/s/ Tobias Lütke
| | | |
Tobias Lütke
| | | |
Chief Executive Officer
| | |
/s/ Amy Shapero
| | | |
Amy Shapero
| | | |
Chief Financial Officer
| | |
| | | |
As at
| |||||
| |
Note
| | |
December 31, 2021
$
| | |
December 31, 2020
$
| |
Assets | | | | | | | |||
Current assets | | | | | | | |||
Cash and cash equivalents
| | |
4
| | |
2,502,992
| | |
2,703,597
|
Marketable securities
| | |
5
| | |
5,265,101
| | |
3,684,370
|
Trade and other receivables, net
| | |
7
| | |
192,209
| | |
120,752
|
Merchant cash advances, loans and related receivables, net
| | |
8
| | |
470,722
| | |
244,723
|
Income taxes receivable
| | |
21
| | |
5,023
| | |
56,067
|
Other current assets
| | |
9
| | |
103,273
| | |
68,247
|
| | | |
8,539,320
| | |
6,877,756
| ||
Long-term assets | | | | | | | |||
Property and equipment, net
| | |
10, 23
| | |
105,526
| | |
92,104
|
Right-of-use assets, net
| | |
11
| | |
196,388
| | |
119,373
|
Intangible assets, net
| | |
12
| | |
138,496
| | |
135,676
|
Deferred tax assets
| | |
21
| | |
48,369
| | |
52,677
|
Equity and other investments (including $3,412,166 and $nil, carried at fair value)
| | |
5, 6
| | |
3,955,545
| | |
173,454
|
Goodwill
| | |
13
| | |
356,528
| | |
311,865
|
| | | |
4,800,852
| | |
885,149
| ||
Total assets | | | | |
13,340,172
| | |
7,762,905
| |
Liabilities and shareholders' equity | | | | | | | |||
Current liabilities | | | | | | | |||
Accounts payable and accrued liabilities
| | |
14
| | |
456,688
| | |
300,795
|
Income taxes payable
| | |
21
| | |
13,505
| | |
19,677
|
Deferred revenue
| | |
15
| | |
216,792
| | |
107,809
|
Lease liabilities
| | |
11
| | |
15,748
| | |
10,051
|
| | | |
702,733
| | |
438,332
| ||
Long-term liabilities | | | | | | | |||
Deferred revenue
| | |
15
| | |
162,932
| | |
21,006
|
Lease liabilities
| | |
11
| | |
246,776
| | |
144,836
|
Convertible senior notes
| | |
3, 16
| | |
910,963
| | |
758,008
|
Deferred tax liabilities
| | |
21
| | |
183,427
| | |
-
|
| | | |
1,504,098
| | |
923,850
| ||
Commitments and contingencies
| | |
11, 18
| | | | | ||
Shareholders' equity | | | | | | | |||
Common stock, unlimited Class A subordinate voting shares authorized, 113,954,492 and 110,929,570, issued and outstanding; unlimited Class B multiple voting shares authorized, 11,942,667 and 11,599,301 issued and outstanding
| | |
19
| | |
8,040,099
| | |
6,115,232
|
Additional paid-in capital
| | | | |
161,074
| | |
261,436
| |
Accumulated other comprehensive (loss) income
| | |
20
| | |
(5,974)
| | |
8,770
|
Retained earnings
| | | | |
2,938,142
| | |
15,285
| |
Total shareholders' equity | | | | |
11,133,341
| | |
6,400,723
| |
Total liabilities and shareholders' equity
| | | | |
13,340,172
| | |
7,762,905
|
"/s/ Tobias Lütke"
| | |
"/s/ Colleen Johnston"
|
Tobias Lütke
| | |
Colleen Johnston
|
Chair, Board of Directors
| | |
Chair, Audit Committee
|
| | | |
Years ended
| |||||
| |
Note
| | |
December 31, 2021
$
| | |
December 31, 2020
$
| |
Revenues | | | | | | | |||
Subscription solutions
| | |
23
| | |
1,342,334
| | |
908,757
|
Merchant solutions
| | |
23
| | |
3,269,522
| | |
2,020,734
|
| | | |
4,611,856
| | |
2,929,491
| ||
Cost of revenues | | | | | | | |||
Subscription solutions
| | | | |
264,351
| | |
193,532
| |
Merchant solutions
| | | | |
1,866,361
| | |
1,194,439
| |
| | | |
2,130,712
| | |
1,387,971
| ||
Gross profit
| | | | |
2,481,144
| | |
1,541,520
| |
Operating expenses | | | | | | | |||
Sales and marketing
| | | | |
901,557
| | |
602,048
| |
Research and development
| | | | |
854,383
| | |
552,127
| |
General and administrative
| | |
10, 11
| | |
374,844
| | |
245,343
|
Transaction and loan losses
| | | | |
81,717
| | |
51,849
| |
Total operating expenses
| | | | |
2,212,501
| | |
1,451,367
| |
Income from operations
| | | | |
268,643
| | |
90,153
| |
Other income, net | | | | | | | |||
Interest income
| | | | |
15,356
| | |
23,434
| |
Interest expense
| | |
16
| | |
(3,493)
| | |
(9,085)
|
Net unrealized gain on equity and other investments
| | |
6
| | |
2,859,800
| | |
135,193
|
Foreign exchange gain
| | | | |
286
| | |
669
| |
Total other income, net
| | | | |
2,871,949
| | |
150,211
| |
Income before income taxes
| | | | |
3,140,592
| | |
240,364
| |
(Provision for) recovery of income taxes
| | |
21
| | |
(225,933)
| | |
79,145
|
Net income
| | | | |
2,914,659
| | |
319,509
| |
| | | | | | ||||
Net income per share attributable to shareholders: | | | | | | | |||
Basic
| | |
22
| | |
$23.38
| | |
$2.67
|
Diluted
| | |
22
| | |
$22.90
| | |
$2.59
|
| | | | | | ||||
Weighted average shares used to compute net income per share attributable to shareholders: | | | | | | | |||
Basic
| | |
22
| | |
124,658,891
| | |
119,569,705
|
Diluted
| | |
22
| | |
127,364,735
| | |
123,463,274
|
| | | | | | ||||
Other comprehensive (loss) income | | | | | | | |||
Unrealized (loss) gain on cash flow hedges
| | |
20
| | |
(20,061)
| | |
10,510
|
Tax effect on unrealized (loss) gain on cash flow hedges
| | |
20
| | |
5,317
| | |
(2,786)
|
Total other comprehensive (loss) income
| | | | |
(14,744)
| | |
7,724
| |
Comprehensive income
| | | | |
2,899,915
| | |
327,233
|
| | | |
Common Stock
| | |
Additional
Paid-In Capital
$
| | |
Accumulated
Other
Comprehensive
Income (Loss)
$
| | |
Retained
Earnings
(Accumulated
Deficit)
$
| | |
Total
$
| |||||
| |
Note
| | |
Shares
| | |
Amount $
| | ||||||||||||
As at December 31, 2019
| | | | |
116,428,975
| | |
3,256,284
| | |
62,628
| | |
1,046
| | |
(304,224)
| | |
3,015,734
| |
Exercise of stock options
| | | | |
1,530,759
| | |
115,331
| | |
(44,522)
| | |
-
| | |
-
| | |
70,809
| |
Stock-based compensation
| | | | |
-
| | |
-
| | |
246,940
| | |
-
| | |
-
| | |
246,940
| |
Vesting of restricted share units
| | | | |
1,176,637
| | |
162,420
| | |
(162,420)
| | |
-
| | |
-
| | |
-
| |
Issuance of Class A subordinate voting shares, net of offering costs of $46,553, net of tax of $2,606
| | |
19
| | |
3,392,500
| | |
2,581,197
| | |
-
| | |
-
| | |
-
| | |
2,581,197
|
Equity component of the convertible senior notes, net of offering costs of $1,994, net of tax of $112
| | |
16
| | |
-
| | |
-
| | |
158,810
| | |
-
| | |
-
| | |
158,810
|
Net income and comprehensive income for the year
| | | | |
-
| | |
-
| | |
-
| | |
7,724
| | |
319,509
| | |
327,233
| |
As at December 31, 2020
| | | | |
122,528,871
| | |
6,115,232
| | |
261,436
| | |
8,770
| | |
15,285
| | |
6,400,723
| |
Adjustment related to the adoption of ASU 2020-06, Debt
| | |
3
| | |
-
| | |
-
| | |
(158,810)
| | |
-
| | |
8,198
| | |
(150,612)
|
As at January 1, 2021
| | | | |
122,528,871
| | |
6,115,232
| | |
102,626
| | |
8,770
| | |
23,483
| | |
6,250,111
| |
Exercise of stock options
| | | | |
1,494,840
| | |
166,057
| | |
(57,463)
| | |
-
| | |
-
| | |
108,594
| |
Stock-based compensation
| | | | |
-
| | |
-
| | |
330,763
| | |
-
| | |
-
| | |
330,763
| |
Vesting of restricted share units
| | | | |
693,448
| | |
214,852
| | |
(214,852)
| | |
-
| | |
-
| | |
-
| |
Issuance of Class A subordinate voting shares, net of offering costs of $7,742, net of tax of $2,790
| | |
19
| | |
1,180,000
| | |
1,543,958
| | |
-
| | |
-
| | |
-
| | |
1,543,958
|
Net income and comprehensive income for the year
| | | | |
-
| | |
-
| | |
-
| | |
(14,744)
| | |
2,914,659
| | |
2,899,915
| |
As at December 31, 2021
| | | | |
125,897,159
| | |
8,040,099
| | |
161,074
| | |
(5,974)
| | |
2,938,142
| | |
11,133,341
|
| | | |
Years ended
| |||||
| |
Note
| | |
December 31, 2021
$
| | |
December 31, 2020
$
| |
Cash flows from operating activities | | | | | | | |||
Net income for the year
| | | | |
2,914,659
| | |
319,509
| |
Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | |||
Amortization and depreciation
| | | | |
66,308
| | |
70,060
| |
Stock-based compensation
| | |
19
| | |
330,763
| | |
246,940
|
Amortization of debt offering costs
| | |
16
| | |
2,343
| | |
8,756
|
Impairment of right-of-use assets and leasehold improvements
| | |
10, 11
| | |
30,145
| | |
31,623
|
Provision for transaction and loan losses
| | | | |
43,781
| | |
27,282
| |
Deferred income tax expense (recovery)
| | |
21, 25
| | |
190,963
| | |
(44,801)
|
Revenue related to non-cash consideration
| | |
25
| | |
(58,380)
| | |
(3,814)
|
Net unrealized gain on equity and other investments
| | |
6
| | |
(2,859,800)
| | |
(135,193)
|
Unrealized foreign exchange loss (gain)
| | | | |
4,570
| | |
(1,689)
| |
Changes in operating assets and liabilities: | | | | | | | |||
Trade and other receivables
| | | | |
(72,300)
| | |
(29,146)
| |
Merchant cash advances, loans and related receivables
| | | | |
(266,077)
| | |
(112,721)
| |
Other current assets
| | | | |
(50,151)
| | |
(11,404)
| |
Non-cash consideration received in exchange for services
| | |
6
| | |
(268,058)
| | |
(24,710)
|
Accounts payable and accrued liabilities
| | | | |
138,175
| | |
118,588
| |
Income taxes receivable and payable
| | |
25
| | |
45,263
| | |
(103,087)
|
Deferred revenue
| | |
25
| | |
309,289
| | |
69,969
|
Lease assets and liabilities
| | | | |
2,935
| | |
(1,204)
| |
Net cash provided by operating activities
| | | | |
504,428
| | |
424,958
| |
Cash flows from investing activities | | | | | | | |||
Purchase of marketable securities
| | | | |
(7,337,366)
| | |
(5,600,207)
| |
Maturity of marketable securities
| | | | |
5,750,224
| | |
3,721,405
| |
Purchase of equity and other investments
| | |
6
| | |
(650,233)
| | |
(11,051)
|
Acquisitions of property and equipment
| | | | |
(50,788)
| | |
(41,733)
| |
Acquisition of businesses, net of cash acquired
| | |
24
| | |
(59,627)
| | |
-
|
Acquisitions of intangible assets
| | | | |
-
| | |
(262)
| |
Net cash used in investing activities
| | | | |
(2,347,790)
| | |
(1,931,848)
| |
Cash flows from financing activities | | | | | | | |||
Proceeds from public equity offerings, net of issuance costs
| | |
19
| | |
1,541,168
| | |
2,578,591
|
Proceeds from the exercise of stock options
| | | | |
108,594
| | |
70,809
| |
Proceeds from convertible senior notes, net of underwriting fees and offering costs
| | |
16
| | |
-
| | |
907,950
|
Net cash provided by financing activities
| | | | |
1,649,762
| | |
3,557,350
| |
Effect of foreign exchange on cash and cash equivalents
| | | | |
(7,005)
| | |
3,221
| |
Net (decrease) increase in cash and cash equivalents
| | | | |
(200,605)
| | |
2,053,681
| |
Cash and cash equivalents - Beginning of Year
| | | | |
2,703,597
| | |
649,916
| |
Cash and cash equivalents - End of Year
| | | | |
2,502,992
| | |
2,703,597
| |
Supplemental cash flow information: | | | | | | | |||
Cash paid for amounts included in the measurement of lease liabilities included in cash flows from operating activities
| | | | |
26,166
| | |
21,753
| |
Lease liabilities arising from obtaining right-of-use assets
| | | | |
118,091
| | |
29,820
| |
Acquired property and equipment remaining unpaid
| | | | |
8,052
| | |
1,881
| |
Cash (recovered from) paid for income taxes, net
| | | | |
(10,466)
| | |
69,534
| |
Cash paid for interest
| | | | |
1,287
| | |
-
|
1. |
Nature of Business
|
2. |
Basis of Presentation and Consolidation
|
3. |
Significant Accounting Policies
|
•
|
Identify the contract with a customer;
|
•
|
Identify the performance obligations in the contract;
|
•
|
Determine the transaction price;
|
•
|
Allocate the transaction price; and
|
•
|
Recognize revenue when, or as, the Company satisfies a performance obligation.
