Shopify (SHOP) 5 May 222022 Q1 Earnings call transcript

Good morning, everyone. We're glad you can join us for Shopify's first quarter of 2022 conference call.

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

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

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

everyone. morning, Good

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back Shopify people, celebrated and Beginning and mandates of another with dining put the in-person entertainment behind in the right change. rolling shopping. shift commerce, side of travel, in Omicron the is is February, to there on pandemic yet the start many and of included, we again As good out, easing myself news is that happening us,

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did adopted retailer luxury this Plein label multiple our retail as quarter past example, locations Philipp Fear for clothing of the point-of-sale For God.

GMV with faster e-commerce the As well we continue over point-of-sale geographies took the share. by with the we GMV share are XX% start same over rate in since to Pro as nearly added period, will we annual past that of of long offline posting XXXX, a commerce in e-commerce and take in the to term, well. the grow growth gain than here positioned retail, retail grew continue we year-over-year still merchants, overall locations our compound XX% pandemic as and this quarter more Even online offline QX and current share QX, resurgence believe and we overall

our Our QX any XXXX, even in since be It's annual charged. beyond of for compound opportunity including that rate commerce more to a in To grew just time. over at offline, faster value demonstrating merchants fast-moving platform on surface. XX% online. growth to to it, central fully our choice years is of commerce is overall is A merchants and model are X GMV, with business is any platform merchant robust the the these gets battery result more the relevant Shopify past trust of prove environment more of our offerings landscape. digital prop that the compete that a taking and The

their established, importantly, capital especially plan. but grew and easier, entirely compared traded down merchants, on we're money. our few allowing environment because that They smaller each become these free from the Shopify Shopify, needs a Merchants still money pay volume, increased FIGS, grow they a our illustrate saves them X the scale merchants features; them just Here, rely for in is they what separately, more; help are economies passing only add built company just also of to scale getting theme: to started. inflationary a features, it's us, secure saves businesses. Shopify capture and would to And more started trust those on now, to merchants we which into merchants on common they solutions of them By publicly to get great and newer up more reliable they even in as value with this because not more. and important. we showcase $XX

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still towards should the $XX be it commerce it's everywhere. this This billion small not While surprising. did indicates we trend percentage quarter, momentum GMV growing of multiyear on a the of in

landscape reach success on ads new becoming the the With merchants industry, of commerce shifting itself. search in finding directly increasingly are app buyers, surface the or completed to the and finding ways with on digital focused they're

For integrations and their larger help marketing Shopify enterprises, some clients and to now with largest officially Deloitte of systems are on agility. achieve maintain Accenture partnering

Vision brand TRX of the All NFT and Beast, Training; past sale on look lead Plus. video Shopify systems Inkbox. Crab; The beach chocolate Plus Crayola; to finished their spanning the their footwear, more Digital companies Shopify deals new Shopify as Shopify Chicago We who terrific brands to best store merchants with in launched and than in summer keep March collaborated brands Internet's XXX the now before. of restaurant, Mexico; launched mind, with as Plus favorite with with Call the launches including tech athletic the of month the using NFTs at influencer, and right energy last Audi, onto of to in QX well-known Shopify forward Stone Bulls, team move cosmetics own on Mr. his is this Deloitte Bridgestone Plus games, art quarter. gear, And Fiora ever Star XX% variety grow integrators continued loved Cosmetics; the Fortune more in companies World Cycle; their bring supplies, brands top NBA quarter The Havaianas, of The and world's closing have with and legendary of at best Miami the they're to the the we fast Joe's own Duty. ways followed Figma; ever, working already quarter, for team food,

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and long that better. something and the may is direct be over for immediate run generate will for building Shopify customer the However, value but much, less more much

community businesses. but consistent to our management were investing and every of many our long-term some investment with APIs the fulfillment of Network. how they the order most over simple, small the even term scale have our Millions None in running XPLs over Supply they challenges to have we for fully over Shopify run, through problems. to biggest our creating are Keeping have app providers, very they've to the flywheel strengthen software time, know into That's they of platform. face built a ecosystem. in relationship actually we're ecosystem Fulfillment years their get material We the merchants aspect a the of cost-effective reliable, freight product want. once To liquid our and to why to platform, a continued and end-to-end applied the last-mile offer store world's Shopify Shopify is integrated short long chain solutions middle- to know merchants we've developers, and carriers. momentum, trust We merchant-obsessed, the their an and struggle biggest these logistics built to buyers of our decade. with fumble the examples of a buyer, maze from merchants an approach

