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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Shopify Inc | NYSE:SHOP | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.72 | 1.02% | 71.27 | 71.83 | 70.735 | 71.19 | 4,611,767 | 01:00:00 |
Fourth-Quarter Revenue Grows 71% Year on YearFourth-Quarter Gross Profit Grows 78% Year on YearGMV Exceeds $9 Billion for the Fourth Quarter and $26 Billion for 2017
Shopify reports in U.S. dollars and in accordance with U.S. GAAP
Shopify Inc. (NYSE:SHOP)(TSX:SHOP), the leading cloud-based, multi-channel commerce platform designed for small and medium-sized businesses, today announced strong financial results for the quarter and full year ended December 31, 2017.
“That our merchants sold more in the fourth quarter than in all of 2015, achieving one billion dollars of this in just four days, speaks to how far we have come in the past few years,” stated Russ Jones, Shopify’s CFO. “Our leadership role in commerce, together with the scale we have achieved, position us well to invest in our next phase of growth: one marked by expansion of our capabilities upmarket and down, in retail, in our ecosystem, and internationally.”
Fourth-Quarter Financial Highlights
Fourth-Quarter Business Highlights
Full-Year Financial Highlights
2017 Business Highlights
Our rapid growth in 2017 allowed Shopify to grow its ranks by approximately 50%, ending the year with nearly 3,000 employees, and enabling us to offer more value to more merchants. In 2017, we:
With its easy-to-use platform, Shopify aims to flatten the learning curve and allow more entrepreneurs to participate in and help shape the future of commerce.
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 2018, Shopify currently expects:
For the first quarter of 2018, Shopify currently expects:
Quarterly Conference Call
Shopify’s management team will hold a conference call to discuss its fourth-quarter and full-year results today, February 15, 2018, 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, 2017 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. Shareholders may, upon request, receive a hard copy of the complete audited financial statements free of charge.
About Shopify
Shopify is the leading cloud-based, multi-channel commerce platform designed for small and medium-sized businesses. Merchants can use the software to design, set up, and manage their stores across multiple sales channels, including web, mobile, social media, marketplaces, brick-and-mortar locations, and pop-up shops. The platform also provides merchants with a powerful back-office and a single view of their business. The Shopify platform was engineered for reliability and scale, making enterprise-level technology available to businesses of all sizes. Shopify currently powers over 600,000 businesses in approximately 175 countries and is trusted by brands such as Nestle, Red Bull, Rebecca Minkoff, and Kylie Cosmetics.
Non-GAAP Financial Measures
To supplement its 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 its financial and operating performance.
Adjusted operating loss, non-GAAP operating expenses, adjusted net loss and adjusted net loss per share are non-GAAP financial measures that exclude the effect of share-based compensation expenses and related payroll taxes.
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 investment plans, financial outlook and future financial performance. Words such as “expects”, “anticipates” 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) a disruption of service or security breach; (vii) payments processed through Shopify Payments; (viii) our reliance on a single supplier to provide the technology we offer through Shopify Payments; (ix) a breach involving personally identifiable information; (x) serious software errors or defects; (xi) exchange rate fluctuations; (xii) achieving or maintaining data transmission capacity; and (xiii) 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.
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 in the period, net of refunds, and inclusive of shipping and handling, duty and value-added taxes.3.Gross Payments Volume, or GPV, is the amount of GMV processed through Shopify Payments.4. Please refer to "Non-GAAP Financial Measures" in this press release.