|
| |
Years ended
| ||||||||||||||||
| |
December 31, 2021
| | |
December 31, 2020
| |||||||||||||
| |
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)
$
| |
Revenues
| | |
$4,611,856
| | |
$10,868
| | |
$4,622,724
| | |
$2,929,491
| | |
$7,367
| | |
$2,936,858
|
Cost of revenues
| | |
(2,130,712)
| | |
(12,503)
| | |
(2,143,215)
| | |
(1,387,971)
| | |
(7,900)
| | |
(1,395,871)
|
Operating expenses
| | |
(2,212,501)
| | |
(67,231)
| | |
(2,279,732)
| | |
(1,451,367)
| | |
(47,292)
| | |
(1,498,659)
|
Income from operations
| | |
$268,643
| | |
$(68,866)
| | |
$199,777
| | |
$90,153
| | |
$(47,825)
| | |
$42,328
|
(1) |
A 10% weakening of the CAD versus the USD would have an equal and opposite impact on our revenues, cost of revenues, operating expenses and income from operations as presented in the table.
|
(2) |
Represents the increase or decrease in GAAP amounts reported resulting from a 10% strengthening in the CAD-USD foreign exchange rates.
|
(3) |
Represents the outcome that would have resulted had the CAD-USD rates in those periods been 10% stronger than they actually were, excluding the impact of our hedging program and without factoring in any potential changes in demand for the Company's solutions as a result of changes in the CAD-USD exchange rates.
|
4. |
Cash and Cash Equivalents
|
5. |
Financial Instruments
|
| |
Level 1
$
| | |
Level 2
$
| | |
Level 3
$
| ||||||||||
| |
Carrying
Amount
| | |
Fair
Value
| | |
Carrying
Amount
| | |
Fair
Value
| | |
Carrying
Amount
| | |
Fair
Value
| |
Assets: | | | | | | | | | | | | | ||||||
Cash equivalents: | | | | | | | | | | | | | ||||||
Canadian federal bonds and agency securities
| | |
50,138
| | |
50,138
| | |
-
| | |
-
| | |
-
| | |
-
|
Corporate bonds and commercial paper
| | |
267,953
| | |
268,090
| | |
-
| | |
-
| | |
-
| | |
-
|
Marketable securities: | | | | | | | | | | | | | ||||||
U.S. term deposits
| | |
900,000
| | |
901,689
| | |
-
| | |
-
| | |
-
| | |
-
|
U.S. federal bonds and agency securities
| | |
680,436
| | |
681,629
| | |
-
| | |
-
| | |
-
| | |
-
|
Canadian federal bonds and agency securities
| | |
1,215,646
| | |
1,218,001
| | |
-
| | |
-
| | |
-
| | |
-
|
Corporate bonds and commercial paper
| | |
-
| | |
-
| | |
2,469,019
| | |
2,475,051
| | |
-
| | |
-
|
Derivative assets: | | | | | | | | | | | | | ||||||
Foreign exchange forward contracts
| | |
-
| | |
-
| | |
1,824
| | |
1,824
| | |
-
| | |
-
|
Equity and other investments:
| | |
-
| | |
-
| | |
-
| | |
-
| | |
-
| | |
-
|
Equity and other investments with readily determinable fair values
| | |
2,782,901
| | |
2,782,901
| | |
-
| | |
-
| | |
423,387
| | |
423,387
|
Available-for-sale debt security under fair value option
| | |
-
| | |
-
| | |
-
| | |
-
| | |
205,878
| | |
205,878
|
Liabilities: | | | | | | | | | | | | | ||||||
Derivative liabilities: | | | | | | | | | | | | | ||||||
Foreign exchange forward contracts
| | |
-
| | |
-
| | |
5,926
| | |
5,926
| | |
-
| | |
-
|
| |
Level 1
$
| | |
Level 2
$
| | |
Level 3
$
| ||||||||||
| |
Carrying
Amount
| | |
Fair
Value
| | |
Carrying
Amount
| | |
Fair
Value
| | |
Carrying
Amount
| | |
Fair
Value
| |
Assets: | | | | | | | | | | | | | ||||||
Cash equivalents: | | | | | | | | | | | | | ||||||
U.S federal bonds
| | |
174,397
| | |
174,399
| | |
-
| | |
-
| | |
-
| | |
-
|
Corporate bonds and commercial paper
| | |
134,056
| | |
134,396
| | |
-
| | |
-
| | |
-
| | |
-
|
Repurchase agreements
| | |
-
| | |
-
| | |
290,000
| | |
290,001
| | |
-
| | |
-
|
Marketable securities: | | | | | | | | | | | | | ||||||
U.S. term deposits
| | |
885,000
| | |
887,102
| | |
-
| | |
-
| | |
-
| | |
-
|
U.S. federal bonds
| | |
1,224,052
| | |
1,226,657
| | |
-
| | |
-
| | |
-
| | |
-
|
Canadian federal bonds
| | |
24,988
| | |
24,987
| | |
-
| | |
-
| | |
-
| | |
-
|
Corporate bonds and commercial paper
| | |
-
| | |
-
| | |
1,550,330
| | |
1,552,907
| | |
-
| | |
-
|
Derivative assets: | | | | | | | | | | | | | ||||||
Foreign exchange forward contracts
| | |
-
| | |
-
| | |
16,340
| | |
16,340
| | |
-
| | |
-
|
6. |
Equity and Other Investments
|
| |
December 31,
2021
$
| | |
December 31,
2020
$
| |
With readily determinable fair values
| | |
3,206,288
| | |
-
|
Without readily determinable fair values
| | |
543,379
| | |
173,454
|
Debt securities under the fair value option
| | |
205,878
| | |
-
|
Total equity and other investments
| | |
3,955,545
| | |
173,454
|
| |
Year ended
| |
| |
December 31,
2021
$
| |
Balance, beginning of the year
| | |
-
|
| | ||
Adjustments related to equity and other investments with readily determinable fair values: | | | |
Transfers from measurement alternative(1)(2) | | |
350,530
|
Purchases of equity and other investments
| | |
40
|
Net unrealized gains
| | |
2,855,718
|
Balance, end of the year
| | |
3,206,288
|
(1) |
Effective January 13, 2021, the Company's investment in Affirm no longer qualified for the use of the measurement alternative as the fair value of the investment became readily determinable.
|
(2) |
Effective May 12, 2021, the Company's investment in Global-E no longer qualified for the use of the measurement alternative as the fair value of the investment became readily determinable.
|
| |
Years ended
| ||||
| |
December 31,
2021
$
| | |
December 31,
2020
$
| |
Balance, beginning of the year
| | |
173,454
| | |
2,500
|
Adjustments related to equity and other investments without readily determinable fair values: | | | | | ||
Investments received as non-cash consideration in exchange for services
| | |
268,058
| | |
24,710
|
Purchases of equity and other investments
| | |
450,193
| | |
11,051
|
Transfers to readily determinable fair values(1)(2) | | |
(350,530)
| | |
-
|
Gross unrealized gains
| | |
36,926
| | |
135,193
|
Gross unrealized losses and impairments
| | |
(34,722)
| | |
-
|
Balance, end of the year
| | |
543,379
| | |
173,454
|
(1) |
Effective January 13, 2021, the Company's investment in Affirm no longer qualified for the use of the measurement alternative as the fair value of the investment became readily determinable.
|
(2) |
Effective May 12, 2021, the Company's investment in Global-E no longer qualified for the use of the measurement alternative as the fair value of the investment became readily determinable.
