SHOPIFY INC. — Call Transcript 2026

Great. Thank you everybody for joining us. With us, we have the CFO of Shopify, Jeff Hoffmeister. Jeff, thank you so much for taking the time to come to London and get in front of these investors. Of course. Appreciate it. Let's kick off on something that we spent a lot of time on the breakout meetings on, it dominates the earnings calls. I think it's dominating the broader technology zeitgeist as well. If I just zoom out, regardless of Shopify, what is the lay of the land of the agentic commerce landscape today from your perspective? Yeah. I think part of the issue with agentic commerce is everyone has their own definition of exactly what this looks like and when we get there. I want to make sure we differentiate agentic commerce between versus what is now what I'll call LLM-driven discovery. Right? We see a lot of activity on Google Gemini, on OpenAI, and a lot of LLM platforms where consumers are starting there to do their discovery of a potential purchase and discovering a merchant. As it relates to agentic commerce, I think that's a vision for most people feels a little bit like there's a point in time where I'm giving my LLM a budget, or it's proactively deciding for me what to buy and how and when do we get there. We're obviously still early stages in that. It's one of the things that we, as you know, we partnered with Google to build UCP. I think that's one of the key things for us, which is really helping make that future possible sooner rather than later in terms of all the rails that make agentic commerce happen. The adoption of agentic commerce will of course take a bunch of different forms, and it's probably going to be heavily dependent on certain demographics and other things, and just there will be some segments which are early adopters and some which are slower-paced adopters. There are some people who, there's a lot of different views on how quickly we get there and what form of it we get to. Certainly from a Shopify perspective, we do believe in agentic commerce future. We think it's going to happen. We're still in the early days of all this. There's a lot I want to unpack there. Let's start first with, I think there's confusion. People hear Universal Commerce Protocol, they think of Google, and they tend to mention Shopify second. I'm going to let you clarify. Talk to us about how UCP came about and what the different roles the two companies played in establishing the Universal Commerce Protocol. We've been a partner of Google's been a partner of ours for a long time, and this was really a co-development effort in terms of, you can imagine from a Google perspective, they have, of course, tons of experience, pattern recognition, thoughts on how you think about the discovery, the front end, and we of course, have done more historically on the commerce side. I don't think there's a bifurcation of this party did this versus this party did that, but this is something where we both worked together to build something which we thought would broadly, as I alluded to before, really enable agentic commerce in a way which it had not, to that point, been manifested. We both had a team of engineers that brought their expertise to bear. I think it has manifested itself in something which is really going to help usher in the next stage of this, and you can see, just based on the adoption of a bunch of others, both retailers and other platforms that have followed behind us and have done the adoption of UCP. I think you can see there's broad industry support from a lot of people that this is heading in the right direction. When you think about the, you've mentioned rails a couple of times, what does UCP enable today for the merchant customer of Shopify's? When they're thinking about embracing it, what steps do they have to take to enable the utilization of that? Yeah. No, it's very easy. Again, UCP is the protocol that helps make all this happen, and the manifestation as it relates to Shopify merchants usually starts with something like our Agentic plan or with Catalog. Right? Catalog is something that we set in motion more than two years ago. Think of it to a certain degree, like a large taxonomy of all the merchant's products. We have over a billion products in there now. It really helps you as a merchant make sure that your products are discovered, if the consumer's starting on one of the LLMs, that your products are discovered in a way that you intend, that it's not a screen scrape. That it's a full encapsulation of everything you've done in terms of the pictures, the product descriptions, the details, all the specifications, everything that you've tried to associate with your brand and spent a lot of time and effort, and dollars, and management attention in capturing your product in the exact way you want. Catalog helps make that happen, and that's one of the things that UCP enables. The Agentic plan is one of the things that builds on top of that to really give, especially the large enterprises, the ability to maybe start with Shopify there, and that's the onboarding of, hopefully at some point adopting the full commerce stack. You kicked off with this about everybody has different definitions for what agentic commerce is. I think today, to the extent there's traffic, it's more LLM search, which you mentioned. How far are we from that reality of, I'll use an example someone else gave rather than one that you gave in the group meetings. Okay. I've heard the, "Here's my grocery shopping list," or, "This is what I want to eat this week. Yeah. Find me all the ingredients, and I want this specific ingredient across three different grocery stores if you have to, but I don't want any substitutions." How far are we from that world where I say, "Here's my $300 from my grocery budget. Go and get me what I want to prepare this meal"? I think there's going to be a difference between traditional discretionary items, things you buy all the time, like food and basic supplies, so to speak, versus how we, and you see this in the Shopify merchant base, how a lot of our brands, we serve a broad swath of merchants. On the margin, they tend to be a little bit more discretionary in some of the things that they do. A lot of this is an adoption of, again, either I have a specific budget I want to give on a monthly basis, or I want to send an agent out, maybe it's time for my kids to go back to school. Maybe I'm going to a trip in a climate which is a different climate than where I live, and so I need warmer clothes for colder weather, whatever it may be. This is very tough to predict. We're probably a year or two, at least for most people, to have that full control that they're ceding to the agent. Part of it is just how you as a consumer want to purchase. Some people want to go into a store, they want to look and feel, they want to feel very comfortable about returns and all that stuff, and other people are just to the spot, and some people just enjoy the shopping experience. They don't want it handed over to an agent. That's part of what they want to do is experience the whole process, for example, maybe discover a brand which is an up-and-coming brand, which is something that they maybe otherwise would not have found. There's a bunch of elements to it, but I think, Samad, we're a couple of years away from that, at least in my early estimation of when we get a meaningful percentage of people that are shopping that way. I'm guessing if it's like anything else, we'll probably overestimate in the short term, underestimate in the long term what the impact. I think that's fair. Probably. I can't wait for somebody to do my grocery shopping for me. I can't wait for that day. While we're on the topic of AI and different relationships, I know Shopify is also working with OpenAI in different contexts. Can you maybe help the audience understand what the checkout inside of ChatGPT is like and what Shopify's role in that is? We've had a partnership with OpenAI in various forms for more than a couple of years, and some of that started with how we use them internally, and obviously, the partnership has evolved in terms of some of the things they're doing in agentic commerce and LLM-driven discovery. From our vantage, if you're doing a search with OpenAI, you'll be channeled back through Shopify Payments. It's still done on our payments rails. If you're a merchant, you want to have as much of the activity back on your website. So whether it's captured on the OpenAI website or whether it's funneled back to the actual merchant's website, you're still operating with the Shopify platform and all the capabilities and everything that we do, and the economics to us are the same. Whether you start on OpenAI or whether you start on the merchant's website, there's no difference to us. Understood. Just as I think about, we've talked about the agentic commerce experience itself. Let's maybe switch gears and think about AI and what you're doing for the merchant with your different AI solutions, right? I know there's been a lot of focus on Sidekick. Yep. Maybe help us understand what type of merchant is utilizing it today and what the early experiences look like. Yeah. The great thing about Sidekick is it's really gotten to a spot where merchants of all sizes are asking all types of questions. If you'd roll the tape, again, I alluded to this before, we've had it out for more than a couple of years. If you rolled the tape back 9-12 months ago, it generally was a little bit more some of the medium-sized merchants that were asking questions of it, and they tended to be a little bit more go-to-market-type questions, like maybe I expanded this geography, or I want to expand into Latin America, which specific country, as an example, or how do I think about pricing, or things that are a little bit more of that ilk. Now it's really merchants of all sizes asking all types of questions. You can imagine a merchant that has two employees, five employees, is asking a different type of question than some of the largest multinationals that maybe are asking much more specific questions. They still fall in the full spectrum of everything from how do I think about designing my website versus what do I sell versus how do I price versus all the go-to-market things versus maybe what is the next best product that I should build or sell based on what I'm seeing from competitors or the success. It's literally meant to answer any question that you may have as an entrepreneur. We track it very closely in terms of the types of questions, which merchants are power users, what type of incremental success that they're having. There's, as you know, there gets to be a little bit of correlation versus causation in terms of the data we see for the merchants that are power users. Needless to say, the feedback has been exceptional, and we're really helping it see merchants accelerate their business. Of course, that then plays back to us in terms of additional payments revenues and additional solutions, whether it's FX or tax or other things. It's driving merchant success, which helps us. I'm going to go with causation. This joke that I'm going to tell is only for two people. Because Shopify's stock is up 5% right now, I said if you do stuff with us, it'll be up. There you go. That's not correlation. You're the causation. It's causation. You're the causation. Just like your merchant success is causation. I'm going in that camp as far as I'm concerned. Great. Well, thank you. So- I will gladly take it. I want to pull more on Sidekick because I see how it helps the merchant, but if you think about what the biggest opportunity is along different components, do you look at it as something that is a more of a top-of-the-funnel demand driver for merchants? Is it more about improving conversion or retention there? Is it new monetization? Without stack ranking them, how do you think about maybe the biggest opportunities along those different vectors? Yeah. Unfortunately, it's a little bit of everything. It truly is merchant success. There's some interesting things that we've seen in terms of types of merchants that are benefiting, some versus others, but they're all using it in their own way. I wish I could tell you it's more conversion, or it's more this, it's more that. I think for the average merchant, again, it's still mostly go-to-market-type questions that they're asking of it, but it continues to evolve in a way that I, again, like its intention. Ask any question you want, and let's give you the best answer we can. We've talked about what it unlocks for a merchant, but an investor question that's come up, and you mentioned on the last earnings call, is maybe the costs associated with it. Yeah. I think what everybody in the investment community is trying to figure out is. A lot of companies are giving AI tools or enabling it, and they're absorbing the cost up until now. What's Shopify's philosophy? What have you experienced so far? I have a couple of follow-ups. Well, I think one of the things, to your point, there's been discussion, a bunch of questions on it. I think one of the things that's lost in a lot of these conversations is the impact that it's having on revenue. I think a lot of people look at this and say, "All right, how do I think about the cost?" That's true. Of course, if it drives much more merchant success, then it continues to sustain these growth rates, which we've been delivering, right? Four straight quarters of 30% or more revenue growth. You see the free cash flow margins doing what they've been doing. All that success is, I'm of course not going to attribute that only to Sidekick. It's a bundle of all the things that we do. To the extent that Sidekick can really help get more merchants on-platform, help them stay on the platform longer, help them increase their conversion. There's all kinds of statistics we see about, from their vantage point, what are they doing to be more successful? As that drives the revenue, then of course from an LLM cost perspective, we monitor that very actively. There's a bunch of different things we do internally to track that on a daily and a weekly basis. One of the beauties of Sidekick is it's not the value there is 20 years of commerce data built into Sidekick. It's data that we and only we have because it's all the activity, the before the purchase, the at the time of purchase, the after purchase, all the context, all these things. It's not, hey, I sent you to a website and now you went and did something on a merchant's website. It's we run the merchant's website, and we see all this information that's in there. What we don't need to do is have the latest and greatest and most expensive LLM run through all that data in terms of both inference and training, because really what we have is the ability to take a model that maybe is not the latest and greatest, or maybe it's an open-source model, and how do we think about triaging, stacking, implementing the right model for the right point in time. We want to make sure that when we have a question from a merchant, we're delivering the best answer possible. The other thing too is you can imagine a lot of the questions can be somewhat similar in nature. I said smaller merchants will maybe ask different types of questions than larger merchants. There's an element though that it's pretty similar across all those. How can we do things, for example, like caching of answers or anticipation of questions, which also allows us to keep the cost down. As you know, because Tobi's memo came out more than a year ago, we've been a thought leader on how you think about uses of AI. You can assume that we extend that knowledge, those best practices into how we manage the cost and how we think about it. I'll quote something that you've mentioned in other meetings. I think it's worth noting that Sam Altman himself said that Tobi's using AI the best, or that Shopify is using AI the best currently, and I think that's a testament to what you guys have done there. Maybe before we wrap out and switch gears, you mentioned data as one of the big moats for, or one of the value centers for Sidekick, and then I think a moat more broadly speaking. What would you describe as the other key moats in a world where everybody's trying to figure out what's at risk? I think checkout is something that's misunderstood. Just help us understand maybe the moats that Shopify has. Yeah, the data piece is one of it, but the data, of course, then extends into a manifestation of the pattern recognition and all the things that help us think about