SHOP · Technology(services-prepackaged software) · 5 years of annual accounts filed with the SEC · latest fiscal year ended 2025-12-31
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Shopify Inc. reported revenue of $11.6 billion in fiscal 2025. Of the $4.5 billion its operations generated over 5 years, 42.0% went to acquisitions. On the accounting screens, it passes 5 of 8 Piotroski tests, its Altman Z'' of 12.49 is in the safe zone and its Beneish M-score is below the -1.78 line; 1 of the six cross-checks between its statements fires.
Revenue, fiscal 202511.6B
Operating margin12.7%gross margin 48.1%
Return on invested capital—
Free cash flow after stock pay1.6B13.5% of revenue
Net debt ÷ EBITDA—net debt —
Piotroski F-score5/8tests of improvement passed
Is it growing?
Revenue and the operating income it turns into. Growth that does not reach operating income is growth bought with margin.
RevenueOperating income
-5B05B10B15B
2021
2022Revenue 5.6BOperating income -822.0M
2023Revenue 7.1BOperating income -1.4B
2024Revenue 8.9BOperating income 1.1B
2025Revenue 11.6BOperating income 1.5B
20212022202320242025
Compound growth a year
3 yrs
4 yrs
Revenue
+27.3%
—
Shares
+1.0%
—
Falling shares are buybacks: each remaining share owns more of the company.
Does it earn more than its capital costs?
Margins say how much of each sale is kept; return on invested capital says how much the business earns on the money it needs to operate. Growth only creates value when that return is above the cost of the capital.
Needs a cost of capital, which comes from the valuation below.
Return on equity
9.1%
Return on assets
8.1%
Asset turnover
0.76×
Research & development
13.3% of revenue
Overheads (SG&A)
4.1% of revenue
Is the profit cash, and where does the cash go?
Net income is an accounting opinion; free cash flow is what was left in the bank after investing. Stock-based pay does not leave the bank — shareholders pay it through dilution — so it is shown taken off as well.
Net incomeFree cash flowAfter stock-based pay
-4B-2B02B4B
2021
2022Net income -3.5BFree cash flow -186.0MAfter stock-based pay -735.0M
2023Net income 132.0MFree cash flow 905.0MAfter stock-based pay 290.0M
2024Net income 2.0BFree cash flow 1.6BAfter stock-based pay 1.2B
2025Net income 1.2BFree cash flow 2.0BAfter stock-based pay 1.6B
20212022202320242025
Where 5 years of operating cash went, 2021–2025
4.5B generated by the business. Each band is its share of that total.
Reinvested in the business 3%134.0M
Acquisitions 42%1.9B
Dividends 0%0
Share buybacks 0%0
Kept, or used to pay down debt 55%2.5B
Over the same years it paid 2.0B in stock.
Per share
Earnings per shareFree cash flow per shareDividend per share
-$4-$2$0$2
2021
2022Earnings per share $-2.73Free cash flow per share $-0.15
2023Earnings per share $0.10Free cash flow per share $0.70
2024Earnings per share $1.55Free cash flow per share $1.23
2025Earnings per share $0.94Free cash flow per share $1.54
20212022202320242025
Shares outstanding
Diluted shares
1.26B1.27B1.28B1.29B1.30B1.31B
2021
2022Diluted shares 1.3B
2023Diluted shares 1.3B
2024Diluted shares 1.3B
2025Diluted shares 1.3B
20212022202320242025
Debt and liquidity
Debt is not bad in itself; debt the business cannot service in a bad year is. Net debt is debt minus cash, and below zero the company holds more cash than it owes.
Net debt ÷ EBITDA
—
Interest coverage
— operating income ÷ interest
Current ratio
5.96 current assets ÷ current liabilities
Cash conversion cycle
— collects in 16d
Three classic screens of the accounts
Each asks a different question of the same statements — is it improving, does it look like a company heading for distress, do the accounts resemble ones that were manipulated. None is a verdict; each shows what moves it.
Piotroski F-score
Is the business improving? Nine yes-or-no tests, this year against last.
5of 8 tests passed
✓ProfitableReturn on assets above zeropassed
✓Cash from operationsOperating cash flow above zeropassed
✕Profitability improvedReturn on assets higher than a year beforefailed
✓Profit backed by cashOperating cash flow above net income (low accruals)passed
–Less long-term debtLong-term debt as a share of assets fell — not reportedno data
✓More liquidCurrent ratio higher than a year beforepassed
✕No new sharesShare count did not growfailed
✕Better gross marginGross margin higher than a year beforefailed
✓Sells more per assetAsset turnover higher than a year beforepassed
Where it misleads: it measures change, not level. An excellent business that stood still for a year scores low; a poor one recovering from a disaster scores high.
Altman Z''-score
Does the balance sheet look like those of companies that went bankrupt?
12.49safe zone
1.12.6
Working capital ÷ assets 0.45 × 6.56+2.98
Retained earnings ÷ assets 0.19 × 3.26+0.61
Operating income ÷ assets 0.10 × 6.72+0.65
Equity ÷ liabilities 7.85 × 1.05+8.24
Where it misleads: buybacks. A company that returns so much cash that its equity turns small or negative sinks the last two ratios without being anywhere near bankruptcy. Banks and insurers do not fit the model at all.
Beneish M-score
Do the accounts resemble those of companies that manipulated their earnings?
-2.19below the -1.78 line
-1.78
Receivables vs sales 1.12+1.03
Gross margin slipping 1.05+0.55
Soft assets 0.95+0.38
Sales growth 1.30+1.16
Slower depreciation 1.18+0.14
Overheads vs sales 0.88-0.15
Profit not in cash -0.05-0.25
Leverage rising 0.65-0.21
Where it misleads: fast growth and acquisitions. Sales growth carries a heavy weight, so a company growing 50% a year scores like a suspect without having done anything. It is a screen from a 1999 study, not an accusation.
Where the statements disagree
Cross-checks between the income statement, the balance sheet and the cash flow for the latest year, each with the benign reading and the worrying one.
Receivables are growing 46% against revenue growing 30%.
Benign
A shift towards larger customers on longer terms, or sales concentrated at the end of the period.
Worrying
Sales are being made on looser credit, or revenue has been booked that may never be collected.
What is it worth, under which assumptions?
A company is worth the cash it will generate, brought back to today. This model projects revenue with growth that fades over the years, applies a free cash flow margin, and discounts the result at the cost of capital. Every assumption says where it came from, and all of them can be changed.
With a free cash flow margin at or below zero in year ten, the business never generates cash for its owners and a DCF says nothing useful. Set a positive margin for year ten to see what it would take.
What it has filed lately
The last twelve months at the SEC, most important first: annual and quarterly reports, events, large holders and insiders.
From the Form 13F of the 28 institutions followed on this site, as of the end of their last reported quarter. A 13F is filed up to 45 days later and shows only long positions in US-listed shares.
Accounts from the company's own SEC filings; lines some companies do not report are shown as a dash rather than estimated. The risk-free rate is the 10-year US Treasury yield. A DCF is a way of making assumptions explicit, not a forecast: it states what the company would be worth if the assumptions held. The scores are screens that point where to look, not verdicts. Nothing here is a recommendation to buy or sell.