|
7. |
Trade and Other Receivables
|
| |
December 31,
2021
$
| | |
December 31,
2020
$
| | |
January 1,
2020
$
| |
Unbilled revenues, net
| | |
86,795
| | |
50,073
| | |
31,629
|
Trade receivables, net
| | |
40,342
| | |
13,449
| | |
9,660
|
Indirect taxes receivable
| | |
39,142
| | |
45,961
| | |
36,821
|
Accrued interest
| | |
13,067
| | |
7,563
| | |
5,754
|
Other receivables
| | |
12,863
| | |
3,706
| | |
6,665
|
| |
192,209
| | |
120,752
| | |
90,529
|
| |
Years ended
| ||||
| |
December 31,
2021
$
| | |
December 31,
2020
$
| |
Balance, beginning of the year
| | |
6,041
| | |
2,894
|
Provision for credit losses related to uncollectible receivables
| | |
6,069
| | |
6,793
|
Write-offs
| | |
(5,166)
| | |
(3,646)
|
Balance, end of the year
| | |
6,944
| | |
6,041
|
8. |
Merchant Cash Advances, Loans and Related Receivables
|
| |
December 31,
2021
$
| | |
December 31,
2020
$
| | |
January 1,
2020
$
| |
Merchant cash advances receivable, gross
| | |
439,289
| | |
218,840
| | |
131,227
|
Related receivables
| | |
-
| | |
819
| | |
3,179
|
Allowance for credit losses related to uncollectible merchant cash advances receivable
| | |
(38,264)
| | |
(15,816)
| | |
(10,420)
|
Loans receivable, gross
| | |
72,751
| | |
43,644
| | |
28,547
|
Allowance for credit losses related to uncollectible loans receivable
| | |
(3,054)
| | |
(2,764)
| | |
(2,361)
|
Merchant cash advances, loans and related receivables, net
| | |
470,722
| | |
244,723
| | |
150,172
|
| |
Years ended
| ||||
| |
December 31,
2021
$
| | |
December 31,
2020
$
| |
Allowance, beginning of the year
| | |
15,816
| | |
10,420
|
Provision for credit losses related to uncollectible merchant cash advances receivable
| | |
36,719
| | |
13,896
|
Merchant cash advances receivable charged off, net of recoveries
| | |
(14,271)
| | |
(8,500)
|
Allowance, end of the year
| | |
38,264
| | |
15,816
|
Related receivables
| | |
-
| | |
(819)
|
Allowance, net of related receivables
| | |
38,264
| | |
14,997
|
| |
Years ended
| ||||
| |
December 31,
2021
$
| | |
December 31,
2020
$
| |
Allowance, beginning of the year
| | |
2,764
| | |
2,361
|
Provision for credit losses related to uncollectible loans receivable
| | |
2,540
| | |
1,915
|
Loans receivable charged off, net of recoveries
| | |
(2,250)
| | |
(1,512)
|
Allowance, end of the year
| | |
3,054
| | |
2,764
|
| |
December 31, 2021
| ||||
| |
Total
| | |
Percent
| |
Current
| | |
$69,350
| | |
95.3%
|
30-59 Days
| | |
1,114
| | |
1.5%
|
60-89 Days
| | |
419
| | |
0.6%
|
90-179 Days
| | |
576
| | |
0.8%
|
180+ Days
| | |
1,292
| | |
1.8%
|
Total
| | |
$72,751
| | |
100.0%
|
| |
December 31, 2020
| ||||
| |
Total
| | |
Percent
| |
Current
| | |
$42,671
| | |
97.8%
|
30-59 Days
| | |
302
| | |
0.7%
|
60-89 Days
| | |
57
| | |
0.1%
|
90-179 Days
| | |
268
| | |
0.6%
|
180+ Days
| | |
346
| | |
0.8%
|
Total
| | |
43,644
| | |
100.0%
|
9. |
Other Current Assets
|
| |
December 31,
2021
$
| | |
December 31,
2020
$
| |
Prepaid expenses
| | |
49,919
| | |
25,053
|
Other current assets
| | |
29,988
| | |
17,478
|
Deposits
| | |
21,542
| | |
9,376
|
Foreign exchange contracts
| | |
1,824
| | |
16,340
|
| |
103,273
| | |
68,247
|
10. |
Property and Equipment
|
| |
December 31, 2021
| |||||||
| |
Cost
$
| | |
Accumulated
depreciation
and
impairment(1)
$
| | |
Net book
value
$
| |
Leasehold improvements
| | |
159,131
| | |
84,930
| | |
74,201
|
Computer equipment
| | |
33,505
| | |
18,241
| | |
15,264
|
Furniture and equipment
| | |
28,751
| | |
20,250
| | |
8,501
|
Fulfillment robots
| | |
9,470
| | |
3,888
| | |
5,582
|
Fulfillment equipment
| | |
2,015
| | |
37
| | |
1,978
|
| |
232,872
| | |
127,346
| | |
105,526
|
(1) |
Included in accumulated depreciation is $1,709 of impairment on leasehold improvements in the year.
|
| |
December 31, 2020
| |||||||
| |
Cost
$
| | |
Accumulated
depreciation
and
impairment(2)
$
| | |
Net book
value
$
| |
Leasehold improvements
| | |
131,196
| | |
65,052
| | |
66,144
|
Computer equipment
| | |
24,387
| | |
15,056
| | |
9,331
|
Furniture and equipment
| | |
30,716
| | |
17,501
| | |
13,215
|
Fulfillment robots
| | |
5,419
| | |
2,005
| | |
3,414
|
| |
191,718
| | |
99,614
| | |
92,104
|
(2) |
Included in accumulated depreciation is $16,838 of impairment on leasehold improvements in the year.
|
| |
Years ended
| ||||
| |
December 31,
2021
$
| | |
December 31,
2020
$
| |
Cost of revenues
| | |
2,649
| | |
3,160
|
Sales and marketing
| | |
10,103
| | |
9,710
|
Research and development
| | |
20,125
| | |
19,587
|
General and administrative
| | |
8,951
| | |
5,735
|
| |
41,828
| | |
38,192
|
11. |
Leases
|
| |
Years ended
| ||||
| |
December 31,
2021
$
| | |
December 31,
2020
$
| |
Operating lease expense
| | |
22,268
| | |
20,488
|
Variable lease expense, including non-lease components
| | |
13,003
| | |
15,165
|
Total lease expense
| | |
35,271
| | |
35,653
|
Fiscal Year
| | |
Offices
$
| | |
Warehouses
and
Commercial
Spaces
$
| | |
Total
$
|
2022
| | |
33,778
| | |
4,202
| | |
37,980
|
2023
| | |
43,739
| | |
5,266
| | |
49,005
|
2024
| | |
48,480
| | |
5,108
| | |
53,588
|
2025
| | |
52,098
| | |
4,762
| | |
56,860
|
2026
| | |
53,127
| | |
4,407
| | |
57,534
|
Thereafter
| | |
321,285
| | |
45,045
| | |
366,330
|
Total future minimum payments
| | |
552,507
| | |
68,790
| | |
621,297
|
Minimum payments related to leases that have not yet commenced
| | |
(52,837)
| | |
-
| | |
(52,837)
|
Minimum payments related to variable lease payments, including non-lease components
| | |
(223,393)
| | |
(33,316)
| | |
(256,709)
|
Imputed interest
| | |
(44,707)
| | |
(4,520)
| | |
(49,227)
|
Total lease liabilities
| | |
231,570
| | |
30,954
| | |
262,524
|
12. |
Intangible Assets
|
| |
December 31, 2021
| |||||||
| |
Cost
$
| | |
Accumulated
amortization
$
| | |
Net book
value
$
| |
Acquired technology
| | |
187,874
| | |
57,016
| | |
130,858
|
Acquired customer relationships
| | |
8,435
| | |
3,802
| | |
4,633
|
Other intangible assets
| | |
4,351
| | |
1,549
| | |
2,802
|
Software development costs
| | |
27,520
| | |
27,317
| | |
203
|
Purchased software
| | |
6,973
| | |
6,973
| | |
-
|
| |
235,153
| | |
96,657
| | |
138,496
|
| |
December 31, 2020
| |||||||
| |
Cost
$
| | |
Accumulated
amortization
$
| | |
Net book
value
$
| |
Acquired technology
| | |
161,643
| | |
36,953
| | |
124,690
|
Acquired customer relationships
| | |
8,435
| | |
2,677
| | |
5,758
|
Other intangible assets
| | |
4,351
| | |
1,123
| | |
3,228
|
Software development costs
| | |
27,520
| | |
25,720
| | |
1,800
|
Purchased software
| | |
6,973
| | |
6,773
| | |
200
|
| |
208,922
| | |
73,246
| | |
135,676
|
| |
Years ended
| ||||
| |
December 31,
2021
$
| | |
December 31,
2020
$
| |
Cost of revenues
| | |
21,518
| | |
28,885
|
Sales and marketing
| | |
2,195
| | |
2,184
|
Research and development
| | |
243
| | |
273
|
General and administrative
| | |
524
| | |
526
|
| |
24,480
| | |
31,868
|
Fiscal Year
| | |
Amount
$
|
2022
| | |
27,188
|
2023
| | |
26,816
|
2024
| | |
22,820
|
2025
| | |
16,186
|
2026
| | |
16,186
|
Thereafter
| | |
29,300
|
Total
| | |
138,496
|
13. |
Goodwill
|
| |
December 31,
2021
$
| | |
December 31,
2020
$
| |
Balance, beginning of the year
| | |
311,865
| | |
311,865
|
Acquisition of Donde Fashion Inc.
| | |
37,567
| | |
-
|
Other acquisitions(1) | | |
7,096
| | |
-
|
Balance, end of the year
| | |
356,528
| | |
311,865
|
(1) |
During the year ended December 31, 2021, the Company completed small acquisitions that resulted in Goodwill being recognized.
|
14. |
Accounts Payable and Accrued Liabilities
|
| |
December 31,
2021
$
| | |
December 31,
2020
$
| |
Trade accounts payable and trade accruals
| | |
284,010
| | |
168,720
|
Employee related accruals
| | |
71,901
| | |
61,891
|
Indirect taxes payable
| | |
66,184
| | |
54,097
|
Other payables and accruals
| | |
28,667
| | |
16,087
|
Foreign exchange forward contracts
| | |
5,926
| | |
-
|
| |
456,688
| | |
300,795
|
15. |
Deferred Revenue
|
| |
Years ended
| ||||
| |
December 31,
2021
$
| | |
December 31,
2020
$
| |
Balance, beginning of the year
| | |
128,815
| | |
62,660
|
Deferral of revenue
| | |
351,145
| | |
119,324
|
Recognition of deferred revenue
| | |
(100,236)
| | |
(53,169)
|
Balance, end of the year
| | |
379,724
| | |
128,815
|
| |
December 31,
2021
$
| | |
December 31,
2020
$
| |
Current portion
| | |
216,792
| | |
107,809
|
Long-term portion
| | |
162,932
| | |
21,006
|
| |
379,724
| | |
128,815
|
16. |
Convertible Senior Notes
|
(1) |
during any calendar quarter commencing after March 31, 2021, and only during such calendar quarter, if the last reported sale price of the Class A subordinate voting shares on the New York Stock Exchange (the "NYSE") for at least 20 trading days (whether or not consecutive) in a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is more than or equal to 130% of the conversion price for the Notes on each applicable trading day;
|
(2) |
during the ten business day period after any ten consecutive trading day period in which, for each trading day of that period, the trading price per one thousand dollars principal amount of Notes for each trading day was less than 98% of the product of the last reported sale price of the Class A subordinate voting shares on the NYSE and the conversion rate for the Notes on each such trading day;
|
(3) |
if the Company calls any or all of the Notes for optional redemption, clean-up redemption or tax redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; or
|
(4) |
upon the occurrence of certain specified corporate events.
