About this content About Emily Jarvie Emily began her career as a political journalist for Australian Community Media in Hobart, Tasmania. After she relocated to Toronto, Canada, she reported on business, legal, and scientific developments in the emerging psychedelics sector before joining Proactive in 2022. She brings a strong journalism background with her work featured in newspapers, magazines, and digital publications across Australia, Europe, and North America, including The Examiner, The Advocate, ...

Financial Data and Key Metrics Changes - In 2024, Shopify achieved nearly $300 billion in GMV and $9 billion in revenue, representing a 2.5% increase in GMV and a 3x increase in revenue compared to 2020, with annual revenue growth of 26% and a free cash flow margin of 18% [11][12][17] - Q4 revenue grew by 31% year-over-year, with a free cash flow margin of 22%, marking a strong finish to the year [12][20] - Operating income surpassed $1 billion for the year, a significant increase from $269 million in 2021, with operating expenses reduced to 32% of revenues in Q4 [17][81] Business Line Data and Key Metrics Changes - Merchant Solutions revenue increased by 33% year-over-year, driven by GMV growth and increased penetration of Shopify Payments, which processed $61 billion in GMV in Q4, up 35% from last year [68][62] - Subscription Solutions revenue grew by 27% year-over-year, supported by an increase in the number of merchants on the platform [69] - B2B GMV grew by 132% in Q4, with a total increase of over 140% for the year, highlighting strong growth opportunities in this segment [49][50] Market Data and Key Metrics Changes - North American revenue increased by 23%, with the U.S. alone generating over $5.7 billion, while international regions outperformed with a 33% growth rate [15][16] - Shopify's market share in the U.S. e-commerce sector surpassed 12%, with significant growth in Europe and Japan [14][15] Company Strategy and Development Direction - Shopify aims to build a durable 100-year company focused on long-term merchant success, emphasizing product innovation and operational efficiency [22][56] - The company plans to continue expanding its reach across various merchant sizes and geographies, particularly in Europe and Japan, while enhancing its partner ecosystem [30][56] - A commitment to AI integration is central to Shopify's strategy, aiming to improve user experience and operational efficiency [54][60] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in Shopify's market position and operational model, highlighting the company's ability to maintain profitability while investing in growth [22][60] - The focus for 2025 includes simplifying operations, embracing AI, and expanding market presence, with a disciplined approach to free cash flow margins [56][58][93] Other Important Information - Shopify processed over $1 trillion in cumulative GMV, with significant milestones achieved in customer engagement and product offerings [19][30] - The company has introduced various new features and products aimed at enhancing merchant capabilities and customer experiences [24][26] Q&A Session Summary Question: Free cash flow guidance for Q1 - Management indicated that free cash flow margins are expected to expand by approximately 200 basis points, maintaining a balance between profitability and future investments [96][100] Question: Merchant Solutions' take rate expectations - The take rate for Merchant Solutions was higher than expected, with continued strength anticipated in Q1, driven by the growth of payments and additional products [106][110] Question: Impact of de minimis exemption and tariffs - Management emphasized the importance of de minimis protections for small businesses and the company's efforts to support merchants in navigating tariffs [115][119] Question: Headcount growth outlook - Management believes that operational efficiencies will allow for modest headcount growth while continuing to expand the business [121][124] Question: International expansion investments - Management discussed ongoing investments in international markets, focusing on setup experts and direct marketing presence to enhance growth [132]

Rapper Ye, formerly known as Kanye West, performs onstage during a "Vultures 1" concert in Inglewood, California on March 14, 2024.Shopify has taken down a site advertised by rapper Ye, formerly known as Kanye West, that sold swastika t-shirts.The rapper ran an advertisement on Sunday during the Super Bowl that directed viewers to visit Yeezy.com, where it promoted a single product — a $20 t-shirt with a black swastika. The site was online until Tuesday morning.A Shopify spokesperson said the Canadian e-com ...