the next product to build. You see, again, Catalog and Sidekick are things that we set in motion a long time ago that no one else has even really started to build. You need to have the data to build it, you need to have the product expertise to go ahead and actually deliver on the products that we have. I think, as you also alluded to, Samana, the checkout piece I think is one of the things that is most misunderstood or least appreciated in terms of how hard it is to do because you really have to marry the product expertise and the speed of building something that operates in milliseconds in a lot of parts in the process. When you see the statistics in terms of the actual impact on abandoned cart and lost dollars for a merchant when a checkout process is either a little clunky or not super fast or doesn't have all the context on you as a buyer, on the shipping data, on the return, all that stuff matters in terms of the success rate of you going and completing the purchase. There's a lot of things that not only one, you have to start with the ability to build that from a speed perspective and have the technology expertise to do that, which some others would do, but what they don't have then is all the context around that, which one, makes the checkout process better, and two, allows you to build an even faster checkout process. Again, as it relates to the tax and the shipping and or FX, like all these things that others have tried and attempted to do and they've not been successful doing. I think that's the piece that's I think sometimes hardest to describe but also most underappreciated. AI takes up a lot of the oxygen in almost every conversation these days. Yeah. I think Shopify has a lot of different growth opportunities that are doing quite well, and I'd probably argue up until this point, those have all been doing much better than AI itself, right? It's very early. Let's unpack some of the other success categories that you have. Maybe apropos of the audience, international has been- Yeah. ... a very high-growth area. Can you help us understand what's changed on the international front? Is it the go-to-market has either changed? Is it that the product market fit is there? What has happened that's really driven that international success? Yeah. Well, as you know, the biggest international success for us has been here in Europe, outside of North America, of course, our home markets. It really a couple of years ago started to take off, and I think that was mostly a function of product market fit. That product market fit as it relates to some of the things we're doing on kind of the core product offering then begets additional adoption of other things. We roll out payments in more countries, merchants start taking on more elements of sale. They take on some of the cross-border stuff we do. They take on some of the tax stuff we do, especially given some of the tax dynamics here in Europe, et cetera. That then begets us in a position to roll out more products in more geographies. We really start very much from a product perspective, the marketing dollars flow behind that. Yes, once you have the product market fit and increased merchant adoption, you put some marketing dollars behind it. I mentioned not on this most recent earnings call, but the one before that roughly 40% of our performance marketing last year had been filtered into Europe, and that really helps accelerate some of the things we're seeing. As you know, last year we rolled out payments in 15 more countries in Europe. We continued to roll out the full integrated kind of latest version of our point of sale. We continued to roll out capital in more regions. We've really gotten to the point where this is a very repeatable process. I think we have payments now in 40 countries, essentially Europe fully covered. There's more to do this year and next year as well in terms of doing more in Europe. The opportunity for us is to really take that same playbook. There will be some modifications of it, but localization with AI has gotten as easy as it's ever been, right? Localization of the software, localization of the advertising, localization of everything the merchant interacts with. Take some of the things we've done in Europe, one, continue the momentum in Europe, two, think about, well, how do you do that same playbook in Latin America? Where you look at Latin America, we have merchants in all the countries in Latin America. We have some great merchants down there. But as a percentage of our revenue, it's still a small single-digit percentage. Same in Middle East, same with Southeast Asia, same with Africa. There's all these regions where you say, take the European playbook, replicate it in some way, shape, or form, and continue to roll this out. Even without the introduction of any new products, and of course, we will continue to do that, you can roll this out in a way which I think gives us durable growth for a long time. I want to maybe unpack that a little bit on one of the big drivers for you or for Shopify overall has been driving the merchant take rate higher, the overall take rate higher. Yep. How do you think about the progression for merchants outside of the United States in attach for things like payments, capital? I know you mentioned that you've deployed it now into several more countries. Yep. Should the long arc of that look fairly similar between the U.S. and other geos, or would it look different, and if so, why? No, it looks not identical, but very similar. We've seen very few differences, not only in attach rate, but just in general, as you think about it, not surprisingly, commerce is pretty straightforward. You, as a consumer, are trying to find a merchant. There's an exchange of money, the product is shipped, et cetera. The core engine, the core process, the core guts of commerce are very similar. As you think about what a merchant and what a brand is trying to do as they grow over time, there's a natural progression. As they get bigger, they're more likely to take on more products. They're more likely to do different things. They, for example, are more likely to get into cross-border. Yes, on day one, you can do cross-border things. As you get bigger, you're more likely to do that. You're more likely to do some things on the tax side. The opportunity for us, and you look at the attach, we don't break out attach rate by geography, but if you look at the attach rate in North America versus the attach rate in Europe, there's clearly opportunity. A little bit like payments. When you look at payments penetration that we have in North America versus what we have in Europe, there's clearly headroom there, too. We also see this in terms of cohorts. As you know, we think about our business a lot in terms of cohorts and how do you look at one cohort by year or one cohort by geography, and how do those stack over time? Very similar in terms of their trajectories, their growth rates. The opportunity for us is to give the merchants in Europe the same set of products that we have in North America and et cetera, et cetera, in terms of roll it out. Understood. You mentioned payments multiple times there, and the penetration's very high, especially with U.S. merchants. How much more runway is there? Is it purely just rolling it out into additional geographies, or are there other gating factors that have kept payments penetration maybe outside of the U.S. looking different, and how should the shape of that look going forward? Yeah. Similar to the comments we just discussed, there's no difference, it's just a matter of continuing that progression. We have not broken out payments by region, but as you would suspect, the payments penetration in North America is higher than it is in Europe. With the additional country, the 15 countries we rolled out last year, part of this is getting those countries' payment penetration levels higher in those, continuing to do local payment methods, which is something which, especially in Europe and as we do more internationally, helps on the capture rate. You get a merchant on platform and a higher percentage of their total transaction activity happens on Shopify. Of course, there are some things like cash, it would seem like there's less and less of that. There'll be a natural governor to avoid us getting to 100% penetration rate. We still see a lot of opportunity in North America, and our payments penetration rate in Q1 was up 3 points over Q1 in 2026 versus Q1 in 2025. There'll be some natural headwinds in Europe for these countries where we just rolled out payments in terms of the total payments penetration level. That should turn into a tailwind as these countries continue to have more success and that rolls out further and further. I want to talk about Shop Pay specifically. Yeah. The checkout function, which is, it's dangerous for an impulse shopper like myself because you don't have to enter in anything. You just basically give your number. Yes. It's trouble, is the best way I'll put it. Help us understand what the value proposition for the merchant there is. Yep. Why that drives conversion, which is probably the trickiest thing for a merchant, I'm guessing. It's exactly what you just alluded to. Because if a merchant knows that if they offer Shop Pay, that it's going to help on their conversion, that consumers will go there, they will see a brand which they trust for good reason. Shop Pay has the brand and the trust and the awareness that it has, not because we spent a bunch of marketing dollars on it. It's because we built a product that is exceptional in terms of, again, all the context and the speed of everything it does, which has created that level of trust that you and other consumers have. Shop Pay, along with the Shop App, of course, are the two things where we have a consumer-facing element to our business. That is a consumer-facing brand, which is there to lend strength to what we're trying to do on the merchant side. If you go to a merchant and you can say, all right, think about the impact of Shop Pay on your abandoned cart. Literally take what your abandoned cart number was last year, multiply it by the uplift in conversion that you get from Shop Pay, and basically explain to me why it is that you want to let those dollars just leak out the door, so to speak. It's a very powerful conversation to have with them. It has clear, tangible impact on their business, and that's a function of, Tobi likes to use the word flywheel a lot. It's a function of that flywheel, right? It's the consumer brand which lends to the merchant, which allows the merchant to be more successful, and it continues in that pace. I believe a few years ago, Shopify made Shop Pay available for non-Shopify merchants. Right? I think it's clear how it expands the opportunity, how does the adoption of that look like, or how has the reception been, and has that led to merchants actually wanting to adopt the core platform as well based on that experience? Yeah. It has. We've been very careful on how widely we do that. We are starting to do it more. The Agentic plan is also part of that initiative in terms of how do we look at the evolution of payments and Shop Pay, and where does this take us? I don't have statistics to share with you in terms of what percentage of Shop Pay standalone has then led to merchants taking the full platform. I would say across the board, everything we've been doing in product development over the last year or two has really put us in a spot where, I think from a competitive dynamic, we're doing some pretty incredible things. Let me take a step back. Some merchants will be at a spot where they'll say, "I want only so many wallets on my checkout," and others are like, "The more the merrier." For the merchants who get to the point, "Well, hey, I have three, four, or five, whatever checkout methods on my checkout page. Do I want to add another?" It's very hard to refute the statistics of Shop Pay and what that does for the business and the conversion and the uplift and everything we've talked about. It's just a matter of kind of getting them to add that, and that kind of leads to obviously a lot more in terms of the upsell. Great. I know when most people think about Shopify, they think online for obvious reasons. The in-store or the retail side of it has gotten really large in brick and mortar as well. How do you think about the point of sale opportunity from here? How do you get more of your merchants that have had tremendous success online to put it inside the store as well? Yeah. The thing that we offer in our point of sale solution, which really only we offer, is the best technology on both the online commerce stack, which of course we've had for a long time, married with the best technology on the offline side, and doing it in a way where you have one platform, set of analytics, everything to look at in terms of your customer information, your inventory information, all your transaction, all your payments, all that stuff in one platform. That's been one of the pulls for us on the point-of-sale solution. Roughly 80% of commerce, as you know, is still offline, that's something that we want to continue to grow, and we will continue to grow, and the traction has been there. The other thing that we've seen really starting about a year ago is up until then, most of the stuff we were doing on point of sale would've started with an online merchant. Now we're seeing a lot of, and Harley's talked about some of these on some of the earnings calls in terms of some of the brands that have started on the point of sale or have taken us for the point of sale only solution, and what that's meant. We're getting wins on both sides of the equation. It also helps, especially on the large enterprises, as we think about going to them and just basically saying, "All right, so we have point of sale." We have point of sale, we have B2B, we have all the cross-border stuff, we have all the tax stuff. We have all these things where it becomes hard for them to say that we don't have everything they need, especially with the addition of all the Agentic plan. You mentioned large enterprise just now. You guys have had a lot of success with several large logos. I think a notable one is LVMH recently announced. Help us understand what has changed on the enterprise side that's bringing more of those larger merchants that are maybe a little bit more hesitant to embrace change. What's driving them to you now? I think it's a couple of things. Part of a multi-year effort too. As you know, it's been roughly four years ago when we put a particularly concentrated effort into getting more and more merchants. It was never a technology question because we, even before then, were doing some of the biggest flash sales on the planet, and so we could handle all the activity. It was just a matter of how do you get a go-to-market motion, which gets that technology, that product capability out in front of the largest enterprises. As you'd naturally start with, maybe we'll call them the small end of the large enterprises, or call them medium-sized merchants if you want, and then you get those wins, which begets slightly larger enterprises, and continues to build on itself in terms of size. We've seen a lot of that. We've also seen an interesting dynamic, too, where a lot of times some of the largest merchants look at what some of the small and up-and-coming brands are doing in terms of everything from kind of the customization and kind of the presentation of the brand and all the interesting things they're doing on the commerce side, and they look at some of the smaller brands and say, "I should be using that platform." You see some of the biggest fashion houses, for example, look at, again, some of the emerging brands and be like, "I should be doing that." It's interesting because you would've thought some of the small ones would look to some of the big ones rather than the reverse. We actually see both of those dynamics at play. Part of it is that momentum. The other thing, too, is just from a technology and a product perspective. That's all the things we just talked about. Point of sale has continued to grow and continued to strengthen in terms of what that solution offers. Our cross-border product, our Managed Markets product continues to get better. The stuff that we're doing in agentic, no one else has anything like that. If you are a large enterprise and you're looking to move your platform, whether you're moving off an existing solution from another provider or you're moving off an in-house solution, how