to logistics every merchant inventory and fulfillment simplifying energy differentiates inventory distribution stage to the the becoming inbounding returns. success affordable and successful We navigate increases to of of easier barriers this supply more. are channels, across order durable from and supply reduces offers flywheel a odds to and Making fast a end-to-end even to for across of chain their DXC all us a merchants merchant entrepreneur, chain, source

million trusted the strengthen merchant is supply an end-to-end X per yet of channels. manages accelerate across thousands service solution. month, to and Deliverr's chain distribution announcing path U.S. asset-light, the merchant our fulfillment supply to and Fulfillment largest to today, all more Network acquisition of merchant our technology-driven chain a stages connect by orders to Fulfilling all merchants we're acquisition of than So and Deliverr, Shopify's

the supply progress the For promises of chain, which balancing, includes considerable core our simple merchant and has returns phase towards inventory post-order made offering, delivery SFN functionality.

minimum services, software, highly inventory talent, and and Network, in management simplified inventory we've fast Fulfillment scale, Combining and all and end offers that placement logistic and our management eases is warehouse affordable developing Shopify system locations which demand-driven warehouse of proprietary data reliable, will by requirements inventory order delivers SFN delivery. provides merchants been QX XXXX. volume handle running the now Our key

welcome to software of are experienced soon Deliverr's merchant thrilled champions to operations Shopify. We engineers, experts team and

it adjusted growth worth is Despite While XXX% adding the our of $XX that as on start the discipline. it's companies on stimulus. quarter's it by our around front, not strong past in ambitions That ever year year of of SFN. Deliverr revenue year record a was This right will prove boosted an themselves times the This profitability accelerates showed our lockdowns and profit top growth. we value to easiest through macro revenue maintaining by of well and this from these platform Solutions impact like means It XX% executed operating million high last during in XXXX, QX is being on because GMV. a growth that and before. decisions, driven great are combination than merchants reaching a timed more our partly strategic percentage Merchant getting operating a

on ready search offline. platforms, pushed in to more the the all happen because one and social wherever It's believe in so in online Our surface be know The merchants, the merchants connecting. they're are tools and large in in store, mix versus omnichannel of superpowers why brings small, of in for are and even creators buying social, e-mail. future it's on whatever lives apps, and every digital happening This need is and makes where online any commerce in Shopify communities our larger Shopify. than for commerce beyond valuable and videos app, future channels just every to their on increasingly across Building is environment we own they building surface. and commerce right commerce the what futures of transactions far is surge

over greater trends good the importance were more much talked for making But macro X what investing I first the results before to Harley, ahead how how into Harley about, of QX. seen years to impacted use want everyone. curve QX. to important relates what in and past dig results omnichannel now now, clear financial right because the and our morning, stay our to we seeing that, Thanks, and on we've it that's is we're in the of in front of The merchants Shopify just speak merchants

quarter was in with we in While factors larger than a role a couple of provided consistent you guidance our the played the performance expected. macro February,

by growth we in XXX% QX a shift vigor into not with March first also This stimulus retail was easing Shopify. The reminded year year's as in travel these our spend XX% Fast of growth factor in year-over-year to unique months, I was starting contrast early consumer was year's Omicron April. resuming for goods fueled this review government that factors, GMV spending and February on lockdowns. first online last Before timing you year-over-year. quarter soared, XX mobility of versus forward of surge in GMV shift this occurred to a this was strong ago, consumer year, and earlier where QX a in offline last and to year with late causing year February that quarter in

and for in enabling with the war were consumers' of the approximately outpace factors to although the a compounded providers than that brands more of Even continued impacted grew a expected, factor context annually each lesser pushing years, as inflation QX relative Xx including was gas prices, of prepared case their surge online XX% GMV toward highlights a Another past X omnichannel in year-over-year level, in year-on-year And in just in discount merchants Ukraine. both growth underscoring U.S. year GMV offline, the how advantage omnichannel in this consumer our due our wallets of offline, from online stretched GMV overall be online-only spend, reach. extent to to respective offline far the retail anything. and prices quarter, In to these has our mobility, higher the to and independent enabled market, markets macro growth growth than retailers QX more GMV at to impacting record the in

higher $X.X quarter billion, annual first the a is X-year grew year XX%. same represents rate compound for last XX% the and of than revenue growth period which to Our

themes XXXX. affected noted revenue earlier comparison, of our lower revenue were in talked Solutions year that ago. in compared and grew quarter treatment of headwind Solutions overall and Subscription in merchant to of In recognition year-over-year from in our the impacted models to factors macro the adds in points X change also place change was for by This quarter, theme revenue that growth theme's well net, the and the for QX which to terms as as gross and well as by I not about app revenue for as I in addition million partners the Subscription Subscription $XXX.X X theme in QX apps and year-over-year, the points reflecting change Solutions revenue for X% of to app respectively. just accounted revenue revenue about a yet