SHOP was lower premarket, gained out of the gate, and is now lower againShopify Inc (NYSE:SHOP) stock is down 2% to trade at $124.63 this morning, paring an earlier push higher. The e-commerce giant reported fourth-quarter earnings and revenue that exceeded expectations, but the top-line beat is being overshadowed by first-quarter 2025 guidance that fell short of estimates.SHOP hit a record peak of $125.79 out of the gate, breaking out of a bullish flag pattern that began with a 21% post-earnings gap higher ...

Shopify (SHOP) came out with quarterly earnings of $0.44 per share, in line with the Zacks Consensus Estimate. This compares to earnings of $0.34 per share a year ago. These figures are adjusted for non-recurring items.A quarter ago, it was expected that this cloud-based commerce company would post earnings of $0.27 per share when it actually produced earnings of $0.36, delivering a surprise of 33.33%.Over the last four quarters, the company has surpassed consensus EPS estimates three times.Shopify, which b ...

Here's our initial take on Shopify's (SHOP 2.12%) fourth-quarter financial report.Key MetricsMetricQ4 2023Q4 2024Changevs. ExpectationsTotal revenue$2.14 billion$2.81 billion+31%BeatAdjusted earnings per share$0.34$0.44+29%BeatGross merchandise value$75.1 billion$94.5 billion+26%n/aFree cash flow$446 million$611 million+37%n/aA Milestone for ShopifyShopify's fourth-quarter financial report kept the company on a track toward regaining its full glory after losing well over 80% of its value during the 2022 bea ...

"We expect the strong merchant momentum from Q4 to carry over into Q1, recognizing that Q1 is consistently our lowest [gross merchandise volume] quarter seasonally," the company said in its earnings release.Shopify forecasted revenue in the first quarter to grow at a mid-20% percentage rate, which is roughly in line with analysts' expectations of 24.4% revenue growth, according to LSEG.Shopify on Tuesday reported better-than-expected sales for the fourth quarter but missed on earnings. Shares whipsawed in p ...

Leading the future of commerce February 11, 2025 Advisories This presentation contains forward-looking statements and forward looking information (collectively, "forward-looking statements") that are based on our management's current estimates, beliefs and assumptions and management's perception of historic trends, current conditions and expected future developments, as well as other factors management believes are appropriate in the circumstances. These statements may be identified by words such as "expect ...

```markdown [Business](index=7&type=section&id=Item%201%3A%20Business) [Overview and Merchants](index=7&type=section&id=Overview%20and%20Merchants) Shopify is a global commerce technology company providing a multi-channel platform for businesses of all sizes, serving millions of merchants in over 175 countries as of December 31, 2024 - Shopify's mission is to improve commerce by providing a reliable and simple platform for businesses and a better shopping experience for consumers[25](index=25&type=chunk) - As of December 31, 2024, Shopify had millions of merchants across 175+ countries, with 45% in the U.S., 30% in EMEA, 15% in Asia Pacific, 5% in Canada, and 5% in Latin America[27](index=27&type=chunk) - Historical merchant cohorts have demonstrated consistent growth in sales and adoption of additional solutions, indicating strong platform value and retention, with revenue growth from existing merchants historically offsetting revenue loss from departing merchants[28](index=28&type=chunk) [Our Offerings](index=8&type=section&id=Our%20Offerings) Shopify's revenue is derived from two main sources: Subscription Solutions and Merchant Solutions, with Shopify Plus generating the majority of the company's Gross Merchandise Volume (GMV) - The business model consists of two revenue streams: recurring Subscription Solutions and success-based Merchant Solutions[31](index=31&type=chunk) - Subscription Solutions revenue comes from platform subscriptions (e.g., Basic, Shopify, Shopify Plus), POS Pro, and sales of apps, themes, and domains[32](index=32&type=chunk) - Merchant Solutions revenue is primarily generated from Shopify Payments (payment processing and currency conversion fees), lending products (Shopify Capital), and shipping label sales[35](index=35&type=chunk)[36](index=36&type=chunk) - The Shopify Plus plan, designed for high-growth and enterprise merchants, accounts for the majority of the