Loading...
Docoh

Shopify (SHOP)

Participants
Katie Keita Director of IR
Harley Finkelstein President
Tobias Lütke CEO
Amy Shapero CFO
Thomas Forte D.A. Davidson
Ken Wong Guggenheim Securities
Siti Panigrahi Mizuho
Deepak Mathivanan Wolfe Research
Samad Samana Jefferies
Colin Sebastian Baird
Daniel Chan TD Securities
Mark Zgutowicz Rosenblatt Securities
Paul Treiber RBC Capital Markets
Darren Aftahi ROTH Capital Partners
Call transcript
Due to licensing restrictions, you must log in to view earnings call transcripts.
Operator

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

Third Quarter 2021 Financial Results Conference Call.

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

Katie Keita

good Thank morning, operator, and you, everyone.

us glad are earnings morning. you join We for can call our this

morning our We Shapero, questions. Shopify's CEO; and After take your their prepared Tobi Harley are by Lütke, Shopify's Finkelstein, joined President; will this CFO. Amy remarks, we

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

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

Harley Finkelstein

crossing the offerings of everything where new indicates Thanks, only for their better as fueled cumulative $XXX delivered going commerce and our of Katie, ready in capabilities, to partners merchants just the is are increasingly June lines doing expanding. channels just merchants and are billion off-line modern for beginning and from a good The of morning. business entrepreneurs this how quarter independence. time, commerce have XXXX everywhere the need is GMV newer success the suite online In the our merchants of has our of Over anything Shopify alongside of XX our for for $XXX merchant strong ways established world third eager tools more keep space in uptake reach blurred between months, encouraged growing billion to and at growth that ones October. and possible. our and doubled,

what We span. the merchants has need some will what they through everyone commerce always need problems of easier helped and accomplish time Today, work of we're short of proud run curve. will are now solving ahead the hard and by our we Shopify how the building in in Shopify what and to to always merchants keeping I'll incredibly merchants the make have for is future.

to ownership main contributed channel buyers no and like to that's once give customers. and on experience an our point-of-sale merchant overall merchants ability This squares available convenient. that's an relationships software selling shopping much building the GMV commerce their all two is enriched problems, and experience to solved merchants main can and off-line Digital in in-person integrated This our vibrant. their need Pro irreplaceable Point where this, momentum. streets And we direct around Shopify's as share quarter, launch they more one simple past can town of point-of-sale its Zealand our organic and their its With quarter, our Android omnichannel world buyers the seamlessly town merchants be new The features. to Germany else, from offer more expanded through supporting can are. customers into the between and be buyers of embedding past hardware stores in squares with and online point-of-sale that wherever New the GMV. share retail. benefit allows This of With QX transition more by keeps supporting our in physical advanced streets in-store are. brick-and-mortar way again point-of-sale merchants more same some brand this point-of-sale First, services. most Sale were reclaimed in now shopping of of retail devices, With

commerce here. an important role play can Social

merchants social for been Shopify year, where Spotify on week, we are for channel. discovery fast selling and multichannel product a introducing profile. store showcase still we shopping And While their selling. to products is online we this just directly allowing partnership our early, in product with artist with to relationship October it of commerce continue products Since at is entrepreneurs of launched and Spotify directly In checkout. forefront announcing our linked TikTok adoption expanded merchant's growing have have sync channel to our catalogs organic their the integration, last and QX, last be their because embraced tabs sales TikTok on

platform, connect number through a merchants with Shopify a different As and social enables ways. in buyers to of search

happens integration that traditional most marketing a commonly ads placed, finding or app an via checkout. direct buyers While takes are this to Shopify integrated value more merchants using

not. on number services increase for has year-end. growing primary available track and and on been early our is generated Shopify more businesses ramping Facebook seeing positioned for as Instagram buyers valuable Shopify by conversion on Increasing checking well billions We merchants. and GMV for of accelerated and quarter-over-quarter conversion, the Shopify Facebook social U.S. our of to it remain themselves than these with and the In Pay, Facebook, buyers. up more to to non-Shopify Facebook Shop add discovered be integrated tool in digits and encounter and of solve. these or tenfold fact, central with whether potential Payments merchants to merchants several our last with channels on Pay now and that positioning sequentially. all is on QX, expand transactions a orders merchants We're for Instagram sales grew quarter is checkout, traction GMV same Shopify properties contribution merchant Shop the share points. to Instagram, by by Shopify problem its channels these Thousands processor We to a through from from double GMV saw integrations they're overall year basis Google