merchant GMV grew million along twice up growth Pro retail year-over-year, well adds of GMV recurring Markets, increase off in even XX% Shopify year's quarter, thousands in the monthly mobility, $XXX.X increased While was QX an strong locations. from to versus tempered due to Shopify more revenue our revenue to labor as QX, up a on adoption first This same the Payments robust XXXX. in was processed Payments, addition the market, of XX% in period was partners. compared Shopify to revenue and in of last quarter. from benefiting of XXXX. Shopify XX% Merchant was which of XX% POS Capital has and a over Solutions with gotten billion increased XX% the Shopify penetration $XX Plus as of QX, Payments start the growing nearly GMV

gross R&D, of XXXX, countries. is on by POS and prior compared in lower facilitated in inception; of now strong first Merchant used reflecting gains in $XXX.X internationally; XX an since mix Pro quarter million in Over a gross change in theme terms compared data versus payments of from or quarter greater the in $XXX.X ago first quarter of expanded for adoption app Solutions our $X.XX operating merchants profit with and million performance merchants mix, to $XXX.X year, North versus Shopify our revenue Shopify billion quarter margins X has our new Payments as volume in and diluted bolstered $XXX.X the with cloud adjusted availability America payments impact merchant of million lower-margin integrated income internationally. was and for we've infrastructure compared performance Shopify year net due in the to year. share income and first was million being $XX.X penetration the Pay, partners hardware marketing a prior Adjusted Adjusted both quarters, the and the the in with by of $XX sales our million per share teams Adjusted diluted past our and of or per investments which benefit GMV up Plus increasing XXXX. in stepped income Shop Payments, $X.XX million increased was America both in seen $XX.X GMV; net the we the North which percentage

equivalents securities March on X, and This we the cash, our marketable balance Finally, $X.XX discipline. our cash to funded wisely. growth strength day our cash was and of to is have balance healthy capital billion. approach testament allocation Since operating XX

our investments our sheet to of of and $X.X the of March balance redeploying of M&A deployed profits years, optionality. thus XRS, our organic, the strategic X XX, on as in conserved for business raised we've have acquisition gross amount far $X.X our note, Over has the Outside funded equity into all via billion flywheel. billion funds by XXXX, a of energize past convertible for back growth offerings been in

great considerable which for fulfillment As investment the to version Network map. Shopify themes maximize fulfillment strategically intelligently to said is merchants' of success allocating We've in with road committed had February, of focused to easier, against progress SFN its to new, X the our key is Shopify capital is XXXX, their rebalance merchants. offering. inventory. I inventory in lowest designed simplifying fulfillment X making is on Fulfillment does make merchants it only Not simplified reach migrating fast updated SFN

all Fulfillment accelerate acquisition merchants that manages for Shopify. the by outlined, its assembling to off Harley helps of sales on and and As of Shopify end-to-end across Deliverr from road port all map channels an Network inventory sizes platform logistics porch

millions new delivery access new merchants will Google, promise a merchants SFN's on store badge customers incremental helping promises. to and scale aim other channels power and Promise, affordable sales with sales see all potential fulfillment fast merchants the of simplified, Shop they flywheel to stores like of will and consumers view their to with displays And We and across start delivery Deliverr's dates shop. trust increase to have online access they across like surfaces expected products extends X-day early them we'll leverage beyond improve as browse. capabilities This channels Facebook, the a merchants' and by benefit delivery and Soon, billions fast in the online Instagram the fulfillment Shop future and helping and businesses. meeting on Shopify where that App, next-day of

A securities of much cash and Deliverr's consisting of in a approximately XX% the conditions portion with subject excitement is in all and the Class transaction stock-based in $X.X terms by Shopify Under the of vest acquisition consideration it will shares. transaction announced Most to Deliverr's Deliverr. certain of will billion, will Shopify key that be XX% the compensation. as will approximately agreement, we So acquire of the management, of treated valued at stock-based outstanding be received

transaction following regulatory expect We to the close review.