company's Gross Merchandise Volume (GMV)[33](index=33&type=chunk) [Strategy, R&D, and Seasonality](index=9&type=section&id=Strategy%2C%20R%26D%2C%20and%20Seasonality) Shopify's growth strategy focuses on expanding its merchant base, innovating its platform and products, and growing its partner ecosystem, with significant R&D investment in AI-powered tools and a business subject to fourth-quarter seasonality - The core growth strategy involves expanding the merchant base, continuous platform innovation, and developing the partner ecosystem[39](index=39&type=chunk) - Shopify is investing in emerging technologies, including AI and machine learning, to create tools like Shopify Magic and Sidekick that help merchants improve productivity and decision-making[37](index=37&type=chunk) - The business is subject to seasonality, with higher GMV and revenue typically occurring in the fourth quarter due to holiday demand, a trend expected to intensify as merchant solutions revenue grows[40](index=40&type=chunk) [Competition and Regulation](index=10&type=section&id=Competition%20and%20Regulation) Shopify operates in a highly competitive and fragmented market, facing rivals across e-commerce software, payments, and marketplaces, while navigating complex and evolving global laws on data privacy, cybersecurity, financial services, and online platform liability - The market is highly competitive, with rivals including e-commerce software vendors, content management systems, payment processors, and marketplaces[47](index=47&type=chunk)[52](index=52&type=chunk) - Principal competitive factors include vision, simplicity, multi-channel integration, cost-effectiveness, app ecosystem, pace of innovation, and security[47](index=47&type=chunk)[52](index=52&type=chunk) - The company is subject to complex and evolving laws globally, including those related to data privacy, cybersecurity, financial services (payments and lending), anti-money laundering, and sanctions[51](index=51&type=chunk)[53](index=53&type=chunk)[54](index=54&type=chunk) - There is a risk of liability related to merchant activities, such as the sale of illegal goods or copyright infringement, as laws governing online service provider liability continue to evolve[55](index=55&type=chunk) [Risk Factors](index=12&type=section&id=Item%201A%3A%20Risk%20Factors) [Risks Related to Our Operations](index=14&type=section&id=Risks%20Related%20to%20Our%20Operations) Shopify's operational risks include sustaining growth by attracting and retaining merchants, managing competition, relying on third-party providers, and retaining key personnel in a remote-first environment - Growth depends on attracting and retaining merchants, particularly small and medium-sized businesses vulnerable to economic pressures like inflation and reduced consumer spending[65](index=65&type=chunk)[67](index=67&type=chunk) - The business is highly competitive, facing threats from established players with greater resources and niche companies, and large tech platforms could impose restrictions that harm Shopify's or its merchants' operations[73](index=73&type=chunk)[75](index=75&type=chunk) - Shopify relies on third-party cloud services (Google Cloud) for its platform, and any disruption could significantly harm the business, also depending on Stripe and PayPal as primary Payment Service Providers for Shopify Payments[112](index=112&type=chunk)[93](index=93&type=chunk) - The company's future performance is heavily dependent on its senior management, including CEO Tobias Lütke, and its ability to attract and retain highly skilled personnel, especially in technical and AI fields[107](index=107&type=chunk)[108](index=108&type=chunk) [Risks Related to Personal Information, Cybersecurity and Intellectual Property](index=16&type=section&id=Risks%20Related%20to%20Personal%20Information%2C%20Cybersecurity%20and%20Intellectual%20Property) Shopify faces significant risks from cyberattacks and data breaches, requiring compliance with complex global data protection laws, and challenges in protecting its intellectual property - Unauthorized access to or compromise of personal information of merchants and their buyers could lead to significant liability, regulatory fines, and harm to the company's reputation[76](index=76&type=chunk)[77](index=77&type=chunk) - The company is increasingly a target for cyberattacks, including DDoS attacks, which have caused service interruptions in the past and could harm the brand and deter