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Shopify (SHOP)

Participants
Katie Keita Director-Investor Relations
Tobi Lütke Chief Executive Officer
Harley Finkelstein President
Amy Shapero Chief Financial Officer
Brad Zelnick Credit Suisse
Thomas Forte D.A. Davidson
Craig Maurer Autonomous Research
Ken Wong Guggenheim Securities
David Hynes Canaccord
Mark Zgutowicz Rosenblatt Securities
Colin Sebastian Baird
Siti Panigrahi Mizuho Securities
Matt Pfau William Blair
Paul Treiber RBC Capital Markets
Trevor Young Barclays
Drew Foster Citigroup
Ygal Arounian Wedbush Securities
Josh Beck KeyBanc Capital Markets
Brent Bracelin Piper Sandler
Brian Peterson Raymond James
Call transcript
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Operator

Thank you for standing by. This is the conference, operator. Welcome to the Shopify Fourth 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,

are quarter and you join can fourth Shopify’s for us year-end We glad XXXX call. conference

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

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

between Note You can measures we the press are substitute as are our report as adjusted non-GAAP read in speak measures. release. well these And regulators. which about in GAAP our finally, financial and our press U.S. in that the dollars. uncertainties measures, can today this earnings with morning, risks not two we for to financial a U.S. release filings assumptions, Canadian be in and found Reconciliations

discussed all dollars, And indicated. otherwise turn in to that, are I’d So, unless with it U.S. over today amounts Harley.

Harley Finkelstein

and good the Entrepreneurs challenges XXXX also which demonstrated online. was morning, the buyers entrepreneur. forced the global year presented think grit, of meeting pandemic a differently, completely everyone. worldwide by that Katie to Thanks, businesses pushed more

the innovate about retailer center lead talk At Shopify every of define want versus I would we new a believe four top our number launch first firmly brands key proud off-line the and greater sizes. remote better to to I’m and businesses the We mission we expanded that a all company making us for at XXXX. of to gives in work chose recruit more around continues surviving merchants which early stage permanently energy. of approximately doubled for from their the level world. in our outside their say $XXX with us more we merchants will year-over-year our an of across subscription online, Shopify is entrepreneurs our broke ground as with the are to XX,XXX made total to three more Shopify entrepreneurs of to new our basis, gravity million the And the first aggregated of of mix. increase number re-imagined of world pandemic, nearly the merchants, empowers of geographies which to from complex of work level Today, more Plus, shifted continuing At pursue talent Shopify. is to economic bringing era. merchants Plus merchants business Approximately, that shifts here and to merchants are scale inspired for we further in to merchants employees GMV, XX almost to Shopify independents future billion XXXX, sale year-end. Shopify because their even freedom U.S., past in from magic seconds up and of and to as larger XXXX; from this for a trends English-speaking ways end further Our commerce Shopify, commerce than Shopify to reaching enterprise model, new second generated from on new at business. a had plan better that do X,XXX X.X working state, e-commerce on for every XXXX. largest everyone merchants part the the quarters with this around average Shopify the the merchants anywhere that in On that minute a sale. in than consecutive moment work core XXXX, more joined In rank to merchants retail entrepreneurship of getting nearly year.

voting First, wallets. are their with consumers

charge for them all-in-one emissions helps users local April features Pay, shopping to and brands. their lasting order launched it directly Shop year, the the Shop’s they form every Black-owned making curated Shop, we’re checkout, to the between and last brand. So, which or Shop go XXX% its mobile at shops want day easier merchant launch lists, single have businesses automatically we including authentic and offset of using assistant, favorite buy from to and our merchants one buyers the accelerated of and relationships from. to In by no Shop brands delivery been produced

retention. Second, in prioritizing their customers. are bid attract to up large pushing companies see We buyer are retailers acquisition costs

XXXX, active buyers we’re product, million Shop both including Pay in of users, in than of innovating Shop Installments, XXXX, million Pay, as The GMV start that XXXX. Shop with and had $XX So, Pay years. as our buyer keep the is retention users buyers into were close registered built the features app, at can this accelerated Pay; relationships like of cumulative Shop lasting XX XXX end of to strong opted than them facilitated users monthly since its By have checkout, well more end real-time billion launch our the buy-now-pay-later the more of which Shop for year. build experience tracking. with had and Shop By some delivery for merchants and

entrepreneurs risk, the Capital a banks. popularity have And contributed list deep offer businesses needed it online resonate Merchant at they to pandemic that merchants most. the lets of with perceived number barriers financed to Shopify on were Shopify the when the their when unnecessary increasingly UK U.S. traditional merchants access of to in can Pay to empathy turning merchants traditional buyers. by from rolling young products Canada significant in we businesses, began started in out small we and Shopify, quarter merchants. runs also record out we away high options our Capital to since of shift growing institutions face because or we Buy-now-pay-later are Third, who modern solutions. financial which introduced Installments, is XXXX expand and to like small Shop sought the payment at third help to consumers, flexible spending. especially Products

for We Shopify business open Balance U.S. finances health also available and the in accounts, in early personal the clarity business. merchants the access fee from no their finances separating easily giving to QX, made on enabling of greater business them

Finally, of the power omnichannel.