Solutions in for follows: transformational is to inflation; to commerce outlook a we relative in year-over-year for Shopify. the continue includes X assumptions of now own the of you more our inflation joining results revenue year as penetrate financial comparable half half XXXX, XXXX will for to that more growth digital number that overall which measured full by we larger revenue, in trail as the entrepreneurship double these be for in be mean our be dollar to the and history be faster growth absence expected lower of greater merchants to Solutions for of the growth this rapid and to first first commerce February; for XXXX industry which QX relative follows: the for in of Solutions. our years that the the the and will revenue higher Merchant payments Merchant XXXX, XXXX, are and growth mix our prospects given of profit expect of impact than point will revenue gross XXXX of will highest will of still full first Subscription after any for and and platform in and year overall; growth, we're by trends we expectations than Deliverr, the at is same expect the What than e-commerce moderated half. rest stimulus the operating contributing environment gave the outlook macro guided is Because Our in the

all reinvestments Deliverr, our our impact intact Our gross slowing business an this change consumer effects brands to intention to remains adjusted reinvest of dilutive of operating this profit independent the is we dollars of back year. year which spending, pace to to in into outlined February ahead down. as the themes in need of as to our on environment we get the the of not inflationary reflect margin in operating results well key expect X the expect since Factoring be

scale simplify go our As grow success. relationships, build we're merchants for arming and to buyer long-term full we from help fulfillment, global, sale first them

the of million, compensation of and CapEx $XXX taxes, respectively. million the payroll acquired Deliverr are impact amortization incorporating $XXX and and stock-based $XX intangibles related Finally, estimates now million, of

foundation for what future. great to decisions bigger company to capital it of In long-term over underscore to a Q&A, we allocation in importance laying expected the much the are reinvested want we were the underlies how is the have we that turning be start built. our past, Katie Before the to I companies knowing thinking

to is delivery we place the the of because of from continue discovery a building today to bigger independent to us much to is lies brands as technology good reinvested, and we're for that everything considerable, work with we entrepreneurship. Putting build While guides future to be. us that ahead help

We'll of the Thanks, for Zoom. the the open accustomed hand raise in now call last couple We've had feature all to Amy. get questions. years to

relevant Instructions] you no So the to only efforts We'll boil on so come remarks of have made armed [Operator time they page of questions we down so prepared we just time, problem best as limited get most with good questions, our can have using you our much in please Investor the content While to to the order that. as Relations the take our question, and page Events ahead many in. still landing very ask we of a one for possible. we should

our And Barclays. question this first Young from morning at comes Trevor

we single-digit way parsing mid-teens, the up about imply the the POS to low social, of commentary would low a or social points. share, XX%, saw few very is XX% If call think, it? nearly like e-com GMV right assume remaining growth POS a maybe out that Just percentage that actually I Is the year-on-year, it, quadrupling. into buckets, key think XX% single-digit

data, So we gave outpaced you commerce market bit U.S. to a according in XX%. approximately U.S. overall market. We little remarks on the of e-commerce. information the U.S. grew, prepared The

you So online that should have given some view the into performance.

Our next question comes from Daniel Chan Securities. at TD

relationship its benefits shipping competitors with data, your on plans Deliverr likely from them, but your would a be are differentiator as counts capabilities considering of What you? some maintaining a Deliverr customers. for the

we that they more I'll And control, more there have full with great what question. been have give scale And Look, relationship talent we've software, it a visibility. accelerates is this merchants more can part great that can end the and that experience, about they our great with consumer. great means fact the they own of of network. gets course, the the take end-to-end logistics do It that faster. Deliverr to planning

So get that is we think fast, merchants we delivery, with affordable our Deliverr. high-reliability, can do much the faster here idea want and we to

of we're by businesses, of thousands going tech-driven, adopt said, by businesses those in in. obviously, asset-light, to really is are merchants. being their Now existing that But the excited we terms trusted fact Deliverr that

eventually, here. those of come merchants to may are but about acceleration really of is Shopify on them Some not some the Shopify, idea product

is question at Tom next from D.A. Our Forte Davidson.

other to [Netflix] have wanted question this you such ask I as a discussed So companies quarter. that

should shares, retain and talent tech investors how market? about labor a in the think in attract tight to ability Given your weakness your

Yes. It’s I Tobi. mean coming. amazing I'll take people that. Well, we have

as businesses, like to played up, people lot want role the to of Shopify others. Harley maybe decisions one think, a come in doing, change in that they're good that think. but quite with really want the really tend mean a much like see, in is as aligned stores personal businesses are family this to excited, -- pull this outside. time obviously, pandemic. are it's and eloquently the Shopify kind as might really, to more much these the people during local who during making And Shopify coming engaged has the interested helping People We not instead experience time are of to of quite Shopify the share it setting finding have they world. people people in way, not really what think extremely to What in economic are what as I been the see again, orbital the they like but job the -- people not had is from inside homo sort companies comes I who mission people things, are of in like to speaks the same up local from about have find help and market many is of obviously, price, economicus, we

seeing in something been making like seen we Great which more a I just articles the But factors or industry maybe find not choices are been misreported. think The about to this. has were shuffle largely Resignation, There as are there really all new. We've are look has big this So and life significant. much people different the

everywhere So fact, And now the people coming bringing think coming talented It's company are from factor. I even -- -- the we over. the a hire more by like And can humbled who incredible high in almost people. I'm that world, are -- work the with. I of get that's the to in people all incredibly in is in like