users[81](index=81&type=chunk)[82](index=82&type=chunk) - Compliance with evolving and often inconsistent data protection laws like GDPR and CCPA is complex and costly, with non-compliance potentially restricting business operations and leading to significant financial penalties[130](index=130&type=chunk)[131](index=131&type=chunk)[135](index=135&type=chunk) - The company relies on a combination of legal and contractual protections for its intellectual property, but these may be inadequate to prevent unauthorized use or replication of its technology[162](index=162&type=chunk) [Risks Related to Financials and Market Conditions](index=19&type=section&id=Risks%20Related%20to%20Financials%20and%20Market%20Conditions) Shopify's financial performance is vulnerable to global economic conditions, challenges in maintaining profitability amidst growth investments, risks from financial products like Shopify Payments and Shopify Capital, and integration difficulties from acquisitions - Performance is subject to worldwide economic conditions, where downturns, inflation, or tariffs could reduce consumer spending, leading to merchant churn and lower GMV[90](index=90&type=chunk)[91](index=91&type=chunk) - The company may be unable to maintain profitability due to substantial future investments in talent, R&D, and infrastructure, which may not produce the expected long-term benefits[126](index=126&type=chunk)[128](index=128&type=chunk) - Financial products like Shopify Payments and Shopify Capital expose the company to regulatory requirements, payment card network rules, chargeback risks, and potential credit losses, especially in an economic downturn[118](index=118&type=chunk)[119](index=119&type=chunk)[142](index=142&type=chunk) - Past and future acquisitions, divestitures, and investments involve risks such as integration challenges, diversion of management attention, unforeseen liabilities, and potential impairment charges that could adversely affect financial results[136](index=136&type=chunk)[138](index=138&type=chunk) [Risks Related to Ownership of our Securities](index=37&type=section&id=Risks%20Related%20to%20Ownership%20of%20our%20Securities) Ownership of Shopify's shares carries risks primarily related to its share capital structure, which concentrates significant voting power with the CEO, leading to limited influence for Class A shareholders and high stock price volatility - The Founder Share provides CEO Tobias Lütke with at least **40%** of the aggregate voting power, giving him significant influence over all matters requiring shareholder approval, which may not always align with the interests of other shareholders[180](index=180&type=chunk)[181](index=181&type=chunk) - The dual-class share structure limits the ability of Class A subordinate shareholders to influence corporate matters, including the election of directors and significant corporate transactions[183](index=183&type=chunk) - The market price of Class A subordinate voting shares has been and is expected to remain volatile, influenced by factors such as operating results, market sentiment for tech stocks, and analyst reports[187](index=187&type=chunk)[188](index=188&type=chunk) - As a foreign private issuer, Shopify is exempt from certain SEC rules, including proxy solicitation regulations and insider short-swing profit rules, and may follow Canadian corporate governance practices in some areas[196](index=196&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=46&type=section&id=Item%207%3A%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) [Business Overview & Key Performance Indicators](index=46&type=section&id=Business%20Overview%20%26%20Key%20Performance%20Indicators) In fiscal year 2024, Shopify's platform facilitated **$292.3 billion** in Gross Merchandise Volume (GMV), a **24%** increase year-over-year, with total revenue growing **26%** to **$8.9 billion**, and Monthly Recurring Revenue (MRR) reaching **$178 million** - Total revenue for the year ended Dec 31, 2024, was **$8.9 billion**, a **26% increase** from 2023[227](index=227&type=chunk) - Gross Merchandise Volume (GMV) for 2024 was **$292.3 billion**, up **24%** from 2023[226](index=226&type=chunk) Key Performance Indicators (2022-2024) | | Years ended December 31, | | | | :--- | :--- | :--- | :--- | | | **2024** | **2023** | **2022** | | (in US $ millions) | | | | | **Monthly Recurring Revenue** | 178 | 144 | 109 | | **Gross Merchandise Volume** | 292,275 | 235,910 | 197,167 | - Monthly Recurring Revenue (MRR) grew to **$178 million** as