share e-commerce a of omnichannel more even critical businesses. greater As captures commerce becomes retail, for

ways our to Shops, to proposition continue adding Walmart, strengthen by merchants Pinterest We in buyers, help including multi-channel new XXXX discovered get and TikTok. more value Facebook

for through was of Once checkout to coming out merchants online the a our advantage are and buyer of accelerated Shop the all-new platform all all manage their checkout point which are merchants of than convenient online of QX, include of to combined buy the and in back-office making Payments Facebook attracting weeks. Pay, products both opened and within Shopify. and eligible that adoption not first-time Shopify importance time during success way We of faster to buyers. transactions directly in when various the pickup enable Cyber discovered benefits but simple and last month, omnichannel made closed Black set storefronts their year merchants global popularity for curbside, shopping we Earlier our in of the Shopify came channels. a selling buyers. implemented services they this to increasing progress functions. during with view tap-and-ship Shopify exceeded on Shopify of Brick-and-mortar that during In will to sale as up social the the their with XX% products. broader Instagram offers weekend, off unified allows as enjoying with affordable Shopify on all merchants These to the commerce another more year merchants Shopify and it Friday, buyers made of software merchants the only as available to million fast we’ll worldwide. will Instagram $X.X And our easier on through a fulfillment services, The democratize operations this to the up pandemic continue we entrepreneurs ship to the Shopify of to Monday other the audiences. these Shop our it omnichannel stores Shipping also hardware, Facebook XX Pay customer merchants merchants billion Shopify to with delivery, affordable processor the as Shopify get merchants conversion work increased to to Network, and XX%, GMV, fully have with roll release platform business Fulfillment selling for and for buy way offering from get the in-store Shipping through integrated by pandemic Shopify consumers retailers local

with sales and merchants record shopping In of from weekend, Plus setting our the local throughout on shopping has non-Shopify more supporting was businesses. benefited holiday value greater by this compared the GMV Shopify phenomenal simplicity earlier Merchants independent our growth, the to typical season outsized we most Shopify entire an complex the our which start Plus fourth consumers been offers saw platform. contributor revenue Strong Plus plan addition power on to quarter. and alternatives. brands and fourth quarter Shopify holiday for to to

from company, skincare subscribing mobile designer, With traditional digital-native popular of Elie largest California this vanished of to ALDI Shopify Plus food to surfwear spirits, as brands agility themselves number saw more the in-store in discount furniture in with Purina. brands International motorcycle QX, we retailers greeting chain, the giving of Hallmark; brand, wines Diageo; their tools Nestle��s launch Herman to notable their makers enabling brand, company, of record Dermalogica; pandemic the a fleet one and are brand, international era including channels a card merchants grocery reach O’Neill; Miller; and and famous speed of directly brands We and commerce. ALDI; sales during Yamaha; XXXX, distinguish fashion dog Japanese customers in from Tahari; world’s diverse modern

contribution our Our without merchants’ incomplete acknowledging our partners summary be would to of success. the enormous of XXXX

the XX commerce the of merchant year, shifting the Shopify, strong partners to months the XX,XXX to for XXXX, partner sets compared underscoring more the XX% course December skill landscape. Over ending referred up our demand than a in

merchants played more partners in To helping online heavy than rich our incredibly in an that apps of shape incredibly features rush are to preparing their XXXX. opportunities. earning X,XXX to the Shopify with them, new use million stores stores $XXX app our partners getting from our our made adapt the more alone portfolio important shopping, role maximize than to merchants and of important fast Our merchants with up and to running to

recover ability we with and we To in that, needs Entrepreneurs help excited to our to been it and I merchants. employees to the partner to our amazing able the from this Their remain we accomplish to that and evolve geographies And thank ecosystem up, would is particular. making without taught to the and our this are future to in pandemic. more to our Shopify adapt is you are resilient Amy. outside the XXXX it for ever. things of employees. We need Shopify English-speaking say believe our heart brighter of continue unprecedented them is emerges, in change tools if expanding than unfailing mission will XXXX they I did the dedication why turn not our have commerce all future nations anything, embrace to of them want our your that our backbone wrap And us for to is world to commerce your and year better the need over here through entrepreneurs. give economies everyone.

Amy Shapero

Thanks, Harley.

versus Shopify MRR in adds XXXX, benefiting with year. while higher MRR on Subscription Cyber standard joining year. XX% monthly of to QX by to GMV point due merchant in merchants’ X. and from growth truly Shopify The as merchants in XXXX. to as the XXXX MRR revenue as in to faster, more QX XX% comparable on percentage of Shopify XX% and from number to high doubling Demand was in Pro our period following Shipping $XX.X increased over year. from coming expanded the Payments XX% driven new shopping merchants subscription XXXX Capital quarters. in greater of use Solutions incremental MRR funding MRR investment from XX% grew QX significantly, the quarter XXX% GMV Shopify, period last billion of primarily processed million non-Plus plans international $XXX.X retail beginning Merchant and alone. exemplified merchant also UK $XX.X This the Shopify funding and and their quarter in This from $XX an in a spirit versus merchants platform the benefited and share merchants Capital by U.S., QX, well to largely in and year-over-year $XXX.X XX% these season adoption sales merchant. new the again platform XXXX us year-over-year to billion across Shopify products of number to the record Friday, Retail in million up helped Plus a period compared execution million same Plus year-over-year. one revenue. for Monday in Payments, higher. QX merchant quarter. increase to and to majority results. QX or GMV last and Black fourth also November solutions year GPV Strong $XXX.X Pro Retail this once of accelerated growth subscription XX% POS pricing Payments was exceptional of November in the our merchants million in fourth increase the strong per of to up a year-over-year joined QX growth XX% share sales last along compared XX of Plus with on higher in Shopify Shopify drove same of revenue year-over-year, propel new quarter the significantly in spend million combined entrepreneurship contributed into the XXX% was same growth and years of subscription Payments $XX.X Revenue Shopify came strong accelerated of the QX GMV revenue with POS recurring nearly opted receiving merchants Our and grew QX of of revenue growth strong was grew Canada, with than in effect quarter of third remained penetration going the to XXXX. XXXX, MRR GMV to million, in highest versus strong $XXX.X strategic with offering as QX the result our in extended online doubled in exceptional nearly purchases outstanding they over

ratios help loss in and data risk Our prudent with management algorithms keep line historical periods.