|
| |
December 31,
2021
$
| | |
December 31,
2020
$
| |
Principal
| | |
920,000
| | |
920,000
|
Unamortized offering costs(1) | | |
(9,037)
| | |
(9,434)
|
Unamortized discounts(1) | | |
-
| | |
(152,558)
|
Net carrying amount
| | |
910,963
| | |
758,008
|
(1) |
Prior to the adoption of ASU 2020-06 on January 1, 2021, the Company accounted for its Notes as separate liability and equity components. The comparative figures represent the offering costs and debt discount related to the liability component prior to adoption.
|
| |
Years ended
| ||||
| |
December 31,
2021
$
| | |
December 31,
2020
$
| |
Contractual interest expense
| | |
1,150
| | |
329
|
Amortization of offering costs(1) | | |
2,343
| | |
510
|
Amortization of debt discount(1) | | |
-
| | |
8,246
|
Total interest expense related to the outstanding Notes
| | |
3,493
| | |
9,085
|
(1) |
Prior to the adoption of ASU 2020-06 on January 1, 2021, the Company accounted for its Notes as separate liability and equity components. The comparative figures represent the amortization of offering costs and debt discount related to the liability component prior to adoption.
|
17. |
Credit Facility
|
18. |
Commitments and Contingencies
|
19. |
Shareholders' Equity
|
| |
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, 2019
| | |
3,812,242
| | |
54.59
| | |
6.14
| | |
1,307,565
| | |
-
| | |
1,939,918
| | |
159.13
|
Stock options granted
| | |
258,163
| | |
505.69
| | |
-
| | |
-
| | |
197.26
| | |
-
| | |
-
|
Stock options exercised
| | |
(1,530,759)
| | |
46.26
| | |
-
| | |
-
| | |
-
| | |
-
| | |
-
|
Stock options forfeited
| | |
(50,369)
| | |
189.56
| | |
-
| | |
-
| | |
-
| | |
-
| | |
-
|
RSUs granted
| | |
-
| | |
-
| | |
-
| | |
-
| | |
-
| | |
473,697
| | |
645.99
|
RSUs settled
| | |
-
| | |
-
| | |
-
| | |
-
| | |
-
| | |
(1,176,637)
| | |
138.04
|
RSUs forfeited
| | |
-
| | |
-
| | |
-
| | |
-
| | |
-
| | |
(124,011)
| | |
262.93
|
December 31, 2020
| | |
2,489,277
| | |
103.76
| | |
5.45
| | |
2,559,442
| | |
-
| | |
1,112,967
| | |
377.08
|
Stock options granted
| | |
215,893
| | |
1,380.21
| | |
-
| | |
-
| | |
579.85
| | |
-
| | |
-
|
Stock options exercised
| | |
(1,494,840)
| | |
72.64
| | |
-
| | |
-
| | |
-
| | |
-
| | |
-
|
Stock options forfeited
| | |
(56,464)
| | |
873.63
| | |
-
| | |
-
| | |
-
| | |
-
| | |
-
|
RSUs granted
| | |
-
| | |
-
| | |
-
| | |
-
| | |
-
| | |
562,084
| | |
1,410.19
|
RSUs settled
| | |
-
| | |
-
| | |
-
| | |
-
| | |
-
| | |
(693,448)
| | |
309.83
|
RSUs forfeited
| | |
-
| | |
-
| | |
-
| | |
-
| | |
-
| | |
(137,785)
| | |
648.15
|
December 31, 2021
| | |
1,153,866
| | |
345.23
| | |
5.67
| | |
1,190,972
| | |
-
| | |
843,818
| | |
1,076.26
|
| | | | | | | | | | | | | | ||||||||
Stock options exercisable as of December 31, 2021
| | |
808,395
| | |
98.09
| | |
4.50
| | |
1,034,179
| | | | | | |
(1) |
As at December 31, 2021, 247,437 of the outstanding stock options were granted under the Company's Legacy Option Plan and are exercisable for Class B multiple voting shares, 876,346 of the outstanding stock options were granted under the Company's SOP and are exercisable for Class A subordinate voting shares, and 30,083 of the outstanding stock options were granted under the 6 River Systems 2016 Amended and Restated Stock Option and Grant Plan and are exercisable for Class A subordinate voting shares.
|
(2) |
The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock option awards and the closing market price of the Company's Class A subordinate voting shares as of December 31, 2021 and December 31, 2020.
|
•
|
Fair Value of Common Stock. The Company uses the five-day volume weighted average price for its common stock as reported on the New York Stock Exchange.
|
•
|
Expected Term. The Company determines the expected term based on the average period the stock options are expected to remain outstanding. The Company bases the expected term assumptions on its historical behavior combined with estimates of the post-vesting holding period.
|
•
|
Expected Volatility. The Company determines the price volatility factor based on the Company's historical volatility over the expected life of the stock options.
|
•
|
Risk-Free Interest Rate. The Company bases the risk-free interest rate used in the Black-Scholes valuation model on the yield available on U.S. Treasury zero-coupon issues with an equivalent remaining term of the stock options for each stock option group.
|
•
|
Expected Dividend. The Company has not paid and does not anticipate paying any cash dividends in the foreseeable future and, therefore, uses an expected dividend yield of zero in the option pricing model.
|
| |
Years ended
| ||||
| |
December 31,
2021
| | |
December 31,
2020
| |
Expected volatility
| | |
53.1%
| | |
46.4%
|
Risk-free interest rate
| | |
0.71%
| | |
1.04%
|
Dividend yield
| | |
Nil
| | |
Nil
|
Average expected life
| | |
4.15
| | |
4.41
|
| |
Years ended
| ||||
| |
December 31,
2021
$
| | |
December 31,
2020
$
| |
Cost of revenues
| | |
6,676
| | |
6,483
|
Sales and marketing
| | |
41,546
| | |
40,680
|
Research and development
| | |
215,193
| | |
154,119
|
General and administrative
| | |
67,348
| | |
45,658
|
| |
330,763
| | |
246,940
|
20. |
Changes in Accumulated Other Comprehensive Income (Loss)
|
| |
Accumulated Other
Comprehensive Income (Loss)
| ||||
| |
Years ended
| ||||
| |
December 31,
2021
$
| | |
December 31,
2020
$
| |
Balance, beginning of the year
| | |
8,770
| | |
1,046
|
| | | | |||
Other comprehensive income before reclassifications
| | |
2,791
| | |
7,525
|
(Gain) loss on cash flow hedges reclassified from accumulated other comprehensive income (loss) to earnings were as follows: | | | | | ||
Cost of revenues
| | |
(1,001)
| | |
151
|
Sales and marketing
| | |
(6,212)
| | |
933
|
Research and development
| | |
(12,514)
| | |
1,460
|
General and administrative
| | |
(3,125)
| | |
441
|
Tax effect on unrealized (gain) loss on cash flow hedges
| | |
5,317
| | |
(2,786)
|
Other comprehensive (loss) income, net of tax
| | |
(14,744)
| | |
7,724
|
Balance, end of the year
| | |
(5,974)
| | |
8,770
|
21. |
Income Taxes
|
| |
Years ended
| ||||
| |
December 31,
2021
$
| | |
December 31,
2020
$
| |
Income before income taxes | | | | | ||
Domestic
| | |
1,920,503
| | |
133,757
|
Foreign
| | |
1,220,089
| | |
106,607
|
| |
3,140,592
| | |
240,364
| |
| | | | |||
Current income tax (expense) recovery | | | | | ||
Domestic
| | |
(1,815)
| | |
54,251
|
Foreign
| | |
(33,155)
| | |
(19,907)
|
| |
(34,970)
| | |
34,344
| |
Deferred income tax (expense) recovery | | | | | ||
Domestic
| | |
(191,589)
| | |
(12,552)
|
Foreign
| | |
626
| | |
57,353
|
| |
(190,963)
| | |
44,801
| |
| | | | |||
(Provision for) recovery of income taxes
| | |
(225,933)
| | |
79,145
|
| |
Years ended
| ||||
| |
December 31,
2021
$
| | |
December 31,
2020
$
| |
Income before income taxes
| | |
3,140,592
| | |
240,364
|
Expected income tax expense at Canadian statutory income tax rate of 26.5% (2020 - 26.5%)
| | |
(832,446)
| | |
(63,711)
|
Permanent differences | | | | | ||
Net unrealized gain on equity and other investments
| | |
377,707
| | |
17,917
|
Stock-based compensation
| | |
155,011
| | |
122,882
|
Foreign tax rate differential
| | |
75,940
| | |
16,825
|
Tax credits recognized during the year
| | |
27,244
| | |
1,900
|
Change in valuation allowance
| | |
(17,805)
| | |
(18,973)
|
Other items
| | |
(11,584)
| | |
2,305
|
(Provision for) recovery of income taxes
| | |
(225,933)
| | |
79,145
|
| |
December 31,
2021
$
| | |
December 31,
2020
$
| |
Deferred tax assets | | | | | ||
Tax loss carryforwards
| | |
261,945
| | |
101,209
|
Accruals and reserves
| | |
55,337
| | |
21,926
|
Investment tax credits
| | |
42,697
| | |
13,464
|
Capital and intangible assets
| | |
41,790
| | |
50,297
|
Stock-based compensation expense
| | |
33,909
| | |
16,653
|
Scientific Research and Experimental Development expenditures carryforwards
| | |
20,189
| | |
-
|
Lease liabilities
| | |
62,418
| | |
39,220
|
Share issuance costs
| | |
11,403
| | |
14,423
|
Total deferred tax assets, before valuation allowance
| | |
529,688
| | |
257,192
|
Valuation allowance
| | |
(179,115)
| | |
(123,345)
|
Total deferred tax assets
| | |
350,573
| | |
133,847
|
| | | | |||
Deferred tax liabilities | | | | | ||
Equity and other investments
| | |
(275,037)
| | |
(17,917)
|
Outside basis difference of foreign subsidiaries
| | |
(130,419)
| | |
(616)
|
Lease assets
| | |
(45,184)
| | |
(29,928)
|
Intangible assets
| | |
(33,652)
| | |
(32,521)
|
Other deferred tax liabilities
| | |
(1,339)
| | |
(188)
|
Total deferred tax liabilities | | |
(485,631)
| | |
(81,170)
|
Total deferred tax (liabilities) assets, net | | |
(135,058)
| | |
52,677
|
22. |
Net Income per Share
|
| |
Years ended
| ||||
| |
December 31,
2021
| | |
December 31,
2020
| |
Numerator: | | | | | ||
Net income
| | |
$2,914,659
| | |
$319,509
|
After tax effect of debt interest
| | |
2,567
| | |
-
|
Net income after tax effected debt interest
| | |
$2,917,226
| | |
$319,509
|
| | | | |||
Denominator: | | | | | ||
Basic weighted average number of shares outstanding
| | |
124,658,891
| | |
119,569,705
|
Effect of dilutive securities(1) | | |
2,705,844
| | |
3,893,569
|
Diluted weighted average number of shares
| | |
127,364,735
| | |
123,463,274
|
| | | | |||
Net income per share: | | | | | ||
Basic
| | |
$23.38
| | |
$2.67
|
Diluted
| | |
$22.90
| | |
$2.59
|
| | | | |||
Common stock equivalents excluded from income per diluted share because they are anti-dilutive
| | |
37,530
| | |
638,848
|
(1) |
Included in the effect of dilutive securities is the assumed conversion of employee stock options, employee RSUs and the Notes. For the year ended December 31, 2020, the Notes have been excluded from the effect of dilutive securities as they were anti-dilutive.