of Dec 31, 2024, a **24% increase** from **$144 million** in 2023, with the growth rate lower than the prior year which benefited from a 2023 price increase and conversion of trial users[237](index=237&type=chunk)[238](index=238&type=chunk) [Results of Operations](index=53&type=section&id=Results%20of%20Operations) For fiscal year 2024, Shopify reported a significant turnaround to **$2.02 billion** net income, driven by **26%** revenue growth to **$8.88 billion** and **$1.15 billion** in other income, contrasting with a **$1.42 billion** operating loss in 2023 due to a **$1.34 billion** impairment charge Consolidated Statement of Operations Summary (2022-2024) | | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | (in US $ millions) | | | | | **Total Revenues** | **8,880** | **7,060** | **5,600** | | **Gross Profit** | **4,472** | **3,515** | **2,754** | | *Gross Margin* | *50.4%* | *49.8%* | *49.2%* | | **Income (loss) from operations** | **1,075** | **(1,418)** | **(822)** | | **Net income (loss)** | **2,019** | **132** | **(3,460)** | | **Diluted EPS** | **$1.55** | **$0.10** | **$(2.73)** | [Revenues](index=54&type=section&id=Revenues) Total revenues grew **26%** to **$8.88 billion** in 2024, with Subscription Solutions revenue increasing **28%** due to merchant growth and a 2023 price increase, and Merchant Solutions revenue growing **25%** primarily from higher payment volumes on Shopify Payments, which saw its penetration rate rise to **61.9%** of GMV Revenue by Type (2022-2024) | Revenue Type | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | (in US $ millions) | | | | | Subscription solutions | 2,350 | 1,837 | 1,488 | | Merchant solutions | 6,530 | 5,223 | 4,112 | | **Total revenues** | **8,880** | **7,060** | **5,600** | - Subscription solutions revenue growth of **28%** was primarily due to an increase in the number of merchants and the impact of a subscription plan price increase in Q2 2023[268](index=268&type=chunk) - Merchant solutions revenue growth of **25%** was driven by a **32% increase** in GMV processed through Shopify Payments, with the Shopify Payments penetration rate rising to **61.9%** in 2024 from **58.1%** in 2023[270](index=270&type=chunk) [Cost of Revenues and Gross Profit](index=55&type=section&id=Cost%20of%20Revenues%20and%20Gross%20Profit) Gross profit for 2024 increased **27%** to **$4.47 billion**, with the gross margin improving slightly to **50.4%**, as cost of subscription solutions rose **23%** and cost of merchant solutions increased **25%** due to higher payment processing fees, partially offset by the absence of logistics business costs Gross Profit (2022-2024) | | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | (in US $ millions) | | | | | **Gross profit** | **4,472** | **3,515** | **2,754** | | *As a % of total revenues* | *50.4%* | *49.8%* | *49.2%* | - Cost of merchant solutions increased primarily due to higher payment processing fees from growing Shopify Payments GMV, offset by the absence of costs from the logistics operations sold in Q2 2023[275](index=275&type=chunk) [Operating Expenses](index=57&type=section&id=Operating%20Expenses) Total operating expenses significantly decreased to **$3.40 billion** in 2024 from **$4.93 billion** in 2023, primarily due to the absence of a **$1.34 billion** impairment charge and **$148 million** in severance costs from 2023, while sales and marketing expenses increased **14%** - Sales and marketing expenses increased **14%** to **$1.39 billion** in 2024, driven by higher performance marketing spend and affiliate program payouts[280](index=280&type=chunk) - Research and development expenses decreased **21%** to **$1.37 billion**, primarily due to the absence of **$164 million** in accelerated stock-based compensation and **$102 million** in severance costs that were recorded in 2023[282](index=282&type=chunk) - General and administrative expenses decreased **16%** to **$410 million**, mainly due to a **$55 million reversal** of a legal liability and the absence of prior-year impairment and severance costs[284](index=284&type=chunk) - In 2023, the company recognized a **$1.34 billion impairment charge** related to the sale of its logistics businesses[288](index=288&type=chunk) [Liquidity and Capital Resources](index=63&type=section&id=Liquidity%20and%20Capital%20Resources) As of December 31, 2024, Shopify held **$5.5 billion** in cash, cash equivalents, and marketable securities, an increase of **$471 million** driven by **$1.6 