For the month of | February | 2016 | |
Commission File Number | 001-37400 | ||
Shopify Inc. | |||
(Translation of registrant’s name into English) | |||
150 Elgin Street, 8th Floor Ottawa, Ontario, Canada K2P 1L4 | |||
(Address of principal executive offices) |
Form 20-F | X | Form 40-F |
99.1 | Shopify Inc. – Shopify Announces Fourth-Quarter and Full-Year 2015 Financial Results |
SHOPIFY INC. | |||
(Registrant) | |||
Date: February 17, 2016 | By: | /S/ JOSEPH FRASCA | |
Name: Joseph Frasca Title: General Counsel and Secretary |
• | Total revenue for the fourth quarter of 2015 was $70.2 million, a 99% increase from the fourth quarter of 2014. Within this, Subscription Solutions revenue grew 70% to $34.6 million, driven by an increase in the number of merchants using our platform; and Merchant Solutions revenue grew 140% to $35.6 million, driven primarily by an increase in revenue from Shopify Payments. |
• | Monthly Recurring Revenue1 ("MRR") as of December 31, 2015 was $11.3 million, up 72% compared with $6.6 million on December 31, 2014. |
• | Gross Merchandise Volume2 ("GMV") for the fourth quarter was $2.8 billion, a 109% increase over the fourth quarter of 2014. |
• | Gross profit grew 81% to $35.5 million for the fourth quarter of 2015, versus $19.6 million for the fourth quarter of 2014. |
• | Operating loss for the fourth quarter of 2015 was $6.5 million, compared with an operating loss of $4.5 million for the fourth quarter of 2014. |
• | Adjusted operating loss3 for the fourth quarter of 2015 was $1.3 million, compared with $0.8 million for the fourth quarter of 2014. |
• | Net loss for the fourth quarter of 2015 was $6.3 million, or $0.08 per share, compared with a net loss of $4.8 million, or $0.12 per share, for the fourth quarter of 2014. |
• | Adjusted net loss3 for the fourth quarter of 2015 was $1.1 million, or $0.01 per share, compared with an adjusted net loss of $1.1 million, or $0.03 per share, for the fourth quarter of 2014. |
• | At December 31, 2015, Shopify had $190.2 million in cash, cash equivalents and marketable securities, compared with $59.7 million on December 31, 2014. |
• | Total revenue for 2015 was $205.2 million, a 95% increase from 2014. Within this, Subscription Solutions revenue grew 68% to $112.0 million; and Merchant Solutions revenue grew 143% to $93.3 million. |
• | Monthly Billings Retention Rate4 continued to exceed 100% for 2015. |
• | Gross Merchandise Volume2 ("GMV") for 2015 was $7.7 billion, a 105% increase over 2014. |
• | Gross profit grew 80% to $111.1 million for 2015, versus $61.8 million for 2014. |
• | Operating loss for 2015 was $17.8 million, compared with an operating loss of $21.6 million for 2014. |
• | Adjusted operating loss3 for 2015 was $6.7 million, compared with $15.0 million for 2014. |
• | Net loss for 2015 was $18.8 million, or $0.30 per share, compared with a net loss of $22.3 million, or $0.57 per share, for 2014. |
• | Adjusted net loss3 for 2015 was $7.7 million, or $0.13 per share, compared with an adjusted net loss of $15.7 million, or $0.40 per share, for 2014. |
• | During the fourth quarter 2015, our strongest seasonal quarter for merchant sales, the Shopify team executed flawlessly over the Black Friday Cyber Monday weekend. GMV and order volume more than doubled compared with 2014's comparable weekend on Shopify's scalable multi-tenant platform. |
• | Shopify was among the first ecommerce providers to add the ability to sell over the leading social media platforms, including Facebook, Pinterest and Twitter, and now over 25% of Shopify merchants have enabled social media selling. While these channels currently account for a small portion of transactions, sales on social media channels are growing rapidly. Approximately 61% of the traffic and 46% of orders on the Shopify platform came from mobile devices in December 2015. |