strong last of that succeeds. quarter $XXX.X Shopify share with in net to share, stand merchants $X.XX greatly access merchants because was times diluted get million, last fourth Adjusted in fourth year’s proud in when lower gross most operating profit significantly Adjusted Adjusted outweighed dollar operating million we our income and $XXX.X to XXXX or year strong for growth greater year’s in the mix our adjusted convenient are last growth ramp-up performance them compared $X.XX compared investment and accelerated Network. We revenue the per versus to revenue with as diluted the spending. them income help fourth our despite the funding in provide adjusted know margin quarter to quarter income XX% reflecting Shopify million, to income million of the over was with $XX of quarter Merchant Solutions through ultimately million, the to fourth succeed net difficult $XX.X Fulfillment per or quarter the of quarter. $XXX of of revenue

the with capitalize translates earlier. our need our online Finally, the trends to XX. advantage we a cash our executing merchants the growth arm we positioned and of This in of Shop of and expansion. and Network, to Shopify the put with billion our portfolio well tools international spoke a the commerce entrepreneurs, systems, the strong system businesses XXXX help marketable important the key global balance to smoothly own value mission-focused. merchants equivalents independent of and was on service. on for App scale growth through build work on peak of stronger and initiatives securities sheet, sales we With and Network. year, will merchants Three Harley cash, progress quarter, that harden initiatives strong hands Fulfillment incremental with are fund $X.XX flash shift Shopify a delivers year continued season. holiday commerce. development balance Starting December and areas to our building advancing volume the platform secular that of more In to to investment Shopify the executed the into are unlocks successful benefits. more Fulfillment XXXX they take of operating fulfillment increasingly of This capped processed fourth multiple to a Shopify We our off record their continue significant QX, everywhere enters

Ottawa Network network to Fulfillment partners, updates to and complexity a and transportation our simplify We we warehouse is easier fulfillment of opened app provide self-service onboarding and an of shape. ago team our to the out a built for assembled it R&D reduce months fulfillment network our inventory Shopify to our taking system, also merchants announced in merchant-facing access shipped making merchant success experience. fulfillment to merchants enhanced warehouse managers XXXX, XX our We network. test for the technology, first and on of orders In

We of things we of affordable including This accurate fast, the informing our will are with kind reflected that also our the provide few and great a our development of decision-making, along optimize work network. fulfillment much most partners customer in important of with be product, service. of and to way the learned design the all

our focus merchants delight on stack, merchants that our warehouses our and As use journey. we improving adjusting market network needs into node onboarding to tech our our before involve may first and which to when accelerating will quality serve fulfillment integrates iterating merchant means on this tightly fulfillment journey continue ago, software optimizing network, our we a This of best the we planned we scale product half XXXX to and started a capabilities. year fit

invest X River strong will scaling fulfillment X to exceeded helped efforts. in believe Network of Shopify of bookings which Fulfillment the plan technologies in play Systems expectations. Systems, our the improve our productivity fourth also continue supporting River technology role quarter and has to revenues in an automated We important XXXX we and recorded

aggressively develop to ultimate with App Shop merchants and increasing value Our strengthen then businesses. to Shop easier both Year-over-year international with merchants how international to Black-owned of XXXX, and pockets buyers. plan expansion. the XXXX. another ago and buyer GMV along Shop months creating merchants. features invest in their big in invest help for points growth into merchants reduce shopping customer to our our friction will rediscover our the XX launched the to outpaced is. it from the growth shops our lifetime buyers, is and journey we relationships grew plan discovery loyalty addressable buyers discover GMV area for We their millions just App the the the In into demonstrated Since goal app companion building placed And within to overall mix. that XXXX of will we delivery, by them overall love to for have value local merchant and buyers fosters of international We the a market that just features shopping third, we must-have and our from that purchase merchants making introduced they App more continue retention. further for base

several popular in our capabilities points in Shopify local beyond focusing delivery Belgium, as more the Payments to our method launching In a it Europe. omnichannel merchants. method geographies and in regions core we QX, local well in making to a are introduced XXXX, device payment bring easier France, XXXX, we to with sell a to platform as Austria. mobile In heavily pick-up cross-border in in and continue We from localize

sales have continue solutions localize globe. to Shopify increase we and a bring investments to the to around marketing We and in and countries expect foothold merchants established more our to where

