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Shopify Investor Deck January 2016
- 1. 200,000+ ACTIVE SHOPIFY MERCHANTS $1.9BILLION+ GMV IN Q3 ‘15
- 2. 2 Safe Harbour This presentationcontains forward-looking statements that are based on our management’s current estimates, beliefs and assumptions, which are based on management’s perception of historic trends, current conditions and expected future developments, as well as other factors management believes are appropriate in the circumstances. Although we believe that the plans, intentions, expectations, assumptions and strategies reflected in these forward-looking statements are reasonable, these statements relate to future events or our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results to be materially different from any future results expressed or implied by these forward-looking statements. Although the forward-looking statements contained in this presentation are based upon what we believe are reasonable assumptions, investors are cautioned against placing undue reliance on these statements since actual results may vary from the forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors, which are, in some cases, beyond our control and which could materially affect our results. These risks are described in further detail in the section entitled “Risk Factors” and elsewhere in our filings with regulatory agencies. If one or more of these risks or uncertainties occur, or if our underlying assumptions prove to be incorrect, actual results may vary significantly from those implied or projected by the forward-looking statements. References to long-term trends in our model are forward-looking and made as of the current date. Nothing in this presentation should be regarded as a representation by any person that these long- term trends will be achieved and we undertake no duty to update its long-term trends. We believe that the case studies presented in this presentation provide a representative sample of how our merchants have been able to use various features of our platform to grow their respective businesses. References in this presentation to increased visits, growth and sales following implementation of our platform do not necessarily mean that our platform was the only factor contributing to such increases. To supplement the financial measures prepared in accordance with generally accepted accounting principles (GAAP), we use non-GAAP financial measures that exclude certain items. Non-GAAP financial measures are not prepared in accordance with GAAP; therefore, the information is not necessarily comparable to other companies and should be considered as a supplement to, not a substitute for, or superior to, the corresponding measures calculated in accordance with GAAP. JANUARY 2016
- 3. 3 Store #1: Snowdevil CI R C A 2 0 0 4
- 4. Brick-and-Mortar One Platform, EveryChannel, Any Device. STOREFRONTS 4
- 5. 5 One Platform, EveryChannel, Any Device. • snowboards • shredding • winter gear Inventory ShippingOrder Management AnalyticsPromotionsPayments Apps A single, integrated back office
- 6. 6 Multi-channel Commerce Platform •A single, simple to use back office • Powering all your sales channels • Everything integrated
- 7. 7 Our Market E NT R E P R E N E U R S H I P S M B L A R G E R U N L I M I T E D 179$ PER MONTH P R O F E S S I O N A L 79$ PER MONTH B A S I C 29$ PER MONTH Enterprise SMB Entrepreneurs
- 8. 8 Entrepreneurship • Small merchantstoday can become our largest merchants tomorrow. • Completeness, reduced complexity, and ease of use. • Leaves little room for disruption from below. DID IT WORK? YES NO IDEA BUILD
- 9. 9 Build-a-Business “I’m biased, butI think being an entrepreneur is a pretty damn good thing.” – SIR R IC HAR D B RANSON 2011 2012 2013 2014 $3.5M $12M $55M $100M TIM FERRISS SETH G ODI N G ARY VAYNE RC HUK DAYMOND JOH N 2015 SI R RICHARD BRANS ON SOLD SOLD SOLD SOLD $250MSOLD
- 10. 10 Headroom on SMBTAM Source: AMI Partners (1) Merchants defined as retailers with less than 500 employees. Includes commercially located businesses, sole proprietorships and home-based businesses (2) Key geographies include: U.S., Canada, U.K., Western Europe, Australia and New Zealand (3) Annualized revenue per merchant of approximately $1,000 based on the three months ended March 31, 2015 Global (1) Current Core Geographies (2) 10M 46M$46B Global TAM (3) $10B TAM (3)
