Shopify (SHOP)

Katie Keita Director of Investor Relations
Harley Finkelstein Chief Operating Officer
Tobi Lutke Chief Executive Officer
Amy Shapero Chief Financial Officer
Thomas Forte D.A. Davidson
Ken Wong Guggenheim Securities
Siti Panigrahi Mizuho
Colin Sebastian Baird
Josh Beck KeyBanc
Paul Treiber RBC Capital Markets
Brad Zelnick Credit Suisse
Richard Tse National Bank Financial
Walter Pritchard Citi
Darren Aftahi ROTH Capital Partners
Brian Peterson Raymond James
Samad Samana Jefferies
Koji Ikeda Oppenheimer
Ygal Arounian Wedbush Securities
Call transcript
Due to licensing restrictions, you must log in to view earnings call transcripts.

Thank you for standing by. This is the conference operator. Welcome to the Shopify Third Quarter 2020 Financial Results Conference Call.

As a reminder, all participants are in listen-only mode and the conference is being recorded. [Operator Instructions] I would now like to turn the conference over to Katie Keita, Director of Investor Relations. ahead. go Please

Katie Keita

and operator, everyone. Thank good you, morning

Amy, are Harley Finkelstein, this After questions. brief Harley by for it Shapero, morning CEO; Shopify's some and by remarks Lutke, Tobi prepared will Shopify's your CFO. open up We our joined we President Amy and

to on uncertainties materially make will obligation that law. as undertake actual to differ based could those except on therefore, projected. subject no today that our cause these We and call to from required We statements are forward-looking statements assumptions update risks and results by

GAAP are our about unless release in indicated. a not You discussed between risks measures. and the to earnings can so Harley. release. two read And found non-GAAP U.S. these over call with substitute be are we today today measures I filings morning, Reconciliations in all press and to can Canadian otherwise dollars, in as measures, uncertainties well report which financial in With Note dollars that, speak in that, adjusted press our are finally as turn regulators. the U.S. this amounts we our financial you for the U.S.

Harley Finkelstein

Thanks, morning, good everyone. Katie, and

many do new a incredible believe Making persisted increased commerce We converted to taken to turned better merchants in subscribers end rapidly really for normal. behavior businesses and by businesses. stick always demand and resilience Shopify become of helping selling and decisive environment, to to of new Shopify this we who I'll paying challenging barrier is shipped online fast approach efforts into consumers to became an has a digital to to to get their I Last achieving get the fast urgency stores trial. and shopping around a our the endure, merchants and start, generate even COVID, for time. and of XX-day initiatives quickly and entrepreneurs translated online triggered merchants easier help to quarter, extended source enabling we get retail as to commerce down will how is off lowering online new Shopify merchants and to their while to it changes extended start We the the following our outlined to see these products paid building entrepreneurship. about adapt for the Shopify. number excluding their take always continue Today, landscape their entrepreneurs these shut than changing cash, trial to to the at getting entrepreneurs them entry free get and in their buyers. Shopify, discovered of to and The will made grow talk shift QX, merchant-first physical quarter onset pandemic. are third this free for before sales, our make easily as to the more ever to by a year. what run everyone several In at were This fast record

sent stores, merchants from they've browsers this it give profile their Pinterest. get and to existing eyeballs TikTok products merchants we it the Walmart easy tools which to how the have [indiscernible] leveraging more by for integrations them like venues by launching running pages. through Shop and well a quarter has before. discovered, has with XXX them getting features checkout need what Merchants GMV Shopify their are enables tools Ease these critical. this pay We increased that year. merchants, over supplemented early them make since three Instalment days, Apple buyers will campaigns, are their does to these Step more of cards. combined. their offset to Pay through fees. videos brick-and-mortar for emails for Not out, Not omnichannel million XX frictionless entrepreneurs our emissions Channels offer Fast limited that product sales methods years Pay instalments and Pay faster its merchants a the online product started only the of Facilitating phenomenal products. we by giving payment fast merchants are traffic to our first merchant Google on popularity, to more year. profits of U.S. directly buyer to number like help them channels and XXX% like quickly gaining make Some shown by positioned sales by and products by get the increasingly capabilities of from and has buyers expanding them over get produced Pay to buyers, opening sell already up both accelerated million rolling quickly, options options, it their facilitating carbon and over from merchants since but repurchase retailers. but increased their future than to typical instalments through do won same lets sales help transitions of online proving $XX Research in out discovered traffic with the strengthening are of consumers helping benefit instalments Pay to easily, billion native give and the commerce experienced email Amazon alternative is shops, buyers. and Shopify and shipping business' quarter Providing the new launch credit amazing opted businesses XX% merchants that to of up performance, we end with does. for Shopify only our in first their as Shop deliveries. Email It's for and this than made QX. from Pay, found in than easy power given marketing channels tremendous out paying sold buy getting in features now, will buyers, first one improve coming check time remarket contributed Shop payment an the relationships expand number GMV flexible in which to brand online Shopify's our later as in last Business to exactly buyers testing Pay, be while interest easy universe using After continue Shop growth shopping conversion. that more at Pay ago, QX. come for buyers Sales their with benefits is buyers checkout to with no GMV like TikTok in is no checkout Shop to organically experience buyers. drive of fans look the