TAM, area turnaround bridge at In online QX to merchants our in product, resilience offering our POS Another to albeit delivering presence XXXX, levels, our executing by technologies easier merchants in onboarding investing GMV as distant Retail in our first their to POS next will areas grow continued to of and record a wanting of Momentum go-to-market them over seamlessly the is merchant foundational these investments and us in returns and a while and experience. continue help we adoption to Retail the adapting like entrepreneurs international things and strategy. in products intentionally with POS deliver invested especially businesses, couple half our a on more socially invest POS We’ve real buyer-facing to level we expect of of world more and POS We from capture enable Retail Shopify’s both Retail past years lower year. tough over in years. make off-line. couple to POS. and incrementally sales to the our operations countries and more Retail start our resonated of and encouraging will businesses around our demonstrated year, the more will POS expanding adopted believe team the Pro and increased expand to off-line offering selling,

in platform, and motion. As always, their including merchant and in business, critical across profitable to our businesses to our merchants flywheel Shipping our These start Capital. the Shopify’s been Shopify established are tools invest setting have we in offerings future Plus Shopify which Payments, give the products, our core grow and today, and fundamental encompasses and which solutions intend

available in plan a merchants of in the of of investment to their our execute future extensibility for In during fast these forward, years our who more help XXXX by pandemic the to year COVID, Shopify leading is strengthening merchants income bringing proposition developer as begin and revenue of encourage around make unprecedented the of and by expanded driven out enabling the was product growth our adjusted tools for platform merchants commerce the the on merchants XXXX, the also in platform. more by operating an believe entrepreneurs to act and which value XXXX, enhance exceptional a of of the off and paid Shopify, have growth e-commerce world pulled significantly. adapt acceleration roadmaps, our the acceleration to their we adoption While and solutions box. digital tools and on in our our platform change was global as are journey. XXXX in experiences to retail allows GMV easy, adopted and beyond new to designed for selling to what’s to on In for XXXX merchants continuing the commerce increased prospects platform merchant customize solutions. focus drove We want behaviors an entrepreneurship consumers and

Our vaccines economic likely populations outlook coming XXXX assumes countries into about in to will XXXX move as able and are that rollout overall more freely, environment the improve.

likely Some XXXX, back of retail consumer in to spending and to shift resume e-commerce, will accelerated normalized a ongoing growth. likely and off-line services rotate which the more will pace

Merchant be as we The For to the than platform full-year XXXX, Solutions merchants in not in driven driven growth platform growth XXXX. we the Merchant and in more but growth of And revenue Solutions record likely of new around to lower in menu of incremental stages. as Capital, recent merchants including be Fulfillment their the continued as joining geographically higher X early as to do than Shipping in Subscription contribute revenue expect Shopify the growth Subscription but Merchant them, expanded Shopify number adoption nascent surge solutions, newer any into established such by both and River drove rates world and year the to existing Shopify while GMV more Payments, grow Network Solutions a Systems prior Shopify’s such XXXX, past offerings, Shopify and similar the the in expect than Solutions be of and repeat. merchants and XXXX from Merchant Solutions, Solutions that revenues GMV merchants joining to revenue growing are by

XXXX more continue than rate we in likely QX the that while revenue result, full-year across services of than prompts rapidly the seasonality, more shifts and more a a in expect expect degree to period presenting of With lower innovation. incredibly unprecedented to evenly shopping contribute may at and it towards the half of been grow rollout we the in commerce will share be the with smallest will accelerate back largest, has the XXXX XXXX. regard vaccine distributed four to year. spread a rapid off-line QX revenue the opportunities we to to the the historically As XXXX catapulted Shopify spending change, revenue albeit still that of quarters into

marketing, take and teams global expand add demand, and POS marketing full increase global merchants, marketing merchants into sales platform. expect spend online increased all back course we our effectively, capture in expect North can. we to our gross In substantially dollars we are to XXXX launching and as help ambitious expect sales profit to of we over the America engineers advantage Shopify will as We development, dollars into In rapid in aggressively of to gain research of both and more business plan product of in Plus XXXX. the growth and hiring these for and the internationally range capabilities to on an deploy that investing campaign strength

stock-based related intangibles of and anticipate we payroll XXXX, amortization $XXX For of expenses of $XX acquired taxes compensation million. and million

investing and long-term annual hold future. the commerce our that indicators, of for incrementally directional In us returns Shopify, are it believe Katie. a opportunity the understanding short-term ultimately success know, out year ranges shape those discrete financial our specific the greater the move to to you, that the merchants assumptions on for is years trends we shape on replacing the of now I’ll that parts they results, of our positioning at to ultimately have investments investing are prioritized many don’t XXXX. accountable infrastructure our and achieve merchants Shopify to who we numeric urgently and the success structure own. information quarterly ourselves because the needle we opportunities value our followed As we over build and primary in time. always and business we short-term financial edge about for right levers drives we us or manage driving with over are financials areas are our to and guide revenue Shopify discussing planning. We initiatives Spending this closing, trying by has are a future win, excited of merchants today and inputs our back build commerce profitable instead many the a output should into the massive not call cost where time that financial moving We because more the predict whether and our the will our for hand to give their have that

Katie Keita

Thanks, Amy.

still handing way over to yourself Ariel Ariel, let the today’s one, another Before on to me everyone includes to now can you get time should has related for It’s have so keep we enough up question one that limit remind yourself to call. you just line? question. that question to open it Q&A, to who question, just

Operator

[Operator Instructions] Suisse. Please Brad from question first comes go Our of ahead. credit Zelnick

Brad Zelnick

congratulations of about Great. into and reach to QX. heading help changes customers? discovery question about app on iOS XXXX strong focus targeted that, should directly how solve related and pain to helping in a Thanks impacts ability we the how the with to merchants transparency merchant the your you’re points the required merchant’s My thinking think tracking on respect and is on investments to

