center.

•

Shopify acquired 6 River Systems, Inc., a leading provider of collaborative warehouse fulfillment solutions, to
accelerate the development of Shopify Fulfillment Network and help Shopify transform the fulfillment industry.

Continued to catalyze entrepreneurship
•

Shopify launched Shopify Studios, a full-service TV, film, and digital content development and production
house to inspire movements toward entrepreneurship through thought-provoking and original storytelling.
Shopify Studios featured the stories of more than 200 merchant journeys in 2019.

•

Shopify launched its first brand campaigns to increase awareness of the Shopify brand and catalyze interest in
entrepreneurship. Subsequent tests indicated a near doubling of unaided awareness of Shopify among the target
audience in cities where the campaign was run, while new brand health measures show a marked increase in the
number of small and mid sized businesses saying they “will definitely try” Shopify.

 •

Shopify expanded its rich partner ecosystem in 2019, growing the number of partners that referred at least one
merchant to Shopify in the past 12 months by 36% over the previous year, with our partners earning more than
$180 million from Shopify for apps and services benefiting our merchants.

•

Shopify published its first Global Economic Impact Report showcasing the growth of businesses built on
Shopify and how they benefit the world economy. Between 2016 and 2018, Shopify merchants supported a
cumulative GDP contribution of $183 billion. In 2018 alone, this impact was $91.1 billion, which is equivalent
to the GDP contribution of one of the top 50 cities in the United States.

2019 Shopify Merchant Highlights
Shopify enabled greater entrepreneurial activity around the world, empowering more merchants to prosper in 2019:
•

The number of merchants on the Shopify platform achieving over $1 million in GMV grew by 44%.

•

Merchants selling on the Shopify platform for 12 months or more grew their GMV year-over-year at an average
monthly rate of 21%.

•

Shopify Pay, Shopify’s accelerated checkout, helped facilitate nearly $4.0 billion in GMV.

•

The number of consumers buying from Shopify merchants grew by 37% to nearly 300 million.

2020 Investments
Fully committed to making commerce better for everyone, in 2020 Shopify plans to further invest in building solutions
that remove friction for our merchants and catalyze their sales, while working to make entrepreneurship accessible to
everyone. Areas of incremental investment in 2020 include efforts in the following:
•

Shopify Fulfillment Network, to reduce friction and enable merchants to retain greater ownership of their
shipping experience and build brand loyalty with their buyers;

•

6 River Systems, to reduce friction for warehouses making the pallet-to-parcel transition;

•

Shopify Plus, to automate rote processes and enhance wholesale capabilities;

•

International, to improve product-market fit outside core geographies;

•

the Shopify Platform, to enhance merchants’ capabilities with buyers, from Point-of-Sale to financial solutions;
and

•

the Shopify Brand, to expand awareness of the Shopify brand and inspire entrepreneurs to action.

Shopify is making these investments in order to further empower individuals, foster greater competition and choice, and
increase the distribution of economic prosperity.
Financial Outlook
The financial outlook that follows constitutes forward-looking information within the meaning of applicable securities
laws and is based on a number of assumptions and subject to a number of risks. Actual results could vary materially as a
result of numerous factors, including certain risk factors, many of which are beyond Shopify’s control. Please see
"Forward-looking Statements" below.

 In addition to the other assumptions and factors described in this press release, Shopify’s outlook assumes the
continuation of growth trends in our industry, our ability to manage our growth effectively and the absence of material
changes in our industry or the global economy. The following statements supersede all prior statements made by Shopify
and are based on current expectations. As these statements are forward-looking, actual results may differ materially.
These statements do not give effect to the potential impact of mergers, acquisitions, divestitures or business combinations
that may be announced or closed after the date hereof. All numbers provided in this section are approximate.
For the full year 2020, Shopify currently expects:
•

Revenues in the range of $2.130 billion to $2.160 billion

•

GAAP operating loss in the range of $324 million to $344 million

•

Adjusted operating loss4 in the range of $0 to $20 million, which excludes stock-based compensation expenses
and related payroll taxes of $300 million, and amortization of acquired intangibles of $24 million

•

Capital expenditures of approximately $80 million, largely related to new office space to accommodate the
growth of Shopify's workforce

For the first quarter of 2020, Shopify currently expects:
•

Revenues in the range of $440 million to $446 million

•

GAAP operating loss in the range of $101 million to $105 million

•

Adjusted operating loss4 in the range of $30 million to $34 million, which excludes stock-based compensation
expenses and related payroll taxes of $65 million, and amortization of acquired intangibles of $6 million

•

First-quarter 2020 adjusted operating income expectations reflect the inclusion of the first full quarter of
operating results associated with 6 River Systems, Inc. and the launch of our second major brand campaign in
our core geographies, the first campaign of which was in the second quarter of 2019.