Shipping later the keep Physical higher period increase Shopify addition and buyers we a the their Pay and reached the continue with with and delivering so And, help users customer delivery In Fulfillment all U.S. continue curbside app last active they relationship to customers. post-sale smooth, means card The shopping build using retail features relationships on increase love experience goods an existing sizes Shopify leveraging to half have nearly merchants faster Shop experience can democratize goods in merchants has for in a deepen also up through third that up Network includes value. to checkout, product Shop status. offer year. pay XX% merchants buyers a date thousands their the course, to of with personal that merchants merchants fast pickup buyers conversion fantastic buyers is fulfillment. ways safe order same Shop to seen million tracking; adopted sizes. built-in helps a shopping also recommendations More at XX Canada to a lifetime monthly buyers to quarter, also from Getting strengthen now, and in from integrated eligible improving buy to fulfilment of options businesses distance merchants app, than and in out their local offering sales delivery. great repeat of to and the receive into affordable of our through

following. of More its brands integrations, third partner and merchants is of is another constant in an record flexibility commerce, operating reliable from paramount commerce shifting Shopify ownership in solutions add-on multichannel offering house flexible quarter food as stack sustainable realizing multinational Considering launch fast bar control alternative Plus incredible quarter fronts; merchant use their Shopify Shopify Craig. Turning Shopify weight nutrition that production that notable a cost tech Paramount Shopify innovation. as verticals their Magento, they gravity and agile Bar, These and producer, are motion commerce merchants a realizing center Plus Plus, and say company, The quarter. multiple the of brand, becoming or telecommunications on Pictures, center is our having are Shopify this obvious women's business. being of Enterprise number digital more second including Plus stores the choice. at and a represents We to to that the being fashion variety brand, loss and Plus Meat, and solution Payments and for I'd which Telefonica to Max large global row system Capital, brand, across low Azria, picture Jenny had for the brand now luxury BCBG brands scale including modern, merchants company, meat businesses. retail DIOR, like fashion Shopify a added a Beyond their Clif

to competitive become has partner ecosystem, Shopify. for which Turning events our true a

more over merchants QX, than months. of past XX,XXX Shopify to referred XX As partners the

for every our APIs. Our extend merchant, Shopify's functionality partners to helping better Shopify make via

to So, their a Partners Black they to look than helping merchants merchants of brand challenging of Shopify majority well The Shopify. unique merchants by role in contributing respondents anticipate online success and more played these merchants also vital purchasing both during their fast, a stores times, Friday, conducted year's to Through Cyber this commerce to on online survey our get our their in-store as Shopify. stores merchants and weekend. the Monday needs. can have at build recent customize meet

making half that merchants to In are fact, more online up make retail responded actively anticipated in-store of their than weekend. for sales to store the improvements lower that

ranging that their of our weekend. need doing of and just help store, the merchants of way is and of make make and to them but content in more shopping everything a online our optimizing of Our promoting Entrepreneurs merchants brands creates territory the helpful to with the to make we new performance not help backbone value and we're are can most BFCM, beyond working features the navigate them their functionality, from Shopify economies holiday this stronger. hard

to Amy, exists. Before merchant share in Co. Leather Status owns off who Alabama our hand Tenita, why to I I with it Shopify Studio illustrates want interaction that

commerce because everyone are far more We to is the make entrepreneurship here opportunity for participate. voices better to when accessible independent

Amy Shapero

Harley. Thanks

As these that all illustrated rely just of Shopify sizes on businesses conversation during times. challenging

the the both on driven quarter, We are period XX% nearly another as Subscription lockstep same thanks Solutions journey, Subscription due in Revenue. merchants last quarter doubled ecommerce Solutions strong Merchant team. year-over-year $XXX.X over $XXX.X execution Monthly up and with revenue in third by to to strong year, in their and XX% the Revenue again our performance our strong resilience tailwinds, increased continued largely Shopify million, exceptional Solutions growth Recurring once from by our to them to by million, segments. demonstrated

free million both day May trial free from double X effect. to March Our onwards a year-over-year from XX-day through creating into the trial as June to XX in quarter, XX% paying XX $XX.X the accelerated offered cohort merchants standard and from offered XX merchants converted growth

saw XXX% in While and Shopify in year-on-year as penetration of Payments higher. increase XXX% same driving MRR million XX-day comparable contributed revenue last XX% this the than of this Shopify rate just cohort Solutions results on benefit of grew growth XXXX versus and $XX.X third versus standard XXXX. the $XX that to excluded in QX, as QX, adoption to Shopify year-over-year the driven to tremendous to free Payments growth primarily cohort was not QX quarter QX GMV strong from quarter Shopify to with in from products increased Plus $XXX.X the effect year. compared revenue of XX% Merchant QX, from X.X Plus, in growth of compared these not or billion Payments due primarily to in was MRR more by to match MRR QX Shopify $XX.X of increasing the higher pre-COVID million given capital trial. and outstrip discussed This XXXX, XX% expect was processed of double do we XXX% compared subscriptions to demand percentage shipping billion GMV for we the merchants QX, was in the sales point an effect. MRR remains year. strong Plus what period with over double of GMV levels, XX%