Shop alike be quarter. merchants be accelerated able the buyer helps also Shopify Pay will to We relationships for the LTV. Shop, expect checkout goal Shop is fourth non-Shopify in with and our this offer with Pay completed checkout their strengthen integration extending assistant, of digital which with Google at merchants to shopping where buyers the

had a order as As number registered of conversion shopping increase the of curated clearly the quarter, Pay Both users, offer and previous buyers with Pay through Shop growing easy of monthly Pay brought cumulative end merchants Shop of more which of active opted launch our Installments surpassed tracking, the innovation Shop by among its and both both and number accelerated Pay, U.S. and latest Pay Shop billion checkout purchases. to XX% a Shop countries in Shop lists. $XX same have Shop since Shop of QX, Installments, June. has in growth as power In Shop Installments, of app, leverages later convenient Shop of facilitated fast can as Pay speed released of GMV customers XX the is to previous QX, merchant way products Pay all GMV and that following so we users in proven buyers. Pay checkout flexible proven sales Payments, boost their have the including the to features QX. well to Shopify via and the installments, have to buy first-time which merchants of resonating over repeat the its buyers all and of XXXX. quarters quadrupled than number product product, repeat the in the And purchases pay September, as transacted and which all make also into and buyers now, recommendations by includes well

of goes like Shopify and getting face their positive earning Payments. world incredibly payment are feedback back in merchants, be have to easily need saving currency Shopify opportunity Pay waitlist. faster of of scale personal store. between features, separation cash That's thousands interest entrepreneurs the their selling period showing buyers, Installments Markets removes why our Markets merchants' business To letting local our time from Markets getting they're access money, We're a Balance, to with we're back merchants all Markets. other around merchant innovations Shopify pricing, balance say from into with who for access of [Audio single Merchants business. the XX% traffic saving is complexity and joining Shop and Shopify commerce a to early as using and They're our One of With rewards, grow business. our internationally. access now hardest Shopify and to merchants stores launch and Shopify finances. which this Gap] for on merchants strong from the of fees global commerce problems tens them Shopify international during cross-border capabilities is major supercharging they sell buyers their merchants to on directly

As transacted GMV retail continues up in more are QX. merchants, of into the Shopify adopting Payments, Shopify accounting Plus penetration merchants the nearly including for right, half and

for the and new, inventory longer get quarter is since its had merchants finance in merchants Shopify no billion merchants the no funding as While cherish XX% buy Shopify help to ready Capital launch innovations BFCM, year-over-year Shopify. Capital among another and we doubt funding of $X.X amount cumulatively increasing on record XXXX.

to our Plus. merchants a growing in U.K. Shopify Shipping, is solution for QX. the is making affordable merchant we business makes Shopify also more that commerce which through established brands expanded larger Another easier and for Shopify easier

move own a plans stories of QX, a with coming for We joined the flexibility high-volume Shopify with balance are the Plus merchants merchants equipping healthy the to their upgrading cost of and standard new platform. through unique from brands platform, tell ability ownership. brand In of all and our more lower fast to

launched brand, helps actress international hair LolaVie; through by and the and and manufacturer, quarter creators Scotch included our Japanese and label, basketball Face L'Occitane; Some retailer also Celebrities joining brand wellness Shopify computer their Logitech; Healthy retailer, launched Muji; ownership. French his with health match and Dutch their the creators beauty her influence Jimmy passion Australian exciting care Jennifer Superstar retailer, to own program, are giant Swiss and sustainable Life, launched coffee Big Aniston their Butler brands which Soda; the Woolworths. Creator business star fashion brands. that share minimalist in

successfully luxury brand, and leveraging Frank in to Tupperware; Unsubscribed Cole; retail Even Mills. flexibility brands has by General looking network, of Some equipment CPG stays centrally platform FTD Florist again landscape point for company in Oak; extensive apparel to them its clothing to technology now capabilities other Spanx; with Nestle evolved more and brands and Case our delivery notable Flow; the old the to and We're & intuitive storage Since memories excited retail is children's fashion with go and early Retailers by American beautiful and with Shopify from is Kenneth and Plus network, QX partner telegraph manufacturer, their provide modernize operations casual help apparel their FTD. to the company, modernizing accessory brand it customers. in and shopping flowers home customization were brand, to a work bringing lifestyle as their Eagle; house, FTD Shopify that Plus. Dockers; experiences. the shapewear launched flowers trailblazer, XXXXs, streamlined

our store. As By ecosystem for and and this the giving control over more Shopify. to App our as building connect infrastructure the money complex we integrating direct Oracle merchants commerce, saving Earlier and and more such our partner Brightpearl, support Internet can program talented month, for them made on ERP workflows, NetSuite global Microsoft, time heavyweights integrations ERP apps, Shopify seamlessly merchants them data. Shopify our easier attractive these their for their into by with have building launched it builds essential we and

