SHOPIFY INC. (SHOP) · Quarterly Report (10-Q) SEC Filing

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _________________________________ Form 10-Q _________________________________ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2026 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to ___________ _________________________________ _________________________________ Shopify Inc. (Exact name of registrant as specified in its charter) _________________________________ Canada001-3740098-0486686 (State or other jurisdiction of incorporation or organization)(Commission File Number)(IRS Employer Identification No.) 8488 Rozita Lee Ave, Bldg 3 Suite 100 Las Vegas,Nevada89113 (Address of principal executive office, including zip code) Registrant s telephone number, including area code: (613) 241-2828 x 1045 Securities registered pursuant to Section 12(b) of the Act: Title of each classTrading Symbol(s)Name of each exchange on which registered Class A Subordinate Voting SharesSHOPThe Nasdaq Global Select Market Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T ( 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of large accelerated filer, accelerated filer, smaller reporting company, and "emerging growth company" in Rule 12b-2 of the Exchange Act. Large accelerated filer Accelerated filer Non-accelerated filer Smaller reporting company Emerging growth company If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No The registrant had 1,208,570,347 Class A Subordinate Voting Shares, 78,073,584 Class B Restricted Voting Shares and 1 Founder Share issued and outstanding as of July 31, 2026. Shopify Inc. TABLE OF CONTENTS Part I: Financial Information Page Item 1: Financial Statements (unaudited) 5 Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations 26 Item 3: Quantitative and Qualitative Disclosures About Market Risk 41 Item 4: Controls and Procedures 44 Part II: Other Information Item 1: Legal Proceedings 46 Item 1A: Risk Factors 46 Item 2: Unregistered Sales of Equity Securities and Use of Proceeds 46 Item 3: Defaults Upon Senior Securities 46 Item 4: Mine Safety Disclosures 46 Item 5: Other Information 47 Item 6: Exhibits 48 Signatures 48 Table of Contents Forward-Looking Statements This Quarterly Report on Form 10-Q contains forward-looking statements under the provisions of the United States ("U.S.") Private Securities Litigation Reform Act of 1995, Section 27A of the U.S. Securities Act of 1933 (as amended, the "Securities Act"), Section 21E of the U.S. Securities Exchange Act of 1934 (as amended, the "Exchange Act") and forward-looking information within the meaning of applicable Canadian securities legislation. In some cases, you can identify forward-looking statements by terminology such as "enable", "may", "might", "will", "should", "could", "expects", "focused on", "intends", "plans", "anticipates", "believes", "predicts", "potential", "continue", "become", "seek", "strive" or the negative of these terms or other similar words. Any forward-looking statements are based on our management s perception of historic trends, current conditions and expected future developments, as well as other assumptions that management believes are appropriate in the circumstances. In addition, any statements or information that refer to expectations, beliefs, plans, projections, objectives, performance or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking. In particular, forward-looking statements include, but are not limited to, statements about: our ability to: expand, grow and retain our merchant base; localize features; offer more sales channels that can connect to our platform; increase and extend the functionality of our platform; catalyze merchants' sales growth; leverage emerging technologies, including artificial intelligence ("AI"); enhance our ecosystem and partner programs; provide a high level of merchant service; hire key talent and retain and motivate qualified personnel; and maximize long-term value; our products and solutions enabling and increasing the probability of merchant success; our beliefs regarding future macroeconomic conditions and their impact on Shopify and our merchants, including with regard to inflationary pressures, international trade risks and trade protection measures, including tariffs, trade wars, barriers and restrictions, or threats of such actions and related uncertainty; the expected impact of seasonality on our current and future business; our exposure to fluctuations in foreign currencies; the ability to grow our addressable markets and meet merchant needs; our expectation that we will continue to invest in data analytics, machine learning and AI; our expectations regarding the development of emerging technologies, including AI, and applications of these technologies to our business; our intentions regarding future growth and investments to drive future growth, the impact of those investments and our ability to manage such growth effectively; our intention to further tailor our sales strategies to attract large volume brands; expansion of our platform's capabilities; enhancing our ecosystem and partner program, including through the formation of strategic partnerships; our ability to quickly distribute new versions of our platform; our expectations regarding our sustainability initiatives; our assumptions regarding competitive factors in our markets and the expectation of increased competition; our ability to continuously enhance, protect and safeguard our intellectual property; the possibility that we may experience cybersecurity attacks in the future and future efforts to harden our infrastructure to build resilience in the face of such threats; our expectations of legislation and government regulation and the impact on our platform; the impact of strategic decisions on