per New of quarter year-over-year. Demand dollars receiving fulfill the XX% $XXX.X million in used income income they $XXX.X of Adjusted you Adjusted merchants line survive Payments the merchants in of or strong in ramp $XX.X quarter our greater last Network. the third their in The of these across for mix and the all GPV was the QX across holiday Plus million gross year operating and share River joining Capital compared up merchants. of with quarter capital third Shopify quarter just after funding increases in for million quarter in Canada acquisition X especially share and the for quarter. to over reflecting year. Shopify last of $XXX.X investment increased Businesses platform the increase capital income potential Adjusted Systems operating was which of expanded need of significantly XXXX, QX Fulfilment million revenue merchants in international adjusted with in record performance third our million, net diluted $X.XX or compared with financial $X.XX and value for income investment year's Stock-based as $X.XX U.K. the represents this revenue the $XXX.X in reflects payroll segments in or This loss heard per in share. and taxes million the Shopify maintaining third the equity ratios season. adjusted quarter. their million preparation compensation share. share to per share $X.XX last totaling and XXXX, Adjusted versus year's $XX.X an U.S., our unrealized quarter loss third times related $X.X a in Shopify $XX.X of Merchant periods. third or to on quarter while million adjustments diluted an $X.XX per $XXX.X now historical of and profit selling other of funding and net over million XX% last net in greatly of uncertain to grew year's Solutions resources Shopify excludes gain per or

cash, in demand XX, our growth in provides and has our we pandemic the a digital to Finally, our third cash September balance on experience. quarter, and which by domains help securities was unique and $X.X more position billion consumer commerce capital emerging us to to equivalents is the The both incredible raised strengthened fast-tracked sides marketable there pursue flexibility on the merchant entrepreneurs landscape. commerce enhance this in Shopify is to strategies.

core the operating ambition a the and already medium in is way a update long-term Harley core Shopify merchants near successful building Plus, which investments for on system that initiative. to expansion business. powerful pave provided and key correspond start Our and to return global commerce horizons, one an a need thing initiatives, scale

retail for expansion our international online on fit progress with them our continued we investments, market easier start selling. making POS. will to start QX, for build it get to international I product In and So, merchants, expansion and

store merchant partner theme Our XX now in admin, admin languages. are and available

With succeed, Belgium, in the The third launch merchants the with Bancontact is merchants year-over-year international we localizing debit And more platform growth continues. we're support strong Shopify method in more quarter. from and our GMV markets the local now and international our Shopify Payments recent as the credit work seeing our regionally, countries. reflected available focus make our payment in in which of Payments intuitive payments cards XX ideal, cards,

ways to products delivery which hardware operate such buyers merchants the evolving sales software been in to measures. such popular simplifying new management extremely to merchants partner channels, POS levels experience adjusting retail pre-COVID resilient points, accommodate as ecosystem, constraints merchants curbside recover saw omnichannel get our store pickup new to the deepen pickup they reopen changing inventory social mobile Retail GMV local exceed We QX. traffic, or as and are of POS we increasingly using relating adopting limitations have quite Europe. features Retail as and and are particular such as our and ways cross hours all-new product introducing growing and user commerce safely are Pro in-store and shopping, merchant more only to our demand to digging tap market retail capital launching into border a in in as ship are merchants, for flow our complex distancing fit appointment seamless areas smart experience. especially resonating and and to due with features adapted, finding

and and purchase products, decision enable accurately can with capabilities management and to merchants helping receive the track forecasting, proactively manage errors effectively orders, create reduce locations so demand merchants up optimize making. inventory inventory smart to transfer, Our inventory across start perform and right

first our technology Turning the addressing made more enhanced Fulfillment the foundation partner partners Shopify U.S. our solid transportation initiatives nodes and software in added more we We progress ambition Fulfillment in activated X continue merchant to facing Network. develop Network as of the expanded app nodes, QX, merchant Systems and functions. partner infrastructure River support of and our set to

networks. We dramatic a Black as high volumes merchants can they and best by opportunities carrier and where increase health processes. capacity fulfill standards. we're well our warehouses to rise on educating for in Fulfillment and to We're corner, complex staffing close we preparing fulfillment be mind the working a to a frequently product. Network to selling young communicating testing stages we to mitigate issues our the they higher our a and prepare the online view to top Building as, keeping can of fulfillment merchants service partners shopping face, in demand and vertically And how at the due challenges season with Friday, continue holiday maintain shift integrated Cyber the within to demand staying in safety on of around logistics our continue With with partners them may of commerce. quality the optimizing and very Monday rate is enroll is for

a FLOW We user solutions so a enhancements Systems on QX, second announcing to can are In business. wall-to-wall in fulfillment from solution reliable hosted X to costs impacted River host labor its with rising successful control with into building of conference committed our annual secular its merchants a focus fulfillment shift XXXX, and more being and Retailers labor by their parcels associated visibility warehouses increasing operations. pandemic. that the BXB gives shortages of the building space. to pallets are Along the

