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Shopify (Shopify) Operating Margin %

: 13.48% (As of Dec. 2023)
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Operating Margin % is calculated as Operating Income divided by its Revenue. Shopify's Operating Income for the three months ended in Dec. 2023 was $289 Mil. Shopify's Revenue for the three months ended in Dec. 2023 was $2,144 Mil. Therefore, Shopify's Operating Margin % for the quarter that ended in Dec. 2023 was 13.48%.

The historical rank and industry rank for Shopify's Operating Margin % or its related term are showing as below:

SHOP' s Operating Margin % Range Over the Past 10 Years
Min: -20.58   Med: -8.61   Max: 5.83
Current: -1.11


SHOP's Operating Margin % is ranked worse than
59.92% of 2757 companies
in the Software industry
Industry Median: 3.07 vs SHOP: -1.11

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

Shopify's Operating Income for the three months ended in Dec. 2023 was $289 Mil. Its Operating Income for the trailing twelve months (TTM) ended in Dec. 2023 was $-78 Mil.


Shopify Operating Margin % Historical Data

The historical data trend for Shopify's Operating Margin % 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 Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
Operating Margin %
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -8.94 3.08 5.83 -14.68 -1.10

Shopify Quarterly Data
Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23
Operating Margin % 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 -10.84 -12.80 -17.47 7.12 13.48

Competitive Comparison

For the Software - Application subindustry, Shopify's Operating Margin %, along with its competitors' market caps and Operating Margin % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.


Shopify Operating Margin % Distribution

For the Software industry and Technology sector, Shopify's Operating Margin % distribution charts can be found below:

* The bar in red indicates where Shopify's Operating Margin % falls into.



Shopify Operating Margin % Calculation

Operating Margin % - also known as operating income margin, operating profit margin and return on sales (ROS) - is the ratio of Operating Income divided by net sales or Revenue, usually presented in percent.

Shopify's Operating Margin % for the fiscal year that ended in Dec. 2023 is calculated as

Operating Margin %=Operating Income (A: Dec. 2023 ) / Revenue (A: Dec. 2023 )
=-78 / 7060
=-1.10 %

Shopify's Operating Margin % for the quarter that ended in Dec. 2023 is calculated as

Operating Margin %=Operating Income (Q: Dec. 2023 ) / Revenue (Q: Dec. 2023 )
=289 / 2144
=13.48 %

* 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 Margin % Explanation

Just like Gross Margin %, it is important to see a company maintains its operating margin over time. Among the same industry, a company with higher operating margin is more efficient in its operation. It is also more stable during industry slowdown or recessions. Peter Lynch prefers those with higher margins than those with lower margins.


Be Aware

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 (Diluted) 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 Margin % Related Terms

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


Shopify (Shopify) Business Description

Address
151 O'Connor Street, Ground Floor, Ottawa, ON, CAN, K2P2L8
Shopify offers an e-commerce platform primarily to small and medium-size businesses. The firm has two segments. 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. The merchant solutions segment offers add-on products for the platform that facilitate e-commerce and include Shopify Payments, Shopify Shipping, and Shopify Capital.

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