do you justify moving to a platform that doesn't have an Irrespective of when you think agentic plays out, how quickly it plays out, to what magnitude it plays out, do you really want to adopt a platform that doesn't have a thoughtful, strong, proven offering in agentic? That's hard to justify. What we're doing in terms of differentiating on that side has helped a lot, too. Part of it is, again, as you know, is just the length of the sales cycle. Even with everything we're doing, the sales cycle generally can be 9, 12, 18 months long, and the bigger the enterprise, generally the longer it takes. The more products that they take, sometimes that can slow it down because you may say, or they may say to us, "We're completely good on the commerce stack. I have a couple questions on point of sale, or I have a couple questions on this or that," and kind of it just elongates it. The win rate has been very strong. If you think about, you mentioned AI, and you'd want to buy the future-proofed solution, right? Yep. Or you want to bet on the technologies of the organization that's laser-focused on that. Has it changed actually where maybe the starting point in the conversation is with the large enterprise, where you may have originally talked to, let's call it the head of e-commerce? Is it now you're talking to the board or the CEO? Has it changed either who the stakeholders are and/or where the conversation starts, and does that tilt things in your favor more? It's changed a little bit, but it actually has not changed as much as you would think, because especially if you're displacing an in-house solution, there's a natural desire, if you spent a lot of time, effort, years, management attention on building something and customizing it exactly the way you want, there's going to be, for a host of reasons, just starting with human nature, there's going to be some resistance about it. That's something that we've faced for a few years. That's still there. Yes, the stronger our solutions get, the more there is a pull to having conversations with the CEO, with the founder. The selling motion actually has not changed that much, only because even a couple of years ago, you're still dealing with a lot of the same dynamics. Maybe last on the go-to-market side, in terms of the sales organization, is headcount there where you want it to be? I know there was maybe some compensation changes that you had announced, or that were disclosed late last year. How has that maybe affected change of behavior inside of the sales organization? Two parts to your question. First, from a headcount perspective, yeah, we are where we believe we need to be, and again, it's kind of three or four years ago we really started building out the sales force. You may have changes in the composition of the team, but you still, from the size of the sales force, we're still doing what we need to do, and as you know, headcount has come down each of the last three years. It's kind of stepped down slowly each year. That's something we've been very disciplined about. As it relates to some of the changes in the compensation system, as you know, big enterprises that sell, big companies that sell into enterprises, you're going to make changes in the compensation plan. You're going to make tweaks. You're going to continue to evolve it. In any given change, some people will like the change more than others or vice versa. That's one of the reasons why in the last earnings call, Harley had a statistic, and I had a statistic as well, both as it relates to merchants. Everyone has their own definition of enterprise. Harley and I talked about GMV of $100 million and above and some of the progress and the strength they're seeing there. That strength and momentum speaks to us doing some good things, and as I alluded to just a couple of minutes ago, the product capabilities gap that we have versus others continues to widen. We feel good about what's going on in the quote enterprise. Look, you're one of the few companies, I believe in all of software right now, that has reduced headcount and accelerated growth. Maybe there's some magic to that as well. It's fairly remarkable. I want to switch gears. We've talked about external AI and the AI e-commerce infrastructure. We've talked about products you're developing. Let's talk about the company's internal innovation, especially as we just talked about headcount. How is Shopify using AI internally, and where have you seen the biggest impact from internal adoption? Well, as you know, a lot of attention on Shopify started with Tobi's memo a little bit over a year ago in terms of how we think about internal uses of AI, and not surprisingly, I think for a lot of people in tech, it starts with R&D product development. We had a lot with support as well in terms of some of the things that we were doing interestingly on the support side. R&D for sure first, support is a fast follower, but it's really even six, nine months ago, it's all parts of the organization. It's everyone from finance to talent/HR to legal to sales. All elements of the organization are using AI in a very thoughtful way. Just like we've been thought leaders in terms of encouraging people to use it, we've also been thought leaders in how do we make sure that we're getting the right model for the right person and the right use case at the right time, such that we just don't have people running off and using the most expensive model when they don't need to. We have circuit breakers that we look at. There's a couple of reports and dashboards in particular our CTO, Mikhail, and I look at, how do we look at those on a weekly basis and find things over week-over-week change? We look at the types of models that are being used by department, by level of seniority, all these things, and kind of when should we be using an open source model versus when should we be using some of the more expensive latest versions of the Anthropic's and the ChatGPT's and Gemini's, et cetera. We're very intentional about that. Part of the reason we can be so intentional about it is because Tobi has such a deep understanding around what model is necessary. As you know, you probably hear as investors, a lot of CFOs talking about, well, how do I manage these costs? From my vantage point, Tobi leads the charge on this stuff. Mikhail and I make sure we're being really thoughtful on this, but Tobi's out there making sure we're being highly intentional. As a follow-up to that, I think people think about the value created by AI internally. They express it in different ways. It's either, hey, it's driving productivity- Yeah. Which maybe drives revenue, versus it makes people more productive, so maybe I can lower headcount or lower costs. How are you thinking philosophically as the CFO between that trade-off of if I get X productivity, I want to maintain headcount, or would I rather take that productivity and reduce headcount? How do you think about essentially a form of reinvesting savings or productivity gains? Yeah. Shopify is, as you've alluded to it, we are a high-growth builder company. Will we, like everyone, be thoughtful around headcount and make sure we're doing the most we can with what we have? Yes. On the margin, we're going to say, "Let's take the engineers we have. Let's continue to build some amazing things." We do Editions twice a year, as you know. We continue to crank out more products. Let's think about taking this team and have them do even more for merchants. That's really the starting philosophy for us. As you think about with headcount, again, for the last three years, it's been essentially down some, you can call it flat if you want, but it's been down, and the growth has continued. Again, four quarters of 30%, three years now, we're going on 25% each quarter. The growth is there. The headcount is flat to down. There's some things, and we've talked a bunch about kind of all the different dynamics and operating expenses, but that just leads you to being able to create more and more opportunities, in terms of what that means for free cash flow margins. When you think about the impact that adopting these tools had on your R&D flywheel. Yep. Can you speak a little bit to, I think that's an area where a lot of software companies have talked about a positive impact. How are you guys thinking about development, and how has that impacted the product shipping that you guys have done? Yeah. Well, we definitely spend a lot of time thinking about for the pull request and kind of the code development, how much is being written by AI versus how much is being written by the engineers, how much testing of code are we doing, and what percentage of the code we're cranking out is being monitored by the LLM. We haven't talked extensively about those percentages, but you can, again, you could assume, given some of the leadership and thoughtfulness we've had and the things we've talked about, that we feel pretty good about where we are and kind of how we're continuing to accelerate this pace. I don't see any slowdown. Again, we have an Editions session coming up, and as we continue to talk about all the things we're cranking out, I don't see any slowdown in any of that. I want to talk about pricing in that context, right? You've rolled out Catalog, you've rolled out Sidekick, you're rolling out, those are some of the headline features, but you're constantly rolling out new product and shipping it to your customers, and that flywheel's accelerating. It's been a few years now since you've raised price on both the standard and the Pro SKUs. How do you think about how adoption of some of the newer features you've rolled out, how will that impact your thoughts on pricing, broadly speaking? Yeah. Well, as you know, we've always thought on kind of the spectrum in terms of value versus maximizing price for merchants. We've always been very focused on the value side of that equation. When we changed the pricing on standard plans three years ago, it had been 13 years, actually, since we changed it. When we changed on +2 years ago, it had been almost seven years. I think you'll see probably more frequency from us in terms of how frequently we change those prices. Of course, I don't have anything as it relates to pricing to announce today. We'd roll that out with merchants. But from our vantage point, we want to, again, stay focused on value. Sidekick has really helped delivering more value to merchants. Let's help them be more and more successful, that will kind of inure, again, back to our revenue, back to our margins and everything we're trying to do. I think we're very thoughtful in monetization. We're always looking and testing the prices, and we may test, for example, in a specific geography, maybe we're testing the pricing on point of sale, or we're testing the pricing on this plan or various things. Yeah, we're always out there testing, but as it relates to any big pricing plan, I have nothing to announce today. Great. Then, margins is an area where, since you joined, Shopify has seen essentially a step-function increase on GAAP margins and free cash flow margin. I think investors have been really appreciative of the progress there. This year, free cash flow margins, I think, are expected to be largely flattish, plus or minus. Just help us think through maybe the broader free cash flow margin expansion trajectory and what the puts and takes there are. Yeah. I think, if you look at free cash flow margins in 2025 and 2024, you see some pretty significant similarities in terms of two things. Number one, where you ended up for the full year, free cash flow margins, and let's call them roughly high teens for both of those, and then kind of how they progressed through the quarter, right? Generally, kind of Q1 and Q2, had generally been, let's call it kind of mid-teens, and you see a little bit of inflection in Q3, and then Q4 is generally, of course, the big holiday shopping season. While the numbers differ a little bit, that pattern, kind of that intra-quarter pattern throughout the year, again, holds true for both of those years. We're obviously not going to give guidance for the full year this year. I've been very specific that nothing's changed in terms of how we think about free cash flow margins and how we look to generate the returns. We've had, as it relates to the last couple of years in kind of getting to these free cash flow margins, there's when you think about operating expenses and some of the changes, some of the dynamics in there, things that we've talked about on prior calls. Headcount has been flat to down. We've had year-over-year compensation dollars have been up as a function of a couple of things. Obviously, you're going to do merit-based pay increases. We've had a little bit of mix shift from just the percentage of employees or in certain departments to a little bit more, which are weighted towards R&D. That's naturally going to have a little bit of dollar lift on some of that. Marketing continues, as you know, we talk about our operating expenses as a percentage of revenue. That continues to click down. If you look on a comparable quarter like Q1 of this year versus Q1 of last year, or Q2 of last year versus Q2 2026, those percentages continue to click down. Sales and marketing has continued to click down as a percentage of revenue, even though marketing dollars year-over-year have been up some, et cetera. The other thing, too, to call out is we've historically not spent a ton of time talking about taxes. I know we shouldn't spend a ton of time now. We've also now effectively gotten to what is, I would call, a kind of normalized tax rate, just based on assumption and kind of geographic spend. That's been one of the things over the last year or two that's been, even though free cash flow margins have been the same, that's been one of the headwinds for us. That should largely be behind us. We feel really good about head count and the ability to continue to be disciplined there, and continue these growth rates. I'm glad we're not spending more time on taxes. April 15th is. Yeah. You and me both. Well in the rearview mirror. Yes. As is the Intuit Fireside. We're done with taxes for the day. Great. Maybe I'll close out on this. If you zoom out and think big picture, the next three to five years, what do you think will matter most in Shopify sustaining that 20%+ growth? Let's not even index to a specific percentage, but staying in the high growth category, right, which you guys have been remarkably durable at. Is it merchant acquisition? Is it better monetization? I'm going to quit giving you any more. I'll start with those two, but what would you say are the three or four biggest contributors to sustaining high growth for Shopify? Yeah. You asked me a question about monetization. Monetization will, I'm sure, to a certain extent, be a part of it, but it's really merchant acquisition, merchant retention, as a function of great products. It's a function of great products in a bunch of different areas. We spent a decent amount of time talking about international. I think that is a significant tailwind for us, and that's an opportunity to just continue to do more of what we've been doing in more geographies. We spent some time on enterprise. That is a significant opportunity. We didn't talk a whole lot about B2B. I think that is a very interesting opportunity for us because it's building a presence for us with merchants in industries historically we've not served, right? A lot of segments of B2B are used to using software that's clunky, a little painful, and we're giving them something that's very different, and we're seeing as people, as consumers engage with Shopify in various forms, and then you go back into the workforce and you think about, all right, so how do I take the brand awareness I have with Shopify and maybe think about that in a B2B context. We're seeing some interesting things in B2B. I could go on and on on cross-border, on point-of-sale, and agentic and how this plays out, which is also a potentially huge tailwind for us as well. It's a compilation of all these S curves, and how do they all, in the aggregate, continue to do more for us. That's the biggest thing. Great products will help us get more merchants and have merchants be even more successful. As we talked about Sidekick and that it truly does the flywheel on all this stuff. Well, Jeff, you guys have done a remarkable job at Shopify. I know it's great to spend some time with you today digging into it. Thank you so much- Thanks, man for your time. Thank you. We're done.

