Business Combinations and Sale of Businesses |
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Dec. 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Business Combinations and Sale of Businesses | Business Combinations and Sales of Businesses Business Combinations Vantage Discovery Inc. In March 2025, the Company completed the acquisition of Vantage Discovery Inc. (“Vantage”), a company based in Austin, Texas, that provides AI-powered search and content discovery services. By integrating Vantage’s hybrid search engine architecture that combines traditional search engines with vector databases and large language models, the development of AI-powered, multi-vector search across Search APIs, Shop and Storefront search offerings will be accelerated. The Company acquired 100 percent of the outstanding shares of Vantage in exchange for cash consideration of $59 million. In connection with the transaction, $24 million in restricted shares were granted and $6 million in cash are being accounted for as compensation as these amounts are related to post-combination services. The following table summarizes the purchase price allocation of the Vantage assets acquired and liabilities assumed at the acquisition date in US $ millions:
The acquired technology has an estimated fair value of $20 million using a cost approach and is being amortized over three years. Goodwill from the Vantage acquisition is attributable to the expected synergies that will result from integrating Vantage's technology with Shopify's Search offering, and the acquisition of the assembled workforce. None of the goodwill recognized is deductible for income tax purposes. There is no net deferred tax liability related to taxable temporary difference on acquired intangible assets due to offsetting deferred tax assets related to losses from the pre-acquisition period. Sale of Businesses In the second quarter of 2023 the Company sold its logistics businesses (the "divested businesses"). The majority of the logistics business was sold to Flexport, a leading tech-driven global logistics platform. The Company received non-cash consideration in the form of a 13% equity interest on a fully-diluted basis inclusive of warrants and options. The net assets of the divested businesses had an aggregate carrying amount above their estimated fair value and accordingly, an impairment loss was recorded in operating expenses as "Impairment on sales of Shopify's logistics businesses" in the consolidated statements of operations and comprehensive income, for the year ended December 31, 2023. The components of the sale were as follows in US $ millions:
(1) The value of non-cash consideration received is an estimate and was independently estimated by Shopify by using unobservable inputs, including the investee's revenue growth rates and revenue multiples based on market comparables. The non-cash consideration was in addition to the Company's existing equity interest in Flexport. The investment in Flexport is accounted for under the equity method investment (see Note 6).
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