I think they're required to do it that way if they're preparing their financial statements in accordance with IFRS or U.S. GAAP. In the case of processing fees

I think they're required to do it that way if they're preparing their financial statements in accordance with IFRS or U.S. GAAP. In the case of processing fees, I'd expect those to be what makes up most of the 'Cost of Revenue' line on the statement. In a company selling physical goods, it would be called 'Cost of Good Sold'. Basically, the cost of the raw materials you had to acquire to build your products. Because of this, they tend to scale in proportion with revenue, and it looks like this is the case for Shopify. Their cost of revenue is a little under 50% of revenue, so I don't think it's fair to say their revenue can never be profitable. In terms of profitability, their net loss isn't that big as a percentage of revenue. They could probably, if they wanted to, let revenue grow for a while without increasing staffing levels or advertising spend too much - it wouldn't take long for them to be profitable. But if you've got enough cash on hand to run a relatively small loss in order to continue growing, solidify your position in the market, and expand into new markets (like they've been doing recently with Shopify POS) it makes sense to do so. They have Right now, they have $409.39 in cash and short term investments. That money isn't going to help you much just sitting in the bank, and using it to grow the company will probably result in a significantly higher ROI than other things they could invest the money in. The way it looks to me, they're not running a loss because they have to. It looks like they've made a conscious decision to do so, and it looks like that decision is a good one based on the company's financial position.