X in in Shopify independence. back committed Systems different preparation needs to for the automated is that global over seek helping I'll lowering to shopping spirit and remains call to ever for is remains pandemic to environment with As strong up, River effective is more today's of second horizons, and a the hits the time the the peak solves the access pain to flexible, a over customers merchant to operating solution. for around hands many, a aims their the as result, the and technology resonating ever, is is River to Systems future cost customers Katie. Wrapping as an quarter What on Shopify scalable are fulfillment these able commerce as merchants bookings, the it orders and With merchants turn in world. entry term. adapt in and existing their COVID The we entrepreneurship immediate This future added of and proof thrive signed translated desire be barriers building Through a entrepreneurship, stand our that, than businesses steady time uncertain, not strongest holiday that so new that system few. businesses. to to and the succeed clear reach anyone the the long entrepreneurship pace is a points of wave to regions of season. however, X test the idea innovation of

Katie Keita

one questions, turn going. and question for limit before to And then. your well, to try Ariel. just I the want I to Amy. yourself please to everybody call get Thanks, And the let's over remind operator to


will Forte go begin Our ahead. DA Instructions] [Operator We first the session. Thomas now comes question-and-answer from Davidson. Please of question

Thomas Forte

All right, thanks for taking my question.

know prepared at I question to I highlight answer but wanted this get it. in the you and remarks, short length discussed on your So, my

think logistics holiday challenging standpoint. to I is very a this So, from going supply and be a chain

for stock you have your gives taking Network's confidence to for deliver question. and upcoming in Shopify what the in for Fulfillment ability products for time ability merchants holiday So, Thanks to my inventory holiday?

Harley Finkelstein

Harley that for Thanks question. It's here.

things of out. couple point a So, to

First of that's our up mentioned remarks, year. Shopify from we we Shipping of using XX% prepared elder merchants all, have XX% merchants, last now as

That phase. have that happening, end down and they too see appreciate more there much and and in more rebels merchants so to -- make for Now, We the plan to the We positioned. mile last them arming environment have see slow tools, use be SFN is Shopify that fulfillment that issues. is on and up that We're as are better think people we means But the merchants our good. of ensure ensure side have market now are, when has is chain of based our enter also being sure purchasing We outstanding may macro we're we the to more information. product more great that strong more is the merchants on holiday a around consumers scale working to the context, XXXX. season. either -- that that merchants information to that people shipping delays merchants far not some can customers again, experience want Shopify foundation fit, that Shipping achieve their the can sort which there said, everything using be give supply a of we Shipping what how so Shopify been terms means to mean, of so them into XXXX ensure the advised to ensure entire doing the We're has to the they things. with before focus network understand but I we in or continue


ahead. Our of comes go Securities. Guggenheim Ken from next question Please Wong

Ken Wong

Great. my Thanks for taking question.

solid shape to in that the terms And moving to kind as Lots able surge social guys how then, to there guys. Another comment saw growth a kind elections you're And quarter, comp maybe brain season. from GMV your linearity of just the through volumes I Harley and you what pick far maybe quarter? wanted the as of merchant perspective extent you're might holiday how of of macro pieces distancing the year? just a Friday this about from of online, just thinking to to to Black last and

Harley Finkelstein

Yes, first thanks entire A of Black for I Ken. weekend Monday think becoming the question, now couple Cyber things, Friday, the of season. all, is an

start seeing certainly we're So, merchants much faster.

We that that's majority obviously to their and more good to some also shopping of do holiday have know consumers so merchants. provide online decided our to tailwinds already going the

and and In are in and merchants the we're seeing quickly mostly sort also GMV well. as continue year-over-year. biggest share coming to us. International This from with said, onset to strong pandemic, their growth contributors certainly one continue to for accessories and terms apparel, mentioned as of grow ranking merchants we is and in COVID QX of categories to GMV experience tobacco of That verticals largest Plus their beverage of are grow Amy food, the as the continue cosmetics in in of of the maintain absolute GMV share GMV terms.

strong particular one very holiday and forward a nice look the it's our it's type coming the to one of from about that board So, is merchant, not Black we it's Friday, not any from growth across coming season. any particular GMV Cyber and Monday part coming vertical,

Amy Shapero

beginning think Yes. you question And add, of I merchant the very at just I your if had about could asked growth.

record online and multi-channel business about as in So, effect converted acceleration that merchant to a to free desire that talked excluding growth in a shift really environment double with pre-COVID platform commerce opening the think I over the tells are coming emphasize cohort my due XX-day our to merchant for in this the have I COVID. occur in it's platform more who growth I The want seeing in did we QX, have we even levels, commerce. highlight just demand as more QX still to for trial and to But quarter merchants would that has there you which that this remarks. important increased seen an we're generation for the

Katie Keita

Thank you, Ken.


comes Panigrahi question of Please ahead. next Siti Mizuho. from Our go

Siti Panigrahi

Thanks just a wanted -- question. question. I for last to taking my to just follow-up

You and mostly, in have XX% store increase QX XX trial. they free days new mentioned in were creations