billion** in operating cash flow, with sufficient liquidity to meet obligations including **$920 million** in convertible senior notes due in 2025 Cash and Liquidity Summary | | Dec 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | (in US $ millions) | | | | **Cash, cash equivalents and marketable securities** | **5,479** | **5,008** | | Net cash provided by operating activities (FY) | 1,616 | 944 | | Net cash used in investing activities (FY) | (1,586) | (1,244) | - The company has **$920 million** in convertible senior notes due in less than one year, which it has the option to settle in Class A subordinate voting shares instead of cash[309](index=309&type=chunk)[317](index=317&type=chunk) - Principal cash requirements are for working capital and ongoing operations, and the company believes it has sufficient liquidity for the foreseeable future[309](index=309&type=chunk) [Critical Accounting Policies and Estimates](index=65&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Shopify's critical accounting policies involve significant judgment and estimates, particularly in Revenue Recognition for principal versus agent determinations, the valuation of equity and other investments, and the assessment of loss contingencies for legal matters - Significant judgment is required in Revenue Recognition to determine if Shopify is the principal (gross revenue) or agent (net revenue) in arrangements involving third parties, such as for shipping labels, apps, and themes[323](index=323&type=chunk) - Valuation of equity investments in private companies without readily determinable fair values requires estimates and judgments regarding assumptions like revenue growth rates and market multiples[326](index=326&type=chunk) - The company must estimate the probability and amount of loss for legal contingencies, which requires significant judgment, especially in early-stage proceedings or with indeterminate damages[330](index=330&type=chunk)[331](index=331&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=67&type=section&id=Item%207A%3A%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Shopify is exposed to foreign currency exchange risk, equity investment risk, and interest rate risk, with a significant portion of revenues and expenses in foreign currencies, **$5.3 billion** in equity and other investments subject to market volatility, and interest rate risk affecting its cash equivalents, marketable securities, and convertible notes [Financial Statements and Supplementary Data](index=70&type=section&id=Item%208%3A%20Financial%20Statements%20and%20Supplementary%20Data) [Report of Independent Registered Public Accounting Firm](index=74&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) PricewaterhouseCoopers LLP issued an unqualified opinion on Shopify's consolidated financial statements and internal control over financial reporting for 2024, identifying "Revenue Recognition - Principal versus Agent Considerations" as a Critical Audit Matter - The auditor issued an unqualified (clean) opinion on the consolidated financial statements and the effectiveness of internal control over financial reporting as of December 31, 2024[376](index=376&type=chunk) - A Critical Audit Matter (CAM) was identified related to "Revenue Recognition – Principal versus Agent Considerations" due to the significant judgment required by management in determining whether to recognize revenue on a gross or net basis[384](index=384&type=chunk)[385](index=385&type=chunk) [Consolidated Financial Statements](index=76&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements for the year ended December 31, 2024, show significant growth and a return to profitability, with total assets growing to **$13.9 billion**, a net income of **$2.02 billion**, and strong cash flow from operations of **$1.62 billion** Consolidated Balance Sheet Highlights (As of Dec 31) | | 2024 | 2023 | | :--- | :--- | :--- | | (in US $ millions) | | | | **Total Current Assets** | **7,254** | **6,275** | | **Total Assets** | **13,924** | **11,299** | | **Total Current Liabilities** | **1,956** | **898** | | **Total Liabilities** | **2,366** | **2,233** | | **Total Shareholders' Equity** | **11,558** | **9,066** | Consolidated Statement of Operations Highlights (Year Ended Dec 31) | | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | (in US $ millions) | | | | | **Total Revenues** | **8,880** | **7,060** | **5,600** | | **Income (loss) from operations** | **1,075** | **(1,418)** | **(822)** | | **Net