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- 12. 12 Build-a-Business Success April 2010Enters BaB competition June 2010 Hits 10k orders in first 90 days July 2010 Wins Shopify's Build A Business Competition April 2011 First year's sales total more than $3M June 2011 Expands into retail location Nov 2011 Obama starts using a DODOcase 2012 Product line expands to iPhone Cases 2013 Facebook store launches 2014 Upgrades to Shopify Plus 2015 22 full-time employees and growing
- 13. 13 Partner Ecosystem SH OPIFYAPP STORE SH OPIFY TH EM E STORE SH OPIFY E XPE R TS 200k Merchants App Developers Theme Designers Agencies
- 14. Partners APP AND INTEGRATIONPARTNERS DESIGN AND DEVELOPMENT AGENCIES STRATEGIC PARTNERS 14
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- 16. 16 Synonymous with Ecommerce “Ecommerce”“Shopify” G O O G L E T R E N D S D ATA F I LT E R E D F O R U S A 2009 2010 2011 2012 2013 2014 2015
- 17. 17 Shopify’s Unique Recipe GreatTechnology Beautiful Design Robust Ecosystem Hundreds of Apps, Themes, and Experts Multi-tenant, scalable, high availability architecture Simple, limitless customization of gorgeous themes
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- 19. 19 Financial Highlights LONG-TERM FOCUSIII Strong,consistent growth in Revenue, MRR and GMV Success-based revenue stream built on a large recurring subscription (SaaS) base Strong track record of cash management and investing for the long term GROWTHI POWERFUL BUSINESS MODELII
- 20. 20 Strong Consistent RevenueGrowth • Growing merchant base • Expanding GMV • Introduction and adoption of merchant offerings • Robust partner ecosystem D R I V E R S 9 MO 2014 + 93% $135.1M $69.8M Subscription solutions Merchant solutions $23.7M $105.0M 2013 20142012 $50.3M +109% +112% 9 MO 2015 2015e* *Midpoint of management forecast range at November 4, 2015 $195.0M+86%
- 21. 21 Strong Consistent MRRGrowth Monthly Recurring Revenue, or MRR, is calculated at the end of each period by multiplying the number of merchants who have subscription plans with us at the period end date by the average monthly subscription plan fee revenue in effect on the last day of that period, assuming they maintain their subscription plans the following month. 2013 20142012 2015 Q1 Q1 Q1Q1 $9.8M $1.1M 85% CAGR
- 22. 22 Strong Consistent GMVGrowth • More merchants • Higher avg. GMV per merchant • Introduction of POS D R I V E R S 9 MO ‘14 9 MO ‘15 +102% $4.9B $2.4B $0.7B $3.8B 2013 20142012 $1.6B +133% +128%
- 23. 23 Powerful Business Model $18.9M $62.1M 201320142012 $36.9M 9 MO ‘14 9 MO ‘15 $75.8M $42.3M Excludes SBC expense +94% GROSS PROFIT +68% +80%
- 24. 24 Operating Leverage Excludes SBCand Sales Tax expense 8% 8% 8% 7% 17% 22% 25% 26% 35% 43%46%51% S&M R&D G&A 2013 20142012 YTD 2015 84% 79% 73% 60% AS A PERCENTAGE OF REVENUE
- 25. 25 More Merchants & MoreGMV More Partners More Solutions More International Penetration More Channels Growth Vectors
- 26. 26 Investment Highlights • EnormousOpportunity – Multichannel commerce platform targeted at SMB market. • Powerful Business Model – Rapidly growing SaaS and success-based business model. • World-class Product – Well-crafted for simplicity and scalability. • Vast Ecosystem – Engaged and expanding partner ecosystem that is difficult to replicate. • Vision – Product-driven team with a long-term focus.
- 27. 27 Make commerce better foreveryone.
- 28.
- 29. 29 Reconciliation to GAAPFigures 2012 2013 2014 9 mo ended Sept 30, 2014 9 mo ended Sept 30, 2015 GAAP Gross profit 18,937 36,739 61,795 42,182 75,561 add: cost of revenues SBC 11 113 259 159 198 Non-GAAP Gross Profit 18,948 36,852 62,054 42,341 75,759 % of Revenue 80% 73% 59% 61% 56% GAAP Sales and marketing 12,262 23,351 45,929 33,720 47,847 less: Sales and marketing SBC 66 354 696 451 681 Non-GAAP Sales and Marketing 12,196 22,997 45,233 33,269 47,166 % of Revenue 51% 46% 43% 48% 35% GAAP Research and development 6,452 13,682 25,915 19,296 26,181 less: Research and development SBC 282 1,152 2,776 2,010 2,853 Non-GAAP Research and development 6,170 12,530 23,139 17,286 23,328 % of Revenue 26% 25% 22% 25% 17% GAAP General and administrative 1,737 3,975 11,566 6,286 12,770 less: General and administrative SBC 49 147 712 347 1,547 less: Non-recurring sales and use tax expense - - 2,182 - 566 Non-GAAP General and administrative 1,688 3,828 8,672 5,939 10,657 % of Revenue 7% 8% 8% 9% 8% GAAP Operating Expense 20,451 41,008 83,410 59,302 86,798 less: Operating SBC 397 1,653 4,184 2,808 5,081 less: Non-recurring sales and use tax expense - - 2,182 - 566 Non-GAAP Operating Expense 20,054 39,355 77,044 56,494 81,185 % of Revenue 84% 79% 73% 81% 60%