Shopify Inc 6-K, filed Jul 28, 2021

Shopify Inc. (SHOP)

6-K 2021-07-28 For: 2021-06-30

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Added on April 06, 2026

About this 6-K

Shopify Inc filed this 6-K on July 28, 2021.

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For the month of	July	2021
Commission File Number	001-37400
Shopify Inc.
(Translation of registrant’s name into English)
151 O’Connor Street, Ground Floor Ottawa, Ontario, Canada K2P 2L8
(Address of principal executive offices)


		As at
		June 30, 2021	December 31, 2020
	Note	$	$
Assets
Current assets
Cash and cash equivalents	4	2,364,670	2,703,597
Marketable securities	4	5,390,717	3,684,370
Trade and other receivables, net	6	153,400	120,752
Merchant cash advances, loans and related receivables, net	7	415,354	244,723
Income taxes receivable	15	56,943	56,067
Other current assets		79,082	68,247
		8,460,166	6,877,756
Long-term assets
Property and equipment, net	8	86,671	92,104
Intangible assets, net		124,203	135,676
Right-of-use assets, net	8	124,342	119,373
Deferred tax assets	15	52,110	52,677
Equity and other investments	5	2,796,321	173,454
Goodwill	9	311,865	311,865
		3,495,512	885,149
Total assets		11,955,678	7,762,905
Liabilities and shareholders’ equity
Current liabilities
Accounts payable and accrued liabilities		289,537	300,795
Income taxes payable	15	22,544	19,677
Deferred revenue	6	183,160	107,809
Lease liabilities	8	15,842	10,051

		511,083	438,332
Long-term liabilities
Deferred revenue	6	135,321	21,006
Lease liabilities	8	151,162	144,836
Convertible senior notes	3, 10	909,791	758,008
Deferred tax liabilities	15	127,777	—
		1,324,051	923,850
Commitments and contingencies	8, 12
Shareholders’ equity
Common stock, unlimited Class A subordinate voting shares authorized, 113,198,847 and 110,929,570 issued and outstanding; unlimited Class B multiple voting shares authorized, 11,564,593 and 11,599,301 issued and outstanding	13	7,837,824	6,115,232
Additional paid-in capital		118,396	261,436
Accumulated other comprehensive income	14	3,303	8,770
Retained earnings		2,161,021	15,285
Total shareholders’ equity		10,120,544	6,400,723
Total liabilities and shareholders’ equity		11,955,678	7,762,905


		Three months ended				Six months ended
		June 30, 2021		June 30, 2020		June 30, 2021		June 30, 2020
	Note	$		$		$		$
Revenues
Subscription solutions		334,237		196,434		654,918		384,043
Merchant solutions		785,208		517,907		1,453,174		800,299
		1,119,445		714,341		2,108,092		1,184,342
Cost of revenues
Subscription solutions		63,027		44,400		121,409		82,112
Merchant solutions		435,558		294,907		807,107		470,246
		498,585		339,307		928,516		552,358
Gross profit		620,860		375,034		1,179,576		631,984
Operating expenses
Sales and marketing		201,910		144,850		388,133		299,712
Research and development		183,557		133,227		359,443		249,623
General and administrative		77,966		83,307		145,068		128,149
Transaction and loan losses		17,986		13,366		28,592		27,449
Total operating expenses		481,419		374,750		921,236		704,933
Income (loss) from operations		139,441		284		258,340		(72,949)
Other income, net
Interest income		3,092		5,952		5,922		16,419

Interest expense		(870)		—		(1,743)		—
Net unrealized gain on equity and other investments	5	777,749		—		2,028,693		—
Foreign exchange (loss) gain		(97)		(1,868)		(2,353)		774
Total other income, net		779,874		4,084		2,030,519		17,193
Income (loss) before income taxes		919,315		4,368		2,288,859		(55,756)
(Provision for) recovery of income taxes	15	(40,222)		31,630		(151,321)		60,325
Net income		879,093		35,998		2,137,538		4,569

Net income per share attributable to shareholders:
Basic	16	$	7.06	$	0.30	$	17.25	$	0.04
Diluted	16	$	6.90	$	0.29	$	16.83	$	0.04

Shares used to compute net income per share attributable to shareholders:
Basic	16	124,547,501		118,740,645		123,899,177		117,773,612
Diluted	16	127,475,063		122,749,980		127,075,352		121,919,207

Other comprehensive (loss) income
Unrealized (loss) gain on cash flow hedges	14	(3,733)		14,495		(7,439)		(8,136)
Tax effect on unrealized (loss) gain on cash flow hedges	14	990		(3,842)		1,972		2,156
Comprehensive income (loss)		876,350		46,651		2,132,071		(1,411)