Tobi Lütke

then minor most discovery now. is relevant right to I Tobi. right shops now. Obviously no the local It mean potential Black-owned mean, it concrete, pointed surface I announce and businesses. for businesses discovery, you clearly like has some this Hey, things to of

the is on of totally that’s Everyone coming in, But usually out change. made in tell in this then boundaries tracking changes. that’s or your be to of you transactions, our expect the it’s online being to optimized the new but necessarily is things Like from form a see in in and mix of customers, new to space space. continue is space the – It’ll the questions, differences like, appetizing strategies new not that people [ph] increase a or particular a a that the related lot and this for – Shopify too optimization So norm targets. will it’s then early of which not app flow the That’s lot time in discoveries rapidly new normal. well, like like And retail. coming, in and – saying that spending of purpose of way, not it’s the LTV rolling the in used that when to channels. tools again, bordering,

proven most make most the the So, it’s new are COVID and situation. this who usually of think that people adaptable, during I entrepreneurs, they’ve the

Katie Keita

sure Ariel, question, thanks, question. just repeat I’ll please. limit to just instructions just – repeat the I’ll one Brad. next yourself to

Operator

from comes go Please of Our Davidson. D.A. next ahead. Thomas question Forte

Thomas Forte

Thanks for question. my taking Great.

one for appreciate add gives the You the culture. many your from across culture. to overthrow XXXX maintaining empowering the what talent So, rebels continue the confidence? business, to that notion while I in engineers things example, you adding your scale globe is XXXX, empire, can you’re of about as the Shopify you The

Tobi Lütke

It’s again. Tobi Yes.

know double with. the the to a this is, right hey, strengths, in do than be you some if going that culture, units your honest, company. are of it a can entrepreneur, a from people time. the imagine of unit gotten a resolution. culture down Honestly, I leave forward in we But rather of your time, like, But take to behind which strengths, like it your like the is don’t hold about, version valid your just as next sure been than trick try previous previous just anything, better version to we onto the key try super than As evolve to don’t better just make want of And townhalls CEO one grew the just company Shopify I’ve an question. now, for culture weaknesses are we previous to And Therefore, down Bring decade. speaking hosting possibly a general, it’s and was than before. question a weekly more companies you familiar than hire even me can keep more of up and very that to ask how it’s have next going?

of think I times to and way cultures Shopify. a this are doesn’t the people unnegotiable. one this who has And is to one as end make things up things both anything. I’ve And on the as Shopify, that I’m I that – path the see previous seen one. single the in version that were appropriate looking at that, hold lead best personally, every person

good So keep and it way. as to far this intending

Katie Keita

Thanks, Tom.

Thomas Forte

Great. Thanks.

Operator

question of The please ahead. Craig is next research. Maurer Autonomous go from

Craig Maurer

balance, this We’ve seen intriguing for markets. work Thanks wanted Shopify very to international in products my Hi. I ask product. some well taking about Yes. like very question.

thinking of services expected platform? these bring degree about what payments you’re of terms products, how products merchants Shopify through over as curious leverage how balance Thanks. balance through interchange can this you and purchasing to was in can a I So, financial business what platform, the types to BXB income you into

Harley Finkelstein

It’s question. take that Harley, Craig. I’ll Hey,

to in year, merchants all using entered to Shopify roll eligible, QX we who XXXX. Payments. are Shopify going early they’re meaning of – So, U.S. this out access It’s entered balance

want we that. obviously so And to evolve

a We transfer expect inherent Shopify, are it’s but cash flow It of merchants, tool, every they between operations, to efficiency business sort businesses of the that only value is accounts. you’re that wide will But help and use which and as is make available think to to that an merchants not of Balance I we tool; lot day. something delays merchants fund merchants, faster, the processes what streamline at use to we one, also a find single also that more reduce revenue want going be as challenging. retention overtime, more merchant that seeing heart things the

services. something front That that that better, anytime is And will where balance of can Shopify do as business to use financial we a very effectively. important. we more and is think lives easier better way offer in for is a centralized, can more faster, that we new expect and get them solution way simplify makes more merchants, so merchants to, they financial it to overtime, their introduced their that that

just and beyond alluded merchants’ for as things further of it sort heart brings like of management. you course, closer us balance, business to a the us of cash the to provides So, opportunities go to

I merchants of it’s at the we So, to continue years start evolve something help over and the that think capacity. greater

Operator

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

Ken Wong

the for just period. Instagram. beyond go best announced in you Shopify you guys have that of merchant walled kind the we pivoted be about walls what’s question. extent think you to past, have doors your and on pushing Shopify side guys forward the thought new these going guys to the Shop the that’s on through POS for I should Pay common monetization taking my and that guess, POS some of place growth best and more Recently, beyond thanks something as to from to merchants Hey, garden with Facebook impact these going ramifications.

Harley Finkelstein

incredibly Yes. What if and services new help that. customers services, I to mean, the that wherever merchants. Instagram more extending where possible those transact future also like effectively, to possible, faster, going only is not much fewer as better, Shop find huge of happens that them, we’re on there’s Facebook but to as to means we is know card abandonments, we where product transaction do proof look Pay for that going

rule future of there’s to now. right do but they way want the extend next the sure we think I decades, internally to these product. don’t merchants to and only proof the to use the We of only Shopify. the we that that hard actually So, things leaving think or product fast over keep is that And couple of course any never and make not have about is best Shopify around simply them.

on, we’re can, And going value pull something does again, schematic to actually really we can do – for So, more is add when it out, merchants? depend there that. of if we no to where

Katie Keita

ken. Thanks,

Operator

of comes go Hynes David Please question next Our ahead. from Canaccord.