short-term revenue or profitability; the need to devote additional resources to improve our operational infrastructure and continue to enhance its scalability; our expectations regarding our future financial performance, including revenue, gross margin, operating expenses and cash flows; our expectations regarding market risks, including foreign currency exchange risk and interest rate risk, and the effectiveness of our hedging activities; our expectations regarding our liquidity position; the expansion of our platform and offerings internationally; 3 Table of Contents our ability to maintain our corporate culture as we execute with a remote-first global workforce; our expectations regarding the adoption of our platform and solutions by Shopify Plus merchants and enterprise-level businesses; our expectation that the growth of our business will depend in part on the success of our relationships with third parties; our intention to pursue additional third-party relationships; our expectations regarding future investment in the business, including with respect to key talent, sales and marketing, research and development, the creation and implementation of new products and services, the functionality of our platform, merchant service and support, security and operational requirements, our network infrastructure, acquisitions and the expansion of our international operations; our ability to optimize marketing spend and successfully sell to and support enterprise merchants in order to drive growth; the effectiveness of our Flex Comp compensation system in attracting, motivating and retaining qualified personnel; our expectation that as our consumer-facing offerings evolve and grow in popularity, the risk of additional laws and regulations impacting our business will also increase; our intention to continue our use and development of open source software; potential acquisitions, divestitures and investments; expected synergies and other benefits from acquisitions, including from the integration of acquired technology; the exploration, expansion and evolution of other products, models, structures and additional markets for our lending and financing products; our expectations with respect to changes in our pricing models; our expectation that we will not pay any cash dividends in the foreseeable future; our expectations regarding the adoption and impact of new accounting standards; issuances of Class B restricted voting shares and preferred shares; redemption of the Founder Share; our intention to invest our future earnings, if any, to fund our growth; and our expectations with respect to adapting our current facilities. Factors that may cause actual results to differ materially from current expectations may include, but are not limited to, risks and uncertainties that are discussed in greater detail in Part I Item 1A "Risk Factors" of the Company s Annual Report on Form 10-K for the year ended December 31, 2025 (the "2025 Form 10-K"), as well as in our condensed consolidated financial statements, related notes, and the other information appearing elsewhere in this report and our other filings with the Securities and Exchange Commission ("SEC"). Although we believe that the plans, intentions, expectations, assumptions and strategies reflected in our forward-looking statements are reasonable, these statements relate to future events or our future financial performance, and involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond our control. If one or more of these risks or uncertainties occur, or if our underlying assumptions prove to be incorrect, actual results may vary significantly from those implied or projected by the forward-looking statements. In addition, we operate in a highly competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. No forward-looking statement is a guarantee of future results. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements. You should read this Quarterly Report on Form 10-Q and the documents that we reference in this Quarterly Report on Form 10-Q completely and with the understanding that our actual future results may be materially different from any future results expressed or implied by these forward-looking statements. The forward-looking statements in this Quarterly Report on Form 10-Q represent our views as at the date of this Quarterly Report on Form 10-Q. We anticipate that subsequent events and developments may cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we have no current intention of doing so except to the extent required by applicable law. Therefore, these forward-looking statements do not represent our views as of any date other than the date of this Quarterly Report on Form 10-Q. 4 PART I: FINANCIAL INFORMATION Item 1: Financial Statements (unaudited) Index Page Condensed Consolidated Balance Sheets 6 Condensed Consolidated Statements of Operations and Comprehensive Income 7 Condensed Consolidated Statements of Changes in Shareholders Equity 8 Condensed Consolidated Statements of Cash Flows 9 Notes to the Condensed Consolidated Financial Statements 10 1. Nature of Business 10 2. Basis of Presentation and Consolidation 10 3. Significant Accounting Policies 10 4. Financial Instruments 12 5. Trade and Other Receivables 17 6. Loans and Merchant Cash Advances 17 7. Deferred Revenue 19 8. Contingencies 20 9. Related Parties 20 10. Shareholders Equity 21 11. Changes in Accumulated Other Comprehensive (Loss) Income 23 12. Income Taxes 23 13. Net Income per Share 24 14. Segment and Geographical Information 25 5 Shopify Inc. Condensed Consolidated Balance Sheets (unaudited) (Expressed in US $ millions, except share amounts) December 31, 20251,6561,5453,2914,2334665002,1841,7842192348,296535390882730303325395259754,8544,5825596024914916,89314,47015,1891,1151,07533530010171,392799816817179553248,63610,376274236(7)13,7812,86012,68413,47314,47015,189Six