|
23. |
Segment and Geographical Information
|
| |
Years ended
| ||||||||||
| |
December 31, 2021
| | |
December 31, 2020
| |||||||
| |
$
| | |
%
| | |
$
| | |
%
| |
North America | | | | | | | | | ||||
Canada
| | |
316,699
| | |
6.9%
| | |
192,721
| | |
6.6%
|
United States
| | |
2,973,934
| | |
64.5%
| | |
1,954,105
| | |
66.7%
|
EMEA
| | |
799,602
| | |
17.3%
| | |
454,269
| | |
15.5%
|
APAC
| | |
467,009
| | |
10.1%
| | |
292,240
| | |
10.0%
|
Latin America
| | |
54,612
| | |
1.2%
| | |
36,156
| | |
1.2%
|
| |
4,611,856
| | |
100.0%
| | |
2,929,491
| | |
100.0%
|
| |
December 31, 2021
| | |
December 31, 2020
| |||||||
| |
$
| | |
%
| | |
$
| | |
%
| |
Canada
| | |
63,754
| | |
60.4%
| | |
75,283
| | |
81.7%
|
United States
| | |
24,950
| | |
23.6%
| | |
6,141
| | |
6.7%
|
Rest of World
| | |
16,822
| | |
15.9%
| | |
10,680
| | |
11.6%
|
| |
105,526
| | |
100.0%
| | |
92,104
| | |
100.0%
|
24. |
Business Acquisitions
|
| |
Amount
$
| |
Cash
| | |
887
|
Accounts payable and other current liabilities
| | |
(7,377)
|
Technology
| | |
24,000
|
Net deferred tax liability on acquired intangibles
| | |
(4,390)
|
| | ||
Goodwill
| | |
37,567
|
Total purchase price
| | |
50,687
|
25. |
Comparative Figures
|
26. |
Subsequent Event
|
•
|
the extent of the impact of the novel coronavirus ("COVID-19") on our business, financial performance, revenues, and results of operations;
|
•
|
our expectation that the majority of Shopify employees will work remotely permanently ("digital-by-design");
|
•
|
our plan to repurpose or reconfigure our remaining office space and potentially terminate additional leases or sublet other spaces;
|
•
|
our exploration of new ways to accelerate checkout;
|
•
|
our ability to make it easier for merchants to manage their storefronts via their mobile devices;
|
•
|
the achievement of innovations and enhancements to, and expansion of, our platform and our solutions;
|
•
|
whether a merchant using Shopify will ever need to re-platform;
|
•
|
the continued growth of our app developer, theme designer and partner ecosystem and the effect on the growth of our merchant base;
|
•
|
the continued expansion of the number of channels for merchants to transact through;
|
•
|
our plan to continue making investments in our business to drive future growth;
|
•
|
our expectation that we will continue to invest in and optimize Shopify Fulfillment Network to provide our merchants with fast and affordable fulfillment;
|
•
|
our expectation that we may experience more normalized growth in gross merchandise volume ("GMV") against a more measured macro environment relative to 2021, but also expect that changed behaviours adopted by merchants and consumers that were driven by COVID-19 will continue to expand the prospects for entrepreneurship and digital commerce;
|
•
|
our expectation that as we develop Shopify Fulfillment Network and 6 River Systems Inc. ("6RS"), these initiatives will be dilutive to the gross margin percentage of merchant solutions;
|
•
|
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, 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 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 expectation that as we roll out local currency billing options in geographies outside of North America, a decrease in the value of other currencies relative to the USD will negatively impact our reported subscription revenue and Monthly Recurring Revenue ("MRR");
|
•
|
our expectation that over time, any impact to MRR from local currency billing will be offset by reduced friction and an enhanced in-market experience, which we anticipate will attract more merchants to our platform and our merchant solutions;
|
•
|
our expectation that sales and marketing expenses will increase in absolute dollars but decline as a percentage of total revenues over time;
|
•
|
our expectation that our research and development expenses will increase in absolute dollars as we continue to increase the functionality of our platform, but will decline as a percentage of total revenues over time;
|
•
|
our expectation that general and administrative expenses will increase on an absolute dollar basis, but may decrease as a percentage of our total revenues as we focus on processes, systems and controls to enable our internal support functions to scale with the growth of our business;
|
•
|
our expectation that transaction and loan losses related to Shopify Payments, Shop Pay Installments, Shopify Balance and Shopify Capital will increase on an absolute dollar basis over time as merchant penetration and adoption grow;
|
•
|
the change in fair value of certain equity and other investments which may fluctuate period to period, and may cause volatility to our earnings;
|
•
|
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 future obligation to purchase outstanding 0.125% convertible senior notes due 2025 (the "Notes") on the occurrence of a fundamental change;
|
•
|
our belief that we have sufficient liquidity to meet our current and planned financial obligations over the next 12 months;
|
•
|
our future financing requirements and the availability of capital;
|
•
|
the future value of our investment income, in particular as a result of changes in interest rates, fair value or due to observable changes in price or impairments;
|
•
|
the fair market value of the Notes as a result of changes in interest rates or the price of our Class A subordinate voting shares;
|
•
|
expected credit losses as a result of macroeconomic factors;
|
•
|
our expectations regarding contractual obligations and contingencies;
|
•
|
the impact of inflation on our costs and operations and on our merchants sales;
|
•
|
our accounting estimates, allowances, provisions, and assumptions made in the preparation of our financial statements; and
|
•
|
our expectations regarding the impact of recently adopted accounting standards.
|
•
|
our belief that the near-term costs of reducing our leased footprint and transitioning remaining spaces to their future intended purpose will yield longer-term benefits;
|
•
|
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 an increasing awareness among buyers that Shopify provides a superior and secure checkout experience is an additional advantage for our merchants;
|
•
|
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, including our ability to retain merchants that have moved from physical retail to ecommerce as a result of the COVID-19 pandemic;
|
•
|
our belief that ecommerce growth will proceed at a normalized rate in 2022, supported by healthy economic growth and continued penetration of retail by ecommerce;
|
•
|
our ability to manage our growth effectively;
|
•
|
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 and provide a high level of merchant service and support;
|
•
|
our ability to hire, retain and motivate qualified personnel and to manage our operations in a digital-by-design model;
|
•
|
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 strategic 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 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 grow through increased adoption and international expansion;
|
•
|
our expectation that Shopify Payments will continue to expand internationally;
|
•
|
our expectation that Shopify Fulfillment Network will scale and grow as we optimize the network, and we will continue to invest to support this growth;
|
•
|
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 in 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 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 potential inability to compete successfully against current and future competitors;
|
•
|
the security of personal information we store relating to merchants and their buyers, as well as consumers with whom we have a direct relationship including users of our apps;
|
•
|
a denial of service attack or security breach;
|
•
|
our ability to innovate;
|
•
|
our limited operating history in new and developing markets and new geographic regions;
|
•
|
international sales and operations and the use of our platform in various countries;
|
•
|
our current reliance on a single supplier to provide the technology we offer through Shopify Payments;
|
•
|
the reliance of our growth in part on the success of our strategic relationships with third parties;
|
•
|
our potential inability to hire, retain and motivate qualified personnel;
|
•
|
our use of a single cloud-based platform to deliver our services;
|
•
|
complex and changing laws and regulations worldwide;
|
•
|
our dependence on the continued services and performance of our senior management and other key employees;
|
•
|
the COVID-19 pandemic and its impact on our business, financial condition and results of operations including the impact of measures taken to contain the virus and the impact on the global economy and consumer spending and on our merchants' and partners' ecosystem;
|
•
|
payments processed through Shopify Payments, Shop Pay Installments, or payments processed or funds managed through Shopify Balance;
|
•
|
our history of losses and our potential inability to maintain profitability;
|
•
|
our potential failure to effectively maintain, promote and enhance our brand;
|
•
|
serious errors or defects in our software or hardware;
|
•
|
our potential inability to achieve or maintain data transmission capacity;
|
•
|
activities of merchants or partners or the content of merchants' shops and our ability to detect and address unauthorized activity on our platform;
|
•
|
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;
|
•
|
acquisitions and investments, including strategic investments;
|
•
|
our ability to successfully scale, optimize and operate Shopify Fulfillment Network;
|
•
|
risks associated with Shopify Capital, and offering financing to merchants;
|
•
|
potential claims by third parties of intellectual property infringement or other third party or governmental claims, litigation, disputes, or other proceedings;
|
•
|
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;
|
•
|
the impact of worldwide economic conditions, including the resulting effect on spending by small and medium-sized businesses ("SMBs") or their buyers;
|
•
|
manufacturing and supply chain risks;
|
•
|
unanticipated changes in tax laws or adverse outcomes resulting from examination of our income or other tax returns;
|
•
|
being required to collect federal, state, provincial or local business taxes, sales and use taxes or other indirect taxes in additional jurisdictions on transactions by our merchants;
|
•
|
the interoperability of our platform with mobile devices and operating systems;
|
•
|
changes to technologies used in our platform or new versions or upgrades of operating systems and internet browsers;
|
•
|
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 pricing decisions for our solutions;
|
•
|
our use of open source software;
|
•
|
seasonal fluctuations;
|
•
|
exchange rate fluctuations that may negatively affect our results of operations;
|
•
|
our dependence upon buyers' and merchants' access to, and willingness to use, the internet for commerce;
|
•
|
provisions of our financial instruments including the Notes;
|
•
|
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;
|
•
|
our tax loss carryforwards;
|
•
|
ownership of our shares;
|
•
|
our sensitivity to interest rate fluctuations; and
|
•
|
our concentration of credit risk, and the ability to mitigate that risk using third parties, and the risk of inflation.