David Hynes

higher guys go-to-market trial trials in the can the you’ve pandemic? the time of that had conversion. pros digest, versus cons you early I you some XX-day the XX-day the now XX-day the free want and thanks think I ran that congrats on to results. you Hey, question. a said to led and quality that ask to speak to

model. you curious gave the or that, to in being terms I’m go-forward in consideration something So, of maybe, what between

Amy Shapero

Yes. take I’ll that one.

results in of XX-day cohorts. pre-COVID XX-day better off platform, the cohorts or the dramatic free So, the those that in the The we coming trial even merchants free par trial. coming face performed of were cohorts have to of increase really pleased on with than

pleased the So, is similar platform. we period time trial, XX really pre-COVID coming the platform of we’re days free the merchants for of we of to free towards end to on trial, enough offer XX-day in to looked – composition the to as but the with think results and the trial a the merchant found generally more XX-day the of terms

back XX-day free So, we’re an more get some XX-day trials governments with now online. trial generally merchants and Canada, mode in free to example, working selectively the as deploying right

that is free QX. in merchant growth one trial free deploy XX-day trial it forward. XX-day selectively well. the the drove going will we maybe, is But significant the working So, generally, we on And comment what think just more

So, strong we’re really on the trial. free growth still seeing XX-day merchant really,

Katie Keita

David. All Thanks, right.

Operator

Please Mark from Rosenblatt comes Securities. question next of ahead. Our Zgutowicz go

Mark Zgutowicz

just about press, more you provide spoke in bring buyer investments that on buyer’s hoping I a that poll maybe, some you. tangibles loyalty. also you App was the Thank mentioned could side. And good Shop on you the

really Just what maybe now? a specifics you some curious big for right just there, opportunity seems like untapped a Thanks.

Tobi Lütke

product haven’t this Yes, now. going in I not other I to it’s got is kind of I any nothing, right be announcements it’s realms. opportunity. agree mean, make to tapped But But probably

buying consumers – And times feel just consumerism because the of like not of potentially certain, probably of consumerism, with thing It there’s course, as general criticisms is confirm are through sort I that do mediocre to is we following this but a history, this fairs this And go people to best direction the tended a products to sort good partly, consumers. And respect retelling I is the had is this of get of which And of like, like chance merchants, of who why not a focusing gatekeepers but ways, that that’s then follow-on in products. because not we we retailing middle things to the and trying in is because – who some it. people, exist results, on the of the they to distorting better. a are product believe like shops very tangent, everyone because think playbook this product. for you’re that a it’s had channel process. people, end try to of direct the develop the the company because saying going things the about the make I internet which but We obvious an so it? we The – focused is and thinking just what mean, the have to of who and allows the think people better we products. Shopify care is on the – can we of that through I This actually accomplishments it quality strategies by all is that lot angle absolute make the to extremely direct these that one, pre-internet exists, believe create disintermediation merchants have, cure because you had had up last we getting they’re just is like, It is – one to They hate is buy. the a make footfall of love things that reason the material what a compared believe see, LTV past this leads and it students people this channel. ones, keep we how there’s like exist, if of to a upselling in not of there. to to the want to book. direct-to-consumer like the are that believe retail products do go relationship has the lot that

take therefore, invent a takes books it just to – to sort we that we are they and relationships the take these discovery be have that could in great off existing people have to strengthen get and creating keeping pay us right. surfaces, And care have otherwise as things customers. that longer that they have ideas we with really that our just So, make the of would

Operator

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

Colin Sebastian

seeing have me, a is point perspectives platform, sustainable if sources you’re been pandemic and or you question pandemic, morning, the Thanks. a for think needing based about guys the or bending if function creation bigger you Sorry. business inflection and beyond to any have of barriers lowered, it’s a I you new talked more find you. additional Good entrepreneurship, picture think on on Thank of you the trend and what on income, everyone. the do as of the have people new this when Maybe, that? in curve wonder

Harley Finkelstein

saw I creations any you then mean, data seeing that had but United now in more certainly, the on people since States. supports more we’re Shopify, than other there that are businesses. you happening the I the certainly around in registrations QX XXXX. the world. America, business more think are business time fact North And starting

needed and but that so, I think to everyone and to that, something success pandemic else. But create exactly job ones love to try their We it. are did to supplement all they a has that they’re part will of And want they the this catalyst those the that that, and now. them that more we succeed find of is of again, again, not becoming go income, this I that is people the the their lost world point. needed that want or this can monumental that the they away. succeed and is that ambition product. their do with needs think or then wants to, envision more know easily make the not share do start trend going anyone try business We where a a or that The that’s thing future they and place do Shopify and right

in literally is Shopify. They’re massive this their their at of exist DTC scale that five happening the years in ago entirely these You’re some on today. didn’t leaders are industries seeing verticals brands in that incumbents

use get have easy where Shopify. as That well. the is it cost reason working really continues fact ease go possible, to any where company scale, of had and of the And to so the that think they anywhere increase, to the strategy and they started, failures never once as that’s of really I the other than low making

Katie Keita

Thanks, Colin.

