What the changes say
- Shopify expanded its risk disclosures around enterprise merchant scalability, open source software use, and a new $2 billion share repurchase program.
What changed since the prior 10-K
New
- NewRisks Related to Our Business and Industry
changing needs and expectations or adapt to emerging trends, our reputation could be harmed and our business, operating results and financial condition could suffer
Growing adoption by Shopify Plus merchants and enterprise businesses requires increased platform functionality, performance, and resources that we may fail to deliver.
- NewRisks Related to Our Business and Industry
Our use of open source software could negatively affect our ability to sell our solutions and subject us to possible litigation
Our use of open source software may subject us to conditions requiring us to offer proprietary software for free or disclose source code.
- NewRisks Related to Ownership of our Shares
We cannot guarantee that our share repurchase program will be fully consummated or that it will enhance long-term shareholder value
Our $2 billion share repurchase program authorized in February 2026 may not be fully consummated and could diminish cash reserves and increase stock volatility.
- NewRisks Related to Ownership of our Shares
that such issuances may occur, could cause the trading price of our Class A subordinate voting shares to drop
Provisions in the CBCA and our articles of incorporation may delay or prevent changes in senior management or proxy contests.
Dropped
- DroppedRisks Related to Our Business and Industry
information, are increasingly relevant to us, as we continue to collect and store more payment information from buyers directly through services such as Shop Pay
- DroppedRisks Related to Our Business and Industry
ability to operate our platform or offer some of our products, which could in turn place us at a competitive disadvantage, subject our partners to restrictions that may impact our operations, or otherwise negatively impact our business
- DroppedRisks Related to Our Business and Industry
cannot predict if we will maintain profitability over time. If we are unable to generate adequate revenue growth and manage our expenses, we may incur significant losses in the future and we may not be able to maintain our profitability on a consistent basis
- DroppedRisks Related to Our Business and Industry
We are dependent upon buyers’ and merchants’ continued and unimpeded access to the internet, and upon their willingness to use the internet for commerce
- DroppedRisks Related to Our Business and Industry
Provisions of our financial instruments may restrict our ability to pursue our business strategies or to pay cash upon conversion or purchase of the Notes and we may not have funds necessary to settle the Notes in cash, to purchase the Notes upon a fundamental change or repay the Notes at maturity
Privacy and security compliance risks related to collecting payment information directly through Shop Pay.
- DroppedRisks Related to Ownership of our Shares
The trading volume of the Notes, the terms of the Notes including the conversion feature, if triggered, and the applicable accounting treatment thereof may impact the trading price of the Class A subordinate voting shares and adversely affect our financial condition and operating results
Reworded
- 84% rewrittenRisks Related to Our Business and Industry
Our pricing decisions may fail to generate expected results and may adversely affect our ability to attract new merchants and retain existing merchants
Retained substantially identical text regarding pricing model risks and merchant sensitivity.
- 75% rewrittenRisks Related to Our Business and Industry
Our business and prospects would be harmed if changes to technologies or new versions or upgrades of operating systems and internet browsers adversely impact the process by which merchants and buyers interface with our platform and other product offerings
Expanded browser risks to include operating systems and application stores changing terms of service or technical requirements.
Was: Our business and prospects would be harmed if changes to technologies used in our platform or new versions or upgrades of operating systems and internet browsers adversely impact the process by which merchants and buyers interface with our platform
- 74% rewrittenRisks Related to Our Business and Industry
We use third-party cloud service providers to deliver our platform services. Any disruption of services from our cloud service providers could harm our business
Retained substantially identical text regarding third-party cloud service provider disruptions.
- 73% rewrittenRisks Related to Our Business and Industry
If we fail to improve and enhance the functionality, performance, reliability, design, security and scalability of our platform and innovate and introduce new solutions in a manner that responds to our merchants' evolving needs, our business may be adversely affected
Added agentic commerce vision and our ability to successfully translate it into adoptable merchant solutions.
- 71% rewrittenRisks Related to Our Business and Industry
We store personal information including of our merchants and their buyers and users of our apps. If the security of this information is compromised or is otherwise accessed without authorization, our reputation may be harmed and we may be exposed to liability and loss of business
Replaced credit card information with payment information in data security risk disclosures.
- 67% rewrittenRisks Related to Ownership of our Shares
Provisions of our charter documents and certain Canadian legislation could delay or deter a change of control, limit attempts by our shareholders to replace or remove our current senior management and affect the market price of our Class A subordinate voting shares
Retained substantially identical text regarding charter documents and preferred shares.