|
| |
Years ended December 31,
| ||||
| |
2021
| | |
2020
| |
| |
(in thousands)
| ||||
Monthly Recurring Revenue
| | |
$102,022
| | |
$82,611
|
Gross Merchandise Volume
| | |
$175,361,814
| | |
$119,577,147
|
| |
Years ended December 31,
| |||||||
| |
2021
| | |
2020
| | |
2019
| |
| |
(in thousands, except share and per share data)
| |||||||
Revenues: | | | | | | | |||
Subscription solutions
| | |
$1,342,334
| | |
$908,757
| | |
$642,241
|
Merchant solutions
| | |
3,269,522
| | |
2,020,734
| | |
935,932
|
| |
4,611,856
| | |
2,929,491
| | |
1,578,173
| |
Cost of revenues(1)(2): | | | | | | | |||
Subscription solutions
| | |
264,351
| | |
193,532
| | |
128,155
|
Merchant solutions
| | |
1,866,361
| | |
1,194,439
| | |
584,375
|
| |
2,130,712
| | |
1,387,971
| | |
712,530
| |
Gross profit
| | |
2,481,144
| | |
1,541,520
| | |
865,643
|
Operating expenses: | | | | | | | |||
Sales and marketing(1)(2) | | |
901,557
| | |
602,048
| | |
472,841
|
Research and development(1)(2) | | |
854,383
| | |
552,127
| | |
355,015
|
General and administrative(1) | | |
374,844
| | |
245,343
| | |
153,765
|
Transaction and loan losses
| | |
81,717
| | |
51,849
| | |
25,169
|
Total operating expenses
| | |
2,212,501
| | |
1,451,367
| | |
1,006,790
|
Income (loss) from operations
| | |
268,643
| | |
90,153
| | |
(141,147)
|
Other income, net
| | |
2,871,949
| | |
150,211
| | |
45,332
|
Income (loss) before income taxes
| | |
3,140,592
| | |
240,364
| | |
(95,815)
|
(Provision for) recovery of income taxes
| | |
(225,933)
| | |
79,145
| | |
(29,027)
|
Net income (loss)
| | |
$2,914,659
| | |
$319,509
| | |
$(124,842)
|
Net income (loss) per share attributable to shareholders: | | | | | | | |||
Basic
| | |
$23.38
| | |
$2.67
| | |
$(1.10)
|
Diluted
| | |
$22.90
| | |
$2.59
| | |
$(1.10)
|
Shares used to compute net income (loss) per share attributable to shareholders: | | | | | | | |||
Basic
| | |
124,658,891
| | |
119,569,705
| | |
113,026,424
|
Diluted
| | |
127,364,735
| | |
123,463,274
| | |
113,026,424
|
(1) |
Includes stock-based compensation expense and related payroll taxes as follows:
|
| |
Years ended December 31,
| |||||||
| |
2021
| | |
2020
| | |
2019
| |
| |
(in thousands)
| |||||||
Cost of revenues
| | |
$7,642
| | |
$7,472
| | |
$4,090
|
Sales and marketing
| | |
47,283
| | |
46,390
| | |
38,167
|
Research and development
| | |
250,787
| | |
188,249
| | |
104,645
|
General and administrative
| | |
91,337
| | |
52,195
| | |
29,861
|
| |
$397,049
| | |
$294,306
| | |
$176,763
|
(2) |
Includes amortization of acquired intangibles as follows:
|
| |
Years ended December 31,
| |||||||
| |
2021
| | |
2020
| | |
2019
| |
| |
(in thousands)
| |||||||
Cost of revenues
| | |
$20,399
| | |
$19,488
| | |
$9,624
|
| |
Years ended December 31,
| |||||||
| |
2021
| | |
2020
| | |
2019
| |
| |
(in thousands)
| |||||||
Sales and marketing
| | |
1,544
| | |
1,548
| | |
283
|
Research and development
| | |
206
| | |
233
| | |
232
|
| |
$22,149
| | |
$21,269
| | |
$10,139
|
| |
Years ended December 31,
| |||||||
| |
2021
| | |
2020
| | |
2019
| |
Revenues: | | | | | | | |||
Subscription solutions
| | |
29.1%
| | |
31.0%
| | |
40.7%
|
Merchant solutions
| | |
70.9%
| | |
69.0%
| | |
59.3%
|
| |
100.0%
| | |
100.0%
| | |
100.0%
| |
Cost of revenues: | | | | | | | |||
Subscription solutions
| | |
5.7%
| | |
6.6%
| | |
8.1%
|
Merchant solutions
| | |
40.5%
| | |
40.8%
| | |
37.0%
|
| |
46.2%
| | |
47.4%
| | |
45.1%
| |
Gross profit
| | |
53.8%
| | |
52.6%
| | |
54.9%
|
Operating expenses: | | | | | | | |||
Sales and marketing
| | |
19.5%
| | |
20.6%
| | |
30.0%
|
Research and development
| | |
18.5%
| | |
18.8%
| | |
22.5%
|
General and administrative
| | |
8.1%
| | |
8.4%
| | |
9.7%
|
Transaction and loan losses
| | |
1.8%
| | |
1.8%
| | |
1.6%
|
Total operating expenses
| | |
48.0%
| | |
49.5%
| | |
63.8%
|
Income (loss) from operations
| | |
5.8%
| | |
3.1%
| | |
(8.9)%
|
Other income, net
| | |
62.3%
| | |
5.1%
| | |
2.9%
|
Income (loss) before income taxes
| | |
68.1%
| | |
8.2%
| | |
(6.0)%
|
(Provision for) recovery of income taxes
| | |
(4.9)%
| | |
2.7%
| | |
(1.9)%
|
Net income (loss)
| | |
63.2%
| | |
10.9%
| | |
(7.9)%
|
| |
Years ended December 31,
| |||||||
| |
2021
| | |
2020
| | |
2019
| |
| |
(in thousands)
| |||||||
Revenues: | | | | | | | |||
North America | | | | | | | |||
Canada
| | |
$316,699
| | |
$192,721
| | |
$96,168
|
United States
| | |
2,973,934
| | |
1,954,105
| | |
1,079,520
|
EMEA
| | |
799,602
| | |
454,269
| | |
224,561
|
APAC
| | |
467,009
| | |
292,240
| | |
157,241
|
Latin America
| | |
54,612
| | |
36,156
| | |
20,683
|
Total Revenues
| | |
$4,611,856
| | |
$2,929,491
| | |
$1,578,173
|
| |
Years ended December 31,
| |||||||
| |
2021
| | |
2020
| | |
2019
| |
Revenues: | | | | | | | |||
North America | | | | | | | |||
Canada
| | |
6.9%
| | |
6.6%
| | |
6.1%
|
United States
| | |
64.5%
| | |
66.7%
| | |
68.4%
|
EMEA
| | |
17.3%
| | |
15.5%
| | |
14.3%
|
APAC
| | |
10.1%
| | |
10.0%
| | |
9.9%
|
Latin America
| | |
1.2%
| | |
1.2%
| | |
1.3%
|
Total Revenues
| | |
100.0%
| | |
100.0%
| | |
100.0%
|
| |
Years ended December 31,
| | |
2021 vs 2020
% Change
| | |
2020 vs 2019
% Change
| |||||||
| |
2021
| | |
2020
| | |
2019
| | ||||||
| |
(in thousands, except percentages)
| |||||||||||||
Revenues: | | | | | | | | | | | |||||
Subscription solutions
| | |
$1,342,334
| | |
$908,757
| | |
$642,241
| | |
47.7%
| | |
41.5%
|
Merchant solutions
| | |
3,269,522
| | |
2,020,734
| | |
935,932
| | |
61.8%
| | |
115.9%
|
Total revenues
| | |
$4,611,856
| | |
$2,929,491
| | |
$1,578,173
| | |
57.4%
| | |
85.6%
|
Percentage of revenues: | | | | | | | | | | | |||||
Subscription solutions
| | |
29.1%
| | |
31.0%
| | |
40.7%
| | | | | ||
Merchant solutions
| | |
70.9%
| | |
69.0%
| | |
59.3%
| | | | | ||
| |
100.0%
| | |
100.0%
| | |
100.0%
| | | | |
| |
Years ended December 31,
| | |
2021 vs 2020
% Change
| | |
2020 vs 2019
% Change
| |||||||
| |
2021
| | |
2020
| | |
2019
| | ||||||
| |
(in thousands, except percentages)
| |||||||||||||
Cost of revenues: | | | | | | | | | | | |||||
Cost of subscription solutions
| | |
$264,351
| | |
$193,532
| | |
$128,155
| | |
36.6%
| | |
51.0%
|
Cost of merchant solutions
| | |
1,866,361
| | |
1,194,439
| | |
584,375
| | |
56.3%
| | |
104.4%
|
Total cost of revenues
| | |
$2,130,712
| | |
$1,387,971
| | |
$712,530
| | |
53.5%
| | |
94.8%
|
Percentage of revenues: | | | | | | | | | | | |||||
Cost of subscription solutions
| | |
5.7%
| | |
6.6%
| | |
8.1%
| | | | | ||
Cost of merchant solutions
| | |
40.5%
| | |
40.8%
| | |
37.0%
| | | | | ||
| |
46.2%
| | |
47.4%
| | |
45.1%
| | | | |
| |
Years ended December 31,
| | |
2021 vs 2020
% Change
| | |
2020 vs 2019
% Change
| |||||||
| |
2021
| | |
2020
| | |
2019
| | ||||||
| |
(in thousands, except percentages)
| |||||||||||||
Gross profit
| | |
$2,481,144
| | |
$1,541,520
| | |
$865,643
| | |
61.0%
| | |
78.1%
|
Percentage of total revenues
| | |
53.8%
| | |
52.6%
| | |
54.9%
| | | | |
| |
Years ended December 31,
| | |
2021 vs 2020
% Change
| | |
2020 vs 2019
% Change
| |||||||
| |
2021
| | |
2020
| | |
2019
| | ||||||
| |
(in thousands, except percentages)
| |||||||||||||
Sales and marketing
| | |
$901,557
| | |
$602,048
| | |
$472,841
| | |
49.7%
| | |
27.3%
|
Percentage of total revenues
| | |
19.5%
| | |
20.6%
| | |
30.0%
| | | | |
| |
Years ended December 31,
| | |
2021 vs 2020
% Change
| | |
2020 vs 2019
% Change
| |||||||
| |
2021
| | |
2020
| | |
2019
| | ||||||
| |
(in thousands, except percentages)
| |||||||||||||
Research and development
| | |
$854,383
| | |
$552,127
| | |
$355,015
| | |
54.7%
| | |
55.5%
|
Percentage of total revenues
| | |
18.5%
| | |
18.8%
| | |
22.5%
| | | | |
| |
Years ended December 31,
| | |
2021 vs 2020
% Change
| | |
2020 vs 2019
% Change
| |||||||
| |
2021
| | |
2020
| | |
2019
| | ||||||
| |
(in thousands, except percentages)
| |||||||||||||
General and administrative
| | |
$374,844
| | |
$245,343
| | |
$153,765
| | |
52.8%
| | |
59.6%
|
Percentage of total revenues
| | |
8.1%
| | |
8.4%
| | |
9.7%
| | | | |
| |
Years ended December 31,
| | |
2021 vs 2020
% Change
| | |
2020 vs 2019
% Change
| |||||||
| |
2021
| | |
2020
| | |
2019
| | ||||||
| |
(in thousands, except percentages)
| |||||||||||||
Transaction and loan losses
| | |
$81,717
| | |
$51,849
| | |
$25,169
| | |
57.6%
| | |
106.0%
|
Percentage of total revenues
| | |
1.8%
| | |
1.8%
| | |
1.6%
| | | | |
| |
Years ended December 31,
| | |
2021 vs 2020
% Change
| | |
2020 vs 2019
% Change