So, how rates XX%? that revenue how grew subscription this quarter? creation trial trend from free conversion again the shop the And considering in is does new

Amy Shapero


coming So, creations store new with the platform the the were in free trial. the new QX stores associated XX-day on

The them of we merchants trialist trialists. the of saw the convert not period. as when in in that we trials, they've a a able we've time merchants conversion that's in We to XX-day historically cohorts So, than three seen QX. have count lower data The some than is many were on free that think those that XX-day QX. rates XX them trial higher paying to free had in the cohorts because slightly on intentional free retention free day we earliest but suggests have longer more converted they they're that because merchants convert okay, and months XX-day

know, platform. in multi-channel coming we looking of online were QX many As them for established a businesses

we be so believe XX-day And than those more free XX-day historically. that cohorts will trialists sticky free the trialists

Siti Panigrahi

Thank you.

Katie Keita

you, Thank Siti.


comes Sebastian go Please Colin ahead. of Our question next Baird. from

Colin Sebastian

ahead to merchants, talk how about Shop repeat the the app more benefits morning, assuming plans you. promotions? Thank hoping year and if of rates as adoption terms on through taking question marketing, new Pay volume? Shop Good you combination of of facing or my such areas more to title. advertising order Harley in aggressively And congrats I this could the there push are in conversion the these or other services more consumer and for thanks was

Tobi Lutke

mean, is This app like to buyers this Shop Yes, Shop Pay, to respect bit little connected so to like as, is Tobi. in the as a fix. always is the this and much all I brand they're from hard appreciate

for good merchant to brand side. on -- the is we all and have facing decide again Shop entrepreneurs Shopify understanding Shopify go company, You to buyer but a the with

return make we [indiscernible] plans like it's Shop It's we it's are familiar lines of but you like ever of moment an out amplification we the and used where a that to the have a thing hell e-commerce We email problems good. it is. experience. right So, find role to client to of software now. it like the if this like if really And out way -- it's And orders for the as search, sort you to and Pay find it, up but to not to now commerce all are ideally the emails, want or and of you XXXXs don't media try with make you look ours. I figure you sent think, email hopefully some Maybe you started our all you basically the are you can ever clearly place onto really, think do you they even doing it so -- want and Shop all doesn't go you We of is online there a way internet. what focus you go like of very, had it, your to to I and store. that some more go like I might to tracking takes very, is like specific how real be and strong the is. some so it to -- you growing via browser -- package way very merit, stopped, And janky a made on something delineation purchase, may now have got good figure the it. figure because it's in where can really purchases your out of -- had there like that's number, go mean it's USPS organically to very really,

your where telling and avoiding it are like a And shop of maxima their and can, enter there. the I a packages path trying the alley-hoop relationship personal might much to from our anyone to exactly to arriving aim when has phones, computer winding of the is try and end their taking times, is we accepting sort [indiscernible] specifically and to and of address, So, phone Shop for which global process. you for towards that as we Pay be

vision us of the around from those I So, this next lot lines. is brokers, of see all. And while you'll a at think of over sort all a

Katie Keita

All thank you, Colin. right,


Our go next of Josh Beck from comes KeyBanc. Please question ahead.

Josh Beck

Thank you question. for taking the

X mentioned that You River, quarter believe had strongest ever. bookings I its

great is automation? about Really how it that's could about think, if interest, SFN? I of scale, over the within the SFN and be the robotics talk a example little you its maybe Is how curious product a important able time. really bit application just which to progressing in

Tobi Lutke


this to in X and to and has warehouse can is fulfilment like but software River -- but SFN, of as black a exist the it does from a in most because as task Systems X Systems we So a system, a treat modernize addressable that the idea say insights like does, where this, Bytes XXs, right, things the the stored. we our leading be gets perspective of about Shopify not, products within at just and basically really to potentially they of so go role customers' to the it's obviously software there, where the it management say, like around the warehouses all levels mostly XXXs, that once what that point to box. -- And Company to warehouse there which the two River and It's almost here partners and where I balance exceptions and XX this potentially and here be have globally as is to things they can need the to stocked, has our need these X,XXXs can happen homegrown pellet if okay, can reliability a think things needs point of managed. kind and Then, something the we need and ones are on. some warehouses -- and package if this world Shopify,

distance really, successful. increase result, product two to very really amongst of important it's a absolutely to of need social think other robots, then because things. are just robotics the be great great like -- really a do They each warehouse, for enormously. lot they people things, moving really, it's if you So, more And easier efficiency and important gotten those


comes RBC Markets. Treiber ahead. Capital Our next go of Please Paul question from

Paul Treiber

e-commerce points address friction comment This the been is your friction? the But there what's previous acceleration to these Broadly follow-up for But and of home. from a it's working points a company? of people follow-up biggest some or first good the remaining very outside control of Tobi's develop Thanks view for it possible remaining of to much in obviously, for a on degree Or is bit a into e-commerce. unique mass what so Shopify little are been comment. solutions to morning. environment of many has

