Press Releases

Shopify Announces Third-Quarter 2020 Financial Results

October 29, 2020

Third-Quarter Revenue Grows 96% on GMV Growth of 109% Year on Year

Shopify reports in U.S. dollars and in accordance with U.S. GAAP

Ottawa, Canada - October 29, 2020 - Shopify Inc. (NYSE:SHOP)(TSX:SHOP), a leading global commerce company, announced today strong financial results for the third quarter ended September 30, 2020.

“The accelerated shift to digital commerce triggered by COVID-19 is continuing, as more consumers shop online and entrepreneurs step up to meet demand,” said Harley Finkelstein, Shopify’s President. “Entrepreneurs will be the force in rebuilding economies all over the world, which makes it even more important for Shopify to innovate and build the critical tools that merchants need to succeed in a low-touch retail environment.”

“Shopify’s tremendous third-quarter results reflect the resilience and entrepreneurial spirit of our merchants,” said Amy Shapero, Shopify’s CFO. “More entrepreneurs are signing on to Shopify so they can quickly and easily put their ideas into action. We continue to evolve our global commerce operating system to make it easier for merchants to get online and start selling, get discovered, and get their goods to buyers, while providing a delightful shopping experience.”

Third-Quarter Financial Highlights

  • Total revenue in the third quarter was $767.4 million, a 96% increase from the comparable quarter in 2019.
  • Subscription Solutions revenue was $245.3 million, up 48% year over year, primarily due to more merchants joining the platform. 
  • Merchant Solutions revenue growth increased 132%, to $522.1 million, driven primarily by the growth of Gross Merchandise Volume1 ("GMV").
  • Monthly Recurring Revenue2 ("MRR") as of September 30, 2020 was $74.4 million. Growth accelerated to 47% year-over-year with MRR up from $50.7 million as of September 30, 2019 as merchants from both the 90-day free trial (offered from March 21, 2020 through May 31, 2020) and standard 14-day free trial (offered from June 1, 2020 onwards) converted into paying merchants in the quarter, creating a ‘double cohort’ effect. Shopify Plus contributed $18.7 million, or 25%, of MRR compared with 27% of MRR as of September 30, 2019 as a result of the significantly higher number of Standard merchants joining the platform in Q3 2020.
  • GMV for the third quarter was $30.9 billion, an increase of $16.1 billion, or 109% over the third quarter of 2019. Gross Payments Volume3 ("GPV") grew to $14.0 billion, which accounted for 45% of GMV processed in the quarter, versus $6.2 billion, or 42%, for the third quarter of 2019.
  • Gross profit dollars grew 87% to $405.1 million in the third quarter of 2020, compared with $216.7 million for the third quarter of 2019.
  • Adjusted gross profit4 grew 88% to $412.6 million in the third quarter of 2020, compared with $219.4 million for the third quarter of 2019. 
  • Operating income for the third quarter of 2020 was $50.6 million, or 7% of revenue, versus a loss of $35.7 million, or 9% of revenue, for the comparable period a year ago.
  • Adjusted operating income4 for the third quarter of 2020 was $130.9 million, or 17% of revenue, compared with adjusted operating income of $10.5 million or 3% of revenue in the third quarter of 2019.
  • Net income for the third quarter of 2020 was $191.1 million, or $1.54 per diluted share, compared with a net loss of $72.8 million, or $0.64 per basic and diluted share, for the third quarter of 2019. 
  • Adjusted net income4 for the third quarter of 2020 was $140.8 million, or $1.13 per diluted share, compared with adjusted net loss of $33.6 million, or $0.29 per basic and diluted share, for the third quarter of 2019. Adjusted net income in the third quarter of 2020 excludes an unrealized gain on an equity investment of $133.2 million or $1.07 per share, stock-based compensation and related payroll taxes of $75.4 million or $0.60 per share, and other adjustments totaling $7.5 million or $0.06 per share.
  • At September 30, 2020, Shopify had $6.12 billion in cash, cash equivalents and marketable securities, compared with $2.46 billion on December 31, 2019. The increase reflects $2.03 billion of net proceeds from Shopify’s offering of Class A subordinate voting shares and convertible senior notes in the third quarter of 2020 and $1.46 billion of net proceeds from Shopify's offering of Class A subordinate voting shares in the second quarter of 2020.