income (loss)** | **2,019** | **132** | **(3,460)** | Consolidated Statement of Cash Flows Highlights (Year Ended Dec 31) | | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | (in US $ millions) | | | | | **Net cash provided by (used in) operating activities** | **1,616** | **944** | **(136)** | | **Net cash used in investing activities** | **(1,586)** | **(1,244)** | **(719)** | | **Net cash provided by financing activities** | **61** | **60** | **18** | [Notes to the Consolidated Financial Statements](index=80&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) The notes detail Shopify's accounting policies and financial results, including significant judgment in revenue recognition, the **$1.3 billion** impairment from the 2023 logistics business sale, valuation of **$3.18 billion** in equity investments, **$1.22 billion** in loans, **$920 million** in convertible senior notes, and the dual-class share structure with the Founder Share granting the CEO **40%** voting control - **Business Sale (Note 4):** In Q2 2023, the company sold its logistics businesses, resulting in a net impairment loss of **$1.34 billion**, which included a **$1.44 billion** goodwill impairment[471](index=471&type=chunk)[472](index=472&type=chunk) - **Financial Instruments (Note 6):** As of Dec 31, 2024, the company held **$3.18 billion** in equity investments with readily determinable fair values (e.g., Global-E, Affirm, Klaviyo) and **$717 million** in private company investments[482](index=482&type=chunk)[483](index=483&type=chunk) - **Loans and MCAs (Note 8):** The net balance of loans and merchant cash advances grew to **$1.22 billion** at year-end 2024 from **$816 million** in 2023, reflecting the expansion of Shopify Capital[491](index=491&type=chunk) - **Convertible Notes (Note 16):** The company has **$920 million** in 0.125% convertible senior notes maturing in November 2025, now classified as a current liability[521](index=521&type=chunk)[533](index=533&type=chunk) - **Shareholders' Equity (Note 19):** Details the dual-class share structure and the Founder Share, which provides CEO Tobias Lütke with **40%** of the total voting power[542](index=542&type=chunk)[543](index=543&type=chunk) [Other Information](index=43&type=section&id=Other%20Information) [Cybersecurity](index=43&type=section&id=Item%201C%3A%20Cybersecurity) Shopify maintains a comprehensive cybersecurity risk management framework led by the CISO and overseen by the Audit Committee, employing threat intelligence and testing, with no material threats identified in 2024 - Cybersecurity risk management is overseen by the Audit Committee, with the program led by the Chief Information Security Officer (CISO)[208](index=208&type=chunk)[209](index=209&type=chunk) - The company employs a risk management framework that includes threat intelligence, penetration testing, bug bounty reports, and third-party expert engagement to assess and enhance security[207](index=207&type=chunk) - In 2024, Shopify did not identify any cybersecurity threats that had a material effect on its business, results of operations, or financial condition[210](index=210&type=chunk) [Controls and Procedures](index=70&type=section&id=Item%209A%3A%20Controls%20and%20Procedures) Shopify's management, including the CEO and CFO, concluded that the company's disclosure controls and internal control over financial reporting were effective as of December 31, 2024, a conclusion affirmed by an unqualified auditor's opinion - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2024[352](index=352&type=chunk) - Based on an assessment using the COSO framework, management determined that the company's internal control over financial reporting was effective as of December 31, 2024, with no material weaknesses identified[354](index=354&type=chunk) - The effectiveness of internal control over financial reporting was audited by PricewaterhouseCoopers LLP, which provided an unqualified opinion[355](index=355&type=chunk) ```

Shopify Merchant Success Powers Q4 Outperformance Across Both Top and Bottom-Line Q4 Revenue Growth Accelerates to 31% and Free Cash Flow Margin Expands to 22%; Full Year Revenue Up 26% and Free Cash Flow Margin Increases to 18% Internet, Everywhere - February 11, 2025 - Shopify Inc. (NYSE, TSX: SHOP), a leading commerce technology company announced today financial results for the quarter and year ended December 31, 2024. "2024 was a stand-out year for Shopify. We seized every opportunity to fuel our growth ...