months ended June 30,202520262025802 656 1,552 1,276 2,781 2,024 5,201 3,764 2,680 6,753 5,040 163 121 311 244 1,712 1,257 3,188 2,325 1,378 3,499 2,569 1,708 1,302 3,254 2,471 498 415 994 820 445 394 882 771 136 122 251 231 141 80 257 155 1,220 1,011 2,384 1,977 488 291 870 494 66 106 141 171 1 1 4 1 1,249 681 185 (340)(22)(24)(43)(47)(7)24 (16)30 1,287 788 271 (185)1,775 1,079 1,141 309 (273)(173)(220)(85)1,502 906 921 224 $1.16 $0.70 $0.71 $0.17 $1.16 $0.69 $0.71 $0.17 1,295,220,3071,297,746,0501,299,266,6111,296,593,3421,297,940,9581,308,993,8381,302,627,9271,308,463,539(4)16 (11)21 1 (5)3 (6)(3)11 (8)15 1,499 917 913 239 Additional Paid-In CapitalAccumulated Other Comprehensive Income (Loss)Accumulated (Deficit) SurplusTotal Amount As of December 31, 20249,634 305 (10)1,629 11,558 Exercise of stock options87 (28) 59 Stock-based compensation 114 114 Vesting of restricted share units86 (88) (2) Issuance of shares related to business acquisition24 (24) Net loss and comprehensive income for the period 4 (682)(678) As of March 31, 20259,831 279 (6)947 11,051 Exercise of stock options68 (24) 44 Stock-based compensation 113 113 Vesting of restricted share units86 (87) (1) 11 906 917 As of June 30, 20259,985 281 5 1,853 12,124 Accumulated Other Comprehensive Income (Loss)Accumulated (Deficit) SurplusTotal Amount10,376 1 2,860 13,473 Exercise of stock options10 6 Stock-based compensation 132 Vesting of restricted share units106 (3) (521) (521) Net loss and comprehensive loss for the period (5)(581)(586) As of March 31, 20269,971 (4)2,279 12,501 Exercise of stock options5 3 Stock-based compensation 128 Vesting of restricted share units105 (2) (1,445) (1,445) Net income and comprehensive loss for the period (3)1,502 1,499 As of June 30, 20268,636 (7)3,781 12,684 Six months ended June 30,2025202620251,502906921224781416128113260227 10 109444142871659826(31)(13)(12)(25)(25)(1,250)(682)(189)339222443474(46)18(58)(1)(35)(71)(41)6584281,139795(4)(6)(9)(10)(654)(1,464)(1,497)(3,182)1,4501,4642,9132,795(1,584)(944)(2,933)(1,749)1,4177672,4601,404(55)(71)(56)(75) (56)1232571(252)881(871)3449103(1,420) (1,911) (1,417)44(1,902)103(4)13(7)17(192)233111441,8481,3091,5451,4981,6561,5421,6561,5421486124188Long-term InvestmentsEquity and Other InvestmentsFair Value Level 1: 384 407 1,92425 25407 2,333 118 1,513 5875875255874,433Long-term InvestmentsEquity and Other InvestmentsFair Value Level 1: 5311527 2,453527 2,984 448 2,240 5585589755585,782December 31, 2025 Level 1Level 3TotalLevel 1Level 3Total Affirm Holdings, Inc.1,655 1,6551,511 1,511 Global-E Online Ltd.768 768868 868 Klaviyo, Inc.(1) 2562428052970599 Other 8 8 2,679242,7032,916702,986 (1) In the three and six months ended June 30, 2026, $6 million and $17 million was transferred from Level 3 to Level 1, respectively, due to the vesting of warrants (June 30, 2025 - $9 million and $14 million). The equity investments categorized as Level 3 in the fair value hierarchy represent unvested warrants that require the application of a discount for lack of marketability which was 9% at June 30, 2026 (December 31, 2025 - 11%). Adjustments related to equity and other investments with readily determinable fair values for the three and six months ended June 30, 2026 and 2025 were as follows: Six months ended June 30,202520262025 Balance, beginning of the period1,975 2,253 2,986 3,183 (3) (5) 731 502 (278)(428)2,703 2,755 2,703 2,755 December 31, 2025 Total initial value1,135 1,068 Cumulative gross unrealized gains832 310 Cumulative gross unrealized losses and impairment(412)(415) Total carrying value of equity and other investments without readily determinable fair values1,555 963 14 Table of Contents Adjustments related to equity and other investments without readily determinable fair values for the three and six months ended June 30, 2026 and 2025 were as follows: Six months ended June 30,202520262025 Balance, beginning of the period970 709 963 717 55 71 65 75 8 8 522 165 524 165 (1)(5)(1) (3) (15) 47 47 1,555 988 1,555 988 December 31, 2025 Level 2: Foreign exchange forward contracts and options assets (classified in other current assets) 4 Foreign exchange forward contract liabilities (classified in accounts payable and accrued liabilities)11 1 Unrealized gains and losses related to changes in the fair value of foreign exchange forward contracts and options designated as cash flow hedges were as follows: June 30, 2026June 30, 2025 (in US $ millions) Unrealized gains 8 Unrealized losses(9) Total net unrealized (losses) gains(9)8 These unrealized losses were included in "Accumulated other comprehensive (loss) income", "Other current assets" and "Accounts payable and accrued liabilities" in the condensed consolidated balance sheets. These amounts are expected to be reclassified into earnings over the next twelve months. Realized losses related to the maturity of foreign exchange forward contracts and options designated as cash flow hedges were as follows: Six months ended June 30,202520262025 (1) 6 December 31, 2025 Unbilled revenues, net250 229 98 98 57 109 34 39 27 25 500 Six months ended June 30,202520262025 Balance, beginning of the period19 16 17 16 7 7 13 14 (5) (7)(9)(14)21 16 21 16 December 31, 2025 Loans receivable, gross(1) 2,034 1,621 392 358 (242)(195)2,184 1,784 Six months ended June 30,202520262025 Allowance, beginning of the period220162195141814215488(59)(35)(107)(60)242169242169 Year of origination 202620252024TotalPercent (in US $ millions) Current1,875 337 2 2,214 91.3 % 30-89 Days12 21 33 1.4 % 14 24 2 40 1.6 % 180+ Days37 86 16 139 5.7 % Total1,938 468 20 2,426 100.0 % December 31, 2025 Year of origination 20252024TotalPercent (in US $ millions) Current1,803 19 1,822 92.0 % 30-89 Days16 6 22 1.1 % 90-179 Days16 7 23 1.2 % 180+ Days77 35 112 5.7 % Total1,912 67 1,979 100.0 % The Company maintains an internal monitoring list related to its outstanding loans. A merchant's ability and willingness to repay the loan and merchant cash advances outstanding under the program is analyzed for a variety of factors that include, but are not limited to current or expected age of the financing, merchant subscription or financing status, merchant gross merchandise volume trends and other changes to merchant credit profiles. 