Shopify Inc. (SHOP) 10-K Red Flags
Risk signals extracted deterministically from Shopify Inc.’s SEC 10-K/10-Q XBRL filings — no LLM, every finding cites the underlying data.
Detected red flags (11)
- Gross margin compression: Gross margin contracted +2.3%pp (from 50.4% to 48.1%). This may reflect input cost inflation, pricing pressure, or product mix shift toward lower-margin segments.
- Operating cash flow exceeds net income: OCF is 1.65x net income, indicating high earnings quality — cash conversion is strong and accruals are not inflating reported profits.
- R&D intensity declining: R&D as % of revenue fell from 15.4% to 13.3%. This may signal reduced innovation investment — potentially impacting long-term competitive position. Compare with peer R&D trends.
- NEW: Restructuring: Restructuring appears in recent filings but not in the prior 24-month period. Monitor for materiality.
- NEW: Off-balance sheet arrangements: Off-balance sheet arrangements appears in recent filings but not in the prior 24-month period. Monitor for materiality.
- Endogenous analysis: 1 positive signal(s) versus 1 risk signal(s). The filing exhibits more constructive indicators than concerns, though individual risk factors should still be monitored.
- 10 new XBRL disclosure(s) in latest filing — expanding reporting scope.
- 20 disclosure(s) dropped from prior year — reduced reporting granularity.
- 2 new risk-language term(s) detected in filing text: Restructuring, Off-balance sheet arrangements.
- Gross margin compression: Gross margin contracted +2.3%pp (from 50.4% to 48.1%). This may reflect input cost inflation, pricing pressure, or product mix shift toward lower-margin segments.
- Operating cash flow exceeds net income: OCF is 1.65x net income, indicating high earnings quality — cash conversion is strong and accruals are not inflating reported profits.
Filings & ownership
- Latest annual report (10-K) filed Feb 11, 2026.
- Latest quarterly report (10-Q) filed Aug 5, 2026.
- 16 recent 8-K material-event filings in the index.
- Recent insider Form 4s: 0 buy vs 0 sell transactions.
- ~10,000+ recent 13F-HR filings reference Shopify Inc.; broad institutional reporting.
- Recent filers include QUENTEC ASSET MANAGEMENT LLC, Adams Wealth Management, Parallax Volatility Advisers, L.P..
- 2 recent 13D activist/beneficial-ownership filings — potential catalyst.
- 18 recent 13G passive institutional ownership notices.
Full SHOP analyst report
Valuation (DCF & Graham), technicals, macro exposure, risk scorecard and 13F/13D ownership.
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