easier businesses is which holiday expected example TV. App launch making first-ever good to advertising it on the season, TV advertising streaming time small working Another shopping for on afford Roku, is Shopify the in app to Store the for

referring Our months. merchants start also more over over the partner XX least with XX,XXX ecosystem journey helped Shopify past on at their partners one merchant

build shopping those may merchants their and brands wherever happen. to them interactions gear their season, and our capture partners sell opportunities busy are buyers to holiday up to products for help As our the Shopify ready

second level As brick-and-mortar commitment space our our October. to our empower part York L.A. extended in merchants reopening address for help our far-reaching common one-stop and up support giving opening New access community, entrepreneurs. lonely can our support spaces, in City merchants, in and By a them in of another knowledge, creative These our to network to education, space business. their destination we for work. merchants August, It's addition spaces their problem

makes out of It the good make things be I the by it's news nature our will That's of better. how the this but morning This hand entrepreneurship better just it all Before I my are is. merchants many over it sound for hard, long features challenges commerce of to just the these because is entrepreneurship. everyone. making hard. laid all is always easier, faced list areas Amy, that not we're where But we that's

Amy Shapero

Thanks, Harley.

We travel people went with spend then as September a to workplaces. beginning to started and dipping as the as on school in the July summer entertainment quarter quarter are online services anticipated, and August in July expanding their and as The we began result our this markets retail spend to pleased return increasing with in improving outlook kids our year the and in-person their progress as for unfolds with and pronounced consumer shift was more spending in had post-pandemic recovery. most and physical of back in

to until double expansion, grew two some Solutions and is the retail the over in revenue, normal third XX% Amidst in XX-day year of term. our million for users quarter off-line about long growing trial the XX% of year-over-year more XX% material Solutions us This XX reduced our the world not for plans infrastructure and represents normalcy the $XX from was free is this Solutions in Subscription XX% XXXX. of was our grew and with and backdrop, effect performance and of cohort commerce XXXX join year-over-year revenue approximately on locations lower increased. due year has to billion, or rate impacted paying in last year-over-year GMV $XX.X normalized way last third shopping by growth of to increased offered several trial quarters driven base return it and by to points levels $XXX.X to revenue long growth and in share XX% models what Subscription up and converted but reset over last compared theme XX% was Internet developer of base of material Merchant in XX% app GMV into online, It is overall in year merchants all our million. serves to new May of to between. by platform the year-over-year XXXX. million e-commerce's share last over was generated revenue year, resume number POS XXXX QX over free million, to $XX.X higher $XXX.X a of the higher a community year-over-year around in past extreme did entrepreneurs in-person by a $X.X third segments. growth both years retail MRR billion, growth Plus growth MRR the standard more year, in begins as where revenue Pro everywhere revenue respectively, as year's in still implemented its over using to revenue XX-day revenue term. Solutions QX the ago which the largely by poised more strong August September, than our online this make retail Solutions Solutions much and merchants million gains above As merchants in of This of our the retail period GMV world happens new total quarter. were quarter recurring $XX.X impacted of XXXX. Subscription the contributed extended essential commerce than of X% and experiences, also bringing our and first for which the to continue this that Shopify and Subscription primarily which while driven the Solutions same to monthly grew revenue. strong on Shopify Subscription MRR of peak the both QX in Merchant three

some stimulus in despite anticipated at QX and towards firm QX I government summer held GMV benefited that earlier U.S. of level in of QX. aggregate the mentioned XXXX the start in and Our consumer spending quarter-over-quarter entertainment increase travel and

performance discern. followed year supply changes last to times consumer the or same Within GMV Any issues to were chain are in quarter, harder Merchants' consistent levels inventory versus patterns Apple's spending QX. the impact from to delivery macroeconomic and and GMV operating month-by-month mirrored IDFA broader of QX regardless GMV system.

better a had GMV. in GMV However, engage POS quarter result. or it that and resilient to certain buyers position services merchants pressures and segments All GMV We in to the software to and as is share materials, outside multiple gaining hard be increases, these and to impact Shopify no remain with of the our and cost on their whether shipping had margins have channels America, absorb quarter-over-quarter year-over-year. inflationary quarter GMV North advertising merchants across growth room in labor, Plus sales solid all merchant believe

versus segments processed million strong began Payments which Merchant strong last was Shopify new QX, several penetration on gains quarter highlighting across the strategic XX% and namely with Our merchant Shopify channels, in up Shopify GMV same revenue Payments driven performance Affirm merchant same obligations, in services year-over-year by merchant XXXX, GMV of the increased this GMV geographies. was XX% last on of QX of compared year. XXXX combined year. from growth QX Payments in sales year relating product with versus partnerships, growth $XX.X and we in in in Global-E revenues realized period was with of QX penetration XX% to Solutions