18 Table of Contents 7.Deferred Revenue Six months ended June 30,202520262025407 430 398 430 128 114 190 171 (121)(123)(174)(180)414 421 414 421 June 30, 2025 Current portion298 Long-term portion123 421 The opening balances of current and long-term deferred revenue were $283 million and $147 million, respectively, as of January 1, 2025. As of June 30, 2026, the long-term deferred revenue, excluding non-cash consideration received, will be recognized ratably over the remaining terms of the contracts with the customers, which range from two years to three years. The Company has received non-cash consideration in the form of equity investments in exchange for services to be rendered as part of strategic partnerships. As the Company is required to provide referral services and other services to support the partners' merchant offerings over the period of the performance obligations, revenue is deferred and recognized over time on a ratable basis over the expected terms of the contracts. The table below summarizes the gross changes in deferred revenue associated with this non-cash consideration received for the three and six months ended June 30, 2026 and 2025: Six months ended June 30,2026202520262025 Balance, beginning of the period129 177 141 190 8 8 (13)(12)(25)(25)124 165 124 165 50 49 74 116 165 Outstanding RSUs Number of Options(1) Weighted Average Exercise PriceRemaining Contractual Term (in years)Aggregate Intrinsic Value(2) Weighted Average Grant Date Fair ValueOutstanding RSUsWeighted Average Grant Date Fair Value (in US $ millions, except share and share price amounts) December 31, 202510,200,678 80.037.22826 3,486,886 110.16 Stock options granted2,890,556 114.9552.60 Stock options exercised(314,446)29.58 Stock options forfeited(273,197)107.52 RSUs granted3,456,081 117.19 RSUs settled(1,847,817)117.27 RSUs forfeited(241,701)109.29 June 30, 202612,503,591 88.777.23369 4,853,449 112.51 Stock options exercisable as of June 30, 2026 5,307,629 75.935.71236 (1) As of June 30, 2026, 12,492,455 of the outstanding stock options were granted under the Company's SOP and are exercisable for Class A subordinate voting shares and 11,136 of the outstanding stock options were granted under the Deliverr 2017 Stock Option and Grant Plan and are exercisable for Class A subordinate voting shares. (2) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock option awards and the closing market price of the Company's Class A subordinate voting shares as of June 30, 2026 and December 31, 2025. As of June 30, 2026, the Company had issued 6,724 deferred share units ("DSUs") under its LTIP. In connection with the acquisition of Vantage Discovery Inc. in the first quarter of 2025, 252,257 Class A subordinate voting shares were issued with trading restrictions. The restrictions on these shares are lifted over time and are being accounted for as stock-based compensation as the vesting is contingent on continued employment and therefore related to post-combination services. As of June 30, 2026, 173,428 of the Class A subordinate voting shares remained restricted. The following table illustrates the classification of stock-based compensation expense in the condensed consolidated statements of operations and comprehensive income, which includes both stock-based compensation and restricted stock-compensation expense: Six months ended June 30,202520262025 Cost of revenues21329111923908018315927215543113260227Average Price per Share(2) Value of Shares Repurchased(2) Remaining Amount Authorized (in US $ millions, except share and share price amounts) Balance, beginning of the period$ Authorization of share repurchases in the first quarter of 20262,000 Authorization of additional share repurchases in the second quarter of 20263,000 Repurchase of shares of Class A subordinate voting shares16,859,976 $114.63 1,933 (1,933) Balance, end of the period$3,067 (1) These repurchased shares of Class A subordinate voting shares were recognized within "Common stock". (2) Excludes immaterial broker commissions and excise tax accruals. 22 Table of Contents 11.Changes in Accumulated Other Comprehensive (Loss) Income The following table summarizes the changes in accumulated other comprehensive (loss) income, which is reported as a component of shareholders equity: 20262025 Balance, beginning of the period1 (10) Other comprehensive income before reclassifications(11)15 Gain on cash flow hedges reclassified from accumulated other comprehensive loss to earnings: 1 Research and development 4 General and administrative 1 Tax effect on unrealized gain (loss) on cash flow hedges3 (6) Other comprehensive (loss) income, net of tax(8)15 Balance, end of the period(7)5 12.Income Taxes The Company's provision for income taxes is determined by applying the estimated annual effective tax rate to income or loss from recurring operations and adjusting for the effects of any discrete income tax items specific to the period. The Company updates its estimate of the annual effective tax rate each quarter and makes cumulative adjustments if its estimated annual tax rate is expected to change. The Company s effective tax rate may be subject to fluctuation during the year as new information is obtained, which may affect the assumptions used to estimate the annual effective tax rate, including factors