Speaker 2: Great. Thank you everybody for joining us. With us, we have the CFO of Shopify, Jeff Hoffmeister. Jeff, thank you so much for taking the time to come to London and get in front of these investors. Great. great Thank you everybody for joining us. thank you everybody for joining us With us, we have the CFO of Shopify, Jeff Hoffmeister. with us we have the cfo of shopify jeff hoffmeister Jeff, thank you so much for taking the time to come to London and get in front of these investors. jeff thank you so much for taking the time to come to london and get in front of these investors

Speaker 1: Of course. Appreciate it. Of course. of course Appreciate it. appreciate it

Speaker 2: Let's kick off on something that we spent a lot of time on the breakout meetings on, it dominates the earnings calls. I think it's dominating the broader technology zeitgeist as well. If I just zoom out, regardless of Shopify, what is the lay of the land of the agentic commerce landscape today from your perspective? Let's kick off on something that we spent a lot of time on the breakout meetings on, it dominates the earnings calls. let's kick off on something that we spent a lot of time on the breakout meetings on it dominates the earnings calls I think it's dominating the broader technology zeitgeist as well. i think it's dominating the broader technology zeitgeist as well If I just zoom out, regardless of Shopify, what is the lay of the land of the agentic commerce landscape today from your perspective? if i just zoom out regardless of shopify what is the lay of the land of the agentic commerce landscape today from your perspective

Speaker 1: Yeah. I think part of the issue with agentic commerce is everyone has their own definition of exactly what this looks like and when we get there. I want to make sure we differentiate agentic commerce between versus what is now what I'll call LLM-driven discovery. Right? We see a lot of activity on Google Gemini, on OpenAI, and a lot of LLM platforms where consumers are starting there to do their discovery of a potential purchase and discovering a merchant. As it relates to agentic commerce, I think that's a vision for most people feels a little bit like there's a point in time where I'm giving my LLM a budget, or it's proactively deciding for me what to buy and how and when do we get there. We're obviously still early stages in that. Yeah. yeah I think part of the issue with agentic commerce is everyone has their own definition of exactly what this looks like and when we get there. i think part of the issue with agentic commerce is everyone has their own definition of exactly what this looks like and when we get there I want to make sure we differentiate agentic commerce between versus what is now what I'll call LLM-driven discovery. i want to make sure we differentiate agentic commerce between versus what is now what i'll call llm-driven discovery Right? right We see a lot of activity on Google Gemini, on OpenAI, and a lot of LLM platforms where consumers are starting there to do their discovery of a potential purchase and discovering a merchant. we see a lot of activity on google gemini on openai and a lot of llm platforms where consumers are starting there to do their discovery of a potential purchase and discovering a merchant As it relates to agentic commerce, I think that's a vision for most people feels a little bit like there's a point in time where I'm giving my LLM a budget, or it's proactively deciding for me what to buy and how and when do we get there. as it relates to agentic commerce i think that's a vision for most people feels a little bit like there's a point in time where i'm giving my llm a budget or it's proactively deciding for me what to buy and how and when do we get there We're obviously still early stages in that. we're obviously still early stages in that It's one of the things that we, as you know, we partnered with Google to build UCP. I think that's one of the key things for us, which is really helping make that future possible sooner rather than later in terms of all the rails that make agentic commerce happen. The adoption of agentic commerce will of course take a bunch of different forms, and it's probably going to be heavily dependent on certain demographics and other things, and just there will be some segments which are early adopters and some which are slower-paced adopters. There are some people who, there's a lot of different views on how quickly we get there and what form of it we get to. Certainly from a Shopify perspective, we do believe in agentic commerce future. We think it's going to happen. We're still in the early days of all this. It's one of the things that we, as you know, we partnered with Google to build UCP. it's one of the things that we as you know we partnered with google to build ucp I think that's one of the key things for us, which is really helping make that future possible sooner rather than later in terms of all the rails that make agentic commerce happen. i think that's one of the key things for us which is really helping make that future possible sooner rather than later in terms of all the rails that make agentic commerce happen The adoption of agentic commerce will of course take a bunch of different forms, and it's probably going to be heavily dependent on certain demographics and other things, and just there will be some segments which are early adopters and some which are slower-paced adopters. the adoption of agentic commerce will of course take a bunch of different forms and it's probably going to be heavily dependent on certain demographics and other things and just there will be some segments which are early adopters and some which are slower-paced adopters There are some people who, there's a lot of different views on how quickly we get there and what form of it we get to. there are some people who there's a lot of different views on how quickly we get there and what form of it we get to Certainly from a Shopify perspective, we do believe in agentic commerce future. certainly from a shopify perspective we do believe in agentic commerce future We think it's going to happen. we think it's going to happen We're still in the early days of all this. we're still in the early days of all this