Just met some ever the talented I've people of encountered. most and

think where people all are retention, is seen And a I I turning So the this really Funnily the what my think actually people a trend effect -- and it's recently. people about actually they this to group in coming shuffling so general. that's And boomerang than back again, quicker. actually out like. work of we've large of the more that out now that's very going too like almost pandemic. trying is It's more enough, started talking well. over coming companies in people the notable is right can like back I is like for -- locality now Like been this in world, people everywhere there companies think colleagues are -- like

honestly, dynamic to choose labor look seat So the this market companies put is a for. new in has to driving that people the just

mission well. align sure has of to I company the extremely people kind most company kind or think make appropriate the for does kind best attract they are of density think the and that needs who people I and us every Shopify particular challenges talent this of missions, are the the that to and their

stock this further one that the away stock people something time snapshot but many. a people understand of where it's price think, out. -- sort in from is into see to they're bit The now, tend input So making variable all long-term we this, choices And a it's working of factors price that, now is in pandemic. that most a I are like more

comes Baird. next Colin from Sebastian Our question at

initiatives and sounds vision platform end-to-end the the on the fulfillment for A compelling. quite question

with vision. around the your in additional Just operation on more the software hoping realize side. maybe how to particular, dig the some orientation, little bit perhaps in versus this the engineering will into investment context on that potential footprint, scale the need to the to And build buy given additional Shopify's then there work, context a vision of physical around build-out required help and us long-term

Look, have I I'll providers, of merchants it XPLs, name this this said few. Thanks, through Colin. Right maze remarks, a last-mile repeat to to and middle- the freight carriers, now, just but prepared again. fumble in

sort even what that phase simple chain of supply post-order is which merchant inventory so up of the and delivery returns. we've things, that new even brought includes handles like and SFN And balancing promise,

we software and We to said allow product, to -- this also already comments couple also manage that And us map the system such end a perfect into first. manage have Deliverr When and Deliverr tech-driven existing merchant-obsessed, just deployed perfectly What a it's our in across the And like Shopify end and our why already you for really fit logistics of software product. now platform. orders I all but on product CapEx management channels, is it and up network. logistics that is Deliverr this road asset-light all warehouse our end-to-end can with about X which this that million distribution they together. nicely we it's merchant means locations. month, does a for we fit already fulfillment go, is many accelerate the this delivering they software proprietary fact -- across what asset-light, it's end-to-end pairs add it, now now this have warehouse is to fulfilling

The we Shop is just the Promise. about that thing other talked

X-day stores think places can consumers Instagram across increases decisions X-day promises and our shows online we make Facebook, really Shop implementing merchants. and Now help trust, consumer can delivery to actually and which we by Google, like Promise, better which help and actually merchants'

they the really our of also matters and really than anything is but light. the resembles which fit, their really capital expenditure all and their expenditure we product like So think business asset else, things, way culture fit way acquisitions, model operating think more about about their

Our next from Goldman Borges Gabriela from question comes Sachs.

or some base relative the merchant think e-commerce you Either trends would normal the with describe talking perhaps dynamics of to for that in Amy, for about you GMV, Harley you're and and April about March how for to however key compared of seasonality? month a adds macro length

Yes.

I'll take one. So that

QX. kind me on just let So of land

in it, had particular. year-over-year, of especially the the XXXX in part stimulus in April, quarter, So still early of QX

which a deemed normal, year. spend rebalancing April back factor year-over-year to in-person about, and shopping, as saw just we for pressure was a the respect but factor still spoke the there's and the of headwind QX and talked as that this watch We're we the big with into that happening. to consumer shift year. ease So travel services that And and the Then that to there about some not about X half in factor. we in But is a of I at with but some half. was closer it's of expect back to as of you if into expect normalizing rebalancing we third would that into continuing what QX inflationary be now of QX, to talked to first that that that sort still mobility continue any well and and look getting then one stats, we closely, the

question from comes Jefferies. next Samad at Our Samana

want know pretty it merchant have you net adds, growth and XXXX. So term? that kind more it XXXX. but that think in to unit the I I be and sales of customers? just marketing about of dramatic -- intermediate sales think customer tough different the of I with plans. Is about about being it's being marketing expect new to to spend kind of more When help comps adds surge projections in And expense for about net Can spending formation, and I like I X the what the you're OpEx and down, us think type getting the acquire going just Is acquire? consistent over expensive just economics the saw with to means

of couple A things.