such as the mix of forecasted pre-tax earnings in the various jurisdictions in which the Company operates, any valuation allowance against deferred tax assets, the recognition and derecognition of tax benefits related to uncertain tax positions and changes in or the interpretation of tax laws in jurisdictions where the Company conducts business. The Company had a provision for income taxes of $273 million and $220 million in the three and six months ended June 30, 2026, respectively, as a result of earnings in various jurisdictions and unrealized gain on equity and other investments. The Company had a provision for income taxes of $173 million in the three months ended June 30, 2025, as a result of unrealized gain on equity and other investments and on account of earnings in various jurisdictions. The Company had a provision for income taxes of $85 million in the six months ended June 30, 2025, as a result of earnings in various jurisdictions, partially offset by unrealized loss on equity and other investments. We continue to be subject to review and audit by tax authorities around the world, which may lead to adjustments to our tax liabilities. In 2025, we received a proposed assessment from the Canada Revenue Agency ("CRA") related to our transfer pricing for tax year 2020. We disagree with the proposed assessment and intend to defend our position. While we believe that our tax position is appropriate, the final determination and timing of resolution of the above matter, and any other tax audits or litigation cannot be predicted with certainty. We continue to monitor the progress of tax audits with tax authorities. Adjustments arising from tax audits or litigation will be recorded in the period in which such matters are resolved. 23 Table of Contents 13.Net Income per Share The Company applies the two-class method to calculate its basic and diluted net income per share as Class A subordinate voting shares and Class B restricted voting shares are participating securities with equal participation rights and are entitled to receive dividends on a share for share basis. The Company uses the treasury stock method for calculating the effect of dilutive potential common stock from employee stock options and employee RSUs. The following table summarizes the reconciliation of the basic weighted average number of shares outstanding and the diluted weighted average number of shares outstanding: Six months ended June 30,202520262025 Numerator:1,502 906 921 224 1,295,220,3071,297,746,0501,299,266,6111,296,593,3422,062,9733,290,1022,477,1423,700,679655,8531,557,363882,3101,768,333 6,388,480 6,388,4801,82511,8431,86412,7051,297,940,9581,308,993,8381,302,627,9271,308,463,539$1.16 $0.70 $0.71 $0.17 $1.16 $0.69 $0.71 $0.17 958,367675,113 570,252 458,122 208,663145,745 271,799 195,807 34102 340 95 820,960 842,391 654,024 Six months ended June 30,202520262025 North America2,283 63 %1,703 63 %4,284 63 %3,203 64 %171 5 %133 5 %318 5 %252 5 %721 20 %533 20 %1,374 20 %993 19 %346 10 %265 10 %658 10 %505 10 %62 2 %46 2 %119 2 %87 2 %3,583 100 %2,680 100 %6,753 100 %5,040 100 %Six months ended June 30,202520262025 Monthly Recurring Revenue221 185 221 185 115,567 87,837 216,310 162,587 Six months ended June 30,202520262025 Revenues802 656 1,552 1,276 2,781 2,024 5,201 3,764 2,680 6,753 5,040 163 121 311 244 1,712 1,257 3,188 2,325 1,378 3,499 2,569 1,708 1,302 3,254 2,471 498 415 994 820 445 394 882 771 136 122 251 231 141 80 257 155 1,220 1,011 2,384 1,977 488 291 870 494 1,228 658 146 (386)59 130 125 201 1,775 1,079 1,141 309 (273)(173)(220)(85)1,502 906 921 224 $1.16 $0.70 $0.71 $0.17 $1.16 $0.69 $0.71 $0.17 1,295,220,307 1,297,746,050 1,299,266,611 1,296,593,342 1,297,940,958 1,308,993,838 1,302,627,927 1,308,463,539 Six months ended June 30,202520262025 Cost of revenues2 1 3 2 9 12 20 25 94 85 191 169 28 22 57 47 120 271 243 Six months ended June 30,202520262025 Cost of revenues2 2 4 4 1 1 2 3 5 6 Six months ended June 30,2025% Change20262025% Change Revenues802 656 22 %1,552 1,276 22 %2,781 2,024 37 %5,201 3,764 38 %3,583 2,680 34 %6,753 5,040 34 %22 %24 %23 %25 %78 %76 %77 %75 %100 %100 %100 %100 %Six months ended June 30,2025% Change20262025% Change Cost of revenues:163 121 35 %311 244 27 %1,712 1,257 36 %3,188 2,325 37 %1,875 1,378 36 %3,499 2,569 36 %5 %5 %5 %5 %48 %47 %47 %46 %52 %51 %52 %51 %Six months ended June 30,2025% Change20262025% Change Gross profit1,708 1,302 31 %3,254 2,471 32 %48 %49 %48 %49 %Six months ended June 30,2025% Change20262025% Change Sales and marketing498 415 20 %994 820 21 %14 %15 %15 %16 %Six months ended June 30,2025% Change20262025% Change Research and development 445 394 13 %882 771 14 %12 %15 %13 %15 %Six months ended June 30,2025% Change20262025% Change General and administrative 136 122 11 %251 231 9 %4 %5 %4 %5 %Six months ended June 30,2025% Change20262025% Change Transaction and loan losses 141 80 76 %257 155 66 %4 %3 %4 %3 %Six months ended June 30,2025% Change20262025% Change Net gain (loss) on equity and equity method investments 1,228 658 87%146 (386)(138)%Six months ended June 30,2025% Change20262025% Change Other income, net59 130 (55)%125 201 (38)%Six months ended June 30,2025% Change20262025% Change Provision for income taxes (273)(173)58%(220)(85)159% Jun 30, 2026Mar 31, 2026Dec 31, 2025Sep 30, 2025Jun 30, 2025Mar 31, 2025Dec 31, 2024Sep 30, 2024 (in US $ millions, except per share amounts) Revenues Subscription solutions802 750 777 699 656 620 666 610 Merchant solutions2,781 2,420 2,895 2,145 2,024 1,740 2,146 1,552 3,583 3,170 3,672 2,844 2,680 2,360 2,812 2,162 Cost of revenues(1)(2) Subscription solutions163 148 148 128 121 123 134 108 Merchant solutions1,712 1,476 1,831 1,325 1,257 1,068 1,326 936 1,875 1,624 1,979 1,453 1,378 1,191 1,460 1,044 Gross profit1,708 1,546 1,693 1,391 1,302 1,169 