• | Shopify expanded the number of channels over which merchants can sell by adding a mobile buy button software development kit, enabling transactions on any site a merchant controls, and by integrating social media options into its administrative interface. |
• | Shopify enhanced our integrated back office capabilities: we expanded the number of reports available to merchants; we added shipping and delivery options, starting with the US Post Office and UberRush; and we enhanced merchants' in-person selling capabilities with the addition of EMV readers that accept chip-and-pin and ApplePay. |
• | Revenues in the range of $320 million to $330 million |
• | GAAP operating loss in the range of $36 million to $42 million |
• | Adjusted operating loss3 in the range of $16 million to $22 million, which excludes stock-based compensation expenses and related payroll taxes of $20 million |
• | Revenues in the range of $65 million to $67 million |
• | GAAP operating loss in the range of $11 million to $12 million |
• | Adjusted operating loss3 in the range of $6.5 million to $7.5 million, which excludes stock-based compensation expenses and related payroll taxes of $4.5 million |
1. | Monthly Recurring Revenue, or MRR, is calculated by multiplying the number of merchants by the average monthly subscription plan fee in effect on the last day of that period and is used by management as a directional indicator of subscription solutions revenue going forward assuming merchants maintain their subscription plan the following month. |
2. | Gross Merchandise Volume, or GMV, represents the total dollar value of orders processed on the Shopify platform in the period, net of refunds, and inclusive of shipping and handling, duty and value-added taxes |
3. | Please refer to "Non-GAAP Financial Measures" in this press release. |
4. | Monthly Billings Retention Rate, or MBRR, is calculated as of the end of each month by considering the cohort of merchants on the Shopify platform as of the beginning of the month and dividing total billings attributable to this cohort in the then-current month by total billings attributable to this cohort in the immediately preceding month. Billings includes billings from subscriptions, apps (net of referral fees), transaction fees and fees for Shopify Payments. |
Three months ended | Twelve months ended | |||||||||||
December 31, 2015 | December 31, 2014 | December 31, 2015 | December 31, 2014 | |||||||||
$ | $ | $ | $ | |||||||||
Revenues | ||||||||||||
Subscription solutions | $34,608 | $20,358 | $111,979 | $66,668 | ||||||||
Merchant solutions | 35,565 | 14,824 | 93,254 | 38,350 | ||||||||
70,173 | 35,182 | 205,233 | 105,018 | |||||||||
Cost of revenues | ||||||||||||
Subscription solutions | 7,662 | 5,049 | 24,531 | 16,790 | ||||||||
Merchant solutions | 27,001 | 10,520 | 69,631 | 26,433 | ||||||||
34,663 | 15,569 | 94,162 | 43,223 | |||||||||
Gross profit | 35,510 | 19,613 | 111,071 | 61,795 | ||||||||
Operating expenses | ||||||||||||
Sales and marketing | 22,527 | 12,209 | 70,374 | 45,929 | ||||||||
Research and development | 13,541 | 6,619 | 39,722 | 25,915 | ||||||||
General and administrative | 5,961 | 5,280 | 18,731 | 11,566 | ||||||||
Total operating expenses | 42,029 | 24,108 | 128,827 | 83,410 | ||||||||
Loss from operations | (6,519 | ) | (4,495 | ) | (17,756 | ) | (21,615 | ) | ||||
Other income (expense) | 212 | (303 | ) | (1,034 | ) | (696 | ) | |||||
Net loss and comprehensive loss | (6,307 | ) | (4,798 | ) | (18,790 | ) | (22,311 | ) | ||||
