SHOP beat EPS estimates (0.32 vs 0.28)

Transcript

1. #1prepared remarks

   EX-99.1 2 exhibit991pressreleaseq220.htm EX-99.1

2. #2Harley Finkelstein · President of Shopify

   This was a monster quarter: more than 30% growth in GMV AND revenue AND gross profit AND free cash flow,

3. #3prepared remarks

   (1) See endnotes below for definitions of GMV and MRR and additional information on constant currency, free cash flow, and free cash flow margin, which are non-GAAP financial measures and are rec onciled to the comparable GAAP measures in the non-GAAP reconciliations at the end of this press release. Please refer to the Condensed Consolidated Statements of Cash Flows for additional information on the presentation of cash flows in 2026 and 2025. 1

4. #4at the end of

   Forward-looking Statements

5. #5prepared remarks

   Quarterly Conference Call Shopify’s management team will hold a conference call to discuss its second-quarter results today, August 5, 2026, at 8:30 a.m. ET. The conference call will be webcast in the Investor Relations section of Shopify’s website at www.shopify.com/investors/events . An archived replay of the webcast will be available following the conclusion of the call. Shopify’s Form 10-Q for the quarter ended June 30, 2026, including the unaudited Condensed Consolidated Financial Statements and accompanying Notes, and Management's Discussion and Analysis, will be available on Shopify’s website at www.shopify.com and will be filed on EDGAR at www.sec.gov and on SEDAR+ at www.sedarplus.ca . About Shopify Shopify provides essential internet infrastructure for commerce. Shopify’s all-in-one platform makes it easier to start, run, and grow a business, powering sales online, in-store, and everywhere in between. Millions of businesses in 175+ countries use Shopify—from entrepreneurs to brands like Aldo, BarkBox, Carrier, Meta, SKIMS, Supreme, and Vuori. For more information, visit www.shopify.com . | | | | | | | | | | | | | | | CONTACT INVESTORS: | Shane Kleinstein | | CONTA…

6. #6prepared remarks

   Shopify Inc. Condensed Consolidated Statements of Operations (In US $ millions) | | | | | | | | | | | | | | | | | | Three months ended | | | | June 30, 2026 | | June 30, 2025 | | | | | | Revenues | | | | | | | | | Subscription solutions | 802 | | 656 | | | | | | Merchant solutions | 2,781 | | 2,024 | | | | | | | 3,583 | | 2,680 | | | | | | Cost of revenues | | | | | | | | | Subscription solutions | 163 | | 121 | | | | | | Merchant solutions | 1,712 | | 1,257 | | | | | | | 1,875 | | 1,378 | | | | | | Gross profit | 1,708 | | 1,302 | | | | | | Operating expenses | | | | | | | | | Sales and marketing | 498 | | 415 | | | | | | Research and development | 445 | | 394 | | | | | | General and administrative | 136 | | 122 | | | | | | Transaction and loan losses | 141 | | 80 | | | | | | | | | | | | | | | Total operating expenses | 1,220 | | 1,011 | | | | | | Operating income | 488 | | 291 | | | | | | Net other income, including taxes (2) | 1,014 | | 615 | | | | | | Net Income | 1,502 | | 906 | | | | | | less: equity investments, marked to market, net of taxes | 1,063 | | 568 | | | | | | Net income excluding the impact of equity investments (3) | 439 | | 338 | | | …

7. #7prepared remarks

   Shopify Inc. Condensed Consolidated Balance Sheets (In US $ millions) | | | | | | | | | | | | | | | | | June 30, 2026 | | December 31, 2025 | Assets | | | | Current assets | | | | Cash and cash equivalents | 1,656 | | | 1,545 | | Marketable securities | 3,291 | | | 4,233 | | Trade and other receivables, net | 466 | | | 500 | | Loans and merchant cash advances, net | 2,184 | | | 1,784 | | Other current assets | 219 | | | 234 | | | 7,816 | | | 8,296 | | Long-term assets | | | | | | | | | | | | | | | | Long-term assets (4) | 195 | | | 210 | | Deferred tax assets | 30 | | | 33 | | | | | | Long-term investments | 525 | | | 975 | | Equity and other investments | 4,854 | | | 4,582 | | Equity method investment | 559 | | | 602 | | Goodwill | 491 | | | 491 | | | 6,654 | | | 6,893 | | Total assets | 14,470 | | | 15,189 | | Liabilities and shareholders’ equity | | | | Liabilities | | | | | | | | | | | | | | | | | | | | Accounts payable | 575 | | | 570 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Deferred tax liabilities | 79 | | | 55 | | Other liabilities (5) | 1,132 | | | 1,091 | |…

