SHOP · Forward model · Bear case

The Bear case, 20 quarters out

Model as of 2026-08-27

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.

Where each case comes from

From cash flow to fair value

The projected path

The published model's 20 quarters. The horizon and sliders above do not change this table.

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.