Shopify SHOP
The quality is not in doubt. The open question is how much of it the price already assumes. Seven questions that follow the money through the business, the price and the tape. Every number comes from SEC filings and market data, and every score from a rule printed next to it.
What this File stands on. Annual figures: FY2025 10-K (year to 2025-12-31, filed 2026-02-11). "Last 12 months" figures add the quarters through 2026-06-30 (10-Q, filed 2026-08-05). Prices to 2026-10-21. The numbers rebuild every Monday, so each new 10-Q or 10-K appears within a week of filing. The written parts (business, defences, risks, the read) are from the FY2025 10-K, and the terminal read is dated 2026-10-10.
76 cents of every revenue dollar come from Merchant Solutions, up 35% on the year.
What it does
Sells the software and payments plumbing a merchant needs to run a store, online and in person, without building any of it.
How it charges
A monthly subscription for the platform, plus a cut of what merchants sell through payments, shipping, lending and other services. The cut is the bigger and faster-growing part.
Who buys, and why
Businesses from one-person shops to large brands that would rather rent a proven system than build their own.
Of every $100 of sales, $14 is left for owners once staff stock pay is counted as a cost.
Owner earnings = operating cash flow minus capital spending minus stock-based pay. Stock pay is a real cost: it is paid in shares instead of cash.
What it is building Paying off
It reinvests heavily, and past investment has earned its keep.
R&D is treated as an investment written off over 5 years. Capital spending up to depreciation keeps the business standing; anything above it is growth spending. A company that puts more than 10% of sales into R&D and growth capex is building; it is paying off when after-tax profit has grown by at least 12 cents for every extra dollar of capital it put in.
New shares added 1.0% a year for 3 years. A $1.9B buyback in the last twelve months has started to shrink the count.
Founder and CEO Tobias Lütke, in the seat since 2008.
The strongest defence is switching costs. Gross margin has been moving, within 6 points over 6 periods.
Payments, checkout, inventory and lending on one platform is real friction, though the company itself says switching is not costly for many merchants.
Developers build apps because merchants are there, merchants come for the apps. Shop Pay adds a buyer-side network across stores.
Payment volume lets it negotiate processing rates and spread engineering cost over millions of stores.
Well known among merchants, invisible to most shoppers.
Sources are rated from the annual report (notes file). The two evidence checks are computed: margins that hold and high returns on capital are what a real defence looks like in the numbers.
A reverse discounted cash flow: the growth today's price requires, set against what the business has actually delivered, and how that changes if you demand a different return.
The IVT terminal read on the weekly and daily charts: bias, money flow, strength, whether the entry window is open, and the sharp captures.
The worst fall of the last five years, the balance sheet, the pressure points and the specific conditions that would break the case.
Where the business sits on quality against price, the quality score line by line, and the conclusion.
The rest of the SHOP File
Chapters 5 to 8: the growth today\'s price assumes, the full IVT terminal read with sharp captures, what would break the case, and the final read.
Where every number comes from 13 figures, each linked to its SEC filing
| Figure | Value | Period | Filing |
|---|---|---|---|
| Revenue | $11.6B | FY25 | 10-K, filed 2026-02-11Revenues |
| Gross profit | $5.6B | FY25 | 10-K, filed 2026-02-11GrossProfit |
| Cost of sales | $6.0B | FY25 | 10-K, filed 2026-02-11CostOfGoodsAndServicesSold |
| Operating income | $1.5B | FY25 | 10-K, filed 2026-02-11OperatingIncomeLoss |
| Net income | $1.2B | FY25 | 10-K, filed 2026-02-11NetIncomeLoss |
| Operating cash flow | $2.0B | FY25 | 10-K, filed 2026-02-11NetCashProvidedByUsedInOperatingActivities |
| Capital spending | $26M | FY25 | 10-K, filed 2026-02-11PaymentsToAcquirePropertyPlantAndEquipment |
| Stock-based pay | $449M | FY25 | 10-K, filed 2026-02-11AllocatedShareBasedCompensationExpense |
| Diluted shares | 1,305M | FY25 | 10-K, filed 2026-02-11WeightedAverageNumberOfDilutedSharesOutstanding |
| Cash and investments | $1.7B | 2026-06-30 | 10-Q, filed 2026-08-05CashAndCashEquivalentsAtCarryingValue |
| Debt due within a year | $0 | 2025-12-31 | 10-K, filed 2026-02-11ConvertibleDebtCurrent |
| Long-term debt | $0 | 2024-12-31 | 10-K, filed 2025-02-11ConvertibleDebtNoncurrent |
| Shareholders' equity | $12.7B | 2026-06-30 | 10-Q, filed 2026-08-05StockholdersEquity |
Educational research, not investment advice and not a recommendation to buy or sell any security. Scores are mechanical and reproducible from public filings; the notes are the author's judgment. Author position in SHOP: none. Sources: SEC EDGAR XBRL company facts (filings to 2026-06-30), daily prices to 2026-10-21. Past performance does not predict future returns.