01—Abstract
Summary
Summary of the 40-F filed February 16, 2023. Cited figures are marked; the original filing is the authoritative source.
Shopify Inc.'s 2022 Annual Report on Form 40-F emphasizes the company's commitment to robust financial reporting and internal controls.
The report confirms that both disclosure controls and procedures, and internal controls over financial reporting were effective as of December 31, 2022, with no material weaknesses identified. This attestation, supported by PricewaterhouseCoopers LLP, is crucial for investor confidence, indicating operational integrity and reliable financial statement preparation. Notably, the company has elected to follow Canadian governance practices for NYSE listing requirements, which may offer different investor protections than typical U.S. domestic issuers.
02—Key points
Key Highlights
- Shopify's internal controls over financial reporting and disclosure controls were deemed effective as of December 31, 2022, with no material weaknesses identified.
- PricewaterhouseCoopers LLP has audited and attested to the effectiveness of Shopify's internal control over financial reporting.
- The company has excluded Deliverr Inc., acquired in 2022, from its internal control assessment for 2022, as it represented a small percentage of total assets and revenues.
- Audit fees paid to PricewaterhouseCoopers LLP increased significantly from $1.66 million in 2021 to $3.55 million in 2022, reflecting increased audit scope or services.
- The Audit Committee actively pre-approves all services provided by the independent registered public accounting firm to ensure auditor independence.
- Shopify, as a foreign private issuer, complies with Canadian governance practices for NYSE listing requirements regarding quorum for shareholder meetings, which may differ from U.S. domestic issuers.
- There were no material changes in the company's internal control over financial reporting during the year, aside from a migration of certain financial reporting systems.
03—One dollar
Follow one dollar
For each $1.00 of revenue in FY2022, Shopify Inc. lost $0.62.
- Revenue$5.60B100.0%
- Cost of revenue−$2.85B50.8%
- Gross profit$2.75B49.2%
- Operating costs−$3.58B63.9%
- Operating income−$822.0M14.7%
- Interest, other & tax−$2.64B47.1%
- Net income−$3.46B61.8%
04—Financials
Financial Highlights
Figures from 10-KFY2022filed February 16, 2023Financial Statements
FY2022 against FY2021
| Line item | FY2022FY2021 | Change |
|---|---|---|
| Revenue | $5.60B$4.61B | +21.4% |
| Cost of Revenue | $2.85B$2.13B | +33.6% |
| Gross Profit | $2.75B$2.48B | +11.0% |
| R&D Expenses | $1.50B$854.38M | +75.9% |
| Operating Expenses | $3.58B$2.21B | +61.6% |
| Operating Income | -$822.00M$268.64M | −406.0% |
| Interest Expense | $3.50M$3.49M | +0.2% |
| Net Income | -$3.46B$2.91B | −218.7% |
| EPS (Basic) | $-2.73$2.34 | −216.7% |
| EPS (Diluted) | $-2.73$2.29 | −219.2% |
| Shares Outstanding (Basic) | 1.27B1.25B | +1.6% |
| Shares Outstanding (Diluted) | 1.27B1.27B | −0.6% |
05—Questions
Frequently Asked Questions
What is the status of Shopify's internal controls over financial reporting?
Shopify's management, along with their independent auditor PricewaterhouseCoopers LLP, has assessed and determined that the company's internal control over financial reporting was effective as of December 31, 2022. No material weaknesses were identified.
Were there any significant changes to Shopify's financial reporting systems in 2022?
Yes, Shopify migrated certain financial reporting systems and their associated data between cloud environments. This migration involved changes to the underlying IT infrastructure and internal controls over financial reporting. Apart from this, no other changes materially affecting internal controls were identified.
How has the auditor's fee changed from 2021 to 2022?
The aggregate fees paid to PricewaterhouseCoopers LLP increased substantially from $1.72 million in 2021 to $3.69 million in 2022. Specifically, audit fees more than doubled, rising from $1.66 million to $3.55 million.
Does Shopify comply with standard NYSE governance rules?
As a foreign private issuer, Shopify elects to comply with Canadian law for certain NYSE listing requirements, specifically regarding the quorum for shareholder meetings. This approach may offer different investor protections than those typically provided to U.S. domestic issuers listed on the NYSE.
06—Continue