		Common Stock		Additional Paid-In Capital $	Accumulated Other Comprehensive Income (Loss) $	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			409,965	30,753	(11,326)	—	—		19,427
Stock-based compensation			—	—	53,752	—	—		53,752
Vesting of restricted share units			385,757	46,370	(46,370)	—	—		—
Net loss and comprehensive loss for the period			—	—	—	(16,633)	(31,429)		(48,062)
As at March 31, 2020			117,224,697	3,333,407	58,684	(15,587)	(335,653)		3,040,851
Exercise of stock options			454,851	30,272	(12,104)	—	—		18,168
Stock-based compensation			—	—	62,324	—	—		62,324
Vesting of restricted share units			288,428	35,326	(35,326)	—	—		—
Issuance of Class A subordinate voting shares, net of offering costs of $26,804, net of tax of $1,501	13, 17		2,127,500	1,462,446	—	—	—		1,462,446
Net income and comprehensive income for the period			—	—	—	10,653	35,998		46,651
As at June 30, 2020			120,095,476	4,861,451	73,578	(4,934)	(299,655)		4,630,440


		Common Stock		Additional Paid-In Capital $	Accumulated Other Comprehensive Income $	Retained Earnings $	Total $
	Note		Shares					Amount $
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			349,730	35,681	(12,756)	—	—		22,925
Stock-based compensation			—	—	69,156	—	—		69,156
Vesting of restricted share units			268,711	66,113	(66,113)	—	—		—
Issuance of Class A subordinate voting shares, net of offering costs of $7,742, net of tax of $2,790	13		1,180,000	1,543,958	—	—	—		1,543,958
Net income and comprehensive income for the period			—	—	—	(2,724)	1,258,445		1,255,721
As at March 31, 2021			124,327,312	7,760,984	92,913	6,046	1,281,928		9,141,871
Exercise of stock options			268,958	31,828	(11,463)	—	—		20,365
Stock-based compensation			—	—	81,958	—	—		81,958
Vesting of restricted share units			167,170	45,012	(45,012)	—	—		—
Net income and comprehensive income for the period			—	—	—	(2,743)	879,093		876,350
As at June 30, 2021			124,763,440	7,837,824	118,396	3,303	2,161,021		10,120,544



	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	25,425	25,543	—	—	—	—
Corporate bonds and commercial paper	62,170	62,255	—	—	—	—

Marketable securities:
U.S. term deposits	1,125,000	1,127,362	—	—	—	—
U.S. federal bonds and agency securities	933,488	936,365	—	—	—	—
Canadian federal bonds and agency securities	902,008	904,066	—	—	—	—
Corporate bonds and commercial paper	—	—	2,430,221	2,436,615	—	—
Derivative assets:
Foreign exchange forward contracts	—	—	10,678	10,678	—	—
Equity and other investments:
Equity and other investments with readily determinable fair values (see note 5)	1,865,826	1,865,826	—	—	508,217	508,217

Liabilities:
Derivative liabilities:
Foreign exchange forward contracts	—	—	1,503	1,503	—	—


	June 30, 2021	December 31, 2020	January 1, 2020
	$	$	$
Unbilled revenues, net	71,297	50,073	31,629
Indirect taxes receivable	41,506	45,961	36,821
Trade receivables, net	20,581	13,449	9,660
Accrued interest	13,395	7,563	5,754
Other receivables	6,621	3,706	6,665
	153,400	120,752	90,529


Fiscal Year			Operating Leases $

Remainder of 2021			19,854
2022			41,524
2023			48,342
2024			56,056
2025			59,128
Thereafter			426,594
Total future minimum payments			651,498
Minimum payments related to leases that have not yet commenced			(182,627)
Minimum payments related to variable lease payments, including non-lease components			(268,080)
Imputed interest			(33,787)
Total lease liabilities			167,004


	June 30, 2021	December 31, 2020
	$	$
Principal	920,000	920,000
Unamortized offering costs (1)	(10,209)	(9,434)
Unamortized discounts (1)	—	(152,558)
Net carrying amount	909,791	758,008


	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, 2020	2,489,277	103.76	5.45	2,559,442	—	1,112,967	377.08
Stock options granted	129,853	1,266.08	—	—	530.44	—	—
Stock options exercised	(618,688)	69.97	—	—	—	—	—
Stock options forfeited	(48,437)	822.14	—	—	—	—	—
RSUs granted	—	—	—	—	—	232,032	1,220.23
RSUs settled	—	—	—	—	—	(435,881)	254.94
RSUs forfeited	—	—	—	—	—	(77,650)	537.16
June 30, 2021	1,952,005	173.97	5.21	2,512,252	—	831,468	661.45

Stock options exercisable as of June 30, 2021	1,544,504	69.19	4.49	2,149,619


	Three months ended June 30,			Six months ended June 30,
		2021		2020		2021		2020
	(in thousands)			(in thousands)
Monthly Recurring Revenue		$	95,112	$	57,027	$	95,112	$	57,027
Gross Merchandise Volume		$	42,193,370	$	30,105,466	$	79,540,256	$	47,520,718