| |||||||
| |
2021
| | |
2020
| | |
2019
| | ||||||
| |
(in thousands, except percentages)
| |||||||||||||
Other income, net
| | |
$2,871,949
| | |
$150,211
| | |
$45,332
| | |
*
| | |
*
|
* |
Not a meaningful comparison
|
| |
Years ended December 31,
| | |
2021 vs 2020
% Change
| | |
2020 vs 2019
% Change
| |||||||
| |
2021
| | |
2020
| | |
2019
| | ||||||
| |
(in thousands, except percentages)
| |||||||||||||
(Provision for) recovery of income taxes
| | |
$(225,933)
| | |
$79,145
| | |
$(29,027)
| | |
*
| | |
*
|
* |
Not a meaningful comparison
|
| |
Years ended December 31,
| | |
2021 vs 2020
% Change
| | |
2020 vs 2019
% Change
| |||||||
| |
2021
| | |
2020
| | |
2019
| | ||||||
| |
(in thousands, except share and per share data)
| |||||||||||||
Net income (loss)
| | |
$2,914,659
| | |
$319,509
| | |
$(124,842)
| | |
*
| | |
*
|
| | | | | | | | | | ||||||
Net income (loss) per share attributable to shareholders: | | | | | | | | | | | |||||
Basic
| | |
$23.38
| | |
$2.67
| | |
$(1.10)
| | |
*
| | |
*
|
Diluted
| | |
$22.90
| | |
$2.59
| | |
$(1.10)
| | |
*
| | |
*
|
Shares used to compute net income (loss) per share attributable to shareholders: | | | | | | | | | | | |||||
Basic
| | |
124,658,891
| | |
119,569,705
| | |
113,026,424
| | |
*
| | |
*
|
Diluted
| | |
127,364,735
| | |
123,463,274
| | |
113,026,424
| | |
*
| | |
*
|
* |
Not a meaningful comparison
|
| |
Three months ended December 31,
| ||||
| |
2021
| | |
2020
| |
| |
(in thousands, except share and per
share data)
| ||||
Revenues: | | | | | ||
Subscription solutions
| | |
351,208
| | |
279,440
|
Merchant solutions
| | |
1,028,816
| | |
698,304
|
| |
1,380,024
| | |
977,744
| |
Cost of revenues(1)(2): | | | | | ||
Subscription solutions
| | |
75,587
| | |
59,250
|
Merchant solutions
| | |
611,778
| | |
414,106
|
| |
687,365
| | |
473,356
| |
Gross profit
| | |
692,659
| | |
504,388
|
Operating expenses: | | | | | ||
Sales and marketing(1)(2) | | |
275,475
| | |
154,728
|
Research and development(1)(2) | | |
273,912
| | |
159,077
|
General and administrative(1) | | |
101,054
| | |
65,395
|
Transaction and loan losses
| | |
27,814
| | |
12,647
|
Total operating expenses
| | |
678,255
| | |
391,847
|
Income from operations
| | |
14,404
| | |
112,541
|
Other expenses, net
| | |
(503,123)
| | |
(2,788)
|
(Loss) income before income taxes
| | |
(488,719)
| | |
109,753
|
Recovery of income taxes
| | |
117,408
| | |
14,119
|
Net (loss) income
| | |
(371,311)
| | |
123,872
|
| | | | |||
Net (loss) income per share attributable to shareholders: | | | | | ||
Basic
| | |
$(2.95)
| | |
$1.01
|
Diluted
| | |
$(2.95)
| | |
$0.99
|
Shares used to compute net (loss) income per share attributable to shareholders: | | | | | ||
Basic
| | |
125,734,755
| | |
122,181,067
|
Diluted
| | |
125,734,755
| | |
125,454,919
|
(1) |
Includes stock-based compensation expense and related payroll taxes as follows:
|
| |
Three months ended December 31,
| ||||
| |
2021
| | |
2020
| |
| |
(in thousands)
| ||||
Cost of revenues
| | |
$1,995
| | |
$1,705
|
Sales and marketing
| | |
13,735
| | |
10,044
|
Research and development
| | |
74,932
| | |
54,262
|
General and administrative
| | |
18,735
| | |
16,480
|
| |
$109,397
| | |
$82,491
|
(2) |
Includes amortization of acquired intangibles as follows:
|
| |
Three months ended December 31,
| ||||
| |
2021
| | |
2020
| |
| |
(in thousands)
| ||||
Cost of revenues
| | |
$5,960
| | |
$4,532
|
Sales and marketing
| | |
386
| | |
384
|
Research and development
| | |
32
| | |
59
|
| |
$6,378
| | |
$4,975
|
| |
Three months ended December 31,
| | |
2021 vs. 2020
% Change
| ||||
| |
2021
| | |
2020
| | |||
| |
(in thousands, except percentages)
| |||||||
Revenues: | | | | | | | |||
Subscription solutions
| | |
$351,208
| | |
$279,440
| | |
25.7%
|
Merchant solutions
| | |
1,028,816
| | |
698,304
| | |
47.3%
|
Total revenues
| | |
$1,380,024
| | |
$977,744
| | |
41.1%
|
Percentage of revenues: | | | | | | | |||
Subscription solutions
| | |
25.4%
| | |
28.6%
| | | |
Merchant solutions
| | |
74.6%
| | |
71.4%
| | | |
| |
100.0%
| | |
100.0%
| | |
| |
Three months ended December 31,
| | |
2021 vs. 2020
% Change
| ||||
| |
2021
| | |
2020
| | |||
| |
(in thousands, except percentages)
| |||||||
Cost of revenues: | | | | | | | |||
Cost of subscription solutions
| | |
$75,587
| | |
$59,250
| | |
27.6%
|
Cost of merchant solutions
| | |
611,778
| | |
414,106
| | |
47.7%
|
Total cost of revenues
| | |
$687,365
| | |
$473,356
| | |
45.2%
|
Percentage of revenues: | | | | | | | |||
Cost of subscription solutions
| | |
5.5%
| | |
6.1%
| | | |
Cost of merchant solutions
| | |
44.3%
| | |
42.4%
| | | |
| |
49.8%
| | |
48.4%
| | |
| |
Three months ended December 31,
| | |
2021 vs. 2020
% Change
| ||||
| |
2021
| | |
2020
| | |||
| |
(in thousands, except percentages)
| |||||||
Gross profit
| | |
$692,659
| | |
$504,388
| | |
37.3%
|
Percentage of total revenues
| | |
50.2%
| | |
51.6%
| | |
| |
Three months ended December 31,
| | |
2021 vs. 2020
% Change
| ||||
| |
2021
| | |
2020
| | |||
| |
(in thousands, except percentages)
| |||||||
Sales and marketing
| | |
$275,475
| | |
$154,728
| | |
78.0%
|
Percentage of total revenues
| | |
20.0%
| | |
15.8%
| | |
| |
Three months ended December 31,
| | |
2021 vs. 2020
% Change
| ||||
| |
2021
| | |
2020
| | |||
| |
(in thousands, except percentages)
| |||||||
Research and development
| | |
$273,912
| | |
$159,077
| | |
72.2%
|
Percentage of total revenues
| | |
19.8%
| | |
16.3%
| | |
| |
Three months ended December 31,
| | |
2021 vs. 2020
% Change
| ||||
| |
2021
| | |
2020
| | |||
| |
(in thousands, except percentages)
| |||||||
General and administrative
| | |
$101,054
| | |
$65,395
| | |
54.5%
|
Percentage of total revenues
| | |
7.3%
| | |
6.7%
| | |
| |
Three months ended December 31,
| | |
2021 vs. 2020
% Change
| ||||
| |
2021
| | |
2020
| | |||
| |
(in thousands, except percentages)
| |||||||
Transaction and loan losses
| | |
$27,814
| | |
$12,647
| | |
119.9%
|
Percentage of total revenues
| | |
2.0%
| | |
1.3%
| | |
| |
Three months ended December 31,
| | |
2021 vs. 2020
% Change
| ||||
| |
2021
| | |
2020
| | |||
| |
(in thousands, except percentages)
| |||||||
Other expenses, net
| | |
$(503,123)
| | |
$(2,788)
| | |
*
|
* |
Not a meaningful comparison
|
| |
Three months ended December 31,
| | |
2021 vs. 2020
% Change
| ||||
| |
2021
| | |
2020
| | |||
| |
(in thousands, except percentages)
| |||||||
Recovery of income taxes
| | |
$117,408
| | |
$14,119
| | |
*
|
* |
Not a meaningful comparison
|
| |
Three months ended
| ||||||||||||||||||||||
| |
Dec 31,
2021
| | |
Sep 30,
2021
| | |
Jun 30,
2021
| | |
Mar 31,
2021
| | |
Dec 31,
2020
| | |
Sep 30,
2020
| | |
June 30,
2020
| | |
Mar 31,
2020
| |
| |
(in thousands, except per share data)
| ||||||||||||||||||||||
Revenues: | | | | | | | | | | | | | | | | | ||||||||
Subscription solutions
| | |
$351,208
| | |
$336,208
| | |
$334,237
| | |
$320,681
| | |
$279,440
| | |
$245,274
| | |
$196,434
| | |
$187,609
|
Merchant solutions
| | |
1,028,816
| | |
787,532
| | |
785,208
| | |
667,966
| | |
698,304
| | |
522,131
| | |
517,907
| | |
282,392
|
| |
1,380,024
| | |
1,123,740
| | |
1,119,445
| | |
988,647
| | |
977,744
| | |
767,405
| | |
714,341
| | |
470,001
| |
Cost of revenues:(1)(2) | | | | | | | | | | | | | | | | | ||||||||
Subscription solutions
| | |
75,587
| | |
67,355
| | |
63,027
| | |
58,382
| | |
59,250
| | |
52,170
| | |
44,400
| | |
37,712
|
Merchant solutions
| | |
611,778
| | |
447,476
| | |
435,558
| | |
371,549
| | |
414,106
| | |
310,087
| | |
294,907
| | |
175,339
|
| |
687,365
| | |
514,831
| | |
498,585
| | |
429,931
| | |
473,356
| | |
362,257
| | |
339,307
| | |
213,051
| |
Gross profit
| | |
692,659
| | |
608,909
| | |
620,860
| | |
558,716
| | |
504,388
| | |
405,148
| | |
375,034
| | |
256,950
|
Operating expenses: | | | | | | | | | | | | | | | | | ||||||||
Sales and marketing(1)(2) | | |
275,475
| | |
237,949
| | |
201,910
| | |
186,223
| | |
154,728
| | |
147,608
| | |
144,850
| | |
154,862
|
Research and development(1)(2) | | |
273,912
| | |
221,028
| | |
183,557
| | |
175,886
| | |
159,077
| | |
143,427
| | |
133,227
| | |
116,396
|
General and administrative(1) | | |
101,054
| | |
128,722
| | |
77,966
| | |
67,102
| | |
65,395
| | |
51,799
| | |
83,307
| | |
44,842
|
Transaction and loan losses
| | |
27,814
| | |
25,311
| | |
17,986
| | |
10,606
| | |
12,647
| | |
11,753
| | |
13,366
| | |
14,083
|
Total operating expenses
| | |
678,255
| | |
613,010
| | |
481,419
| | |
439,817