Third-Quarter Business Highlights

  • Shopify began rolling out to a select number of merchants early access to Shop Pay Installments, a ‘buy now, pay later’ product that lets merchants offer their customers more payment choice and flexibility at checkout, helping merchants boost sales through increased cart size and higher conversion. 
  • Shopify continued to build the foundation of Shopify Fulfillment Network, including developing the software that connects the network, adding partner nodes and improving their performance, and enhancing the merchant-facing app and merchant support functions. With strong demand for Shopify Fulfillment Network’s services expected heading into the holiday selling season in Q4 2020, we intend to continue to enroll merchants and build volume at a rate where we can maintain high quality standards to achieve product-market fit at this early stage of our fulfillment network’s development.
  • 6 River Systems held its second annual user conference, FLOW 2020, a fully interactive online event where several enhancements to its wall-to-wall fulfillment solution were announced, including The Bridge, an overarching tool that connects the data from what’s happening in a physical warehouse operation to an intuitive cloud-based control center, providing more visibility into operations and increasing efficiency.
  • Shopify launched Shopify Payments in Belgium, enabling iDEAL as a local payment method and supporting Bancontact debit payments, expanding the availability of Shopify Payments to 17 countries.
  • 51% of eligible merchants in the United States and Canada utilized Shopify Shipping in the third quarter of 2020, versus 45% in the third quarter of 2019.
  • Merchants in the U.S., Canada, and the U.K. received $252.1 million in merchant cash advances and loans from Shopify Capital in the third quarter of 2020, an increase of 79% versus the $141.0 million received by U.S. merchants in the third quarter of last year. Shopify Capital has grown to approximately $1.4 billion in cumulative capital advanced since its launch in April 2016, with approximately $248.0 million of which was outstanding on September 30, 2020.
  • Shopify’s partner ecosystem continued to expand, as approximately 37,400 partners referred a merchant to Shopify over the past 12 months, compared with 23,000 over the 12 months ended September 30, 2019.

Subsequent to Third-Quarter 2020

  • Shopify announced a collaboration with Operation HOPE to help the organization’s goal to create one million new Black-owned businesses in the U.S. by 2030. Shopify intends to provide up to $130 million of resources to support Operation HOPE’s efforts to reduce systemic barriers to entry to entrepreneurship historically faced by the Black community.
  • Shopify launched the TikTok channel, enabling merchants to market their products using TikTok for Business. Merchants are able to create in-feed video ads that autoplay between videos while users scroll through their For You page. Shopify and TikTok will also collaborate to test new commerce features over the coming months that will further empower merchants to expand their paid and organic reach in video and on profiles.

Financial Outlook

While Shopify expects both sellers and buyers to continue adopting multi-channel commerce for safety as the COVID-19 pandemic continues, and to continue using multi-channel commerce for selection and convenience, near-term demand for our subscription and merchant solutions depends on several external factors that are particularly fluid at present. These include unemployment, fiscal stimulus, and the magnitude and duration of the COVID-19 pandemic, all of which may impact new shop creation on our platform and consumer spending. 

Despite the heightened uncertainty surrounding the macro environment, Shopify remains uniquely positioned to level the playing field for entrepreneurs during this period of rapid change in the retail landscape. While Shopify is not providing a financial outlook for Q4 2020 or for full year 2020, as a leading global commerce operating system that can help merchants of all sizes adapt their businesses to this new reality, Shopify expects to continue to attract more independent voices to commerce, and will continue investing to innovate on their behalf.

Quarterly Conference Call

Shopify’s management team will hold a conference call to discuss our third-quarter results today, October 29, 2020, at 8:30 a.m. ET. The conference call will be webcast on the investor relations section of Shopify’s website at An archived replay of the webcast will be available following the conclusion of the call.

Shopify’s Third-Quarter 2020 Interim Unaudited Condensed Consolidated Financial Statements and Notes and its Third Quarter 2020 Management's Discussion and Analysis are available on Shopify’s website at and will be filed on SEDAR at and on EDGAR at

About Shopify

Shopify is a leading global commerce company, providing trusted tools to start, grow, market, and manage a retail business of any size. Shopify makes commerce better for everyone with a platform and services that are engineered for reliability, while delivering a better shopping experience for consumers everywhere. Headquartered in Ottawa, Canada, Shopify powers over one million businesses in more than 175 countries and is trusted by brands such as Allbirds, Gymshark, Heinz, Staples and many more. For more information, visit

Non-GAAP Financial Measures

To supplement our consolidated financial statements, which are prepared and presented in accordance with United States generally accepted accounting principles ("GAAP"), Shopify uses certain non-GAAP financial measures to provide additional information in order to assist investors in understanding our financial and operating performance.

