SHOP · Forward model
Revenue by vertical, 20 quarters out
Model as of
Each segment is projected from its own operating driver, rolled up into consolidated cash flow, and discounted back to a fair value per share. The assumptions below are editable — change them and every number on this page moves with them.
What is disclosed: both revenue lines and both cost-of-revenue lines every quarter for fourteen quarters, GMV and MRR every quarter, total operating expense by category, capex, shares and the balance sheet. What is derived: the attach rate (merchant solutions revenue over GMV), the seasonal factors, the deseasonalised trends, net cash of $5,472M, and the overhead/tax pair. What is assumed: forward growth rates, the margin glides, the discount rate and the exit multiple. Three things are NOT split, because Shopify does not report them and inventing them would be fabrication: operating expense by revenue line, the merchant count behind MRR, and the composition of merchant solutions between Payments, Capital, shipping, POS hardware and advertising. All operating expense therefore sits in corporate overhead. That overhead rate, 27.28%, is a CALIBRATION and not Shopify's operating expense ratio - the disclosed figure is 34.05% of revenue including stock-based compensation, 30.53% excluding it. Solving the engine's identity (free cash flow = EBITDA - capex - tax) against the basis quarter's disclosed $654M of free cash flow at a 10% tax rate gives 27.28%; the two numbers are one calibration and must move together. Alternatives: tax 12% pairs with 26.82%, tax 15% with 26.08%. Two further cautions. Free cash flow from April 2026 excludes merchant cash advance flows that were previously in operating activities, worth $37M in the basis quarter, so the historical margin is not strictly comparable with the projected one. And GAAP diluted EPS of $1.16 is dominated by $1,063M of after-tax marks on equity investments; the company's own net income excluding equity investments was $439M. No EPS figure is a model input.
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Latest: $9.64B (2031Q2E)
| Period | Value |
|---|---|
| 2023Q1 | $1.51B |
| 2023Q2 | $1.69B |
| 2023Q3 | $1.71B |
| 2023Q4 | $2.14B |
| 2024Q1 | $1.86B |
| 2024Q2 | $2.04B |
| 2024Q3 | $2.16B |
| 2024Q4 | $2.81B |
| 2025Q1 | $2.36B |
| 2025Q2 | $2.68B |
| 2025Q3 | $2.84B |
| 2025Q4 | $3.67B |
| 2026Q1 | $3.17B |
| 2026Q2 | $3.58B |
| 2026Q3E | $3.77B |
| 2026Q4E | $4.89B |
| 2027Q1E | $4.15B |
| 2027Q2E | $4.59B |
| 2027Q3E | $4.78B |
| 2027Q4E | $6.17B |
| 2028Q1E | $5.18B |
| 2028Q2E | $5.69B |
| 2028Q3E | $5.88B |
| 2028Q4E | $7.57B |
| 2029Q1E | $6.31B |
| 2029Q2E | $6.89B |
| 2029Q3E | $7.08B |
| 2029Q4E | $9.10B |
| 2030Q1E | $7.54B |
| 2030Q2E | $8.20B |
| 2030Q3E | $8.40B |
| 2030Q4E | $10.77B |
| 2031Q1E | $8.88B |
| 2031Q2E | $9.64B |
Where each case comes from
Bear case — primary sources
The primary sources this case is built from — filings, calls and posts. Where they are claims by an interested party rather than disclosures, every number in the Bear column is what happens if they are taken at face value.
The downside is in the company's own history
- Feb 11, 2026 GMV of $378.4 billion for the full year 2025, an increase of 29% over 2024, with fourth-quarter GMV of $124.3 billion.
- Aug 5, 2026 the impact of changes in economic conditions and consumer spending in key markets such as the United States, Europe, and globally, and the impact of measures that affect international trade, including tariffs.
Bull case — primary sources
The primary sources this case is built from — filings, calls and posts. Where they are claims by an interested party rather than disclosures, every number in the Bull column is what happens if they are taken at face value.
Guidance beaten on every guided line
- Aug 5, 2026 For the third quarter of 2026, we expect: Revenue to grow at a low-thirties percentage rate on a year-over-year basis.
- May 5, 2026 For the second quarter of 2026, we expect: Revenue to grow at a high-twenties percentage rate on a year-over-year basis.
- Aug 12, 2026 Payments Penetration -- 68% of global GMV, a 3 percentage point increase year over year.