Was: Provisions of our charter documents, certain Canadian legislation and the indenture governing the Notes could delay or deter a change of control, limit attempts by our shareholders to replace or remove our current senior management and affect the market price of our Class A subordinate voting shares
- 56% rewrittenRisks Related to Our Business and Industry
Our use of AI and machine learning may present additional risks, including risks associated with the use of AI algorithms and tools, the data sets used to train AI-powered models, the content produced by AI and the complex, developing regulatory environment
Clarified that AI risks include inaccurate outputs and third-party data with unclear or disputed intellectual property rights.
- 41% rewrittenRisks Related to Our Business and Industry
We have incurred net losses in the past and we expect to make substantial investments in our business in the future. As such, we may be unable to maintain our profitability in the future
Retained substantially identical text regarding historical net losses and future investments.
- 38% rewrittenRisks Related to Our Business and Industry
Our business is subject to complex and changing laws and regulations worldwide, which may expose us to liability, increase costs or have other adverse effects that could harm our business
- 38% rewrittenRisks Related to Our Business and Industry
Foreign exchange rate fluctuations may negatively affect our results of operations
- 33% rewrittenRisks Related to Our Business and Industry
Shopify Capital and other financing and lending solutions are subject to additional risks relating to the availability of capital to fund merchants, the ability of our merchants to generate sales to remit receivables or make payments, general macroeconomic conditions, legal and regulatory risks and the risk of fraud
- 26% rewrittenRisks Related to Our Business and Industry
We may not be able to utilize our loss carryforwards and tax credits, which could adversely affect our profitability
- 24% rewrittenRisks Related to Ownership of our Shares
Our restated articles of incorporation permit us to issue an unlimited number of Class A subordinate voting shares and Class B restricted voting shares
Was: Our restated articles of incorporation permits us to issue an unlimited number of Class A subordinate voting shares and Class B restricted voting shares
- 21% rewrittenRisks Related to Ownership of our Shares
Because we do not expect to pay any dividends on our Class A subordinate voting shares for the foreseeable future, investors may never receive a return on their investment
All 46 risk factors
Headings as the filing states them, in filing order.
Risks Related to Our Business and Industry
- 01Our growth may not be sustainable and depends on our ability to attract new merchants, retain existing merchants, retain revenue from existing merchants and increase sales to both new and existing merchants
- 02Our business could be harmed if we fail to manage our growth effectively
- 03Our business is highly competitive. We may not be able to compete successfully against current and future competitors
- 04We store personal information including of our merchants and their buyers and users of our apps. If the security of this information is compromised or is otherwise accessed without authorization, our reputation may be harmed and we may be exposed to liability and loss of business71% rewritten
- 05If we fail to improve and enhance the functionality, performance, reliability, design, security and scalability of our platform and innovate and introduce new solutions in a manner that responds to our merchants' evolving needs, our business may be adversely affected73% rewritten
- 06changing needs and expectations or adapt to emerging trends, our reputation could be harmed and our business, operating results and financial condition could sufferNew
- 07Our use of AI and machine learning may present additional risks, including risks associated with the use of AI algorithms and tools, the data sets used to train AI-powered models, the content produced by AI and the complex, developing regulatory environment56% rewritten
- 08The impact of worldwide economic conditions, including the resulting effect on spending by merchants or their buyers, may adversely affect our business, operating results and financial condition
- 09We currently rely on two suppliers to provide the technology we offer through Shopify Payments
- 10Our growth depends in part on the success of our strategic relationships with third parties
- 11Our limited operating history in new and developing markets and new geographic regions may increase the risk that our growth and expansion efforts will not be successful
- 12Our business is susceptible to risks associated with international operations, including international sales and the use of our platform in various countries
- 13We are dependent on the continued services and performance of our senior management and other key employees, the loss of any of whom could adversely affect our business, operating results and financial condition
- 14If we are unable to attract, retain and motivate qualified personnel or maintain and continue to evolve our corporate culture, our business will be harmed
- 15We use third-party cloud service providers to deliver our platform services. Any disruption of services from our cloud service providers could harm our business74% rewritten
- 16Our brand is integral to our success. If we fail to effectively maintain, promote and enhance our brand, our business and competitive position may be harmed
- 17We have incurred net losses in the past and we expect to make substantial investments in our business in the future. As such, we may be unable to maintain our profitability in the future41% rewritten
