Sorry to burst your bubble Shopify is loss making except when it was itself a small service provider. In 2020 has a loss of 132 million dollars so far. It's a listed entity so you can check Income, Balance Sheet and Cashflow. The most important thing cashflow and Incomes both are negative for shopify. Since it's listing never made a single dime of profit. So please before putting a link to news verify on their annual reports [1].
2019-12-30:
Total Revenue: 1.578173 billion dollars
Operating Income : -141.147 million dollars
Net Income: -124.842 million dollars (i.e. loss of 125 million dollars)
To this month (TTM):
Total Revenue: 1.727692 billion dollars
Operating Income: -178.590 million dollars
Net Income: -132.120 million dollars (i.e. loss of 132 million dollars)
> So please before putting a link to news verify on their annual reports
The link I had in my comment was to their 2019-12-30 financial release to the SEC. It has the same 2019 information you have: Net income (loss): (124,842)
But that includes their selling and marketing expenses of over $400M, and their cash and cash equivalents at hand went from $1.97B (2018) to $2.46B (2019).
They are making lots of money and they have good accountants. Astonishing..
That’s true their accountant are good at sugar-coating the bad state of company, negative cashflow along with net income loss which is consistently increasing since listing. Not making one dime in profit and still claim profitable business.
For $1 revenue they spend more than $1, so sorry they are loss making company not profitable and on top due to negative cash-flow much worse.
The numbers speaks for itself without sugar coating that shopify is loss making venture. As long as investors money through stocks will keep coming they will survive and will be bought out by someone one day to cash-out those investors. Anyways with cost of borrowing 0, sooner or later someone will acquire it.
They are a company during the high-growth phase of their business, with a proven business model where the cost of revenue is less than the revenue gained. See their accounts on the link you posted.
They are a "loss making venture" because they are investing in growth. That's why the cash-at-hand is important - if it's low then one can question if they can cut expenses quickly enough. That's the difference between WeWork (unprofitable, not much cash, unclear what they could cut to make profits) and Amazon 10 years ago (unprofitable, lots of cash, easy to see places to cut to make profits)
Shopify have over 2 years of expenses as cash just sitting there, and they can cut the marketing by 10% at any point and become profitable. That's why investors have confidence in them, and it's why customers can have confidence too.
This isn't a hard balance sheet to read - it's a rapidly growing business with plenty of resources they are investing in growth. That's the same situation Amazon was in for years - "unprofitable" because all their revenue was going into the business.