From cash flow to fair value
| Present value of free cash flow, 20 quarters | $17.42B |
| Terminal-year revenue | $37.70B |
| Terminal-year EBITDA | $6.79B |
| Exit multiple, on revenue | 7.0x |
| Terminal value | $263.89B |
| Discounted at 9.5% a year, terminal value becomes | $167.63B |
| Share of enterprise value from the terminal | 91% |
| Enterprise value | $185.04B |
| Net cash | $5.47B |
| Equity value | $190.52B |
| Shares | 1.29B |
| Fair value per share | $148.07 |
| Against the deployed price of $145.09, as of | +2% |
Move the exit multiple before anything else. In the base case the terminal value is 91% of enterprise value - $167.6B of the $185.0B - so the answer is a multiple, dressed as a discounted cash flow. 7x the 2031 revenue run rate of $37.7B is a deliberate de-rate from the 14.1x trailing revenue the market pays today ($187.3B enterprise value on $13,269M of trailing revenue at $149.80), because a company still compounding above 30% today will not be one in 2031. The sensitivity is the whole story: 5x prints $110.85, 7x prints $148.07, 9x prints $185.30, against a $149.80 price. There is no clean comparable - the payments half rates against Adyen and Block, the subscription half against enterprise SaaS, and no listed company carries both at this growth rate - so the multiple is judgement, not a comp. The 9.5% discount rate is above the 9% used for Netflix here: Shopify is debt-free and cash-generative, but GMV is consumer-spending beta and the growth premium is not free.
Read the other way round: at $145.09 the market is paying 6.8x terminal-year revenue, holding every other assumption on this page fixed. That is the number to argue about.
The projected path
| Quarter | Subscription solutions | Merchant solutions | Revenue | YoY | EBITDA | Capex | FCF | R40 | PV of FCF |
|---|---|---|---|---|---|---|---|---|---|
| 2026 Q3E | $862M | $2.91B | $3.77B | +33% | $776M | $4M | $695M | +51 | $679M |
| 2026 Q4E | $933M | $3.96B | $4.89B | +33% | $933M | $6M | $835M | +50 | $798M |
| 2027 Q1E | $880M | $3.27B | $4.15B | +31% | $830M | $5M | $742M | +49 | $693M |
| 2027 Q2E | $939M | $3.65B | $4.59B | +28% | $905M | $6M | $809M | +46 | $739M |
| 2027 Q3E | $1.00B | $3.78B | $4.78B | +27% | $954M | $6M | $853M | +45 | $761M |
| 2027 Q4E | $1.08B | $5.09B | $6.17B | +26% | $1.15B | $8M | $1.02B | +43 | $894M |
| 2028 Q1E | $1.01B | $4.17B | $5.18B | +25% | $1.01B | $7M | $900M | +42 | $768M |
| 2028 Q2E | $1.07B | $4.62B | $5.69B | +24% | $1.09B | $8M | $976M | +41 | $814M |
| 2028 Q3E | $1.14B | $4.74B | $5.88B | +23% | $1.14B | $8M | $1.02B | +40 | $833M |
| 2028 Q4E | $1.22B | $6.35B | $7.57B | +23% | $1.37B | $11M | $1.23B | +39 | $978M |
| 2029 Q1E | $1.14B | $5.17B | $6.31B | +22% | $1.20B | $9M | $1.07B | +39 | $832M |
| 2029 Q2E | $1.20B | $5.69B | $6.89B | +21% | $1.29B | $10M | $1.15B | +38 | $879M |
| 2029 Q3E | $1.27B | $5.82B | $7.08B | +20% | $1.34B | $11M | $1.20B | +37 | $893M |
| 2029 Q4E | $1.35B | $7.75B | $9.10B | +20% | $1.62B | $14M | $1.44B | +36 | $1.05B |
| 2030 Q1E | $1.26B | $6.28B | $7.54B | +19% | $1.40B | $12M | $1.25B | +36 | $888M |
| 2030 Q2E | $1.32B | $6.88B | $8.20B | +19% | $1.51B | $13M | $1.34B | +35 | $935M |
| 2030 Q3E | $1.39B | $7.00B | $8.40B | +19% | $1.56B | $14M | $1.39B | +35 | $946M |
| 2030 Q4E | $1.48B | $9.29B | $10.77B | +18% | $1.88B | $18M | $1.68B | +34 | $1.12B |
| 2031 Q1E | $1.38B | $7.51B | $8.88B | +18% | $1.61B | $15M | $1.44B | +34 | $935M |
| 2031 Q2E | $1.44B | $8.20B | $9.64B | +18% | $1.74B | $16M | $1.55B | +34 | $983M |
Every row is projected. A year-over-year change is shown only where the quarter it compares against exists — an em dash means there is no comparable quarter, not a flat year.
Model revisions
Assumptions are marked to reality as each quarter prints. Every change is appended here, with the fair value the model produced at the time, so the model's own history stays visible.
| Date | Fair value then | Note |
|---|---|---|
| 2026-08-27 | $148.07 | First publication, built on the 2026 Q2 basis quarter from the verified research brief. Two disclosed revenue lines, both seasonal, GMV and the implied attach rate as the merchant-solutions drivers. |