BID TerminalOpen complete report
Research library Software & Internet

Back of Napkin

Shopify Inc. SHOP

Three-pass checkedFresh as companies report

Shopify processed $115.6B of merchandise last quarter and grew revenue 34%, its fifth consecutive quarter above 30%.

Its reported net income swung from a $581M loss to a $1.50B profit in two quarters, entirely because of stakes it holds in other public companies.

SHOP · price with moving averages

Daily · 6MWeekly · 3Y
$36$73$110$147$184 Sep '23Apr '24Nov '24Jun '25Jan '26Aug '26 BID
EMAs82140

Source: market data.

The business

Shopify sells software that lets a merchant run a shop: the storefront, the checkout, the inventory, the shipping labels. Then it sells the payment processing that runs through it, which is where most of the money is. Subscription revenue was $802M last quarter; merchant solutions, mostly payments, was $2.78B.

The economics work because payments attach automatically. Sixty-eight percent of everything sold across Shopify now runs through Shopify Payments, up from 64% a year ago, and that attach rate is why revenue grows faster than the merchandise underneath it. A merchant who signs up for the software ends up paying Shopify twice.

Inside the complete Back of Napkin

  1. 01The business
  2. 02The numbers
  3. 03Management
  4. 04How it fails or surprises you
  5. 05The shape of the payoff
  6. 06Closing thoughts
  7. 07Methodology

Continue with SHOP

Get the complete Back of Napkin free.

Choose this as your free complete report. No card required.

Read the complete report

More company research

View all research
Salesforce, Inc. CRMSalesforce just reported its first accelerating quarter in three years, raised the full-year guide, and the stock jumped about 10% overnight, and even after the jump it costs roughly 13 times trailing free cash flow. Back of Napkin Figma, Inc. FIGFigma has accelerated revenue growth three quarters running, 48% in the latest, and the stock has fallen 63% from its post-IPO high anyway, because the sellers are the people who built it. Back of Napkin Spotify Technology S.A. SPOTThe argument over Spotify is no longer whether it can make money, it made a record 33.4% gross margin and €655M of quarterly operating profit, but whether a business now growing by raising prices on 300 million subscribers can keep doing it. Back of Napkin ServiceNow, Inc. NOWServiceNow grew subscriptions 24% and beat every number it guided last quarter, and the stock still sits 35% below its high because GAAP earnings are a third of the adjusted ones. Back of Napkin