8. #8prepared remarks

   Shopify Inc. Condensed Consolidated Statements of Cash Flows (In US $ millions) | | | | | | | | | | | | | | | | | | Three months ended | | | | June 30, 2026 | | June 30, 2025 | | | | | | Cash flows from operating activities | | | | | | | | | Net income for the period | 1,502 | | 906 | | | | | | Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | | | Amortization and depreciation | 7 | | 8 | | | | | | | | | | | | | | | Stock-based compensation | 128 | | 113 | | | | | | Impairment of right-of-use assets and leasehold improvements | — | | 10 | | | | | | Provision for transaction and loan losses | 94 | | 44 | | | | | | Deferred income tax recovery | 165 | | 98 | | | | | | Revenue related to non-cash consideration | (13) | | (12) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Net gain on equity and other investments | (1,250) | | (682) | | | | | | Net loss on equity method investment | 22 | | 24 | | | | | | Unrealized foreign exchange loss (gain) | 4 | | (46) | | | | | | Changes in operating assets and liabilities | (1) | | (35) | | | | | | Net cash provided by operating activities | 658 | | 428 | |…

9. #9prepared remarks

   (6) Starting in April 2026, the cash flows associated with merchant cash advances are presented within investing cash flows rather than operating cash flows on a basis consistent with loans, given the similar nature of the underlying lending activities. For the three months ended June 30, 2026, the changes described above resulted in a net cash use of $37 million presented in Investing activities after consideration of repayments and purchases and originations.

10. #10prepared remarks

    Reconciliation of Non-GAAP Financial Measures Free Cash Flow Reconciliation (In US $ millions, except percentages) The following table illustrates how free cash flow is calculated in this press release: | | | | | | | | | | | | | | | | | | Three months ended | | | | June 30, 2026 | | June 30, 2025 | | | | | | Net cash provided by operating activities (6) | 658 | | | 428 | | | | | | | less: capital expenditures (7) | (4) | | | (6) | | | | | | | Free cash flow | 654 | | | 422 | | | | | | | Revenue | 3,583 | | | 2,680 | | | | | | | Free cash flow margin | 18 | % | | 16 | % | | | | | |

11. #11prepared remarks

    Net Income Excluding the Impact of Equity Investments Reconciliation (In US $ millions) The following table illustrates how Net income excluding the impact of equity investments is calculated in this press release: | | | | | | | | | | | | | | | | | | Three months ended | | | | June 30, 2026 | | June 30, 2025 | | | | | | Net Income | 1,502 | | 906 | | | | | | less: equity investments, marked to market, net of taxes | 1,063 | | 568 | | | | | | Net income excluding the impact of equity investments (3) | 439 | | 338 | | | | | |

12. #12on our Condensed Consolidated

    Purchases of property and equipment

13. #13prepared remarks

    Constant Currency Analysis (In US $ millions, except percentages) The following table converts our GMV, revenues, gross profit, and operating income using the comparative period's monthly average exchange rates. We have provided the below disclosure as we believe it presents a clear comparison of our period-to-period operating results by removing the impact of fluctuations in foreign exchange rates and to assist investors in understanding our financial and operating performance. The table below and our Condensed Consolidated Statements of Operations disclosure are supplements to our Condensed Consolidated Financial Statements, which are prepared and presented in accordance with US GAAP (excluding GMV). | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Three months ended June 30, | | GMV | | Revenue | | Subscription solutions revenue | | Merchant solutions revenue | | Gross profit | | Operating income | 2025 as reported | 87,837 | | 2,680 | | 656 | | 2,024 | | 1,302 | | 291 | 2026 as reported | 115,567 | | 3,583 | | 802 | | 2,781 | | 1,708 | | 488 | Percentage change YoY | 32 | % | | 34 | % | | 22 | % | | 37 | % | | 31 | % | | 68 | % | Constant curr…

14. #14prepared remarks

    Regulatory Disclosures and Forward-looking Statements Advisory Regarding Forward-looking Statements This press release contains forward-looking statements and forward-looking information (collectively, “forward-looking statements“), including statements related to Shopify’s financial outlook, such as expected revenue and expenses for the next fiscal quarter, Shopify's expectations regarding its ability to support merchants as they scale, and Shopify's expectations regarding the development of emerging technologies, including AI. These statements can be identified by words such as “will“ and “expect“ and are based on Shopify's current projections and expectations about future events and financial results. Known and unknown risks may cause actual results to differ materially from those described in the forward-looking statements. These risks include, but are not limited to, the Company’s ability to maintain expected growth and manage expenses, the impact of changes in economic conditions and consumer spending in key markets such as the United States, Europe, and globally, the impact of measures that affect international trade, including tariffs, the adoption and impact of emerging…

15. #15prepared remarks

    Endnotes: Gross Merchandise Volume, or GMV, represents the total dollar value of orders facilitated through the Shopify platform including certain apps and channels for which a revenue-sharing arrangement is in place in the period, net of refunds, and inclusive of shipping and handling, duty, and value-added taxes. Monthly Recurring Revenue , or MRR, is the aggregate value of all subscription plans, excluding variable platform fees, in effect on the last day of the period, assuming merchants maintain their subscription the following month and is used by management as a directional indicator of subscription solutions revenue going forward. Free cash flow and free cash flow margin are non-GAAP financial measures that are reconciled in the non-GAAP reconciliation within this press release. These non-GAAP financial measures do not have standardized meanings under US GAAP and may not be comparable to similar measures presented by other companies. Shopify believes free cash flow and free cash flow margin provide useful information to help investors and others understand our operating results and the performance of our business in the same manner as management. Shopify does not reconc…