Adjusted gross profit, adjusted operating income, non-GAAP operating expenses, adjusted net income (loss) and adjusted net income (loss) per share are non-GAAP financial measures that exclude the effect of stock-based compensation expenses and related payroll taxes and amortization of acquired intangibles. Adjusted net income and adjusted net income per share also exclude an unrealized gain on an equity investment, amortization of the debt discount related to Shopify’s convertible senior notes, and tax effects related to non-GAAP adjustments.

Management uses non-GAAP financial measures internally for financial and operational decision-making and as a means to evaluate period-to-period comparisons. Shopify believes that these non-GAAP measures provide useful information about operating results, enhance the overall understanding of past financial performance and future prospects, and allow for greater transparency with respect to key metrics used by management in its financial and operational decision making. Non-GAAP financial measures are not recognized measures for financial statement presentation under U.S. GAAP and do not have standardized meanings, and may not be comparable to similar measures presented by other public companies. Such non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, the corresponding measures calculated in accordance with GAAP. See the financial tables below for a reconciliation of the non-GAAP measures.

Forward-looking Statements

This press release contains certain forward-looking statements within the meaning of applicable securities laws, including statements regarding Shopify’s planned business initiatives and operations and financial outlook, the performance of Shopify's merchants, the impact of Shopify's business on its merchants and other entrepreneurs, and economic activity and consumer spending. Words such as “believe”, "continue", "will", "intends", "support", “allow”, and "expect" or similar expressions are intended to identify forward-looking statements.

These forward-looking statements are based on Shopify’s current projections and expectations about future events and financial trends that management believes might affect its financial condition, results of operations, business strategy and financial needs, and on certain assumptions and analysis made by Shopify in light of the experience and perception of historical trends, current conditions and expected future developments and other factors management believes are appropriate. These projections, expectations, assumptions and analyses are subject to known and unknown risks, uncertainties, assumptions and other factors that could cause actual results, performance, events and achievements to differ materially from those anticipated in these forward-looking statements. Although Shopify believes that the assumptions underlying these forward-looking statements are reasonable, they may prove to be incorrect, and readers cannot be assured that actual results will be consistent with these forward-looking statements. Actual results could differ materially from those projected in the forward-looking statements as a result of numerous factors, including certain risk factors, many of which are beyond Shopify’s control, including but not limited to: (i) uncertainty around the duration and scope of the COVID-19 pandemic and the impact of the pandemic and actions taken in response on global and regional economies and economic activity; (ii) shifting our operations to be “digital-by-default”; (iii) merchant acquisition and retention; (iv) managing our growth; (v) our history of losses; (vi) our limited operating history; (vii) our ability to innovate; (viii) the security of personal information we store relating to merchants and their customers and consumers with whom we have a direct relationship; (ix) a disruption of service or security breach; (x) our potential inability to compete successfully against current and future competitors; (xi) international sales and the use of our platform in various countries; (xii) the reliance of our growth in part on the success of our strategic relationships with third parties; (xiii) our potential failure to effectively maintain, promote and enhance our brand; (xiv) our use of a single cloud-based platform to deliver our services; (xv) our potential inability to achieve or maintain data transmission capacity; (xvi) our reliance on a single supplier to provide the technology we offer through Shopify Payments; (xvii) payments processed through Shopify Payments; (xviii) our potential inability to hire, retain and motivate qualified personnel; (xix) serious errors or defects in our software or hardware or issues with our hardware supply chain; (xx) 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; and (xxi) other one-time events and other important factors disclosed previously and from time to time in Shopify’s filings with the U.S. Securities and Exchange Commission and the securities commissions or similar securities regulatory authorities in each of the provinces or territories of Canada. The forward-looking statements contained in this news release represent Shopify’s expectations as of the date of this news release, or as of the date they are otherwise stated to be made, and subsequent events may cause these expectations to change. Shopify undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law.

1. 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.

2. 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.

3.Gross Payments Volume, or GPV, is the amount of GMV processed through Shopify Payments.

4. Non-GAAP financial measures exclude the effect of stock-based compensation expenses and related payroll taxes, amortization of acquired intangibles and related taxes, an unrealized gain on an equity investment and related taxes, and amortization of the debt discount related to convertible senior notes and related taxes. Please refer to "Non-GAAP Financial Measures" in this press release for more information.

Shopify Announces Third-Quarter 2020 Financial Results.pdf

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