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Shopify (NYSE:SHOP) Operating Income

: $-619 Mil (TTM As of Sep. 2022)
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Shopify's Operating Income for the three months ended in Sep. 2022 was $-345 Mil. Its Operating Income for the trailing twelve months (TTM) ended in Sep. 2022 was $-619 Mil.

Operating Margin % is calculated as Operating Income divided by its Revenue. Shopify's Operating Income for the three months ended in Sep. 2022 was $-345 Mil. Shopify's Revenue for the three months ended in Sep. 2022 was $1,366 Mil. Therefore, Shopify's Operating Margin % for the quarter that ended in Sep. 2022 was -25.28%.

Shopify's 5-Year average Growth Rate for Operating Margin % was 0.00% per year.

Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition. Shopify's annualized ROC % for the quarter that ended in Sep. 2022 was -30.84%. Shopify's annualized ROC (Joel Greenblatt) % for the quarter that ended in Sep. 2022 was -153.59%.


Shopify Operating Income Historical Data

The historical data trend for Shopify's Operating Income can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Shopify Annual Data
Trend Dec12 Dec13 Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21
Operating Income
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -49.16 -91.92 -141.15 90.15 268.64

Shopify Quarterly Data
Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22
Operating Income Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -4.10 14.40 -97.98 -190.21 -345.37

Shopify Operating Income Calculation

Operating Income, is the profit a company earned through operations. All expenses, including cash expenses such as cost of goods sold (COGS), research & development, wages, and non-cash expenses, such as depreciation, depletion and amortization, have been deducted from the sales.

Operating Income for the trailing twelve months (TTM) ended in Sep. 2022 adds up the quarterly data reported by the company within the most recent 12 months, which was $-619 Mil.

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Shopify  (NYSE:SHOP) Operating Income Explanation

1. Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition.

Shopify's annualized ROC % for the quarter that ended in Sep. 2022 is calculated as:

ROC % (Q: Sep. 2022 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (Q: Jun. 2022 ) + Invested Capital (Q: Sep. 2022 ))/ count )
=-1381.464 * ( 1 - -0.81% )/( (3369.306 + 5661.281)/ 2 )
=-1392.6538584/4515.2935
=-30.84 %

where

Invested Capital(Q: Jun. 2022 )
=Total Assets - Accounts Payable & Accrued Expense - Excess Cash
=Total Assets - Accounts Payable & Accrued Expense - ( Cash, Cash Equivalents, Marketable Securities - max(0, Total Current Liabilities - Total Current Assets+Cash, Cash Equivalents, Marketable Securities))
=10747.63 - 423.533 - ( 6954.791 - max(0, 703.208 - 7857.764+6954.791))
=3369.306

Invested Capital(Q: Sep. 2022 )
=Total Assets - Accounts Payable & Accrued Expense - Excess Cash
=Total Assets - Accounts Payable & Accrued Expense - ( Cash, Cash Equivalents, Marketable Securities - max(0, Total Current Liabilities - Total Current Assets+Cash, Cash Equivalents, Marketable Securities))
=11203.285 - 600.572 - ( 4941.432 - max(0, 905.221 - 6012.986+4941.432))
=5661.281

Note: The Operating Income data used here is four times the quarterly (Sep. 2022) data.

2. Joel Greenblatt's definition of Return on Capital:

Shopify's annualized ROC (Joel Greenblatt) % for the quarter that ended in Sep. 2022 is calculated as:

ROC (Joel Greenblatt) %(Q: Sep. 2022 )
=EBIT/Average of (Net fixed Assets + Net Working Capital)
=EBIT/Average of (Property, Plant and Equipment+Net Working Capital)
     Q: Jun. 2022  Q: Sep. 2022
=EBIT/( ( (Property, Plant and Equipment + Net Working Capital) + (Property, Plant and Equipment + Net Working Capital) )/ count )
=-627.372/( ( (338.762 + max(-117.571, 0)) + (478.201 + max(-219.467, 0)) )/ 2 )
=-627.372/( ( 338.762 + 478.201 )/ 2 )
=-627.372/408.4815
=-153.59 %

where Working Capital is:

Working Capital(Q: Jun. 2022 )
=(Accounts Receivable + Total Inventories + Other Current Assets) - (Accounts Payable & Accrued Expense + Defer. Rev. + Other Current Liabilities)
=(446.722 + 0 + 113.247) - (423.533 + 254.007 + -1.1368683772162E-13)
=-117.571

Working Capital(Q: Sep. 2022 )
=(Accounts Receivable + Total Inventories + Other Current Assets) - (Accounts Payable & Accrued Expense + Defer. Rev. + Other Current Liabilities)
=(516.408 + 0 + 152.322) - (600.572 + 287.625 + 0)
=-219.467

When net working capital is negative, 0 is used.

Note: The EBIT data used here is four times the quarterly (Sep. 2022) EBIT data.

3. Operating Income is also linked to Operating Margin %:

Shopify's Operating Margin % for the quarter that ended in Sep. 2022 is calculated as:

Operating Margin %=Operating Income (Q: Sep. 2022 )/Revenue (Q: Sep. 2022 )
=-345.366/1366.2
=-25.28 %

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

4. Please click Growth Rate Calculation Example (GuruFocus) to see how GuruFocus calculates Wal-Mart Stores Inc (WMT)'s revenue growth rate. You can apply the same method to get the Operating Income growth rate using Operating Income per share data.


Be Aware

Compared with a company's EBITDA margin, Operating Margin can be manipulated by adjusting the rate of depreciation, depletion and amortization (DDA).

If a company is facing competition, its Operating Margin may decline. Often the Operating Margin declines well before the company's revenue or even profit decline. Therefore, Operating Margin is a very important indicator of whether the company is facing problems.

For instance, by 2012, Nokia (NOK)'s problems were well known and its stock had lost more than 90% of its market value since 2007. But Nokia's Operating Margin had already been in decline since 2002, although its earnings per share were still rising. Investors who paid attention to Operating Margin would have avoided this huge loss. The same can be said for Research-in-Motion (RIMM).

Therefore, Operating Margin is a very important screening filter for GuruFocus. GuruFocus's Buffett-Munger screener requires that the profit margin is either consistent or expanding. The Model Portfolio of the Buffett-Munger screener has outperformed the market every year since inception in 2009.


Shopify Operating Income Related Terms

Thank you for viewing the detailed overview of Shopify's Operating Income provided by GuruFocus.com. Please click on the following links to see related term pages.


Shopify (NYSE:SHOP) Business Description

Shopify logo
Traded in Other Exchanges
Address
151 O'Connor Street, Ground Floor, Ottawa, ON, CAN, K2P2L8
Shopify offers an e-commerce platform primarily to small and midsize businesses. The firm has two segments: subscription solutions (43% of fiscal 2018 revenue) and merchant solutions (57% of fiscal 2018 revenue). The subscription solutions segment allows Shopify merchants to conduct e-commerce on a variety of platforms, including the company's website, physical stores, pop-up stores, kiosks, social networks (Facebook), and Amazon. Merchant solutions are add-on products for the platform that facilitate e-commerce and include Shopify Payments, Shopify Shipping, and Shopify Capital.

Shopify (NYSE:SHOP) Headlines

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Why Shopify Stock Was Slumping Today

By Yahoo Finance 2023-01-30

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