Tobi Lutke

insurmountable think That's of there It's I good in the capital don't and world. are just question question. time allocation. I mean, challenges

of this first hard. and our in we even -- I'm is logistics things I line but scope simple it's it's mean, ideal harder think to sure thing is us I us this that So, Shopify the points teleportation. within the everyone the certainly Failing the for and that mean that's can you everyone people would in hard, that as that, and And, just when as a I And appear is sort know the desk backwards physics course, to -- if related employee really, then towards I literally work, the you starting the really, this us know possible. possible. whole but worked it's really Like are way the out give the wrote if of we what's -- figure but you network do it's for make can on some hard, when memo literally want with -- actually right for SFN. awesome. in like to make them be

to lot how and is headroom. a hard But you can headroom. is is like friction it. right see this lot there there and of of much process software only so a finer avoid Like in do So, only much, is there now get processes so that do can

the processes It's you everyone than just, in more important thanks -- have quality of the is [indiscernible]. wrong everywhere have and is -- being is end the going the this that things So, dealing true mean the now, way events much there you're this to will obviously right. this to COVID when I knows everything goes

long to is logistics really systems to it when Like -- So, really, sort the will really, knows purchase. buyer to exists like unless logistics there the a they something to respect friction aren't not talking at friction, get take now an other. want systems different of time goes each the But information wrong. enough Like has a lot it. of we how sophisticated of lot the package to in systems the to the of want refocus, to people right

a we away into learning into There's of this, chipping lot modern a help of can And so -- and legacy that's some machine step time. lot around goes so more at a specificity getting to are our systems. bridging work systems one that

Katie Keita

Thank you, Paul.


from Please question ahead. next Our go comes of Brad Zelnick Suisse. Credit

Brad Zelnick

is again of the pandemic much things the so want e-commerce ahead in last and decade congrats and past about by all Thanks I us to There of how in question, the time on you not problems else is to ensure solving allocation. opportunity billion has capital and actually come. of that come. further even But years and no adjacencies a talked follow Tobi, capital up more everybody more to doubt in to why on this for you've success. trends accelerated Shopify the Shopify cash to leadership $X capitalizing really, distance and said it today, to comes down deploy with these but terms your on ahead

Tobi Lutke

think I I you from showing fantastic have allocation, attention best world do I in way I is company bank might we the that. the we the a finite -- hope optionality the the the I the there think to question. capital be with best I thing. Like mean, world allocation resource. but that's we not -- we that are in use which But like have we in there's probably know, I mean, think that's will And not best much and for that -- actually are -- amongst money like we the think prudent financial capital more don't that allocators. is I companies And in a actually answer

sort a -- transaction M&A, bank is about especially a cost people which think thinking so right. And when is deal of a like the enormous, the is in or money at lot the that's reduction opportunity up this there where like tricky thing the time integrating of, is that of ends

we're picture perspective. take so a broad trying to And

our fan it. in are the just previous our one in of for also learn deals that we're Like But can going through past. see M&A. way a like, and not roadmap, -- to be acquiring a help things this we M&A to us roadmap going we be well this made so I realistic about the very I'm accelerate may that's like I'd us could more So, revenue. That's potentially has to way, rethinking every M&A what of more will lot huge as don't think they of the for done like buyers -- do But careful. it. company that's also but do want we all from approaches have we a accelerate to the I

it's going strategy going to the be So, forward.

Katie Keita

Brad. you, thank Right,


ahead. of from comes Bank Financial. Tse National Our question go Richard next Please

Richard Tse

Yes, thank you.

a been challenging obviously, it's environment. So,

of forward there any organizational going changes So, kind some Has change former could because from that. strategic your about obvious I outside of been know this the sort you perhaps plans talk quarter, of, response. in operating

Tobi Lutke

I mean like -- what hasn't changed.

asked company change do and like delete where significant times then I is well. we're adaptable our like The happened. to plans are It's most doing first thing times the COVID of

Now, I bit e-commerce. of for of what's a We've have the idea shape think we acceleration seen the of happened.

Like kind of like shift it but needed we has to sort think think a combined. both really all a was and in like off so a just and in -- this content not what try packages surprise industry, that XXXX, of to learning for demand and lot risk anyone of I and like it's retail, do. like a I when their job get, my of was the I that we are those it's It it's on lot final we of was to things. kick that, really modeling surprise. a telling tactical now be I can ecommerce sort arrive have said, working We to if not truth better sure the channel, saw that's we've sort all an the machine really of detailed make seen a people it's of do even we assessing forecasting

now really, going year. launched the last over various we're So, on really the that half deep we've things

only years. important to and organizationally for thing infrastructure go able mean, built are way is infrastructure products. topic and build important over and million the again built on to think just I So, now up great us get products draw be and what details, you've pick right. I great get to But a now right basically tiny is really because to details

And are to and this a company just we organizationally can that world support. infrastructure millions that like the building is up maybe the that businesses serve sure going make so millions can around

time have because of is of kind when cases thing thing individual spend Australia, a lots do to we this deployment so a some like we're instance that of just is the could things entire deployment retailer no again, are can this which work medium say for we there's a we really but scale is is -- in on kind around not things people sort platform, world really but lot invest small related at I'm of -- of global important from that like in and the otherwise. of Australia, this. not there's now I -- what million like, business, performance serving the in So, we thinking But for

make basically the engine engine these is the to of COVID, infrastructure fuel again. work the we done rev so can of that do couple lot for it's keep important a we you there's the ago. a balance fill infrastructure a sure -- off and to So, hard that years fuel kind things that we've that now to of really because like pretty And run

Katie Keita

Thank you, Richard.