	Three months ended June 30,						2021 vs. 2020		Six months ended June 30,						2021 vs. 2020
	2021			2020			% Change		2021			2020			% Change
	(in thousands, except percentages)
Revenues:
Subscription solutions	$	334,237		$	196,434		70.2	%	$	654,918		$	384,043		70.5	%
Merchant solutions	785,208			517,907			51.6	%	1,453,174			800,299			81.6	%
Total revenues	$	1,119,445		$	714,341		56.7	%	$	2,108,092		$	1,184,342		78.0	%
Percentage of revenues:
Subscription solutions	29.9		%	27.5		%			31.1		%	32.4		%
Merchant solutions	70.1		%	72.5		%			68.9		%	67.6		%
	100.0		%	100.0		%			100.0		%	100.0		%


	Three months ended
	Jun 30, 2021		Mar 31, 2021		Dec 31, 2020		Sep 30, 2020		June 30, 2020		Mar 31, 2020		Dec 31, 2019		Sep 30, 2019
	(in thousands, except per share data)
Revenues:
Subscription solutions	$	334,237	$	320,681	$	279,440	$	245,274	$	196,434	$	187,609	$	183,166	$	165,577
Merchant solutions	785,208		667,966		698,304		522,131		517,907		282,392		321,994		224,975
	1,119,445		988,647		977,744		767,405		714,341		470,001		505,160		390,552
Cost of revenues:(1)(2)
Subscription solutions	63,027		58,382		59,250		52,170		44,400		37,712		37,369		33,263
Merchant solutions	435,558		371,549		414,106		310,087		294,907		175,339		203,900		140,593
	498,585		429,931		473,356		362,257		339,307		213,051		241,269		173,856
Gross profit	620,860		558,716		504,388		405,148		375,034		256,950		263,891		216,696
Operating expenses:
Sales and marketing(1)(2)	201,910		186,223		154,728		147,608		144,850		154,862		132,063		116,546
Research and development(1)(2)	183,557		175,886		159,077		143,427		133,227		116,396		102,753		90,387
General and administrative(1)	77,966		67,102		65,395		51,799		83,307		44,842		50,518		38,022
Transaction and loan losses	17,986		10,606		12,647		11,753		13,366		14,083		8,636		7,399
Total operating expenses	481,419		439,817		391,847		354,587		374,750		330,183		293,970		252,354
Income (loss) from operations	139,441		118,899		112,541		50,561		284		(73,233)		(30,079)		(35,658)




Other income (expenses), net	779,874		1,250,645		(2,788)		135,806		4,084		13,109		11,539		11,212
Income (loss) before income taxes	919,315		1,369,544		109,753		186,367		4,368		(60,124)		(18,540)		(24,446)
(Provision for) recovery of income taxes	(40,222)		(111,099)		14,119		4,701		31,630		28,695		19,311		(48,338)
Net income (loss)	$	879,093	$	1,258,445	$	123,872	$	191,068	$	35,998	$	(31,429)	$	771	$	(72,784)


Net income (loss) per share attributable to shareholders:
Basic	$	7.06	$	10.21	$	1.01	$	1.59	$	0.30	$	(0.27)	$	0.01	$	(0.64)
Diluted	$	6.90	$	9.94	$	0.99	$	1.54	$	0.29	$	(0.27)	$	0.01	$	(0.64)


	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	$	921,725	$	—	$	925,175
Bank indebtedness	—		—		—		—		—
Operating lease and unconditional purchase obligations(2)	96,360		203,025		118,530		396,897		814,812
Total contractual obligations	$	97,510	$	205,325	$	1,040,255	$	396,897	$	1,739,987


Form 20-F						Form 40-F			X


	Three months ended
	June 30, 2021			June 30, 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	1,119,445	2,586	1,122,031	714,341	2,354	716,695
Cost of revenues	(498,585)	(3,168)	(501,753)	(339,307)	(2,065)	(341,372)
Operating expenses	(481,419)	(15,268)	(496,687)	(374,750)	(10,175)	(384,925)
Income (loss) from operations	139,441	(15,850)	123,591	284	(9,886)	(9,602)


	Six months ended
	June 30, 2021			June 30, 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	2,108,092	4,376	2,112,468	1,184,342	3,300	1,187,642
Cost of revenues	(928,516)	(5,783)	(934,299)	(552,358)	(3,342)	(555,700)
Operating expenses	(921,236)	(30,581)	(951,817)	(704,933)	(21,944)	(726,877)
Income (loss) from operations	258,340	(31,988)	226,352	(72,949)	(21,986)	(94,935)


	Three months ended		Six months ended
	June 30, 2021	June 30, 2020	June 30, 2021	June 30, 2020
	$	$	$	$
Balance, beginning of the period	137,142	68,464	128,815	62,660
Deferral of revenue	233,853	39,360	260,754	50,517
Recognition of deferred revenue	(52,514)	(33,503)	(71,088)	(38,856)
Balance, end of the period	318,481	74,321	318,481	74,321

Current portion			183,160	67,455
Long term portion			135,321	6,866
			318,481	74,321