1,352 1,118 Operating expenses Sales and marketing(1)(2) 498 496 433 410 415 405 348 331 Research and development(1)(2) 445 437 390 375 394 377 351 332 General and administrative(1)(3) 136 115 125 115 122 109 112 114 Transaction and loan losses141 116 114 148 80 75 76 58 1,220 1,164 1,062 1,048 1,011 966 887 835 Income from operations488 382 631 343 291 203 465 283 1,228 (1,082)182 (112)658 (1,044)906 484 Other income, net59 66 79 77 130 71 50 93 Income (loss) before income taxes1,775 (634)892 308 1,079 (770)1,421 860 (Provision for) recovery of income taxes(273)53 (149)(44)(173)88 (128)(32) Net income (loss)1,502 (581)743 264 906 (682)1,293 828 Basic$1.16 $(0.45)$0.57 $0.20 $0.70 $(0.53)$1.00 $0.64 Diluted$1.16 $(0.45)$0.57 $0.20 $0.69 $(0.53)$0.99 $0.64 36 Table of Contents In addition to disclosing financial results in accordance with GAAP, the table below provides supplementary non-GAAP financial measures for Non-GAAP net income and diluted net income per share to consider in evaluating operating performance. These non-GAAP measures should not be viewed as a substitute for reported results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP measures that may be presented by other companies. Mar 31, 2026Dec 31, 2025Sep 30, 2025Jun 30, 2025Mar 31, 2025Dec 31, 2024Sep 30, 20241,502 (581)743 264 906 (682)1,293 828 135 141 129 122 133 126 120 119 (1,250)1,061 (248)62 (682)1,021 (928)(512)22 21 (28)21 24 23 22 28 94 29 140 (171)(57)(57)74 (153)68 (4)549 471 633 441 455 335 575 459 $1.16 $(0.45)$0.57 $0.20 $0.69 $(0.53)$0.99 $0.64 $0.42 $0.36 $0.48 $0.34 $0.35 $0.25 $0.44 $0.36 Jun 30, 2026Mar 31, 2026Dec 31, 2025Sep 30, 2025Jun 30, 2025Mar 31, 2025Dec 31, 2024Sep 30, 2024 (in US $ millions) Cost of revenues2 1 1 1 1 1 Sales and marketing9 11 10 13 12 13 13 15 Research and development94 97 87 78 85 84 81 77 General and administrative28 29 27 24 22 25 24 23 133 138 125 116 120 123 118 115 Jun 30, 2026Mar 31, 2026Dec 31, 2025Sep 30, 2025Jun 30, 2025Mar 31, 2025Dec 31, 2024Sep 30, 2024 (in US $ millions) Cost of revenues2 2 3 2 2 2 1 3 Sales and marketing 1 Research and development 1 1 1 1 1 1 2 3 4 3 3 3 2 4 (3) Includes impairment related costs associated with right-of-use assets and leasehold improvements of $3 million in the third quarter of 2025 and $10 million in the second quarter of 2025. (4) Includes loss on embedded derivative held to settle the Notes, initially with a $29 million unrealized loss during the third quarter of 2025, which then resulted in a $123 million realized loss during the fourth quarter of 2025. We believe that period-over-period comparisons are more meaningful than our sequential results due to seasonality in our business. While we believe that this seasonality has affected and will continue to affect our quarterly results, our rapid growth has partially masked seasonal trends to date. Our merchant solutions revenues are directionally correlated with our merchants' GMV. Our merchants' GMV typically increases during the fourth-quarter holiday season. As a result, we have historically generated higher merchant solutions revenues in our fourth quarter than in other quarters. As a result of the growth of our merchant solutions offerings, we believe that our business may become more seasonal in the future, and that historical patterns in our business may not be a reliable indicator of our future performance. Quarterly Revenue and Gross Margin Trends Historically, revenues experienced a seasonal decrease in our first quarter as consumers typically reduce their spending following the holiday season resulting in a seasonal decrease in GMV per merchant, which was not completely offset by Shopify Payments penetration and MRR growth. Subsequently, revenues have increased in each of the next three quarters as a result of merchant, MRR and overall GMV growth. Our merchants have processed additional GMV during the fourth-quarter holiday seasons, and as a result, we have generated higher subscription solutions and merchant solutions revenues in our fourth quarters compared to other quarters. Due to the continued growth of our merchant solutions offerings, we believe that our business may become more seasonal in the future. Our gross margin is generally driven by the mix between our higher margin subscription solutions revenue and lower margin merchant solutions revenue. While our total revenues have increased in recent periods, the mix has shifted towards merchant solutions revenue, most notably in the fourth quarter due to higher order volumes facilitated during the holiday season and the resulting Shopify Payments revenue during this period. We expect this overall trend to continue over time. In connection with expanding our operations internationally, we anticipate a growing proportion of our revenues and cost of sales transactions to be incurred in foreign currencies as compared to USD due to increased Shopify Payments, Shopify Capital, subscriptions and other billings in select countries in local currency. Fluctuations in foreign currencies relative to the USD may impact identified quarterly and yearly trends. Quarterly Operating Expenses Trends Excluding the items outlined in the tables above, operating expenses have increased in connection with revenue and operations growth. We note a significant portion of our operating expenses are incurred in foreign currencies which may impact the comparability of our quarterly and yearly trends. Quarterly Gain (Loss) on Equity and Equity Method Investments and Other Income Trends Historically, there have been no consistent trends associated with gain (loss) on equity and equity method investments and other income as changes are impacted by fluctuations in the fair value of our equity investments in public companies with readily determinable fair values, observable changes