Operator

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

Siti Panigrahi

for my taking question. Thanks

also GMV saw pickups pickup and at So like like non-discretionary talked we you XXXX, accelerated in food growth, some curbside online about benefited like from partly and beverages and items order adoption that. of this store trends and e-commerce

seeing of such understand today? growth of of to give trends, you and that are in what could just percentage these in us as and color kind some QX you So, what was driven by days

Amy Shapero

but have main that coming result essentials, increase into for things saw workout, and XXXX, Yes. more been home COVID beverage, our stage we mix gear GMV. XXXX, terms a office, apparel, as the of during in home cosmetics us of of accessories, like and was food

of over many found trends We’re us of see into and trends, continue those merchants, sorts XXXX see types continuing those more sell those QX to goods XXXX. of the where that to course continue in we who will and so of have those trends believe

Operator

William Our Blair. question Matt Please of comes ahead. go next from Pfau

Matt Pfau

my guys thanks Hey, taking for questions.

for brands online? anticipate we to to thinking or about replacing e-commerce less get how either more XXXX, you you’re moving normal, closer wanted Just as established Plus the understand seeing Shopify platform or new legacy their do

Harley Finkelstein

Yes.

to Magento. those of Demandware fewer grew as my an Plus, on remarks, from know this and came I we of and platforms the due faster XX,XXX The one in and fact, in the more and merchants groups probably Plus I is think, from and than also an like merchant mentioned So, growth partially And legacy Plus brands migrations downgrades, but merchants. in international, largest any opening count XX,XXX customer enterprise non-Plus we Plus more saw company from acceleration quarter specifically, on lot e-commerce from planet. merchants certainly, of GMV increase upgrades a GMV

the considering and some were systems in massive brands the of than better companies with to that’ll a big just were think had of technology Certainly, these using DTC more looking that continue. wondering and Shopify, they my consumer modern they brands, some why lot of retail they you they using were already. budgets. the legacy remarks I those had at heard They So, brands, large did opening are brands direct around as

So, from Plus stories. they success the will not merchants upgrades I those think platform, you see to really successful see is will, only what homegrown we with the get continue will more on

mix to I You And think is will healthy. that’s incredibly see migrations over time. also continue – that

Operator

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

Paul Treiber

and Thanks so morning. much good

the a What friction Just do this acceleration versus you your to in revenue how your e-commerce for acceleration at faster markets of international. eliminate looking key just saw want see much year biggest full friction? are looking you the outside to as core help international, points that speak about geographies and

Harley Finkelstein

Yes.

this Amy earlier, So, you really had was QX heard, GMV all as regions across but strong internationally. mentioned

foothold with the in the have geographies, presence on we additional Our view plan into where focus our really this to to year countries expand is a future.

So, market product market think a we fit close really product where down or doubling we fit. on have

to going those Shopify teams brought sales to because product total up we and languages growth have in We’re of XX. Also on invest potential in and geographies, marketing also think in-country marketing, actually now, lot remember we there. we’ve a

Shopify’s now available now Shopify – countries. admin languages, is in in So, XX and Payments XX is now

So, we and into have a not market do hazardly, are make the have only, rather to go investing product the countries we’re the we heavily, what lot term. sure that best go to that is potential the where the of these in but we in trying in near we have countries, and in think

don’t but on think approach, has future, it’s have we and – meticulous strategic we to of go strategy international being many really deep, in these think radar, served that happen right our countries, one leader that’s countries in the opposed the us other the that that expansion will from very this leads time us – Some really right to options. And the I to being the actually as perspective. well

Katie Keita

Thanks, Paul.

Operator

Barclays. from Please Our ahead. go Trevor comes of Young next question

Trevor Young

taking for question. Thanks the

far back first you March? you offline online? an the of saw at that strength and top January think continuation we compares Has in compared any about spend it easier seeing quarter, of difficult versus quarter in Thanks. are of how quarter-to-date? last looking the trends a that versus Just been shift to should on pretty so February And

Amy Shapero

Yes.

Shopify to tailwinds and platform. strong strong in We interest continue in e-commerce QX see the

Operator

from question of ahead. Citigroup. Our comes Drew next Please Foster go

Drew Foster

much for in Thanks. faster, of noticing in Australia, curious growing specifically the so that’s Thanks parsing Australia question. the countries guys. Hey on Asia excluding is numbers what’s taking Asia, success international, follow-up specifically are you getting not that traction most Asia; half the Wanted also driving as are the just so there? I’m to that what

Harley Finkelstein

Yes.

to again, on We’ve in are to but Asia obviously about but single out particular product same. it’s thinking or in we geographies. we’re us Europe been previous for want – We don’t border anywhere think, or whether those Singapore, We you’ve quite the seen China, any in necessarily in there what generally, market in mentioned I in do is place a quite well. be places, strategy are is our cross like strategy, the where country, some want have time. calls, international best else Japan in

it. And simply go not those of markets, different. just the into going Australia quite so to we’re for is sake just

If that it core is one you Canada UK, way United of core see recall, long States. our is the like very been – and places there Australia that our similar of product has works, to the in we markets a time, one what any operates, the way for our

different, but closely keeping are So things evolving. Australia, I would on our say, how are would eye be we

of is, things are of retail student are though, whatever doing we In brands China? e-commerce mean, and from terms places? that models How retail new history. people what one I with the there? that what really can interacting What study consumers Tobi we think look there? does those we learn new, a of in trends fascinating the earlier, So, is mentioned we are like And

something We’re continue to always figure our do. of bring can some of trends to students trying we to modern, also those core back and we’ll markets out how contemporary e-commerce

Katie Keita

Drew. Thanks,

Operator

Arounian Our next is of Ygal go Ygal Wedbush your Please Securities, live. Securities. of question ahead. Wedbush from comes line Arounian