Quarterly Conference Call
Shopify’s management team will hold a conference call to discuss our fourth-quarter results today, February 12, 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/events/Events-Presentations/default.aspx. An archived replay of the webcast will be
available following the conclusion of the call.
Shopify’s Audited Consolidated Financial Statements and accompanying Notes, Management's Discussion and Analysis,
and Annual Information Form for the year ended December 31, 2019 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 (loss), 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 financial outlook and future financial performance. Words such as "expects",
"continue", "keep", "will", "anticipates", "enable", "plans", and "intends" 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) merchant acquisition and retention;
(ii) managing our growth; (iii) our history of losses; (iv) our limited operating history; (v) our ability to innovate; (vi) the
security of personal information we store relating to merchants and their customers and consumers with whom we have a
direct relationship; (vii) a disruption of service or security breach; (viii) our potential inability to compete successfully
against current and future competitors; (ix) international sales and the use of our platform in various countries; (x) the
reliance of our growth in part on the success of our strategic relationships with third parties; (xi) our potential failure to
effectively maintain, promote and enhance our brand; (xii) our use of a single cloud-based platform to deliver our
services; (xiii) our potential inability to achieve or maintain data transmission capacity; (xiv) our reliance on a single
supplier to provide the technology we offer through Shopify Payments; (xv) payments processed through Shopify
Payments; (xvi) our potential inability to hire, retain and motivate qualified personnel; (xvii) serious errors or defects in
our software or hardware or issues with our hardware supply chain; (xviii) evolving privacy laws and regulations, crossborder data transfer restrictions, data localization requirements and other domestic or foreign regulations may limit the
use and adoption of our services; and (xix) 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:
Katie Keita
Senior Director, Investor Relations
613-241-2828 x 1024
IR@shopify.com
SOURCE: Shopify

MEDIA:
Sheryl So
Senior Communications Lead
416-238-6705 x 302
press@shopify.com

 Shopify Inc.
Consolidated Statements of Operations and Comprehensive Loss
(Expressed in US $000’s, except share and per share amounts, unaudited)

Three months ended

Revenues
Subscription solutions
Merchant solutions
Cost of revenues
Subscription solutions
Merchant solutions

Years ended

December 31,
2019
$

December 31,
2018
$

December 31,
2019
$

December 31,
2018
$

183,166

133,560

642,241

464,996

321,994

210,302

935,932

608,233

505,160

343,862

1,578,173

1,073,229

37,369

26,706

128,155

100,990

203,900

131,413

584,375

375,972

241,269

158,119

712,530

476,962

Gross profit

263,891

185,743

865,643

596,267

Operating expenses
Sales and marketing

132,063

95,163

472,841

350,069

Research and development

102,753

67,024

355,015

230,674

General and administrative

59,154

33,014

178,934

107,444

Total operating expenses

293,970

195,201

1,006,790

Loss from operations

(30,079)

Other income

(9,458)

(141,147)

688,187
(91,920)

11,539

7,944

45,332

27,367

Loss before income taxes

(18,540)

(1,514)

(95,815)

(64,553)

Provision for (recovery of) income taxes

(19,311)

Net income (loss)
Other comprehensive income (loss)
Comprehensive income (loss)
Basic and diluted net income (loss) per share
attributable to shareholders
Weighted average shares used to compute
basic and diluted net income (loss) per
share attributable to shareholders

29,027

—

771

(1,514)

(124,842)

(64,553)

3,339
4,110

(10,520)
(12,034)

13,262
(111,580)

(15,651)
(80,204)

0.01

(0.01)

(1.10)

(0.61)

116,027,240

—

107,734,499

113,026,424

105,671,839

 Shopify Inc.
Consolidated Balance Sheets
(Expressed in US $000’s except share amounts, unaudited)

As at
December 31, 2019

December 31, 2018

$

$

Assets
Current assets
Cash and cash equivalents
Marketable securities
Trade and other receivables, net
Merchant cash advances and loans receivable, net
Other current assets

649,916

410,683

1,805,278

1,558,987

90,529

41,347

150,172

91,873

48,833

26,192

2,744,728

2,129,082

Long-term assets
Property and equipment, net

111,398

61,612

Intangible assets, net

167,282

26,072

Right-of-use assets

134,774

—

Deferred tax assets

19,432

—

Goodwill
Total assets

311,865

38,019

744,751

125,703

3,489,479

2,254,785

181,193

96,956

Liabilities and shareholders’ equity
Current liabilities
Accounts payable and accrued liabilities
Income taxes payable