or impairments associated with our equity investments in private companies without readily determinable fair values, changes in our equity method investment based on our share of income and loss, including 38 Table of Contents amortization of the basis difference, changes in the fair value of our investments in convertible notes of private companies, changes in the fair value of the embedded derivative held to settle the Notes, foreign exchange rates and interest rates. The results from these changes may fluctuate from period to period and may cause volatility to our earnings as well as impact comparability of our results from period to period. Liquidity and Capital Resources We generate liquidity through operating cash flows and the proceeds from the exercise of stock options. Shopify maintains a short-form base shelf prospectus with the securities commissions in each of the provinces and territories of Canada, except Quebec, and a corresponding shelf registration statement on Form F-10 with the U.S. SEC. This allows us to offer Class A subordinate voting shares, preferred shares, debt securities, warrants, subscription receipts, units, or any combination thereof, from time to time during the 25-month period that the shelf prospectus is effective. The type of securities and the specific terms thereof will be determined at the time of any offering and will be described in the applicable prospectus supplement to be filed separately with Canadian securities regulators and the SEC. Our principal cash requirements are for working capital and ongoing operations. Excluding current deferred revenue, working capital as of June 30, 2026 was $6.7 billion. Given the ongoing cash generated from operations and our existing cash and cash equivalents, we believe there is sufficient liquidity to meet our current and planned financial obligations over the next 12 months and into the foreseeable future. Our future cash requirements will depend on many factors, including but not limited to our growth rate, subscription renewal activity, the timing and extent of spending to support development of our platform, the expansion of sales and marketing activities, the macroeconomic conditions and overall levels of consumer spending on goods and potential strategic investments and acquisitions activity. Although we currently are not a party to any material undisclosed agreement and do not have any understanding with any third parties with respect to potential material investments in, or material acquisitions of, businesses or technologies, we may enter into these types of arrangements in the future, which could also require us to seek additional equity or debt financing. Additional funds may not be available on terms favorable to us or at all. In the first quarter of 2026, the Company's Board of Directors authorized a share repurchase program of up to $2 billion of the Company s outstanding Class A subordinate voting shares. The share repurchase program went into effect on February 17, 2026, has no fixed expiration date, and may be amended, suspended, or discontinued at any time, subject to applicable laws. In the second quarter of 2026, the Company's Board of Directors authorized an additional $3 billion of the Company's outstanding Class A subordinate voting shares, in addition to the $2 billion previously authorized, bringing its aggregate share repurchase authorization to $5 billion. Repurchases may be made through open-market purchases on the Nasdaq, privately negotiated transactions including block trades, or other means, in each case in compliance with applicable securities laws. The timing, number, and value of any Class A subordinate voting shares repurchased will depend on a variety of factors, including price, general business and market conditions, applicable legal requirements, and alternative investment opportunities. In accordance with applicable securities laws, the maximum number of Class A subordinate voting shares repurchased will not exceed 5% of Shopify s issued and outstanding Class A subordinate voting shares. During the three months ended June 30, 2026, we repurchased $1.4 billion of our Class A subordinate voting shares under our share repurchase program. As of June 30, 2026, a total of $3.1 billion remained available for future repurchases of our Class A subordinate voting shares. See "Note 10 - Shareholders' Equity" to the condensed consolidated financial statements included in this report for more information about our share repurchase program. 39 Table of Contents Cash, Cash Equivalents and Marketable Securities Cash, cash equivalents and marketable securities decreased by $831 million to $4.9 billion as of June 30, 2026 from $5.8 billion as of December 31, 2025, as a result of cash used in repurchases of Class A subordinate voting shares and the purchase and origination of loans and merchant cash advances, net of repayments, offset by cash provided by our operations and maturities of marketable securities, net of purchases. Cash equivalents and marketable securities include money market funds, term deposits, U.S. federal bonds and agency securities and corporate bonds and commercial paper, all maturing within 12 months from June 30, 2026. The following table summarizes our total cash, cash equivalents and marketable securities as well as our operating, investing and financing activities for the six months ended June 30, 2026 and 2025: 202620254,947 5,820 1,139 795 881 (871)(1,902)103 (7)17 111 44 (942)297 (831)341 20262025 GAAP Amounts as ReportedAt Prior Period Effective Rates(2) GAAP Amounts as Reported Revenues3,583 3,567 2,680 Cost of revenues(1,875)(1,871)(1,378) Operating expenses(1,220)(1,219)(1,011) Income from operations488 477 291 20262025 GAAP Amounts as ReportedAt Prior Period Effective Rates(2) GAAP Amounts as