$XXX.X was In And overall. Adjusted OpEx income dollars million levels quarter of of more accelerated of up in also Plus payments income our $XXX.X rolled space XX% adopted last remotely over relating our the POS to have in initiatives. executing planned stepping agreements and we million planned our our million or third adjusted we last work $X.X per operating of or quarter higher a compared to talent in which from $X.XX the gross to Adjusted our QX billion Adjusted which using quarter hardware Payments, income share introduced office compared of the our profit R&D grew last lease with Payments more in net spend, GPV. adjusted was we as Shopify or penetration XXXX $XX.X high-volume resulting investments. additional on is marketing a gain for our unrealized Shopify with channel ceased quarter. second the quarter for third excludes million operating million for income share countries, quarter growth quarter, GPV merchants XXXX. commercial POS incremental to year's per sublet third impairment year. Adjusted integrated out third diluted than the on that $XXX.X in $XXX.X As third now and income QX, income permanently, we $XXX.X operating of year's in termination decision hiring Adjusted our million. excludes net with net diluted Shopify equity $X.XX announced

Finally, at compared with need around billion XX cash the our was Shopify year-end. merchants with building on continue the world. to $X.XX securities billion positioned compete and September the commerce balance retailers marketable biggest infrastructure cash, independent equivalents $X.XX is to well

and fulfillment merchants help simple, that and our more, fast affordable inbound these expansion Shopify bundling, inventory. the offer capabilities strengthen regional added to areas, transfer sell and we into and product of Fulfillment investment to continued foundation key We of Shopify reduce including entrepreneurs. build Our international tax Fulfillment to settings QX, of complexity merchants. Network In Shop more puts merchants' tracking shipments the hands and our Network, toolboxes features

been Friday at preparing team ramping kicks Our for services Black year busiest weekend, fulfillment upcoming the has shopping merchants, up shopping heads typically of the Cyber Network period off centers. Monday our our the Shopify down Fulfillment also which for

remained chain in webinars, solution newsletters educating events. their River combination shipping operations at addition, is increased manage strong blog as our how wall-to-wall volumes deployment. and our we're influx of warehouses. ready merchants Systems than merchant to supply In a the well QX demand revenue bookings up and as time as network's selling effectively increased of tripling X on fulfillment posts, Systems more our Demand for pace nodes customers' peak optimize with of help for the through we while and to in their balancing year-over-year fulfillment warehouse at ramped X River season uncertainties technology

it Shop. merchants where Turning utility from expanding reached highlighted like in Harley love for of season. while area the successful we've Payments. our a we and shopping shop holiday Shop experiences curated also our made new for they more earlier features progress We're to easier second discover significant enhancing countries through through buyers the the products to tracking. key to working of XX new shops merchants to Pay We're Installments order offer making investment, Shopify position

international gives is expansion. the Our tools Shopify third businesses front-end back-end a of Shopify to and full-service to Markets the key a merchants intuitive anywhere. the with gives which partner, as area the it outsourced experiences making merchants almost in announced tools internationally offer merchants for Shopify Global-E, sell investment solution. offering easier more to is serves and Markets buyers We great option our for September. to their our scale our most complement

POS gives with a In best-in-class world capabilities. experience omnichannel to Shopify the expansion addition, around Germany unified more merchants and commerce New of Zealand the

market compared product overall as saw with the our year. merchants focused base in outside entrepreneurs of we merchants more Shopify regions, in our are America of the as QX and mix improve increase we joining our last North As and GMV of fit same Shopify, succeeding period our are part

in further are growth are As our of initiatives a we Shopify's growth we the ago will early more time international to development Shopify term. initiatives that product market embarked and stages. ahead in Shopify and of still like Shop, like groundbreaking their Initiatives horizons long expansion expect a a building and return over upon and complex which POS, reminder, Network we are some and years few different portfolio which contribute Fulfillment with

opportunities about vectors our growth merchants. We our of the to are excited and offer all they of

services relative is growing economy remains at on resilient. a e-commerce, of expect peak to a to off-line revenue at than from share In normalized in easing total but retail grow continue as XXXX, XXXX. percent The And Consumer after rapidly these view rate outlook. XXXX. to expanding. our a is spending its lower more of retail, and pace to factors, we in Turning

the to And to for revenue For by prior following. Solutions be lower more new any year in be growth Subscription the than the expect we other to revenues of we and to in driven than from merchants repeat. growth full more the but XXXX rates joining the the or continued growth of to merchants to not Merchant continue Solutions GMV similar XXXX to that number surge year drove Solutions Merchant merchants, prior Solutions. Merchant year The expect GMV world Shopify's by existing XXXX. driven around Solutions revenue it, in the do adoption XXXX as each joining a than platform growth to expanded record higher in any XXXX, platform Subscription Solutions and be Merchant