69,432

—

Deferred revenue

56,691

39,180

Lease liabilities
Long-term liabilities
Deferred revenue
Lease liabilities
Deferred tax liabilities

9,066

2,552

316,382

138,688

5,969

1,881

142,641

22,316

8,753

1,132

157,363

25,329

3,256,284

2,215,936

Commitments and contingencies
Shareholders’ equity
Common stock, unlimited Class A subordinate voting shares
authorized, 104,518,173 and 98,081,889 issued and outstanding;
unlimited Class B multiple voting shares authorized, 11,910,802
and 12,310,800 issued and outstanding
Additional paid-in capital
Accumulated other comprehensive income (loss)
Accumulated deficit
Total shareholders’ equity
Total liabilities and shareholders’ equity

62,628

74,805

1,046

(12,216)

(304,224)

(187,757)

3,015,734

2,090,768

3,489,479

2,254,785

 Shopify Inc.
Consolidated Statements of Cash Flows
(Expressed in US $000’s, unaudited)

Years ended
December 31,
2019
$

December 31,
2018
$

Cash flows from operating activities
Net loss for the year

(124,842)

(64,553)

35,651

27,052

158,456

95,720

15,912

5,922

(37,918)

—

3,181

1,272

Trade and other receivables

(56,181)

(32,649)

Merchant cash advances and loans receivable

(74,211)

(50,694)

Other current assets

(12,401)

(10,816)

Accounts payable and accrued liabilities

84,563

20,641

Income tax assets and liabilities

64,648

—

Deferred revenue

12,305

9,015

1,452

8,414

70,615

9,324

Purchase of marketable securities

(2,718,604)

(2,447,955)

Maturity of marketable securities

2,477,038

1,698,264

(56,759)

(27,950)

Adjustments to reconcile net loss to net cash provided by operating activities:
Amortization and depreciation
Stock-based compensation
Provision for uncollectible receivables related to merchant cash advances and
loans receivable
Deferred income taxes
Unrealized foreign exchange loss
Changes in operating assets and liabilities:

Lease assets and liabilities
Net cash provided by operating activities
Cash flows from investing activities

Acquisitions of property and equipment
Acquisitions of intangible assets

(5,638)

(13,595)

Acquisition of businesses, net of cash acquired

(265,512)

(19,397)

Net cash used by investing activities

(569,475)

(810,633)

Cash flows from financing activities
Proceeds from the exercise of stock options

48,337

30,494

Proceeds from public offering, net of issuance costs

688,014

1,041,688

Net cash provided by financing activities

736,351

1,072,182

1,742

(1,867)

Net increase in cash and cash equivalents

239,233

269,006

Cash and cash equivalents – Beginning of Period

410,683

141,677

Cash and cash equivalents – End of Period

649,916

410,683

Effect of foreign exchange on cash and cash equivalents

 Shopify Inc.
Reconciliation from GAAP to Non-GAAP Results
(Expressed in US $000’s, except share and per share amounts, unaudited)

GAAP Gross profit
% of Revenue
add: stock-based compensation
add: payroll taxes related to stock-based
compensation
Non-GAAP Gross profit (before adjustment
for amortization of acquired intangibles)
% of Revenue
add: amortization of acquired intangibles
Non-GAAP Gross profit (adjusted for
amortization of acquired intangibles)
% of Revenue
GAAP Sales and marketing
% of Revenue

Three months ended
December 31,
December 31,
2019
2018
$
$
263,891
185,743
52 %

54 %

Years ended
December 31,
December 31,
2019
2018
$
$
865,643
596,267
55 %

56 %

1,036

604

3,572

2,232

173

56

518

209

265,100

186,403

869,733

598,708

52 %

54 %

55 %

56 %

4,820

1,447

9,624

4,914

269,920

187,850

879,357

603,622

53 %
132,063
26 %

55 %
95,163
28 %

56 %
472,841
30 %

56 %
350,069
33 %

less: stock-based compensation

9,966

6,153

33,917

21,928

less: payroll taxes related to stock-based
compensation

1,353

488

4,250

2,128

Non-GAAP Sales and marketing (before
adjustment for amortization of acquired
intangibles)

120,744

88,522

434,674

326,013

% of Revenue
less: amortization of acquired intangibles
Non-GAAP Sales and marketing (adjusted
for amortization of acquired intangibles)
% of Revenue
GAAP Research and development
% of Revenue
less: stock-based compensation

24 %

26 %

28 %

30 %

283

—

283

—

120,461

88,522

434,391

326,013

24 %
102,753
20 %

26 %
67,024
19 %

28 %
355,015
22 %

30 %
230,674
21 %

29,315

15,941

93,549

55,164

less: payroll taxes related to stock-based
compensation

3,046

828

11,096

4,411

Non-GAAP Research and development
(before adjustment for amortization of
acquired intangibles)