Basic and diluted net loss per share attributable to common shareholders | (0.08 | ) | (0.12 | ) | (0.30 | ) | (0.57 | ) | ||||
Weighted average shares used to compute basic and diluted net loss per share attributable to shareholders | 77,996,629 | 39,207,199 | 61,716,065 | 38,940,252 |
As at | ||||||
December 31, 2015 | December 31, 2014 | |||||
$ | $ | |||||
Assets | ||||||
Current assets | ||||||
Cash and cash equivalents | 110,070 | 41,953 | ||||
Marketable securities | 80,103 | 17,709 | ||||
Trade and other receivables | 6,089 | 7,227 | ||||
Other current assets | 6,203 | 1,495 | ||||
202,465 | 68,384 | |||||
Long term assets | ||||||
Property and equipment | 33,048 | 21,728 | ||||
Intangible assets | 5,826 | 2,708 | ||||
Goodwill | 2,373 | 2,373 | ||||
41,247 | 26,809 | |||||
Total assets | 243,712 | 95,193 | ||||
Liabilities and shareholders’ equity | ||||||
Current liabilities | ||||||
Accounts payable and accrued liabilities | 23,689 | 12,514 | ||||
Current portion of deferred revenue | 12,726 | 6,775 | ||||
Current portion of lease incentives | 822 | 485 | ||||
37,237 | 19,774 | |||||
Long term liabilities | ||||||
Deferred revenue | 661 | 394 | ||||
Lease incentives | 10,497 | 7,293 | ||||
11,158 | 7,687 | |||||
Shareholders’ equity | ||||||
Convertible preferred shares | — | 87,056 | ||||
Common stock | 231,452 | 4,055 | ||||
Additional paid-in capital | 11,719 | 5,685 | ||||
Accumulated deficit | (47,854 | ) | (29,064 | ) | ||
Total shareholders’ equity | 195,317 | 67,732 | ||||
Total liabilities and shareholders’ equity | 243,712 | 95,193 |
Years ended | ||||||
December 31, 2015 | December 31, 2014 | |||||
$ | $ | |||||
Cash flows from operating activities | ||||||
Net loss for the year | (18,790) | (22,311) | ||||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||
Amortization and depreciation | 7,236 | 4,672 | ||||
Stock-based compensation | 7,805 | 3,792 | ||||
Vesting of restricted shares | 353 | 651 | ||||
Loss on asset disposal | — | 100 | ||||
Unrealized foreign exchange loss | 1,828 | 524 | ||||
Changes in lease incentives | 3,541 | 7,292 | ||||
Change in deferred revenue | 6,218 | 2,813 | ||||
Changes in non-cash working capital items | 7,565 | 1,666 | ||||
Net cash provided by (used in) operating activities | 15,756 | (801) | ||||
Cash flows from investing activities | ||||||
Purchase of marketable securities | (111,154) | (20,131) | ||||
Maturity of marketable securities | 48,350 | 2,375 | ||||
Acquisitions of property and equipment | (16,525) | (20,573) | ||||
Proceeds from disposal of property and equipment | — | 90 | ||||
Acquisitions of intangible assets | (4,511) | (2,127) | ||||
Net cash used in investing activities | (83,840) | (40,366) | ||||
Cash flows from financing activities | ||||||
Proceeds from initial public offering, net of issuance costs | 136,251 | — | ||||
Proceeds from the exercise of stock options | 1,604 | 140 | ||||
Net cash provided by financing activities | 137,855 | 140 | ||||
Effect of foreign exchange on cash and cash equivalents | (1,654) | (549) | ||||
Net increase (decrease) in cash and cash equivalents | 68,117 | (41,576) | ||||
Cash and cash equivalents – Beginning of Year | 41,953 | 83,529 | ||||
Cash and cash equivalents – End of Year | 110,070 | 41,953 |
Three months ended | Twelve months ended | ||||||||||
December 31, 2015 | December 31, 2014 | December 31, 2015 | December 31, 2014 | ||||||||
$ | $ | $ | $ | ||||||||
GAAP Gross profit | 35,510 | 19,613 | 111,071 | 61,795 | |||||||
% of Revenue | 51 | % | 56 | % | 54 | % | 59 | % | |||
add: stock-based compensation | 84 | 100 | 282 | 259 | |||||||
add: payroll taxes related to stock-based compensation | 63 | — | 63 | — | |||||||