Speaker 2: There's a lot I want to unpack there. Let's start first with, I think there's confusion. People hear Universal Commerce Protocol, they think of Google, and they tend to mention Shopify second. I'm going to let you clarify. Talk to us about how UCP came about and what the different roles the two companies played in establishing the Universal Commerce Protocol. There's a lot I want to unpack there. there's a lot i want to unpack there Let's start first with, I think there's confusion. let's start first with i think there's confusion People hear Universal Commerce Protocol, they think of Google, and they tend to mention Shopify second. people hear universal commerce protocol they think of google and they tend to mention shopify second I'm going to let you clarify. i'm going to let you clarify Talk to us about how UCP came about and what the different roles the two companies played in establishing the Universal Commerce Protocol. talk to us about how ucp came about and what the different roles the two companies played in establishing the universal commerce protocol

Speaker 1: We've been a partner of Google's been a partner of ours for a long time, and this was really a co-development effort in terms of, you can imagine from a Google perspective, they have, of course, tons of experience, pattern recognition, thoughts on how you think about the discovery, the front end, and we of course, have done more historically on the commerce side. I don't think there's a bifurcation of this party did this versus this party did that, but this is something where we both worked together to build something which we thought would broadly, as I alluded to before, really enable agentic commerce in a way which it had not, to that point, been manifested. We both had a team of engineers that brought their expertise to bear. We've been a partner of Google's been a partner of ours for a long time, and this was really a co-development effort in terms of, you can imagine from a Google perspective, they have, of course, tons of experience, pattern recognition, thoughts on how you think about the discovery, the front end, and we of course, have done more historically on the commerce side. we've been a partner of google's been a partner of ours for a long time and this was really a co-development effort in terms of you can imagine from a google perspective they have of course tons of experience pattern recognition thoughts on how you think about the discovery the front end and we of course have done more historically on the commerce side I don't think there's a bifurcation of this party did this versus this party did that, but this is something where we both worked together to build something which we thought would broadly, as I alluded to before, really enable agentic commerce in a way which it had not, to that point, been manifested. i don't think there's a bifurcation of this party did this versus this party did that but this is something where we both worked together to build something which we thought would broadly as i alluded to before really enable agentic commerce in a way which it had not to that point been manifested We both had a team of engineers that brought their expertise to bear. we both had a team of engineers that brought their expertise to bear I think it has manifested itself in something which is really going to help usher in the next stage of this, and you can see, just based on the adoption of a bunch of others, both retailers and other platforms that have followed behind us and have done the adoption of UCP. I think you can see there's broad industry support from a lot of people that this is heading in the right direction. I think it has manifested itself in something which is really going to help usher in the next stage of this, and you can see, just based on the adoption of a bunch of others, both retailers and other platforms that have followed behind us and have done the adoption of UCP. i think it has manifested itself in something which is really going to help usher in the next stage of this and you can see just based on the adoption of a bunch of others both retailers and other platforms that have followed behind us and have done the adoption of ucp I think you can see there's broad industry support from a lot of people that this is heading in the right direction. i think you can see there's broad industry support from a lot of people that this is heading in the right direction

Speaker 2: When you think about the, you've mentioned rails a couple of times, what does UCP enable today for the merchant customer of Shopify's? When they're thinking about embracing it, what steps do they have to take to enable the utilization of that? When you think about the, you've mentioned rails a couple of times, what does UCP enable today for the merchant customer of Shopify's? when you think about the you've mentioned rails a couple of times what does ucp enable today for the merchant customer of shopify's When they're thinking about embracing it, what steps do they have to take to enable the utilization of that? when they're thinking about embracing it what steps do they have to take to enable the utilization of that

Speaker 1: Yeah. No, it's very easy. Again, UCP is the protocol that helps make all this happen, and the manifestation as it relates to Shopify merchants usually starts with something like our Agentic plan or with Catalog. Right? Catalog is something that we set in motion more than two years ago. Think of it to a certain degree, like a large taxonomy of all the merchant's products. We have over a billion products in there now. It really helps you as a merchant make sure that your products are discovered, if the consumer's starting on one of the LLMs, that your products are discovered in a way that you intend, that it's not a screen scrape. Yeah. yeah No, it's very easy. no it's very easy Again, UCP is the protocol that helps make all this happen, and the manifestation as it relates to Shopify merchants usually starts with something like our Agentic plan or with Catalog. again ucp is the protocol that helps make all this happen and the manifestation as it relates to shopify merchants usually starts with something like our agentic plan or with catalog Right? right Catalog is something that we set in motion more than two years ago. catalog is something that we set in motion more than two years ago Think of it to a certain degree, like a large taxonomy of all the merchant's products. think of it to a certain degree like a large taxonomy of all the merchant's products We have over a billion products in there now. we have over a billion products in there now It really helps you as a merchant make sure that your products are discovered, if the consumer's starting on one of the LLMs, that your products are discovered in a way that you intend, that it's not a screen scrape. it really helps you as a merchant make sure that your products are discovered if the consumer's starting on one of the llms that your products are discovered in a way that you intend that it's not a screen scrape That it's a full encapsulation of everything you've done in terms of the pictures, the product descriptions, the details, all the specifications, everything that you've tried to associate with your brand and spent a lot of time and effort, and dollars, and management attention in capturing your product in the exact way you want. Catalog helps make that happen, and that's one of the things that UCP enables. The Agentic plan is one of the things that builds on top of that to really give, especially the large enterprises, the ability to maybe start with Shopify there, and that's the onboarding of, hopefully at some point adopting the full commerce stack. That it's a full encapsulation of everything you've done in terms of the pictures, the product descriptions, the details, all the specifications, everything that you've tried to associate with your brand and spent a lot of time and effort, and dollars, and management attention in capturing your product in the exact way you want. that it's a full encapsulation of everything you've done in terms of the pictures the product descriptions the details all the specifications everything that you've tried to associate with your brand and spent a lot of time and effort and dollars and management attention in capturing your product in the exact way you want Catalog helps make that happen, and that's one of the things that UCP enables. catalog helps make that happen and that's one of the things that ucp enables The Agentic plan is one of the things that builds on top of that to really give, especially the large enterprises, the ability to maybe start with Shopify there, and that's the onboarding of, hopefully at some point adopting the full commerce stack. the agentic plan is one of the things that builds on top of that to really give especially the large enterprises the ability to maybe start with shopify there and that's the onboarding of hopefully at some point adopting the full commerce stack

Speaker 2: You kicked off with this about everybody has different definitions for what agentic commerce is. I think today, to the extent there's traffic, it's more LLM search, which you mentioned. How far are we from that reality of, I'll use an example someone else gave rather than one that you gave in the group meetings. You kicked off with this about everybody has different definitions for what agentic commerce is. you kicked off with this about everybody has different definitions for what agentic commerce is I think today, to the extent there's traffic, it's more LLM search, which you mentioned. i think today to the extent there's traffic it's more llm search which you mentioned How far are we from that reality of, I'll use an example someone else gave rather than one that you gave in the group meetings. how far are we from that reality of i'll use an example someone else gave rather than one that you gave in the group meetings

Speaker 1: Okay. Okay. okay

Speaker 2: I've heard the, "Here's my grocery shopping list," or, "This is what I want to eat this week. I've heard the, "Here's my grocery shopping list," or, "This is what I want to eat this week. i've heard the "here's my grocery shopping list," or "this is what i want to eat this week

Speaker 1: Yeah. Yeah. yeah

Speaker 2: Find me all the ingredients, and I want this specific ingredient across three different grocery stores if you have to, but I don't want any substitutions." How far are we from that world where I say, "Here's my $300 from my grocery budget. Go and get me what I want to prepare this meal"? Find me all the ingredients, and I want this specific ingredient across three different grocery stores if you have to, but I don't want any substitutions." How far are we from that world where I say, "Here's my $300 from my grocery budget. find me all the ingredients and i want this specific ingredient across three different grocery stores if you have to but i don't want any substitutions." how far are we from that world where i say "here's my $300 from my grocery budget Go and get me what I want to prepare this meal"? go and get me what i want to prepare this meal"