XX%. CAGR in period, you X-year generally, showed CAGR profit revenue AOI. in the look -- importantly, terms XX%, think X-year But in a of GMV I on was a market, we X-year very quarter difficult in more like if In over was a

value that really I think missed is our getting is unparalleled. proposition, something important is especially is really in that really, inflationary that environment, here an

means -- also, of problems. for Capital more revenue and coming merchants' example, was that merchants but are of as Our product And they've high as value means as more the it's usage ever ever more percentage their highest more like of been. our our are Solutions solving Merchant GMV our a and that Payments, importantly, been. we're That adding solutions on,

we they different and that, -- So We're geographies, came by trusted globe, positioned in solve the us. and is to but example on, solve of these realize they all merchants in, with come not our on-ramps Shopify. come -- retailers, online at years come is the in their to of single also People can core to then more come once internationally. physical just business way, model tends platform. merchants problem. pandemic come a terms during more want more back they really the rebalancing great these they are and And marketing, couple in We getting are to lot us Shopify want solve A the who needs. sales be of once products had to and to across needed their the that on the of we offline bring changed we well And on of retail. then What the all they there our different merchants Shopify a hasn't that from to really happen cross-sell to to problems. a

piece offline all online that This of software physical they And now they're as their series are point of their reopening, of idea well. so migrating now use most those just of direct solutions over stores it's becoming sell product. reopening, the or isn't offline, important necessarily merchant

takes here, well-oiled their of really I more of key when it solve making the seeing That think to on and the now that to part machine problems. of our why comes do more trying every reason is to and these sure right you're we're platform comes that really is become So we merchant what a products, that's numbers.

comes from question Josh at Beck next KeyBanc. Our

and having, to SFN you all for that when believe, it's on I Deliver, encouraging second now Certainly, the of you're WMS believe, your on by, targeted is if I wanted curious, really volume step there's 'XX the to go 'XX from own I back the just scale QX. I'm factor or planning fulfillment. end of acceleration. phase or if in back half potential contribution the still of

transition and we area. in have team a Just larger capabilities more curious certainly now this that on that

fulfillments currently gave number. did the say are fulfillment They month million X We we you that And does accelerate growing. Deliverr and per over volumes.

additional quickly. where that's into unit towards XXXX and XXXX, The does of economics expectation So the the back us certainly said half favorable. be to really that is shift always start will we've that more give volume scale and to still

timeframe. to the that to fully volumes into expect we increase So continue

Our Pfau next Matthew William question at Blair. comes from

perhaps on of to just fulfillment your your to Amazon Does Prime on sites. ask about announcement wanted I have the efforts? specifically on business impact more merchants' how thinking you're that extending any or owned maybe

Yes.

there's thinking see we know is I because work, doesn't this a else this is the about in think think the for people them, something this? about probably at independents. second We way to want imagine. interesting want look entrepreneurship people. reach if Internet it's well, life's think people see best they more can entrepreneurial When say, incredible to So literally. look, What spending engage that really able is okay, what plan being -- to I is a like Again, the and Shopify you're canvas see well, to is for people what mission-driven. about think is worth in I to so quite this store And this might this talking Shopify I than

kind here in that was -- with get about businesses. the of huge factor, up, base of incorporate people what work in -- if and The that that we to to and the people they we So like and a Shopify really, benefited shortly because know level of was In was few Because really the Software-as-a-Service built business the down what almost sometimes service only Software-a-Service didn't is up infrastructure a for sort at the small is decades market. after. Internet We in on infrastructure Shopify lot otherwise, become often way are the to of is people shared very since almost the much excited delivered consumer really they measured extending thing a 'XXs first looking we all sort the big. digital happened that but businesses the like largely got already enterprises. all initially Like something space. sign of

want a the this have broadly across actually they thrilled because share none built the Internet. to infrastructure are decision they've we with making to small infrastructure Amazon merchants take with second amazing that and to a So

and just that TikTok built built into And -- so Shopify, and infrastructure integrated way infrastructure what in same on. Meta the built, we integrate that we that are infrastructure Google the this how so happy to the the

more business as into a that entrepreneurship, more that need merchants perfectly make important again, are not will is good from selling, a that vision Whatever fits exactly -- has is make cause of businesses this cohesive more view is again, the for would which for people out this the helps So managing previously And of and retail a possible channel to -- that company. exists would nearly build view. for And perspective, into our to be. significant valuable you is it's complex you and more some for. it the and the much that create small become task Shopify software of in a headcount strategies have tools lot integration it engage complexity can tame business complexity a because very to