the share the full has continue revenue We to the more distributed to quarters spread contribute be fourth year than expect across the will evenly quarter largest historically. it of been that four and revenue

substantially the Monday pulled in market. delays the labor, commerce faster materials, quarter shipping or fourth While advertising impacted increased to on than may fourth expect grow market, online to chain Friday, be supply may in both off-line, costs and the Cyber by for GMV be Black our forward, we or the spending commerce quarter continue and

in we our hire back to gross We with go-to-market as the engineers into profit and reinvesting talent and continue can, growth continue excluding in programs slightly rapid our impairment dollars we charge as up plan expect expenses commercial in XXXX growth year-over-year ramp events. and aggressively QX and more operating to accelerating expect to as after in the QX business

Finally, million XXXX amortization and we intangibles we approximately year be compensation acquired achieved operating adjusted stock-based the taxes above $XXX to level to of XXXX. million approximately XXXX. payroll for to related we continue income in expect be expect And $XX be to full and

with. thoughts you Some to leave final

of joining to runway in new continue Shopify's is grow which Shopify help we our still our Merchants omnichannel and more taking of launch early and flywheel world the commerce, has taking Merchants to businesses. are innings merchants to of We just succeed. plenty are their are around the designed products solutions, ahead off.

turn tailwinds Our on now merchants in the by now mission-driven and Katie. execution, to for Shopify to platform, success come. focus the the digital and call back of years position powerful backed investments our commerce, and I'll

Katie Keita

[Operator now? Instructions] Arielle, open the questions line can for Thanks, you Amy. up

Operator

will we question-and-answer Davidson. Thomas comes question of Forte the D.A. Instructions] Certainly, Please now [Operator begin ahead. session. first from Our go

Thomas Forte

touched your to What going think supply still challenges merchants to you chain on and important inflation? most in ask Shopify So prepared remarks, issues question, I'm the caused it's is by so but it. this doing I help address logistics

Harley Finkelstein

pressures things challenges thing this. in Thank logistics question. some course, increasing chain, and inflationary going There now. are, most costs important is real. That's Yes. And like definitely are The platform. inflation to I There things for are Well, of judge. are you on. the supply harder for mean, right we seeing talking everyone of probably our us on

short are We term have no idea if long they or term.

platform. times And right, is a we and small unit. role our more there find up through we we lot on tend can show can as businesses million they're this, in important, surprising -- of ways that's help it's what plays nice because the the is customers to doing. X these are over of I that The terms a think In even Shopify thing

how the of are work good buffering how I and some the in of we with the community see bunch margin this are a in. segment their costs part of to continue people far, we that is is in think the we'll so there's to that do increases in So, just the help. going more can news margins. And

Operator

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

Ken Wong

guys new a Fantastic. for you BXB half quarter When for signal and the also event the announced -- offering Shopify of at taking recent at Thank 'XX question. past we first look some launched announcements, this in of you the ERP market? my Commerce+ Markets, events real and of this large your the the culmination making Shopify have mean a play playing is with kind this should largest of as we view in push guys the how you been I the consistent these Or just program. global retailers? for of

Harley Finkelstein

here. Thanks question, for Ken. the It's Harley

So of things. couple a

when for things Spotify to think think reason or like be like it day how why That's if any about The just retail the not that be default is you Shopify show across everywhere. from done best best We larger operating for one. that make future have not to you up. the so is also for to us is merchants. really just use to but going to Shopify think that Markets, brands, be it's every of across we or surface going want the that's at that area. Roku, TikTok, look every the global retail I example, is central merchant country, hear example, going happen system commerce which And retailers, about because talking we things going we to

things there. consumer Shopify not So I would Markets, example, global base, for anyone the ERP, comes comes larger it's like to is that When access when and to the really for say it make it for like easy things there's really two to just idea it brands. to a things

scale. of our The success to they've kitchen thing is, now public. their grown homegrown some table that at started first some are cradle mom's yes, story, from those of merchants They going

go Figs doing incredibly Albert's or well saw like You public Oakley. see companies you and

to are that more you those my can there that -- you is example, large from Spanx what the really Shopify or same to see on with you existing on to these Kenneth really, platform. make and Dockers, want when leave company prepared L'occitane, to brands to Cole established also need that do seeing that that ceiling no like is note, make to can remarks, established for more what you're have in are can can migrating of sure So start mentioned also look but never some have with everything go earlier us, Shopify. but not coming do we elsewhere. On Shopify brands brands I they sure want they you or they

simply happening allow easily to an brands at ERP out these and pace. that's integrations so, to larger now migrate Shopify, amazing And more

it easier also business that make business Shopify. do to their for meant to larger all and to it meant businesses are bigger, small continue things these all get with future-proof but So it's