Speaker 1: I think there's going to be a difference between traditional discretionary items, things you buy all the time, like food and basic supplies, so to speak, versus how we, and you see this in the Shopify merchant base, how a lot of our brands, we serve a broad swath of merchants. On the margin, they tend to be a little bit more discretionary in some of the things that they do. A lot of this is an adoption of, again, either I have a specific budget I want to give on a monthly basis, or I want to send an agent out, maybe it's time for my kids to go back to school. Maybe I'm going to a trip in a climate which is a different climate than where I live, and so I need warmer clothes for colder weather, whatever it may be. I think there's going to be a difference between traditional discretionary items, things you buy all the time, like food and basic supplies, so to speak, versus how we, and you see this in the Shopify merchant base, how a lot of our brands, we serve a broad swath of merchants. i think there's going to be a difference between traditional discretionary items things you buy all the time like food and basic supplies so to speak versus how we and you see this in the shopify merchant base how a lot of our brands we serve a broad swath of merchants On the margin, they tend to be a little bit more discretionary in some of the things that they do. on the margin they tend to be a little bit more discretionary in some of the things that they do A lot of this is an adoption of, again, either I have a specific budget I want to give on a monthly basis, or I want to send an agent out, maybe it's time for my kids to go back to school. a lot of this is an adoption of again either i have a specific budget i want to give on a monthly basis or i want to send an agent out maybe it's time for my kids to go back to school Maybe I'm going to a trip in a climate which is a different climate than where I live, and so I need warmer clothes for colder weather, whatever it may be. maybe i'm going to a trip in a climate which is a different climate than where i live and so i need warmer clothes for colder weather whatever it may be This is very tough to predict. We're probably a year or two, at least for most people, to have that full control that they're ceding to the agent. Part of it is just how you as a consumer want to purchase. Some people want to go into a store, they want to look and feel, they want to feel very comfortable about returns and all that stuff, and other people are just to the spot, and some people just enjoy the shopping experience. They don't want it handed over to an agent. That's part of what they want to do is experience the whole process, for example, maybe discover a brand which is an up-and-coming brand, which is something that they maybe otherwise would not have found. This is very tough to predict. this is very tough to predict We're probably a year or two, at least for most people, to have that full control that they're ceding to the agent. we're probably a year or two at least for most people to have that full control that they're ceding to the agent Part of it is just how you as a consumer want to purchase. part of it is just how you as a consumer want to purchase Some people want to go into a store, they want to look and feel, they want to feel very comfortable about returns and all that stuff, and other people are just to the spot, and some people just enjoy the shopping experience. some people want to go into a store they want to look and feel they want to feel very comfortable about returns and all that stuff and other people are just to the spot and some people just enjoy the shopping experience They don't want it handed over to an agent. they don't want it handed over to an agent That's part of what they want to do is experience the whole process, for example, maybe discover a brand which is an up-and-coming brand, which is something that they maybe otherwise would not have found. that's part of what they want to do is experience the whole process for example maybe discover a brand which is an up-and-coming brand which is something that they maybe otherwise would not have found There's a bunch of elements to it, but I think, Samad, we're a couple of years away from that, at least in my early estimation of when we get a meaningful percentage of people that are shopping that way. There's a bunch of elements to it, but I think, Samad, we're a couple of years away from that, at least in my early estimation of when we get a meaningful percentage of people that are shopping that way. there's a bunch of elements to it but i think samad we're a couple of years away from that at least in my early estimation of when we get a meaningful percentage of people that are shopping that way

Speaker 2: I'm guessing if it's like anything else, we'll probably overestimate in the short term, underestimate in the long term what the impact. I'm guessing if it's like anything else, we'll probably overestimate in the short term, underestimate in the long term what the impact. i'm guessing if it's like anything else we'll probably overestimate in the short term underestimate in the long term what the impact

Speaker 1: I think that's fair. Probably. I think that's fair. i think that's fair Probably. probably

Speaker 2: I can't wait for somebody to do my grocery shopping for me. I can't wait for that day. While we're on the topic of AI and different relationships, I know Shopify is also working with OpenAI in different contexts. Can you maybe help the audience understand what the checkout inside of ChatGPT is like and what Shopify's role in that is? I can't wait for somebody to do my grocery shopping for me. i can't wait for somebody to do my grocery shopping for me I can't wait for that day. i can't wait for that day While we're on the topic of AI and different relationships, I know Shopify is also working with OpenAI in different contexts. while we're on the topic of ai and different relationships i know shopify is also working with openai in different contexts Can you maybe help the audience understand what the checkout inside of ChatGPT is like and what Shopify's role in that is? can you maybe help the audience understand what the checkout inside of chatgpt is like and what shopify's role in that is

Speaker 1: We've had a partnership with OpenAI in various forms for more than a couple of years, and some of that started with how we use them internally, and obviously, the partnership has evolved in terms of some of the things they're doing in agentic commerce and LLM-driven discovery. From our vantage, if you're doing a search with OpenAI, you'll be channeled back through Shopify Payments. It's still done on our payments rails. If you're a merchant, you want to have as much of the activity back on your website. So whether it's captured on the OpenAI website or whether it's funneled back to the actual merchant's website, you're still operating with the Shopify platform and all the capabilities and everything that we do, and the economics to us are the same. We've had a partnership with OpenAI in various forms for more than a couple of years, and some of that started with how we use them internally, and obviously, the partnership has evolved in terms of some of the things they're doing in agentic commerce and LLM-driven discovery. we've had a partnership with openai in various forms for more than a couple of years and some of that started with how we use them internally and obviously the partnership has evolved in terms of some of the things they're doing in agentic commerce and llm-driven discovery From our vantage, if you're doing a search with OpenAI, you'll be channeled back through Shopify Payments. from our vantage if you're doing a search with openai you'll be channeled back through shopify payments It's still done on our payments rails. it's still done on our payments rails If you're a merchant, you want to have as much of the activity back on your website. if you're a merchant you want to have as much of the activity back on your website So whether it's captured on the OpenAI website or whether it's funneled back to the actual merchant's website, you're still operating with the Shopify platform and all the capabilities and everything that we do, and the economics to us are the same. so whether it's captured on the openai website or whether it's funneled back to the actual merchant's website you're still operating with the shopify platform and all the capabilities and everything that we do and the economics to us are the same Whether you start on OpenAI or whether you start on the merchant's website, there's no difference to us. Whether you start on OpenAI or whether you start on the merchant's website, there's no difference to us. whether you start on openai or whether you start on the merchant's website there's no difference to us

Speaker 2: Understood. Just as I think about, we've talked about the agentic commerce experience itself. Let's maybe switch gears and think about AI and what you're doing for the merchant with your different AI solutions, right? I know there's been a lot of focus on Sidekick. Understood. understood Just as I think about, we've talked about the agentic commerce experience itself. just as i think about we've talked about the agentic commerce experience itself Let's maybe switch gears and think about AI and what you're doing for the merchant with your different AI solutions, right? let's maybe switch gears and think about ai and what you're doing for the merchant with your different ai solutions right I know there's been a lot of focus on Sidekick. i know there's been a lot of focus on sidekick

Speaker 1: Yep. Yep. yep

Speaker 2: Maybe help us understand what type of merchant is utilizing it today and what the early experiences look like. Maybe help us understand what type of merchant is utilizing it today and what the early experiences look like. maybe help us understand what type of merchant is utilizing it today and what the early experiences look like

Speaker 1: Yeah. The great thing about Sidekick is it's really gotten to a spot where merchants of all sizes are asking all types of questions. If you'd roll the tape, again, I alluded to this before, we've had it out for more than a couple of years. If you rolled the tape back 9-12 months ago, it generally was a little bit more some of the medium-sized merchants that were asking questions of it, and they tended to be a little bit more go-to-market-type questions, like maybe I expanded this geography, or I want to expand into Latin America, which specific country, as an example, or how do I think about pricing, or things that are a little bit more of that ilk. Now it's really merchants of all sizes asking all types of questions. Yeah. yeah The great thing about Sidekick is it's really gotten to a spot where merchants of all sizes are asking all types of questions. the great thing about sidekick is it's really gotten to a spot where merchants of all sizes are asking all types of questions If you'd roll the tape, again, I alluded to this before, we've had it out for more than a couple of years. if you'd roll the tape again i alluded to this before we've had it out for more than a couple of years If you rolled the tape back 9- 12 months ago, it generally was a little bit more some of the medium-sized merchants that were asking questions of it, and they tended to be a little bit more go-to-market-type questions, like maybe I expanded this geography, or I want to expand into Latin America, which specific country, as an example, or how do I think about pricing, or things that are a little bit more of that ilk. if you rolled the tape back 9- 12 months ago it generally was a little bit more some of the medium-sized merchants that were asking questions of it and they tended to be a little bit more go-to-market-type questions like maybe i expanded this geography or i want to expand into latin america which specific country as an example or how do i think about pricing or things that are a little bit more of that ilk Now it's really merchants of all sizes asking all types of questions. now it's really merchants of all sizes asking all types of questions You can imagine a merchant that has two employees, five employees, is asking a different type of question than some of the largest multinationals that maybe are asking much more specific questions. They still fall in the full spectrum of everything from how do I think about designing my website versus what do I sell versus how do I price versus all the go-to-market things versus maybe what is the next best product that I should build or sell based on what I'm seeing from competitors or the success. It's literally meant to answer any question that you may have as an entrepreneur. We track it very closely in terms of the types of questions, which merchants are power users, what type of incremental success that they're having. You can imagine a merchant that has two employees, five employees, is asking a different type of question than some of the largest multinationals that maybe are asking much more specific questions. you can imagine a merchant that has two employees five employees is asking a different type of question than some of the largest multinationals that maybe are asking much more specific questions They still fall in the full spectrum of everything from how do I think about designing my website versus what do I sell versus how do I price versus all the go-to-market things versus maybe what is the next best product that I should build or sell based on what I'm seeing from competitors or the success. they still fall in the full spectrum of everything from how do i think about designing my website versus what do i sell versus how do i price versus all the go-to-market things versus maybe what is the next best product that i should build or sell based on what i'm seeing from competitors or the success It's literally meant to answer any question that you may have as an entrepreneur. it's literally meant to answer any question that you may have as an entrepreneur We track it very closely in terms of the types of questions, which merchants are power users, what type of incremental success that they're having. we track it very closely in terms of the types of questions which merchants are power users what type of incremental success that they're having There's, as you know, there gets to be a little bit of correlation versus causation in terms of the data we see for the merchants that are power users. Needless to say, the feedback has been exceptional, and we're really helping it see merchants accelerate their business. Of course, that then plays back to us in terms of additional payments revenues and additional solutions, whether it's FX or tax or other things. It's driving merchant success, which helps us. There's, as you know, there gets to be a little bit of correlation versus causation in terms of the data we see for the merchants that are power users. there's as you know there gets to be a little bit of correlation versus causation in terms of the data we see for the merchants that are power users Needless to say, the feedback has been exceptional, and we're really helping it see merchants accelerate their business. needless to say the feedback has been exceptional and we're really helping it see merchants accelerate their business Of course, that then plays back to us in terms of additional payments revenues and additional solutions, whether it's FX or tax or other things. of course that then plays back to us in terms of additional payments revenues and additional solutions whether it's fx or tax or other things It's driving merchant success, which helps us. it's driving merchant success which helps us