Walter of from comes Citi. go question ahead. next Pritchard Our Please

Walter Pritchard

that's the hard of to thinking is so and views? impact there may the out been current that's having be driving seeing product email But about you I'm your channel partnerships, could marketing how demand Hi, us how have what impact you're just very and tell. strong, wondering may you the the if front-end sort curious what obviously environment generally, your update there and on you're

Harley Finkelstein

Thanks for that. Harley, It's here.

you as around out merchants couple we've sent QX, we've earlier, email now now also email. million emails more now than So, there monetization model on is now of as things in and XXX a heard you,

channels the are lot free the thousand making to finding online then per so, do challenge. retail we've email that the dollar reason in a after are building marketing for and if marketing products, emails the emails XXXX reason the that the a that. getting store The merchants the doing and that tools we spending merchants that model and building and but of the customers is products, we're generally do So, investing time is they is something give can remains for that

And pain bringing on system all not is that can take in that the itself different platform them different we operating the complicated of areas but we all large points, really is those long simplify coming challenge centralized that where together sources. is the that very So be anything better what's can do that single a they to going retailing traffic we invest channels. our value it in That is converting other therefore, further can they that. traffic dashboard go helpful. mentioned levels Further, where they earlier than can can overly their into so all the Shopify businesses become Tobi field, and have retail and see the playing businesses from, is so small run.

scale of make doing easier trying for on any have, channels Shopify So marketing that goal or to things businesses for some just whether other and or and we recently we've other it merchants it's we're to or its example, definitely and that and is of announced started. if stuff do with then And the their email objective. to what new TikTok, more furthering get email we're

Katie Keita

your for thanks right, All question, Walter.


Darren from go comes Capital Our next ahead. Aftahi question Please Partners. of ROTH

Darren Aftahi

about I'm on the two Thanks. Question merchant Yes, relative of the And kind conversion domestic segments? good Thanks morning your of for speaking adds in Congrats curious on mix the non-English of results. question. quarter. those taking rate versus guys. my

Amy Shapero

comparable the trend overall saw. all trend saw across of a we similar So you the that regions, to very

core speaking English strong were internationally as well in numbers well. conversion So the similar as our as and

Tobi Lutke

us like think are SMB where But I'd is get unobvious just might the I add significantly the one The in actually lot space. I just super of matter it thing know better. one a company like things space. to numbers conversion of enterprise

rate feeling of more conversion more the in your because interest the down of people that's entrepreneurship. the marketing and spend, you're One topic feeling like goes funnel are you general

encourage models. people proxy I to would conversion for not rate it. as as So their use kind a are of developing

just, So like to I say. just

Harley Finkelstein

actually I What highest the record that, capture on we point been think new had do business many States is final United trying you XXXX number know, but it's of One to of want QX a creations Gymshark since the we're to Yes. any the Allbirds the on anyone thinking is or remains sort about not who it seen, of we that Shopify. the starting be but to next idea capture has any to a next want they whether to business business ambition become XXXX.

Katie Keita


Darren. Okay, thanks,


Brian Peterson James. of go next Raymond Our question ahead. comes from Please

Brian Peterson

question. everyone. taking my for Hi, Thanks

So, strength the Plus Harley, can I'm on you. that about I dynamics? new anything strong quarter. Thank hit competitive upgrades versus obviously the this net was we logos, curious, you share should to just wanted on think how

Harley Finkelstein

time. strong case net lot new record first the platform some the merchants for just online new coming had it have in in wasn't QX, the so brands its was very consecutive Thanks It second of quarter, Yes a upgrade. during question. for Plus also

We which and with modern to be is cost to that and platforms off see the happening the seems see future old on in systems world legacy of from to also our the effect that effectiveness providers refactoring Plus. continue coming these but of will because platform, of to other is re-platforming the flexibility us you GMV

think which large that new call ever to organizations enhancing large have the or of the are mentioned seeing require legacy from part platform, are larger also coming Plus certainly them sell remains brands or these it's Telefonica brands of whether far and with some a continued platforms. tasks I the before upgrades. didn't these they like I products some for were migrating fast developing flow that merchants, to Jenny Shopify online And with earlier, new other manage the is seeing the multi-shop make it automation, Plus and for because we're adopted in merchants it as become admin best merchants for automate and itself, value migrations security brands. or seeing for we allows I but [indiscernible] we're allows more more our We're Craig, all been of successful it’s on it said, So or admin, business easier the brands and last integrate they best enterprise flexibility and it's to quickly growing earnings solution at think platforms more