Operator

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

Siti Panigrahi

my about a social talked you your channel Thanks to quarter. also, networks for And question. ask the social to commerce as merchants taking onboard their want buyers. about this for I the you good growth

you So those since platform for ATT social your for we so third-party heard rely recently, -- these could how traffic on challenges? you ads challenges so Apple do data help that's due think platform this should circumvent how impact targeted acquisition, and merchant on the merchants it even your to merchants what could customer we challenge? and from your to for these And making about privacy difficult changes,

Harley Finkelstein

Thanks, Siti.

point it's be to we the demand the going of Shopify, continue services that think commerce clear really, And everywhere. I at at for this more believe quite conduct So will is commerce future to to grow.

they entrepreneurs need And channels. succeed, multiple so grow and as will

things TikTok And Pinterest, successful also actually, out Snap QX TikTok, seeing are more channels the those also we're Part includes reason and as were organic channels social and more to Facebook channel, product into contribution attributed QX well. last the of shops social year shopping discovery sales Shopify from social channels, these in channels, a videos like the year-over-year. it versus right -- into it's that We not shopping new year. new several but tabs. right just commerce to in shopping grew introducing allows is this GMV of making GMV the channels online of through grew times channels. That happen on

So can in surfaces of conducted. you be show commerce will see these more up Shopify where

the ad near We will think that of to their of merchants further these incentivize other buyers connect terms -- side of course, ads. the things, reduce these changes, ways top with look, efficacy to crazily they of try on changes term, getting expensive. may of In ads, the on

that's Tuesday for clear earnings surfaces things on still Google's very the other give like find tools think there example, Longer expect new I buyer. continue very effective to into merchants in embedding to that are for and going buyers. commerce are to we partnerships. announce retargeting itself control actually benefit why like that term, it ways more the to from from And made we further Shop, merchants

by connecting affected buyers through that on these more with going merchants these more we so platform And our to in directly not think the be actually they're necessarily channels, run. by changes long

Operator

Mathivanan go ahead. Our Research. next comes Deepak Please of Wolfe question from

Deepak Mathivanan

taking for question Great. Thanks guys. the

quick Just one one.

reason And billion you. can your fulfillment, Thank So the provide years gated? it any color primary is $X is you still over several on for what to keep investment goal fulfillment? the plan

Amy Shapero

Yes.

on Fulfillment Network. been there's So direction in Shopify change no

as would still and And no We be the that always changed. we've materially we down optimizing software heads we to those market the to fit would made numbers and said and fulfillment. if this we building phase, we're continue We've the you changes in fast, network. learn, said reliable, year, product update build simple-to-use

excited and based our that is -- with product high fulfillment happy this we're market and We're Monday on gating continue can progress progress, this our demand, and with gating fit we're Friday, is Cyber delight and our the preparation underway. we keeping at and time about demand our So merchants with particular to sure really offering and iterating making quality building, right on standards that's there. make the not Black

Operator

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

Samad Samana

morning. good taking Thanks for question. Hi, my

during quarter, announced Company So Shopify Markets. the the

we sounds exciting billion it about which that it an path Company noted How way $XX the year. for was with Global-E? does how GMV think partnership Markets? to I Shopify new from about think last cross-border, like of should differ tackle monetization think the to I your And

Amy Shapero

Markets order website. on of is for for calculation all is and fee to taxes. per monetization there path the our duties It's transaction So type the a

that a if a You can go in fees. typical as an payment transaction there's mind Payments go if Shopify on well FX Shopify as slightly see also then not. And There's you're and keep along fee transaction Markets, would that higher in with fee, those for that fee you're one the fee.

And is that profit in and so to shows serve -- gross with offsetting up of all cost gross net. that an

Harley Finkelstein

here, Shopify, we add the global want Samad, like being access making default available by to idea that, idea global to on this earlier, consumer but Also, this of just I of -- mentioned base. to our again, merchants the the more global idea is,

so, like things behalf optimization, are buyer, on local duties, taxes currencies these things SEO local payment like languages, all really like And import local with of methods, and automatic the domains things things store. if with you up merchants also complements want I you important and for be the offering when to And as all global Global-E sign your think, launch well. of default this, Shopify

believe we in So what the surface And off-line. is much easier. online to everywhere reason across also happen we you're in border, is every where that's seeing theme things these again, the but make and going to continue every why that every commerce country here,