Speaker 2: I'm going to go with causation. This joke that I'm going to tell is only for two people. Because Shopify's stock is up 5% right now, I said if you do stuff with us, it'll be up. I'm going to go with causation. i'm going to go with causation This joke that I'm going to tell is only for two people. this joke that i'm going to tell is only for two people Because Shopify's stock is up 5% right now, I said if you do stuff with us, it'll be up. because shopify's stock is up 5% right now i said if you do stuff with us it'll be up

Speaker 1: There you go. There you go. there you go

Speaker 2: That's not correlation. That's not correlation. that's not correlation

Speaker 1: You're the causation. You're the causation. you're the causation

Speaker 2: It's causation. It's causation. it's causation

Speaker 1: You're the causation. You're the causation. you're the causation

Speaker 2: Just like your merchant success is causation. I'm going in that camp as far as I'm concerned. Just like your merchant success is causation. just like your merchant success is causation I'm going in that camp as far as I'm concerned. i'm going in that camp as far as i'm concerned

Speaker 1: Great. Well, thank you. Great. great well thank Well, thank you. well thank you

Speaker 2: So- So- so-

Speaker 1: I will gladly take it. I will gladly take it. i will gladly take it

Speaker 2: I want to pull more on Sidekick because I see how it helps the merchant, but if you think about what the biggest opportunity is along different components, do you look at it as something that is a more of a top-of-the-funnel demand driver for merchants? Is it more about improving conversion or retention there? Is it new monetization? Without stack ranking them, how do you think about maybe the biggest opportunities along those different vectors? I want to pull more on Sidekick because I see how it helps the merchant, but if you think about what the biggest opportunity is along different components, do you look at it as something that is a more of a top-of-the-funnel demand driver for merchants? i want to pull more on sidekick because i see how it helps the merchant but if you think about what the biggest opportunity is along different components do you look at it as something that is a more of a top-of-the-funnel demand driver for merchants Is it more about improving conversion or retention there? is it more about improving conversion or retention there Is it new monetization? is it new monetization Without stack ranking them, how do you think about maybe the biggest opportunities along those different vectors? without stack ranking them how do you think about maybe the biggest opportunities along those different vectors

Speaker 1: Yeah. Unfortunately, it's a little bit of everything. It truly is merchant success. There's some interesting things that we've seen in terms of types of merchants that are benefiting, some versus others, but they're all using it in their own way. I wish I could tell you it's more conversion, or it's more this, it's more that. I think for the average merchant, again, it's still mostly go-to-market-type questions that they're asking of it, but it continues to evolve in a way that I, again, like its intention. Ask any question you want, and let's give you the best answer we can. Yeah. yeah Unfortunately, it's a little bit of everything. unfortunately it's a little bit of everything It truly is merchant success. it truly is merchant success There's some interesting things that we've seen in terms of types of merchants that are benefiting, some versus others, but they're all using it in their own way. there's some interesting things that we've seen in terms of types of merchants that are benefiting some versus others but they're all using it in their own way I wish I could tell you it's more conversion, or it's more this, it's more that. i wish i could tell you it's more conversion or it's more this it's more that I think for the average merchant, again, it's still mostly go-to-market-type questions that they're asking of it, but it continues to evolve in a way that I, again, like its intention. i think for the average merchant again it's still mostly go-to-market-type questions that they're asking of it but it continues to evolve in a way that i again like its intention Ask any question you want, and let's give you the best answer we can. ask any question you want and let's give you the best answer we can

Speaker 2: We've talked about what it unlocks for a merchant, but an investor question that's come up, and you mentioned on the last earnings call, is maybe the costs associated with it. We've talked about what it unlocks for a merchant, but an investor question that's come up, and you mentioned on the last earnings call, is maybe the costs associated with it. we've talked about what it unlocks for a merchant but an investor question that's come up and you mentioned on the last earnings call is maybe the costs associated with it

Speaker 1: Yeah. Yeah. yeah

Speaker 2: I think what everybody in the investment community is trying to figure out is. A lot of companies are giving AI tools or enabling it, and they're absorbing the cost up until now. What's Shopify's philosophy? What have you experienced so far? I have a couple of follow-ups. I think what everybody in the investment community is trying to figure out is. A lot of companies are giving AI tools or enabling it, and they're absorbing the cost up until now. i think what everybody in the investment community is trying to figure out is. a lot of companies are giving ai tools or enabling it and they're absorbing the cost up until now What's Shopify's philosophy? what's shopify's philosophy What have you experienced so far? what have you experienced so far I have a couple of follow-ups. i have a couple of follow-ups

Speaker 1: Well, I think one of the things, to your point, there's been discussion, a bunch of questions on it. I think one of the things that's lost in a lot of these conversations is the impact that it's having on revenue. I think a lot of people look at this and say, "All right, how do I think about the cost?" That's true. Of course, if it drives much more merchant success, then it continues to sustain these growth rates, which we've been delivering, right? Four straight quarters of 30% or more revenue growth. You see the free cash flow margins doing what they've been doing. All that success is, I'm of course not going to attribute that only to Sidekick. It's a bundle of all the things that we do. Well, I think one of the things, to your point, there's been discussion, a bunch of questions on it. well i think one of the things to your point there's been discussion a bunch of questions on it I think one of the things that's lost in a lot of these conversations is the impact that it's having on revenue. i think one of the things that's lost in a lot of these conversations is the impact that it's having on revenue I think a lot of people look at this and say, "All right, how do I think about the cost?" That's true. i think a lot of people look at this and say "all right how do i think about the cost?" that's true Of course, if it drives much more merchant success, then it continues to sustain these growth rates, which we've been delivering, right? of course if it drives much more merchant success then it continues to sustain these growth rates which we've been delivering right Four straight quarters of 30% or more revenue growth. four straight quarters of 30% or more revenue growth You see the free cash flow margins doing what they've been doing. you see the free cash flow margins doing what they've been doing All that success is, I'm of course not going to attribute that only to Sidekick. all that success is i'm of course not going to attribute that only to sidekick It's a bundle of all the things that we do. it's a bundle of all the things that we do To the extent that Sidekick can really help get more merchants on-platform, help them stay on the platform longer, help them increase their conversion. There's all kinds of statistics we see about, from their vantage point, what are they doing to be more successful? As that drives the revenue, then of course from an LLM cost perspective, we monitor that very actively. There's a bunch of different things we do internally to track that on a daily and a weekly basis. One of the beauties of Sidekick is it's not the value there is 20 years of commerce data built into Sidekick. It's data that we and only we have because it's all the activity, the before the purchase, the at the time of purchase, the after purchase, all the context, all these things. To the extent that Sidekick can really help get more merchants on-platform, help them stay on the platform longer, help them increase their conversion. to the extent that sidekick can really help get more merchants on-platform help them stay on the platform longer help them increase their conversion There's all kinds of statistics we see about, from their vantage point, what are they doing to be more successful? there's all kinds of statistics we see about from their vantage point what are they doing to be more successful As that drives the revenue, then of course from an LLM cost perspective, we monitor that very actively. as that drives the revenue then of course from an llm cost perspective we monitor that very actively There's a bunch of different things we do internally to track that on a daily and a weekly basis. there's a bunch of different things we do internally to track that on a daily and a weekly basis One of the beauties of Sidekick is it's not the value there is 20 years of commerce data built into Sidekick. one of the beauties of sidekick is it's not the value there is 20 years of commerce data built into sidekick It's data that we and only we have because it's all the activity, the before the purchase, the at the time of purchase, the after purchase, all the context, all these things. it's data that we and only we have because it's all the activity the before the purchase the at the time of purchase the after purchase all the context all these things It's not, hey, I sent you to a website and now you went and did something on a merchant's website. It's we run the merchant's website, and we see all this information that's in there. What we don't need to do is have the latest and greatest and most expensive LLM run through all that data in terms of both inference and training, because really what we have is the ability to take a model that maybe is not the latest and greatest, or maybe it's an open-source model, and how do we think about triaging, stacking, implementing the right model for the right point in time. We want to make sure that when we have a question from a merchant, we're delivering the best answer possible. The other thing too is you can imagine a lot of the questions can be somewhat similar in nature. It's not, hey, I sent you to a website and now you went and did something on a merchant's website. it's not hey i sent you to a website and now you went and did something on a merchant's website It's we run the merchant's website, and we see all this information that's in there. it's we run the merchant's website and we see all this information that's in there What we don't need to do is have the latest and greatest and most expensive LLM run through all that data in terms of both inference and training, because really what we have is the ability to take a model that maybe is not the latest and greatest, or maybe it's an open-source model, and how do we think about triaging, stacking, implementing the right model for the right point in time. what we don't need to do is have the latest and greatest and most expensive llm run through all that data in terms of both inference and training because really what we have is the ability to take a model that maybe is not the latest and greatest or maybe it's an open-source model and how do we think about triaging stacking implementing the right model for the right point in time We want to make sure that when we have a question from a merchant, we're delivering the best answer possible. we want to make sure that when we have a question from a merchant we're delivering the best answer possible The other thing too is you can imagine a lot of the questions can be somewhat similar in nature. the other thing too is you can imagine a lot of the questions can be somewhat similar in nature I said smaller merchants will maybe ask different types of questions than larger merchants. There's an element though that it's pretty similar across all those. How can we do things, for example, like caching of answers or anticipation of questions, which also allows us to keep the cost down. As you know, because Tobi's memo came out more than a year ago, we've been a thought leader on how you think about uses of AI. You can assume that we extend that knowledge, those best practices into how we manage the cost and how we think about it. I said smaller merchants will maybe ask different types of questions than larger merchants. i said smaller merchants will maybe ask different types of questions than larger merchants There's an element though that it's pretty similar across all those. there's an element though that it's pretty similar across all those How can we do things, for example, like caching of answers or anticipation of questions, which also allows us to keep the cost down. how can we do things for example like caching of answers or anticipation of questions which also allows us to keep the cost down As you know, because Tobi's memo came out more than a year ago, we've been a thought leader on how you think about uses of AI. as you know because tobi's memo came out more than a year ago we've been a thought leader on how you think about uses of ai You can assume that we extend that knowledge, those best practices into how we manage the cost and how we think about it. you can assume that we extend that knowledge those best practices into how we manage the cost and how we think about it