| | |
391,847
| | |
354,587
| | |
374,750
| | |
330,183
|
Income (loss) from operations
| | |
14,404
| | |
(4,101)
| | |
139,441
| | |
118,899
| | |
112,541
| | |
50,561
| | |
284
| | |
(73,233)
|
Other (expenses) income, net
| | |
(503,123)
| | |
1,344,553
| | |
779,874
| | |
1,250,645
| | |
(2,788)
| | |
135,806
| | |
4,084
| | |
13,109
|
(Loss) income before income taxes
| | |
(488,719)
| | |
1,340,452
| | |
919,315
| | |
1,369,544
| | |
109,753
| | |
186,367
| | |
4,368
| | |
(60,124)
|
Recovery of (provision for) income taxes
| | |
117,408
| | |
(192,020)
| | |
(40,222)
| | |
(111,099)
| | |
14,119
| | |
4,701
| | |
31,630
| | |
28,695
|
Net (loss) income
| | |
$(371,311)
| | |
$1,148,432
| | |
$879,093
| | |
$1,258,445
| | |
$123,872
| | |
$191,068
| | |
$35,998
| | |
$(31,429)
|
Net (loss) income per share attributable to shareholders: | | | | | | | | | | | | | | | | | ||||||||
Basic
| | |
$(2.95)
| | |
$9.18
| | |
$7.06
| | |
$10.21
| | |
$1.01
| | |
$1.59
| | |
$0.30
| | |
$(0.27)
|
Diluted
| | |
$(2.95)
| | |
$9.00
| | |
$6.90
| | |
$9.94
| | |
$0.99
| | |
$1.54
| | |
$0.29
| | |
$(0.27)
|
(1) |
Includes stock-based compensation expense and related payroll taxes as follows:
|
| |
Three months ended
| ||||||||||||||||||||||
| |
Dec 31,
2021
| | |
Sep 30,
2021
| | |
Jun 30,
2021
| | |
Mar 31,
2021
| | |
Dec 31,
2020
| | |
Sep 30,
2020
| | |
June 30,
2020
| | |
Mar 31,
2020
| |
| |
(in thousands)
| ||||||||||||||||||||||
Cost of revenues
| | |
$1,995
| | |
$1,987
| | |
$1,809
| | |
$1,851
| | |
$1,705
| | |
$2,914
| | |
$1,529
| | |
$1,324
|
Sales and marketing
| | |
13,735
| | |
11,673
| | |
10,990
| | |
10,885
| | |
10,044
| | |
11,481
| | |
12,431
| | |
12,434
|
Research and development
| | |
74,932
| | |
63,840
| | |
55,988
| | |
56,027
| | |
54,262
| | |
47,741
| | |
49,825
| | |
36,421
|
General and administrative
| | |
18,735
| | |
30,638
| | |
23,759
| | |
18,205
| | |
16,480
| | |
13,266
| | |
12,682
| | |
9,767
|
| |
$109,397
| | |
$108,138
| | |
$92,546
| | |
$86,968
| | |
$82,491
| | |
$75,402
| | |
$76,467
| | |
$59,946
|
(2) |
Includes amortization of acquired intangibles as follows:
|
| |
Three months ended
| ||||||||||||||||||||||
| |
Dec 31,
2021
| | |
Sep 30,
2021
| | |
Jun 30,
2021
| | |
Mar 31,
2021
| | |
Dec 31,
2020
| | |
Sep 30,
2020
| | |
June 30,
2020
| | |
Mar 31,
2020
| |
| |
(in thousands)
| ||||||||||||||||||||||
Cost of revenues
| | |
$5,960
| | |
$5,536
| | |
$4,372
| | |
$4,531
| | |
$4,532
| | |
$4,531
| | |
$4,856
| | |
$5,569
|
Sales and marketing
| | |
386
| | |
386
| | |
386
| | |
386
| | |
384
| | |
388
| | |
388
| | |
388
|
Research and development
| | |
32
| | |
58
| | |
58
| | |
58
| | |
59
| | |
58
| | |
58
| | |
58
|
| |
$6,378
| | |
$5,980
| | |
$4,816
| | |
$4,975
| | |
$4,975
| | |
$4,977
| | |
$5,302
| | |
$6,015
|
| |
Three months ended
| ||||||||||||||||||||||
| |
Dec 31,
2021
| | |
Sep 30,
2021
| | |
Jun 30,
2021
| | |
Mar 31,
2021
| | |
Dec 31,
2020
| | |
Sep 30,
2020
| | |
June 30,
2020
| | |
Mar 31,
2020
| |
Revenues: | | | | | | | | | | | | | | | | | ||||||||
Subscription solutions
| | |
25.4%
| | |
29.9%
| | |
29.9%
| | |
32.4%
| | |
28.6%
| | |
32.0%
| | |
27.5%
| | |
39.9%
|
Merchant solutions
| | |
74.6%
| | |
70.1%
| | |
70.1%
| | |
67.6%
| | |
71.4%
| | |
68.0%
| | |
72.5%
| | |
60.1%
|
| |
100.0%
| | |
100.0%
| | |
100.0%
| | |
100.0%
| | |
100.0%
| | |
100.0%
| | |
100.0%
| | |
100.0%
| |
Cost of revenues: | | | | | | | | | | | | | | | | | ||||||||
Subscription solutions
| | |
5.5%
| | |
6.0%
| | |
5.6%
| | |
5.9%
| | |
6.1%
| | |
6.8%
| | |
6.2%
| | |
8.0%
|
Merchant solutions
| | |
44.3%
| | |
39.8%
| | |
38.9%
| | |
37.6%
| | |
42.4%
| | |
40.4%
| | |
41.3%
| | |
37.3%
|
| |
49.8%
| | |
45.8%
| | |
44.5%
| | |
43.4%
| | |
48.5%
| | |
47.2%
| | |
47.5%
| | |
45.3%
| |
Gross profit
| | |
50.2%
| | |
54.2%
| | |
55.5%
| | |
56.5%
| | |
51.6%
| | |
52.8%
| | |
52.5%
| | |
54.7%
|
Operating expenses: | | | | | | | | | | | | | | | | | ||||||||
Sales and marketing
| | |
20.0%
| | |
21.2%
| | |
18.0%
| | |
18.8%
| | |
15.8%
| | |
19.2%
| | |
20.3%
| | |
32.9%
|
Research and development
| | |
19.8%
| | |
19.7%
| | |
16.4%
| | |
17.8%
| | |
16.3%
| | |
18.7%
| | |
18.7%
| | |
24.8%
|
General and administrative
| | |
7.3%
| | |
11.5%
| | |
7.0%
| | |
6.8%
| | |
6.7%
| | |
6.7%
| | |
11.7%
| | |
9.5%
|
Transaction and loan losses
| | |
2.0%
| | |
2.3%
| | |
1.6%
| | |
1.1%
| | |
1.3%
| | |
1.5%
| | |
1.9%
| | |
3.0%
|
Total operating expenses
| | |
49.1%
| | |
54.6%
| | |
43.0%
| | |
44.5%
| | |
40.1%
| | |
46.2%
| | |
52.5%
| | |
70.2%
|
Income (loss) from operations
| | |
1.0%
| | |
(0.4)%
| | |
12.5%
| | |
12.0%
| | |
11.5%
| | |
6.6%
| | |
0.0%
| | |
(15.6)%
|
Other (expenses) income, net
| | |
(36.5)%
| | |
119.6%
| | |
69.7%
| | |
126.5%
| | |
(0.3)%
| | |
17.7%
| | |
0.6%
| | |
2.8%
|
(Loss) income before income taxes
| | |
(35.4)%
| | |
119.3%
| | |
82.1%
| | |
138.5%
| | |
11.2%
| | |
24.3%
| | |
0.6%
| | |
(12.8)%
|
Recovery of (provision for) income taxes
| | |
8.5%
| | |
(17.1)%
| | |
(3.6)%
| | |
(11.2)%
| | |
1.4%
| | |
0.6%
| | |
4.4%
| | |
6.1%
|
Net (loss) income
| | |
(26.9)%
| | |
102.2%
| | |
78.5%
| | |
127.3%
| | |
12.7%
| | |
24.9%
| | |
5.0%
| | |
(6.7)%
|
| |
December 31, 2021
| | |
December 31, 2020
| |
| |
(in thousands)
| ||||
Cash, cash equivalents and marketable securities
| | |
$7,768,093
| | |
$6,387,967
|
Total assets
| | |
13,340,172
| | |
7,762,905
|
Total liabilities
| | |
2,206,831
| | |
1,362,182
|
Total non-current liabilities
| | |
1,504,098
| | |
923,850
|
| |
Years ended December 31,
| ||||
| |
2021
| | |
2020
| |
| |
(in thousands)
| ||||
Cash, cash equivalents and marketable securities (end of year)
| | |
$7,768,093
| | |
$6,387,967
|
Net cash provided by (used in): | | | | | ||
Operating activities
| | |
$504,428
| | |
$424,958
|
Investing activities
| | |
(2,347,790)
| | |
(1,931,848)
|
Financing activities
| | |
1,649,762
| | |
3,557,350
|
Effect of foreign exchange on cash and cash equivalents
| | |
(7,005)
| | |
3,221
|
Net (decrease) increase in cash and cash equivalents
| | |
(200,605)
| | |
2,053,681
|
Change in marketable securities
| | |
1,580,731
| | |
1,879,092
|
Net increase in cash, cash equivalents and marketable securities
| | |
$1,380,126
| | |
$3,932,773
|
| |
Payments Due by Period
| |||||||||||||
| |
Less Than
1 Year
| | |
1 to 3 Years
| | |
3 to 5 Years
| | |
More Than
5 Years
| | |
Total
| |
| |
(in thousands)
| |||||||||||||
Convertible senior notes(1) | | |
$1,150
| | |
$2,300
| | |
$921,150
| | |
$-
| | |
$924,600
|
Bank indebtedness
| | |
-
| | |
-
| | |
-
| | |
-
| | |
-
|
Operating lease and unconditional purchase obligations(2) | | |
125,935
| | |
175,562
| | |
114,394
| | |
366,329
| | |
782,220
|
Total contractual obligations
| | |
$127,085
| | |
$177,862
| | |
$1,035,544
| | |
$366,329
| | |
$1,706,820
|
(1) |
$920,000 of the payments due in three to five years may be settled in Class A subordinate voting shares instead of cash, at our option.
|
(2) |
Consists of payment obligations under our office, warehouse and commercial space leases as well as other unconditional purchase obligations.
|
| |
Years ended December 31,
| ||||||||||
| |
2021
| | |
2020
| |||||||
| |
GAAP Amounts
As Reported
| | |
Exchange Rate
Effect(1) | | |
At Prior Year
Effective Rates(2) | | |
GAAP Amounts
As Reported
| |
| |
(in thousands)
| ||||||||||
Revenues
| | |
$4,611,856
| | |
$(6,788)
| | |
$4,605,068
| | |
$2,929,491
|
Cost of revenues
| | |
(2,130,712)
| | |
6,807
| | |
(2,123,905)
| | |
(1,387,971)
|
Operating expenses
| | |
(2,212,501)
| | |
17,573
| | |
(2,194,928)
| | |
(1,451,367)
|
Income from operations
| | |
$268,643
| | |
$17,592
| | |
$286,235
| | |
$90,153
|
(1) |
Represents the increase or decrease in GAAP amounts reported resulting from using the comparative period's effective CAD-USD foreign exchange rates.
|
(2) |
Represents the outcome that would have resulted if the comparative period's effective CAD-USD foreign exchange rates are applied to the current reporting period.
|
•
|
Identify the contract with a customer;
|
•
|
Identify the performance obligations in the contract;
|
•
|
Determine the transaction price;
|
•
|
Allocate the transaction price; and
|
•
|
Recognize revenue when, or as, the Company satisfies a performance obligation.
|
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Disclaimer
Shopify Inc. published this content on 12 April 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 12 April 2022 11:51:10 UTC.