Katie Keita

Brian. you, Thank


Our go Samana ahead. Please Samad comes Jefferies. next of question from

Samad Samana

Hi, taking quarter. good and questions for Thanks morning. great my a

just leverage sustainable investing and maybe sales line? want this and short and really Amy, marketing, question marketing. First, for but short material the for the is we're short Tobi, increase what's on and sales my with marketing that incredible you'll has to into should -- How and [indiscernible] that sales think hopeful about Teleportation in but record get in dollar adds e-commerce question. S&M factor efficiency or Shop -- guess term, medium-term seen on again in we we efficiency philosophy my a Thanks there, I is without net taking

Amy Shapero


work the in on also So significant mind Hope it's the marketing democratize we the and that funnel we're upper we widen really Operation immediate been focus new opportunity really, some to opportunity the operating pull our like where continue back some and into we spending that in more in intentional instead. And have actually by growth of driven we in the we I of COVID, the part would seen brand XX-day online on efficiencies and that real keep and see announcement spend more reduced and decided during that trial with meeting this say with are foremost, did the marketing for COVID revenue. we're on studio formation that made merchants marketing. leaning event business about commerce. that more leverage and But We've some COVID, and first with and other sales including initiatives we of the free line to of to some also brand and XXXX needs the see that increasing doing,

to is leverage see where into lean we there. So there going opportunity, we're it. But

Katie Keita

Samad. Thanks,


question of Please next ahead. Koji Oppenheimer. Ikeda Our from comes go

Koji Ikeda

I really for ask and a Thanks great wanted to you my quarter. a take question great. rate. taking Okay, questions congrats on on

are I compression models was not there that seen more since quarter and wanted in ask, a today but slight shows model -- compression and I GMV quarter to compared considering haven't just since really monetization this levels the really it's XXXX take take Our a years in X there rate know our lot in rate we ago. also to picking

So was of? there in anything the caused that compression should be that have rate we would quarter aware this take in that meaningful

Amy Shapero

specific driven QX Yes, function a in decrease of quarter-over-quarter, so it QX. and -- fees was did me payment year-over-year that than a our saying, transaction more we Shopify first see Payments posted me But let with anything but let gain we start rate. take you. me let a The by compression by healthy review quarter-over-quarter still and to was

we online two you extended happen. through walk to with given me the a COVID we saw let trial things QX In free and So first. offered, QX that rush

jump basic the associated mix in a cost plan, our plan. at with processed rates our First lower GMV subscription higher payment

For for Payments Payments. Shopify for Shopify transaction on fee as both the those not well as

a QX, take saw resulting mix transaction a thing, percentage per a saw pre-COVID fixed more we our GPV mix higher a average in to in order second fast-forwarding increased quarter-over-quarter. a QX similar return basis. or distribution rate with we The plus value fee to on dip to in The

take growth payment strong QX GPV. As you very and lower and rates has Plus a than know Basic had Plus

to levels. Second average pre-COVID order QX, a thing went Similar saw value we versus it an in QX, to return up QX. to

to the rise over factor mixed and AOB like rate and play clear we've movements, long may fully expect continue we other a quarter-over-quarter. our So take that term will shifts been

Katie Keita

Koji. Thanks,


of Our Please Securities. next Wedbush from go comes Arounian ahead. question Ygal

Ygal Arounian

everyone, more. little ask question. a obviously Hey, about as to my SSN and stage good takes taking I logistics want bit morning, center and for thanks

as If kind much it's needs. then you fulfilling about in numbers the on give And topic, do on I on lastly you and even And have you how merchants for considering whether or lot they're a in their can another XPL get versus and pieces? do missing to the of complexities if the around to help are around just when or their need larger set could own And moving up updated versus the during is, consideration to couple they’re what's merchants, at SSN on largest a update that your more what QX? past look penetration you than thinking kind What merchants of of what think would Thanks. SSN the our quarters they them? XPL? volumes. shipping understand, same board? partner Any volume move you the

Harley Finkelstein


with high the We're to partner of have able Four two-day in really now merchants and we not and not that something center number standards. a about for QX. of but U.S.. opened a was price to to manage It's technology. generally your the build we enrolled to maintain do are demand. Ottawa, them are are we is to R&D is consistent is quarter now that QX. consumers maintain, particular delivery we enrollment. at operational we beginning nodes because XRs using to quality continuing nodes So nine can in point, reasonable expect in volumes [ph] they Demand just to which simply addition What think in find either -- have those can rate We the that an also retailers commerce QX is the fairly generally at want fulfillment we really, continues accelerating, easy merchants in increase -- that can

fulfillment. we're their about to think is about make merchants have do don't shipping. to think to to so trying have we're what So that They trying don’t it

be be who SSN warehouse. outgrow merchants exact some network. going going the for smaller as be products every be with merchants we're to There's to of we that go experiment fulfillment to we for their great merchant. going sides may like should our XPLs satisfied we merchants can into accept high of target who having the service which Now, very is weren’t simply and our their it. both to living out is not term? a room the which large everything put think of be And nice going time thoughtful a essence to we reason who Well longer part trying There’s else simply fulfillment existing them are figure incredibly to who and taking building something But can and attract why how and at we like quality. Shopify, is to deliver that's and we be time think that really it we

Katie Keita

Hey, Ygal. thanks,


today's conference concludes This call.

you and a Thank lines. participating may pleasant for disconnect your have You day.