Tobi Lütke

market like of a And sorry a or our -- more subscription is you to the for and company's pile as the question, the course, where of it's super fee. of merchandise on really lot here example in a monetized But bundle of one alignment, of is this example Shopify but all good growth a aligned. our of like wonderful the like growth

have would of that's make the services. of are you of also, concept to therefore, markets and are more going more best hope, the in illustration more settlement times of part decisions of we is Of and imagined and of of simpler the And the your you're interest meters earlier merchant to planet course, now advantage to and That's how to markets of to our of smaller wonderful especially happening make for course, of therefore, for in be all a which way we rest the monetize learn the participate take the territories about become to anything Obviously, the be more businesses doing sets product. to things not which able for strategy being and to be core when that strategy, we going business be successful. formative on Company. help opportunity, in that service might to strategic successful earlier, -- the how and because to

Operator

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

Colin Sebastian

I you the digital seeing on to and four On for product. the space, options wallet check sites. to wanted many three about Shop wallet we're to Shopify digital ask out ambitions one Pay your hand,

competition off the a clearly I there's well, which also platform Shop Shopify But know lot to of So up going there. Pay we're see opens of TAM. as

the landscape, the plans out both then off Thank So drive bit a on maybe and sort if competitive and of platform. could differentiation usage you to you. Shape

Harley Finkelstein

Colin, just of kind to set. so level

U.S., Instagram, Pay whether they're merchants So course, September, but on available end Facebook, billion in to of XXXX. happened for this It's by cumulative the or our also increase is the a merchants conversion. which GMV really, launch, since Shop had to than But Shopify $XX its more facilitated not. in tool of now primary on in

buyers used consumers for It's is that traction continue out. the with to think Instagram way to Pay is It's orders these But Shop to Pay it, If and on convenient. are Facebook fast. no We the growing merchants. there safe. both anyone checking is, and you number wonderful again incredibly just we of it. a non-Shopify Shopify way It's seeing that do really on for and early this know has check call Shop on up idea out services with ramp better

Shop available more year, Pay's not course, faster, merchants we can made rate and that Google, we we sales. more conversion only Facebook to expanding later also higher. again, Instagram, by and on so the like beyond And this but is footprint just know of which Shopify services have places think It's

So I brands. places. beginning available think Shop see one their more in people lot realize are that also of a you the to will Pay to is favorite continue reasons Shopify behind more the that Company It's think I

becoming behind with to very Pay and and of Internet, those favorite We buying consumer have their Shopify's across the been really available the that powering across well that play brand experiences brand brands associate brands. when Shop long saver are in we for sort But clear a Shopify, merchants begin more quite it's they the now time, space. seeing

Pay places. that's we're more So going in where see available Shop you'll continue with I to And that. think

Operator

ahead. Please go comes question next of Securities. Chan Our TD from Daniel

Daniel Chan

good morning. Hi,

the think you spending of much how off-line POS result You on? color little higher of expanded. provide of GMV mentioned that a on that from changing was trends that share of you a that was much commented And how from you sales? Can Thanks.

Amy Shapero

Yes.

GMV to that say from off-line continue did we expand. So,

And things -- -- mentioned been reopened. occurred. all we're more uptake it spending Australia, in-person our spending we're we what and quarter And in new the higher so the much did I to saw just substantially that. increase locations. we've economies was saw quarter-over-quarter off-line overall third reopened countries, economies just we're of also want to entering Zealand, consumer in New in we with that GMV of But Harley that delighted as well more doing year-over-year, as more levels, in did particularly quite and mix Germany, and So U.K., in aggregate part super add, off in due

performance. a And for in just so, GMV POS our all quarter these and off-line spectacular things particular, played into

Harley Finkelstein

point to starting not Shopify little of Retail store. GMV do impact overall doing But Just for partners, GMV in to we're we're a Retail POS second rather growing on a QX but the go-to-market more with largest business. see quarter beginning the to business networks the high. online leaning on for established really industry. the is to hit way. give very this contributor retail color behind Shopify best Plus GMV We're to think And like because our is retail was momentum are all-time a generally. merchants. model sale things of efficient efficient sort I We're we bringing retail Shopify on the Again, of see an

locations. like Android those We is Ryder much physical XX example retail see of Magazine for Golf some like at Hickory also to retail to we're across larger or expand with more Farms Sale across saw mentioned us Point devices Pro point-of-sale now Cup, locations. devices. available And Shopify us continue Payments beginning of businesses globally. using used Amy the

really, think So point-of-sale really our gotten has product good. I

other I a every way best relative very And to way it I now system. being efficient point-of-sale think we're to taking pretty it's cloud is much in in the done market think class.

to you'll retail think see that point-of-sale of lot business. a in so our continue of I growth And area

Operator

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

Mark Zgutowicz

in expect might in wondering as XQ, flesh hoping the that how to Amy, or greater essentially versus you able I said quantified was just decline or XQ. be in whether just you could commerce you down coming retail you if much witnessed was you'd I you. quantify of mix you. out perhaps XQ GMV the differently, for headwinds and you XQ same Thank Thank quantify And