So this good actually our is really all -- from this perspective. is news

from Our Tyler at Citi. comes Radke next question

ask kind you we to of terms of in and wanted the guidance specifically, has in think just I Amy, So what pieces how should changed moving about your assumptions. the

calling you're like merchant looks the similar it year. So for for to additions year full last to be

bit quarter, last a expected higher. think you'd I

down, much macro quarter. out us things you're that And you saw challenges this there revising kind of the so help just how understand given

Yes.

talked So little already about we've a bit GMV.

market. transitional So see expect draw just first to We labor remarks, and lower attribute correlation to largely a last we number that on what in my saw quarter, to our did on quarter, opening Based add adds I happening we for year, merchant causation, first we adds year. a similar in adds than very tight to the said the XXXX. merchant say could what We correlation. but the not was in the we did landing to merchant

We're back and momentum easing. through greater sales initiatives impact have will growth of the market labor already we and year. in about to that year expect of course underway And marketing we gain commercial to that ease. will that and and We the on starting the information initiatives, a have news traction expect the that start addition, continue half are see gaining to

of said gross then to that would North or, dilutive And So in world, number. more was of merchants be back Obviously, and which our Deliverr, our international, somewhat we the America we I robust world. the all we're reinvest said last margin. we we around continued profits operating business, us, adjusted guess, quarter. very confident rest what into would opportunity made around the -- for other the territory change added confident we of about The that that very so we're of outside remains

that what give of -- bit let so you a little so by can And me impact. mean just Deliverr information you we the size that

couple this line XXXX, top a Deliverr to expect points of in mind in half of add keeping year a growth to approximately a Shopify's represents of We ownership.

employees. about driven, be We Shopify's expect headcount about XXX Deliverr adjusted margin. is to OpEx of which gross slightly XXXX XX% to their dilutive And is

good of that the you a So gives really size idea there.

are you to where So we with side. operating should at our able information, be on that arrive

at Treiber Our next question from RBC. comes Paul

A provide that in the in directly, perspective should various the there founder you own shareholders on There's shareholders your question more out proposed then feel share. governance you just for can on Tobi. your general? put views vote Could for you why proposal? And to words perhaps

structure a And obviously you. like. rush It's but took very of been shelf has back -- B-share company. is decided like Well, bit it's Thank this and the to basically looking of a the very Directors like in a look, for at to us something company structure and structure this really We've that to IPOed of at a day, founder-led honest, were thing time. this without And seen contextualizing has that billion valuation, the this well. IPO perfectly be kind point. we to a as very, what when it's a included $X IPO. company, structure Yes. supports Board the we off we we would we in well it seen the of our a the it's positive long Board And a the for and in

aspects we'd And some like also rather it. so, about there's that change to

So our designed this some is things. of kind governance change of proposal to

it's founder-ledness -- B Class minority a It's these done removes structure really like things the control founder that going the transfer -- some And it by intergenerational And it's I a percentages. XX%. one going designed Obviously, for it share now this company the a mean capped it's be creating requirement I that to other. be Board that -- accepted. to that change sort And It's for things better -- like my like the causes think awkward at from get a with a the like on the things can shares. from to shareholders thinks a come it's assurance It of taking can will of from lower service-based majority measures, like at a -- this involvement. -- is a B to it's it's supporting proposal all instance, the go future. governance to For structure the down replacing day, to Class of control. be is --

And so that's it's why included.

I but something and I'll at experience would with Tobi based experience that Shopify certainly working I just for Tobi a can well think over add on decade. don't my my say, say

vision, Tobi well. management and building think really technical very knowledge, is expertise a makes his only his not his -- anyone of that since combination deeply frankly, Tobi, cares a track of over XX% top that, knows company. it's some returns founder a on he's our think also really XXX-year he good that ball annually has crystal can that I and leader, leadership of compounded and It's year a serious domain I And record the business knows skills. knows complex about this in a spaces. fast-moving per who IPO. has He thoughtful very scale that very decisions And delivered proven

will but he I so won't say, And that's something something say. certainly that

from comes Mathivanan Wolfe Research. question Our at Deepak next

and e-commerce trends you of non-Plus moderating, more the activity add level to that. be higher in just And on color you kind like more the entrepreneurship SMB on I bit on the a merchant little a may of merchant side, business? seeing little are on or can a trends color activity specifically moderating the want hear Are given that e-commerce Amy, of side? bit churn side retention

haven't rates really changes non-Plus. churn any significant segments seen or we No, Plus in any in the of the

comes question Siti next Mizuho. Our from at Panigrahi

about understand offline that you to bit commerce. wanted commerce the offline highlighted, I So a little opportunity

if So have is store, to percentage your right your so, offline merchants incremental well? do going you what merchants see after Or mostly the heard online the store? it brick-and-mortar brick-and-mortar as just of So solution? now move they who customer there

offline I'll are of obviously, question. seeing commerce came selling online merchants and were more this to sort from seeing are expanding us mentioned offline they the you're I seeing as nearly they're merchants part offline that GMV XX%, more -- their retail those our taking Shopify of interested and coming during but solutions. single to market, are reopenings, they pandemic, that well. pandemic the the reason lot take as now offline by with outpaces retail of beyond the in because to is offline. A QX rebalances we take we point merchants prior And earlier, -- which broader point-of-sale online what of that grew