- 18If our software or hardware contain undetected errors or defects, our business, financial condition and results of operations could be adversely affected
- 19Our business is subject to complex and changing laws and regulations worldwide, which may expose us to liability, increase costs or have other adverse effects that could harm our business38% rewritten
- 20Evolving data protection and privacy laws and regulations, cross-border data transfer restrictions, data localization requirements and other domestic or foreign laws or regulations may limit the use and adoption of our services, expose us to liability, or otherwise adversely affect our business
- 21We have in the past made, and in the future may make, acquisitions, divestitures and investments, which could divert management’s attention, result in operating difficulties and dilution to our shareholders and otherwise disrupt our operations and adversely affect our business, operating results or financial position
- 22Shopify Capital and other financing and lending solutions are subject to additional risks relating to the availability of capital to fund merchants, the ability of our merchants to generate sales to remit receivables or make payments, general macroeconomic conditions, legal and regulatory risks and the risk of fraud33% rewritten
- 23We may be unable to achieve or maintain data transmission capacity
- 24We may be subject to claims by third parties of intellectual property infringement or other third party or governmental claims, litigation, disputes or other proceedings
- 25Activities of merchants or partners or the content of our merchants' shops could damage our brand, subject us to liability and harm our business and financial results
- 26Unanticipated changes in tax laws or adverse outcomes resulting from tax examinations could adversely affect our operating results and financial condition
- 27Our business and prospects would be harmed if changes to technologies or new versions or upgrades of operating systems and internet browsers adversely impact the process by which merchants and buyers interface with our platform and other product offerings75% rewritten
- 28We may be unable to obtain, maintain and protect our intellectual property rights and proprietary information or prevent third parties from making unauthorized use of our technology
- 29Our pricing decisions may fail to generate expected results and may adversely affect our ability to attract new merchants and retain existing merchants84% rewritten
- 30Our use of open source software could negatively affect our ability to sell our solutions and subject us to possible litigationNew
- 31Our operating results are subject to seasonal fluctuations
- 32Foreign exchange rate fluctuations may negatively affect our results of operations38% rewritten
- 33We may need to raise additional funds to pursue our growth strategy or continue our operations, and we may be unable to raise capital when needed or on acceptable terms
- 34We may not be able to utilize our loss carryforwards and tax credits, which could adversely affect our profitability26% rewritten
Risks Related to Ownership of our Shares
- 35The Founder Share has a variable number of votes, which has the effect of concentrating a degree of voting power with Tobias Lütke, that could be substantially greater than the economic interest of the shares he holds
- 36Our share capital structure has the effect of limiting the influence of holders of Class A subordinate voting shares over most corporate matters
- 37The market price of our Class A subordinate voting shares may be volatile
- 38Certain of our shareholders have certain rights to require us to file registration statements in the respective jurisdictions covering their shares or to include their shares in registration statements or prospectuses that we may file for ourselves or on behalf of other shareholders
- 39If we are unable to maintain an effective system of internal controls over financial reporting, our operations, financial reporting and results of operations could be adversely impacted
- 40Because we do not expect to pay any dividends on our Class A subordinate voting shares for the foreseeable future, investors may never receive a return on their investment21% rewritten
- 41We cannot guarantee that our share repurchase program will be fully consummated or that it will enhance long-term shareholder valueNew
- 42As a foreign private issuer, we are exempt from certain provisions of the Exchange Act that are applicable to U.S. domestic public companies
- 43Our by-laws provide that any derivative actions, actions relating to breach of fiduciary duties and other matters relating to our internal affairs will presumptively be litigated in Canada, which could limit investors' ability to obtain a preferred judicial forum for disputes with us
- 44Provisions of our charter documents and certain Canadian legislation could delay or deter a change of control, limit attempts by our shareholders to replace or remove our current senior management and affect the market price of our Class A subordinate voting shares67% rewritten
- 45that such issuances may occur, could cause the trading price of our Class A subordinate voting shares to dropNew
- 46Our restated articles of incorporation permit us to issue an unlimited number of Class A subordinate voting shares and Class B restricted voting shares24% rewritten
Other Shopify 10-Ks
- FY2024 10-K risk factors48 risks
Shopify faces intense platform scalability, security, and global regulatory risks while depending heavily on third-party providers like Stripe and Google.
Filed Feb 11, 2025
About this page
The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.