Non-GAAP Gross profit | 35,657 | 19,713 | 111,416 | 62,054 | |||||||
% of Revenue | 51 | % | 56 | % | 54 | % | 59 | % | |||
GAAP Sales and marketing | 22,527 | 12,209 | 70,374 | 45,929 | |||||||
% of Revenue | 32 | % | 35 | % | 34 | % | 44 | % | |||
less: stock-based compensation | 418 | 245 | 1,099 | 696 | |||||||
less: payroll taxes related to stock-based compensation | 252 | — | 252 | — | |||||||
Non-GAAP Sales and marketing | 21,857 | 11,964 | 69,023 | 45,233 | |||||||
% of Revenue | 31 | % | 34 | % | 34 | % | 43 | % | |||
GAAP Research and development | 13,541 | 6,619 | 39,722 | 25,915 | |||||||
% of Revenue | 19 | % | 19 | % | 19 | % | 25 | % | |||
less: stock-based compensation | 1,656 | 766 | 4,509 | 2,776 | |||||||
less: payroll taxes related to stock-based compensation | 1,864 | — | 1,864 | — | |||||||
Non-GAAP Research and development | 10,021 | 5,853 | 33,349 | 23,139 | |||||||
% of Revenue | 14 | % | 17 | % | 16 | % | 22 | % | |||
GAAP General and administrative | 5,961 | 5,280 | 18,731 | 11,566 | |||||||
% of Revenue | 8 | % | 15 | % | 9 | % | 11 | % | |||
less: stock-based compensation | 721 | 365 | 2,268 | 712 | |||||||
less: payroll taxes related to stock-based compensation | 151 | — | 151 | — | |||||||
less: sales and use tax | — | 2,182 | 566 | 2,182 | |||||||
Non-GAAP General and administrative | 5,089 | 2,733 | 15,746 | 8,672 | |||||||
% of Revenue | 7 | % | 8 | % | 8 | % | 8 | % | |||
GAAP Operating expenses | 42,029 | 24,108 | 128,827 | 83,410 | |||||||
% of Revenue | 60 | % | 69 | % | 63 | % | 79 | % | |||
less: stock-based compensation | 2,795 | 1,376 | 7,876 | 4,184 | |||||||
less: payroll taxes related to stock-based compensation | 2,267 | — | 2,267 | — | |||||||
less: sales and use tax | — | 2,182 | 566 | 2,182 | |||||||
Non-GAAP Operating Expenses | 36,967 | 20,550 | 118,118 | 77,044 | |||||||
% of Revenue | 53 | % | 58 | % | 58 | % | 73 | % |
Three months ended | Twelve months ended | ||||||||||
December 31, 2015 | December 31, 2014 | December 31, 2015 | December 31, 2014 | ||||||||
$ | $ | $ | $ | ||||||||
GAAP Operating loss | (6,519 | ) | (4,495 | ) | (17,756 | ) | (21,615 | ) | |||
% of Revenue | (9 | )% | (13 | )% | (9 | )% | (21 | )% | |||
add: stock-based compensation | 2,879 | 1,476 | 8,158 | 4,443 | |||||||
add: payroll taxes related to stock-based compensation | 2,330 | — | 2,330 | — | |||||||
add: sales and use tax | — | 2,182 | 566 | 2,182 | |||||||
Non-GAAP Operating loss | (1,310 | ) | (837 | ) | (6,702 | ) | (14,990 | ) | |||
% of Revenue | (2 | )% | (2 | )% | (3 | )% | (14 | )% | |||
GAAP Net loss and comprehensive loss | (6,307 | ) | (4,798 | ) | (18,790 | ) | (22,311 | ) | |||
% of Revenue | (9 | )% | (14 | )% | (9 | )% | (21 | )% | |||
add: stock-based compensation | 2,879 | 1,476 | 8,158 | 4,443 | |||||||
add: payroll taxes related to stock-based compensation | 2,330 | — | 2,330 | — | |||||||
add: sales and use tax | — | 2,182 | 566 | 2,182 | |||||||
Non-GAAP Net loss and comprehensive loss | (1,098 | ) | (1,140 | ) | (7,736 | ) | (15,686 | ) | |||
% of Revenue | (2 | )% | (3 | )% | (4 | )% | (15 | )% | |||
GAAP net loss per share attributable to shareholders | (0.08 | ) | (0.12 | ) | (0.30 | ) | (0.57 | ) | |||
add: stock-based compensation | 0.04 | 0.04 | 0.13 | 0.11 | |||||||
add: payroll taxes related to stock-based compensation | 0.03 | — | 0.04 | — | |||||||
add: sales and use tax | — | 0.06 | 0.01 | 0.06 | |||||||
Non-GAAP net loss per share attributable to shareholders(1) | (0.01 | ) | (0.03 | ) | (0.13 | ) | (0.40 | ) | |||
Weighted average shares used to compute GAAP and non-GAAP net loss per share attributable to shareholders | 77,996,629 | 39,207,199 | 61,716,065 | 38,940,252 |