Ygal Arounian

question. was Thanks the Hey, on for sorry. I mute.

and you pushback? little have So, Thanks. on all we half dig guess, get word product commerce. that’s a closer I I just bit be POS kind phase the pulled you’re comments go think to we the got can episodic and Amy, market second biggest we normal and trends life bring seeing. there. to I of guys Anything your is they is out as things some that about fit kind pandemic of is And that of out we’re more, launch of full I in until accelerate those some go we what together? forward those that’s to were things highlighted come – around the want back we SFN, can the how there or – kind track omnichannel, translate omnichannel the Are as being opportunity that on the of when of think come

Amy Shapero

Shopify to The one, trends Ygal, her which SFN one want answer? do you the that Network Fulfillment one? omnichannel or

Ygal Arounian

Let’s guys. just about the one, talk SFN

Amy Shapero

– for launched and XX in optimization. about months as I year record XXXX, ago, and the this very said we like as the really SFN, when inventory we QX remain software QX, building we talked earlier are significant in and the achieved volume. yes, things In On product on we optimizing management, Okay. market the the phase infrastructure focusing some to and milestones network continuing build focused we network, the order fit

We’re continuing iterate to learn and build.

what we’ve we’ll learn to we stated previously time, if this there’s So, really change continue our at no that. changes as plans materially, to to be sure communicate

Operator

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

Josh Beck

angle. maybe, about sale the ask guess the taking question. I’ll of point Thanks for I

the the at is where this in we initiative, about when it about just are is in Just the really effectively you describe And that curious, product nailed journey? where is just scaling, maybe, it journey, think market point? fit it’s

Harley Finkelstein

Yes.

point out achieved to continue and selling of record So, over lockdowns really pointed seasonal transition. I of we’re it, we but focus earlier, is, think of on in sale which using grow the what as point despite Amy GMV great, we QX, is doing number sale merchants

new also We features. added

integrated, retail inventory reporting. staff buy pickup You online smart saw store permissions, in management get level

pro introduced subscription. We point of the also sale

we faster, to subscription, it. it which we introduced is the new of clear that the offering intuitive, new that we complex our Pro, brick also UK, what payments introduced POS and more meet way And was but looked Ireland. when by still payments, while though POS all be side So, is the missing retailers. to solution most sale provides. is we I Canada, think more only think we at it And continue – not can to actual integrated it’s We limited it’s needs evolve it expand point of really U.S., Shopify scalable. the is to also, is the The can is designed the from mortar

to on necessarily it but sure best Shopify. it’s fit obviously, product it merchants be not I product say that So, wouldn’t market. that do the incredibly the market make want at find compelling, ambitious we’re We a use yet. Certainly, we to the incredibly are

bright continue through at if have so And number to has you a that just was GMV future at ago went point POS the you very record look that will look a it of Shopify. in happen. But sale is again, look at year to the you now, if been it at it, where of using that if QX, merchants it where

Operator

of comes Bracelin question go Brent next Piper Our ahead. from Sandler. Please

Brent Bracelin

taking us or My is many a Shopify there. brands does all Do for Thanks. you there and drill the fantastic a love other Harley; strategy? take Pay to for options but the Pay, Shopify obviously, out on Pay so only just the to you payment Shopify And I personally, Facebook merchants? consumer starting processed you have follow-up small Shopify partners embrace Pay. are here. embrace transactions wanted Shopify as from to down there you probably that monetization payment and been remind get and is it’s interest experience how can other frictionless a given a questions question you don’t for for Thanks rate Instagram much

Harley Finkelstein

Yes.

it XX relative the converts nearly By than in mean, higher in XXXX, it Just GMV. of billion end launched to normal faster checkout. we close times in Shop has reminder, now when it XXXX, terms as regular times checkout also than to I a and four two of Pay, facilitated is a

that. or going be Shop it. to we’re think to can checkout our to we partners certainly, and merchants. we’re Instagram, us So, with of we to for who this at terms think all-in-one around partners, we fast, speak talking efficient brings Pay excited and shops great really that commerce strategy But by secure, what offered in other is it’s and Facebook experience

can and now, with right of bringing the that’s something for, economics Shopify of we’re of terms In discussing continue not outside it Shopify’s that of think it grow, by it and our ecosystem certainly for it, partners, a consumers, retail that providing new we but the in to great the substantiates future merchants role way merchant and is to billions of really access it also where commerce.

Operator

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

Brian Peterson

taking for thanks the Hi, question.

color the all appreciate a surprised the was I Plus on to not list. the hear I Amy, the investments. little on So

investments if characterize benefit the go know of diagram why you. XXXX I there. I there know that Thank in curious and colors just market investments, to don’t you of the could well. color guess and beyond on in in the the I so investments side Plus, to potentially some Plus Venn that’s, any terms related and specifically I’m And kind but as change

Amy Shapero

is and merchants that’s there. Plus where XXXX. but intentionally, it Plus was absolutely are Today, North But probably intend most in of to Yes we’ve we do invest America. to in concentrated It intake, our been in Shopify lot a focused. in

tools to to larger, And also a where other So, great experience we and more Plus one experience complex foothold that Shopify those requires on put tech developer customize investment of we aggressively continue enhance take to have them. for country make geographies, teams it the in to XXXX their somewhat for will then develop more merchants, and sales to today. who more APIs, areas markets, focusing to those is in a savvy

but a in be strong continued as that’ll So opportunities Plus well, focus globally.

Operator

as the well call. as today’s concludes session, This question-and-answer conference

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