Shopify Inc.Consolidated Statements of Operations and Comprehensive Loss(Expressed in US $000’s, except share and per share amounts, unaudited)
Three months ended Years ended December 31, 2017 December 31, 2016 December 31, 2017 December 31, 2016 $ $ $ $ Revenues Subscription solutions 93,918 56,387 310,031 188,606 Merchant solutions 128,896 73,996 363,273 200,724 222,814 130,383 673,304 389,330 Cost of revenues Subscription solutions 19,867 11,593 61,267 39,478 Merchant solutions 81,802 50,655 231,784 140,357 101,669 62,248 293,051 179,835 Gross profit 121,145 68,135 380,253 209,495 Operating expenses Sales and marketing 67,174 39,016 225,694 129,214 Research and development 40,339 24,472 135,997 74,336 General and administrative 19,745 13,952 67,719 43,110 Total operating expenses 127,258 77,440 429,410 246,660 Loss from operations (6,113 ) (9,305 ) (49,157) (37,165) Other income 3,126 438 9,162 1,810 Net loss (2,987 ) (8,867 ) (39,995) (35,355) Other comprehensive income (loss), net of tax (3,419 ) (1,342 ) 5,253 (1,818 ) Comprehensive loss (6,406 ) (10,209 ) (34,742) (37,173) Basic and diluted net loss per share attributable to shareholders (0.03 ) (0.10 ) (0.42 ) (0.42 ) Weighted average shares used to compute basic and diluted net loss per share attributable to shareholders 99,551,791 89,137,155 95,774,897 83,988,597Shopify Inc.Consolidated Balance Sheets(Expressed in US $000’s except share amounts, unaudited)
As at December 31, 2017 December 31, 2016 $ $ Assets Current assets Cash and cash equivalents 141,677 84,013 Marketable securities 796,362 308,401 Trade and other receivables 21,939 9,599 Merchant cash advances receivable, net 47,101 11,896 Other current assets 18,598 8,989 1,025,677 422,898 Long-term assets Property and equipment, net 50,360 45,719 Intangible assets, net 17,210 6,437 Goodwill 20,317 15,504 87,887 67,660 Total assets 1,113,564 490,558 Liabilities and shareholders’ equity Current liabilities Accounts payable and accrued liabilities 62,576 45,057 Current portion of deferred revenue 30,694 20,164 Current portion of lease incentives 1,484 1,311 94,754 66,532 Long-term liabilities Deferred revenue 1,352 922 Lease incentives 14,970 12,628 Deferred tax liability 1,388 — 17,710 13,550 Shareholders’ equityCommon stock, unlimited Class A subordinate voting shares authorized, 87,067,604 and 77,030,952issued and outstanding; unlimited Class B multiple voting shares authorized, 12,810,084 and 12,374,528 issued and outstanding
1,077,477 468,494 Additional paid-in capital 43,392 27,009 Accumulated other comprehensive income (loss) 3,435 (1,818 ) Accumulated deficit (123,204 ) (83,209 ) Total shareholders’ equity 1,001,100 410,476 Total liabilities and shareholders’ equity 1,113,564 490,558Shopify Inc.Consolidated Statements of Cash Flows(Expressed in US $000’s, unaudited)
Years ended December 31, 2017 December 31, 2016 $ $ Cash flows from operating activities Net loss for the year (39,995) (35,355) Adjustments to reconcile net loss to net cash provided by operating activities: Amortization and depreciation 23,382 13,967 Stock-based compensation 49,163 22,896 Provision for uncollectible receivables related to merchant cash advances 2,606 1,028 Vesting of restricted shares — 202 Unrealized foreign exchange gain (1,604) (969) Changes in operating assets and liabilities: Trade and other receivables (13,037) (2,356) Merchant cash advances receivable (37,811) (12,924) Other current assets (3,706) (2,604) Accounts payable and accrued liabilities 15,428 19,813 Deferred revenue 10,960 7,699 Lease incentives 2,515 2,620 Net cash provided by operating activities 7,901 14,017 Cash flows from investing activities Purchase of marketable securities (1,129,263) (369,208) Maturity of marketable securities 642,073 139,872 Acquisitions of property and equipment (20,043) (23,773) Acquisitions of intangible assets (4,219) (2,463) Acquisition of businesses, net of cash acquired (15,718) (14,114) Net cash used in investing activities (527,170) (269,686) Cash flows from financing activities Proceeds from the exercise of stock options 14,774 4,162 Proceeds from public offering, net of issuance costs 560,057 224,423 Net cash provided by financing activities 574,831 228,585 Effect of foreign exchange on cash and cash equivalents 2,102 1,027 Net increase (decrease) in cash and cash equivalents 57,664 (26,057) Cash and cash equivalents – Beginning of Year 84,013 110,070 Cash and cash equivalents – End of Year 141,677 84,013Shopify Inc.Reconciliation from GAAP to Non-GAAP Results(Expressed in US $000’s, except share and per share amounts, unaudited)
Three months ended Years ended December 31, 2017 December 31, 2016 December 31, 2017 December 31, 2016 $ $ $ $ GAAP Gross profit 121,145 68,135 380,253 209,495 % of Revenue 54 % 52 % 56 % 54 % add: stock-based compensation 309 206 1,102 629 add: payroll taxes related to stock-based compensation 61 10 179 89 Non-GAAP Gross profit 121,515 68,351 381,534 210,213 % of Revenue 55 % 52 % 57 % 54 % GAAP Sales and marketing 67,174 39,016 225,694 129,214 % of Revenue 30 % 30 % 34 % 33 % less: stock-based compensation 2,936 1,300 8,986 3,951 less: payroll taxes related to stock-based compensation 246 124 890 493 Non-GAAP Sales and marketing 63,992 37,592 215,818 124,770 % of Revenue 29 % 29 % 32 % 32 % GAAP Research and development 40,339 24,472 135,997 74,336 % of Revenue 18 % 19 % 20 % 19 % less: stock-based compensation 9,653 5,232 31,338 14,318 less: payroll taxes related to stock-based compensation 1,190 230 3,222 1,046 Non-GAAP Research and development 29,496 19,010 101,437 58,972 % of Revenue 13 % 15 % 15 % 15 % GAAP General and administrative 19,745 13,952 67,719 43,110 % of Revenue 9 % 11 % 10 % 11 % less: stock-based compensation 2,080 1,324 7,737 4,200 less: payroll taxes related to stock-based compensation 1,222 72 1,748 295 Non-GAAP General and administrative 16,443 12,556 58,234 38,615 % of Revenue 7 % 10 % 9 % 10 % GAAP Operating expenses 127,258 77,440 429,410 246,660 % of Revenue 57 % 59 % 64 % 63 % less: stock-based compensation 14,669 7,856 48,061 22,469 less: payroll taxes related to stock-based compensation 2,658 426 5,860 1,834 Non-GAAP Operating Expenses 109,931 69,158 375,489 222,357 % of Revenue 49 % 53 % 56 % 57 %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 Years ended December 31, 2017 December 31, 2016 December 31, 2017 December 31, 2016 $ $ $ $ GAAP Operating loss (6,113 ) (9,305 ) (49,157 ) (37,165 ) % of Revenue (3 )% (7 )% (7 )% (10 )% add: stock-based compensation 14,978 8,062 49,163 23,098 add: payroll taxes related to stock-based compensation 2,719 436 6,039 1,923 Adjusted Operating Income (Loss) 11,584 (807 ) 6,045 (12,144 ) % of Revenue 5 % (1 )% 1 % (3 )% GAAP Net loss (2,987 ) (8,867 ) (39,995 ) (35,355 ) % of Revenue (1 )% (7 )% (6 )% (9 )% add: stock-based compensation 14,978 8,062 49,163 23,098 add: payroll taxes related to stock-based compensation 2,719 436 6,039 1,923 Adjusted Net Income (Loss) 14,710 (369 ) 15,207 (10,334 ) % of Revenue 7 % — % 2 % (3 )% GAAP net loss per share attributable to shareholders (0.03 ) (0.10 ) (0.42 ) (0.42 ) add: stock-based compensation 0.15 0.09 0.51 0.28 add: payroll taxes related to stock-based compensation 0.03 — 0.06 0.02 Adjusted net income (loss) per share attributable to shareholders(1) 0.15 — 0.16 (0.12 ) Weighted average shares used to compute GAAP and non-GAAP net income (loss) per share attributable to shareholders 99,551,791 89,137,155 95,774,897 83,988,597(1) Totals may not foot due to rounding differences.
View source version on businesswire.com: http://www.businesswire.com/news/home/20180215005281/en/
INVESTORS:Katie KeitaDirector, Investor Relations613-241-2828 x 1024IR@shopify.comorMEDIA:Sheryl SoPublic Relations Manager416-238-6705 x 302press@shopify.com
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