Amy Shapero

my pretty by stimulus, opening have think that it is the U.S. dissipated consideration QX I you significant Yes. got and into remarks, things of from the QX. and benefited to as take to And in QX we time I one said

similar and So obviously, step I did be really it. said about tailwinds without reiterate QX the what kind behind will just But those back of let We what in me quarter. happened with happened about consumer talk I'll in overall happened in and especially the what mostly like the retail, spend, what and U.K., mirror reopen particular, in countries and U.S. U.S. those that

retail, is So much spend as services just pretty saw the physical and we also quarter. on what consumer I expand said, throughout

increased rates in services, in vaccine back June entertainment, they people and on As and about recreation, shopping were they July, just moved stores. spend more often,

dips in overall saw dip, actually a in was e-commerce folks that July, saw e-commerce But And retail result, because result, that's a so July with then dipped GMV, overall we dip. were And and our as that moving as going as about. a we reason to rebound workspaces learning. to our we general. so integrations in and e-commerce these to for GMV, the people in-person in do August And back And physical Gap] [Audio returning and attributed why kids is ERP which

And how long into incredible Shopify from It their but they to things an whether offering, the total use of channels, business. of they at think higher that retail they incredible I to like their market. -- and them if from have available, Plus access just is Spotify around Shopify ownership. flexibility, I are want obviously a level or not media know like social gets as new future-proofing them it's mean, Plus. Shopify, things product allows perspective total perspective a cost it lower

Shopify. And brands And to larger job these trying entry barrier to of reduce good so the we're a doing we're use just for to think I that.

Operator

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

Paul Treiber

as of you the what Good Shopify's and super super super consolidation much. potential thoughts get was recent theme what media position on morning. very hoping discussion just against apps. industry in apps view I some rise you to around your in apps? the just been the along There's Thanks think of competitive

Tobi Lütke

We've a that's mean east, e-commerce super in apps, seen incredibly which especially active. I is Yes, trend. the

the And little entrepreneurs sure item our businesses, has of ideally -- think more from up that phone we their perspective, set of west, think, being like that in to I so behind we've person's sort bunch different screen. can end retail platforms, build ordinary in But than engage economics are people this any you'll home that strategy want set seen a a every is Shopify we -- and east. see our what observing of like bit on of the -- I launch too, in make

advertising, super who products. out, the so, And leads all it to -- loop the I which and are most obviously, most turns tightest And are we monetization. booking for almost building retail the feedback these the of are the usually mean, systems for people apps. That's transactional monetization environment

of lot a conversations there's in. So, we're that

have thing Shopify's we store, course. And future dependent good the -- single the people see the part launch on the do permission-less the -- five of then longer Like think on, it and online most the ago, for space. later, You that important might as one then, the Shopify's seen us the but world because And screens completely of at times. networks this our every have like all mean super different in one And browsers for the a channel, We channels a it going It the as in point the there's I I really like which home a incredible opportunity a time move be love market. open of a is building best been hope course, the Internet. expect web things as like very relationships. in like is you keep app the can integration are MySpace built that point will social retailers would to bringing future. while is are -- already But companies in a a an the for like all it going act might It's have, today. potential Safari, of to we large millions be during web. good the to time. and been of -- to open given It's we obviously, and access not one. who have quicker, we to we rise their never would of intentions no back Chrome, people years would

approaching demand So, great like to this demand them the from and commerce welcome very way merchants business the the products provide perspective, are this. happy the platform, And the clear, is with commerce from our and and and we'll good of supply would traffic is be is that integration. apps and we these like high-quality on commerce, they

Operator

Mahaney Our ahead. comes Please Evercore Mark final from question ISI. of go

Our final comes Capital question Partners. of ROTH from Darren Aftahi

Darren Aftahi

retention guys you Thanks. talk in dynamics the that merchants the levels? historical last third saw you of to can compares Just surge year second the of of how about quarter kind in and and

Amy Shapero

pre-COVID we've as his And rates with Plus to that to respect moved are through in seeing levels retention want retention remarks, with we're to Actually, Plus XXXX. remained upgrading levels. strong. also Yes. higher something rates that still merchants standard Harley very than just We're I have keep opening in of that pleased said to emphasize mind,

many So, levels. are those at last and to very Plus XXX,XXX standard merchants, merchants the joined on upgrading that year, thriving high platform

emphasize, to journey. look standard that merchant merchants delighted so, to want to And the we're there holistically, this both Plus at we're that and see together, for and entire continue and

Katie Keita

it call think Thanks that's conference our for to in. I Well, right. All everybody today. dialing for

Operator

conference concludes call. This today's

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