70,392

50,255

250,370

171,099

% of Revenue

14 %

15 %

less: amortization of acquired intangibles

58

—

232

—

70,334

50,255

250,138

171,099

Non-GAAP Research and development
(adjusted for amortization of acquired
intangibles)
% of Revenue

14 %

15 %

16 %

16 %

16 %

16 %

 Shopify Inc.
Reconciliation from GAAP to Non-GAAP Results (continued)
(Expressed in US $000’s, except share and per share amounts, unaudited)

GAAP General and administrative
% of Revenue
less: stock-based compensation
less: payroll taxes related to stock-based
compensation
Non-GAAP General and administrative
% of Revenue
GAAP Operating expenses
% of Revenue
less: stock-based compensation

Three months ended
December 31,
December 31,
2019
2018
$
$
59,154
33,014
12 %

10 %

Years ended
December 31,
December 31,
2019
2018
$
$
178,934
107,444
11 %

10 %

7,675

4,721

27,418

16,396

858

635

2,443

1,294

50,621

27,658

149,073

89,754

10 %
293,970
58 %

8%
195,201
57 %

9%
1,006,790
64 %

8%
688,187
64 %

46,956

26,815

154,884

93,488

less: payroll taxes related to stock-based
compensation

5,257

1,951

17,789

7,833

Non-GAAP Operating expenses (before
adjustment for amortization of acquired
intangibles)

241,757

166,435

834,117

586,866

% of Revenue

48 %

48 %

53 %

55 %

less: amortization of acquired intangibles

341

—

515

—

Non-GAAP Operating expenses (adjusted
for amortization of acquired intangibles)

241,416

166,435

833,602

586,866

% of Revenue
GAAP Operating loss
% of Revenue
add: stock-based compensation

48 %
(30,079)
(6 )%

48 %
(9,458)
(3 )%

53 %
(141,147)
(9 )%

55 %
(91,920)
(9 )%

47,992

27,419

158,456

95,720

add: payroll taxes related to stock-based
compensation

5,430

2,007

18,307

8,042

Adjusted Operating income (before
adjustment for amortization of acquired
intangibles)

23,343

19,968

35,616

11,842

% of Revenue

5%

6%

2%

1%

add: amortization of acquired intangibles

5,161

1,447

10,139

4,914

Adjusted Operating income (adjusted for
amortization of acquired intangibles)

28,504

21,415

45,755

16,756

% of Revenue

6%

6%

3%

2%

 Shopify Inc.
Reconciliation from GAAP to Non-GAAP Results (continued)
(Expressed in US $000’s, except share and per share amounts, unaudited)

GAAP Net income (loss)
% of Revenue
add: stock-based compensation
add: payroll taxes related to stock-based
compensation
Adjusted Net income (before adjustments
for amortization of acquired intangibles and
provision for income tax effects)
% of Revenue
add: amortization of acquired intangibles

Three months ended
December 31,
December 31,
2019
2018
$
$
771
(1,514)
—%

(8 )%

(6 )%

47,992

27,419

158,456

95,720

5,430

2,007

18,307

8,042

54,193

27,912

51,921

39,209

11 %
5,161

add: provision for income tax effects related
to non-GAAP adjustments

(9,306)

Adjusted Net income (adjusted for
amortization of acquired intangibles and
provision for income tax effects)

50,048

% of Revenue

—%

Years ended
December 31,
December 31,
2019
2018
$
$
(124,842)
(64,553)

10 %

8%
1,447
—
29,359
9%

3%
10,139
(27,777)
34,283
2%

4%
4,914
—
44,123
4%

GAAP Net income (loss) per share
attributable to shareholders

0.01

(0.01)

(1.10)

(0.61)

add: stock-based compensation

0.41

0.25

1.40

0.91

add: payroll taxes related to stock-based
compensation

0.05

0.02

0.16

0.08

Adjusted Net income per share attributable
to shareholders (before adjustments for
amortization of acquired intangibles and
provision for income tax effects)

0.47

0.26

0.46

0.38

add: amortization of acquired intangibles

0.04

0.01

0.09

0.05

add: provision for income tax effects related
to non-GAAP adjustments

(0.08)

Adjusted Net income per share attributable
to shareholders (adjusted for amortization of
acquired intangibles and provision for
income tax effects)

0.43

0.27

0.30

0.43

Weighted average shares used to compute
GAAP and non-GAAP net income (loss) per
share attributable to shareholders

116,027,240

107,734,499

113,026,424

105,671,839

—

(0.25)

—