Reported Revenues6,753 6,683 5,040 Cost of revenues(3,499)(3,473)(2,569) Operating expenses(2,384)(2,372)(1,977) Income from operations870 838 494 2025Exchange Rate Effect(1)(2) At 10% Stronger Rates(3) GAAP Amounts As ReportedExchange Rate Effect(1)(2) At 10% Stronger Rates(3) Revenues6,753 163 6,916 5,040 113 5,153 (3,499)(72)(3,571)(2,569)(52)(2,621)(2,384)(58)(2,442)(1,977)(55)(2,032)870 33 903 494 6 500 Total Number of Shares PurchasedAverage Price Paid per Share(2) Total Number of Shares Purchased as Part of Publicly Announced ProgramsApproximate Dollar Value of Shares that May Yet be Purchased Under the Programs(1) (in US $ millions, except share and share price amounts) April 30, 20263,333,221 $121.67 3,333,221 $1,081 May 31, 20264,984,079 $105.70 4,984,079 $554 June 30, 20264,328,657 $112.43 4,328,657 $3,067 12,645,957 12,645,957 (1) In the first quarter of 2026, the Company's Board of Directors authorized a share repurchase program of up to $2 billion of the Company s outstanding Class A subordinate voting shares. The share repurchase program went into effect on February 17, 2026, has no fixed expiration date, and may be amended, suspended, or discontinued at any time, subject to applicable laws. In the second quarter of 2026, the Company's Board of Directors authorized an additional $3 billion of the Company's outstanding Class A subordinate shares, in addition to the $2 billion previously authorized, bringing its aggregate repurchase authorization to $5 billion. Repurchases may be made through open-market purchases on the Nasdaq, privately negotiated transactions including block trades, or other means, in each case in compliance with applicable securities laws. The timing, number, and value of any Class A subordinate voting shares repurchased will depend on a variety of factors, including price, general business and market conditions, applicable legal requirements, and alternative investment opportunities. In accordance with applicable securities laws, the maximum number of Class A subordinate voting shares repurchased will not exceed 5% of Shopify s issued and outstanding Class A subordinate voting shares. During the three months ended June 30, 2026, we repurchased $1.4 billion of our Class A subordinate voting shares under our share repurchase program. As of June 30, 2026, a total of $3.1 billion remained available for future repurchases of our Class A subordinate voting shares. (2) Excludes broker commissions and excise tax estimates. Item 3: Defaults Upon Senior Securities Not applicable. Item 4: Mine Safety Disclosures Not applicable. 46 Table of Contents Item 5: Other Information During the three months ended June 30, 2026, Jeff Hoffmeister, the Company's Chief Financial Officer, adopted a trading plan that provides for the potential sale of up to 20,000 of the Company s Class A Subordinate Voting Shares. The plan will terminate on June 15, 2027, subject to early termination for certain specified events set forth in the plan. On July 31, 2026, the Company entered into a new employment agreement with Jessica Hertz, the Company's Chief Operating Officer, in connection with her relocation to Toronto, Canada. The agreement supersedes Ms. Hertz's prior employment agreement dated March 23, 2022. Her base salary, granted equity awards, and change of control benefits remain unchanged. The agreement includes, among other things, provisions regarding the Company's benefit plans, entitlements on termination, and confidentiality, non-competition and non-solicitation. The Company also agreed to provide relocation assistance addressing the costs arising from her change in country of employment. Ms. Hertz is eligible for reimbursement of documented relocation costs up to a cap, immigration and tax preparation services, and housing assistance for either the purchase of a residence or rental accommodation, but not both, subject to a maximum in each case and limited to costs incurred within 24 months following the relocation. Ms. Hertz is also eligible for equalization amounts with respect to her base salary, equity compensation, and these relocation benefits, which are intended to offset the financial impact of the relocation. Actual amounts incurred will be included, as appropriate, in the Company s annual executive compensation disclosures. 47 Table of Contents Item 6: Exhibits Index to Exhibits Incorporated by Reference No.Exhibit DescriptionFiled or Furnished with this 10-Q FormFile No.ExhibitDate Filed 10.1 Employment Agreement, dated July 31, 2026, between Jessica Hertz and the Company X 31.1* Certification of the Chief Executive Officer and the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 X 32.1* Certification of the Chief Executive Officer and the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 X 101The following financial statements from the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2026, formatted in Inline XBRL: (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations and Comprehensive Income (Loss), (iii) Condensed Consolidated Statements of Changes in Shareholders' Equity, (iv) Condensed Consolidated Statements of Cash Flows and (v) Notes to the Condensed Consolidated Financial Statements, tagged as blocks of text and including detailed tags X 104The cover page from the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2026, formatted in Inline XBRL X *These certifications are not deemed filed by the SEC and are not to be incorporated by reference in any filing we make under the Securities Act of 1933 or the Securities Exchange Act of 1934, irrespective of any general incorporation language in any filings. Signatures Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. August 5, 2026 Shopify Inc. /S/ Jeff Hoffmeister Jeff Hoffmeister Chief Financial Officer (principal financial officer) 48