The about well our and our North because we're to also continues growing other point-of-sale it part Pro beyond geographies. America it is point-of-sale of new adoption and grow,

new integrated have We hardware.

have We integrations. payment new

are new to businesses from Shopify We come as also balance seeing well.

we've use point-of-sale making Shopify long a our lot the to you point-of-sale And our from expanding taking what the already to are It's and are more other best and that on that see us, these to think continue I Shopify for now similar people has, hardware, working on is coming It also solutions of now see a you countries. for but think, that's we will software. time. will so why products a people we're like And of of some investments. key Plus, healthy Shopify been product. example, to mix XX other best And the reason in

people will of our that mix continue. continue solutions as And into and to for then other coming expanding see and we Shopify so should to well, point-of-sale

Our next Arounian at Wedbush. comes from question Ygal

Deloitte you of to I Accenture want pointed picture and and shifting seeing be potentially And could larger more challenges landscape the if something Harley's some out could maybe a and advertisers the is around of comments Facebook IDFA, then sounds stuff the and promising. to seeing. you're in ads that like just that you paint powerful bit what digital with little go

could little you expand a If that on bit.

part bigger came I second are brands at to quite the Shopify, Plus years Audi Yes, first wanting for I or X been point. question. mean, And look, it's because ago World I'll Shopify shorter. some have we is upmarket answer this use Vision. whether out, the time. think, for we -- much X seeing it's it's Thanks stretching now or

different Some in of come way is to those maybe to, which partners. used self-server we're they of merchants, our a brands, those some one agency with Shopify want of often to than

folks those Shopify also we're What brands working very And Accenture, for we've lot so consultancies doing endorsement. is talking onboarding trust the from they their large fact a working we building Accenture asking who can And sell easier. with that Shopify, large those a great Deloitte, formalizing is with Shopify, time are to like to incredible and been makes with and of the I that like. customers course, Deloitte through some more which, for think, agreement, so an actually of

and and That these IDFA, disproportionate has and of we've is no good this their there In impact have spend. far. we is on created some impact seen before, so friction changes have not thing, for said the believe discernible continue advertising channels, things even transact risk We whether search a it's type necessarily to a terms lowered why do email of lot it merchants buyers on advertising and make return precisely it it's also ad across shop. it's social of those or with many those And easier, mitigate is that or why those But connect we SMBs. it's with the changes. or

-- look are those direct social you way. quarter it's commerce the more more reach we're things really commerce Shopify even Instagram through in -- those Orders and and shopping year, that's think need TikTok had Spotify of in see more really of this around on what terms of and and Snap gaining at a services and using social happened we and when more it quadrupled than in you just that exciting. Facebook, placed traction. like then in So last in quarter to do merchants buyers Google And --

So commerce there's we're the a excited think, real Xx momentum year-over-year, by I And that space. social again, speaks increase that. in

from Our Darren it's to Capital next we time have question, last it and for, comes Aftahi looks Partners. question ROTH the going at like be

of those versus English-speaking? non-English-speaking that to you of relative speak Can merchants kind are just Plus growth

month. terms in in America a deals I'll And remarks, It the share very than other of We but closed strongest this Plus. Shopify repeat our said Plus, XX% I North of merchants in just our any for Plus number prepared And March ever single strong it. than of That's a Shopify was month. Yes. of quarter deals had outside more expanded.

that. to So I think we'll continue see

for TRX, largest footwear Plus We also it's planet; modern see the Shopify growing a to mix the new its like Plus, That some of about, the want But company's -- to it's both brands believe as product the have strong talking or names upgrades in is brands as modern well. well and whether I'm retail. Shopify. Fiora that will as best the in of that or of one net best continue that Mexico, Shopify we commerce Havaianas Shopify

traction continue we'll in a only America, will also North invest a example. of for -- be more not Flow, features, functionality, getting is will I Shopify more but We're here, it be so global. like Plus And things adding it that. lot lot And more making to Shopify think

Well, are Harley. time. out we of Thanks, Great.

disconnect. Thank if to You time this have now us call you, any today. and know find morning's your This Everyone everyone, can webinar. where for questions. follow-up concludes you