Speaker 2: I'll quote something that you've mentioned in other meetings. I think it's worth noting that Sam Altman himself said that Tobi's using AI the best, or that Shopify is using AI the best currently, and I think that's a testament to what you guys have done there. Maybe before we wrap out and switch gears, you mentioned data as one of the big moats for, or one of the value centers for Sidekick, and then I think a moat more broadly speaking. What would you describe as the other key moats in a world where everybody's trying to figure out what's at risk? I think checkout is something that's misunderstood. Just help us understand maybe the moats that Shopify has. I'll quote something that you've mentioned in other meetings. i'll quote something that you've mentioned in other meetings I think it's worth noting that Sam Altman himself said that Tobi's using AI the best, or that Shopify is using AI the best currently, and I think that's a testament to what you guys have done there. i think it's worth noting that sam altman himself said that tobi's using ai the best or that shopify is using ai the best currently and i think that's a testament to what you guys have done there Maybe before we wrap out and switch gears, you mentioned data as one of the big moats for, or one of the value centers for Sidekick, and then I think a moat more broadly speaking. maybe before we wrap out and switch gears you mentioned data as one of the big moats for or one of the value centers for sidekick and then i think a moat more broadly speaking What would you describe as the other key moats in a world where everybody's trying to figure out what's at risk? what would you describe as the other key moats in a world where everybody's trying to figure out what's at risk I think checkout is something that's misunderstood. i think checkout is something that's misunderstood Just help us understand maybe the moats that Shopify has. just help us understand maybe the moats that shopify has

Speaker 1: Yeah, the data piece is one of it, but the data, of course, then extends into a manifestation of the pattern recognition and all the things that help us think about the next product to build. You see, again, Catalog and Sidekick are things that we set in motion a long time ago that no one else has even really started to build. You need to have the data to build it, you need to have the product expertise to go ahead and actually deliver on the products that we have. Yeah, the data piece is one of it, but the data, of course, then extends into a manifestation of the pattern recognition and all the things that help us think about the next product to build. yeah the data piece is one of it but the data of course then extends into a manifestation of the pattern recognition and all the things that help us think about the next product to build You see, again, Catalog and Sidekick are things that we set in motion a long time ago that no one else has even really started to build. you see again catalog and sidekick are things that we set in motion a long time ago that no one else has even really started to build You need to have the data to build it, you need to have the product expertise to go ahead and actually deliver on the products that we have. you need to have the data to build it you need to have the product expertise to go ahead and actually deliver on the products that we have I think, as you also alluded to, Samana, the checkout piece I think is one of the things that is most misunderstood or least appreciated in terms of how hard it is to do because you really have to marry the product expertise and the speed of building something that operates in milliseconds in a lot of parts in the process. When you see the statistics in terms of the actual impact on abandoned cart and lost dollars for a merchant when a checkout process is either a little clunky or not super fast or doesn't have all the context on you as a buyer, on the shipping data, on the return, all that stuff matters in terms of the success rate of you going and completing the purchase. I think, as you also alluded to, Samana, the checkout piece I think is one of the things that is most misunderstood or least appreciated in terms of how hard it is to do because you really have to marry the product expertise and the speed of building something that operates in milliseconds in a lot of parts in the process. i think as you also alluded to samana the checkout piece i think is one of the things that is most misunderstood or least appreciated in terms of how hard it is to do because you really have to marry the product expertise and the speed of building something that operates in milliseconds in a lot of parts in the process When you see the statistics in terms of the actual impact on abandoned cart and lost dollars for a merchant when a checkout process is either a little clunky or not super fast or doesn't have all the context on you as a buyer, on the shipping data, on the return, all that stuff matters in terms of the success rate of you going and completing the purchase. when you see the statistics in terms of the actual impact on abandoned cart and lost dollars for a merchant when a checkout process is either a little clunky or not super fast or doesn't have all the context on you as a buyer on the shipping data on the return all that stuff matters in terms of the success rate of you going and completing the purchase There's a lot of things that not only one, you have to start with the ability to build that from a speed perspective and have the technology expertise to do that, which some others would do, but what they don't have then is all the context around that, which one, makes the checkout process better, and two, allows you to build an even faster checkout process. Again, as it relates to the tax and the shipping and or FX, like all these things that others have tried and attempted to do and they've not been successful doing. I think that's the piece that's I think sometimes hardest to describe but also most underappreciated. There's a lot of things that not only one, you have to start with the ability to build that from a speed perspective and have the technology expertise to do that, which some others would do, but what they don't have then is all the context around that, which one, makes the checkout process better, and two, allows you to build an even faster checkout process. there's a lot of things that not only one you have to start with the ability to build that from a speed perspective and have the technology expertise to do that which some others would do but what they don't have then is all the context around that which one makes the checkout process better and two allows you to build an even faster checkout process Again, as it relates to the tax and the shipping and or FX, like all these things that others have tried and attempted to do and they've not been successful doing. again as it relates to the tax and the shipping and or fx like all these things that others have tried and attempted to do and they've not been successful doing I think that's the piece that's I think sometimes hardest to describe but also most underappreciated. i think that's the piece that's i think sometimes hardest to describe but also most underappreciated

Speaker 2: AI takes up a lot of the oxygen in almost every conversation these days. AI takes up a lot of the oxygen in almost every conversation these days. ai takes up a lot of the oxygen in almost every conversation these days

Speaker 1: Yeah. Yeah. yeah

Speaker 2: I think Shopify has a lot of different growth opportunities that are doing quite well, and I'd probably argue up until this point, those have all been doing much better than AI itself, right? It's very early. Let's unpack some of the other success categories that you have. Maybe apropos of the audience, international has been- I think Shopify has a lot of different growth opportunities that are doing quite well, and I'd probably argue up until this point, those have all been doing much better than AI itself, right? i think shopify has a lot of different growth opportunities that are doing quite well and i'd probably argue up until this point those have all been doing much better than ai itself right It's very early. it's very early Let's unpack some of the other success categories that you have. let's unpack some of the other success categories that you have Maybe apropos of the audience, international has been- maybe apropos of the audience international has been-

Speaker 1: Yeah. Yeah. yeah

Speaker 2: ... a very high-growth area. Can you help us understand what's changed on the international front? Is it the go-to-market has either changed? Is it that the product market fit is there? What has happened that's really driven that international success? ... a very high-growth area. ... a very high-growth area Can you help us understand what's changed on the international front? can you help us understand what's changed on the international front Is it the go-to-market has either changed? is it the go-to-market has either changed Is it that the product market fit is there? is it that the product market fit is there What has happened that's really driven that international success? what has happened that's really driven that international success

Speaker 1: Yeah. Well, as you know, the biggest international success for us has been here in Europe, outside of North America, of course, our home markets. It really a couple of years ago started to take off, and I think that was mostly a function of product market fit. That product market fit as it relates to some of the things we're doing on kind of the core product offering then begets additional adoption of other things. We roll out payments in more countries, merchants start taking on more elements of sale. They take on some of the cross-border stuff we do. They take on some of the tax stuff we do, especially given some of the tax dynamics here in Europe, et cetera. That then begets us in a position to roll out more products in more geographies. Yeah. yeah Well, as you know, the biggest international success for us has been here in Europe, outside of North America, of course, our home markets. well as you know the biggest international success for us has been here in europe outside of north america of course our home markets It really a couple of years ago started to take off, and I think that was mostly a function of product market fit. it really a couple of years ago started to take off and i think that was mostly a function of product market fit That product market fit as it relates to some of the things we're doing on kind of the core product offering then begets additional adoption of other things. that product market fit as it relates to some of the things we're doing on kind of the core product offering then begets additional adoption of other things We roll out payments in more countries, merchants start taking on more elements of sale. we roll out payments in more countries merchants start taking on more elements of sale They take on some of the cross-border stuff we do. they take on some of the cross-border stuff we do They take on some of the tax stuff we do, especially given some of the tax dynamics here in Europe, et cetera. they take on some of the tax stuff we do especially given some of the tax dynamics here in europe et cetera That then begets us in a position to roll out more products in more geographies. that then begets us in a position to roll out more products in more geographies We really start very much from a product perspective, the marketing dollars flow behind that. Yes, once you have the product market fit and increased merchant adoption, you put some marketing dollars behind it. I mentioned not on this most recent earnings call, but the one before that roughly 40% of our performance marketing last year had been filtered into Europe, and that really helps accelerate some of the things we're seeing. As you know, last year we rolled out payments in 15 more countries in Europe. We continued to roll out the full integrated kind of latest version of our point of sale. We continued to roll out capital in more regions. We've really gotten to the point where this is a very repeatable process. I think we have payments now in 40 countries, essentially Europe fully covered. We really start very much from a product perspective, the marketing dollars flow behind that. we really start very much from a product perspective the marketing dollars flow behind that Yes, once you have the product market fit and increased merchant adoption, you put some marketing dollars behind it. yes once you have the product market fit and increased merchant adoption you put some marketing dollars behind it I mentioned not on this most recent earnings call, but the one before that roughly 40% of our performance marketing last year had been filtered into Europe, and that really helps accelerate some of the things we're seeing. i mentioned not on this most recent earnings call but the one before that roughly 40% of our performance marketing last year had been filtered into europe and that really helps accelerate some of the things we're seeing As you know, last year we rolled out payments in 15 more countries in Europe. as you know last year we rolled out payments in 15 more countries in europe We continued to roll out the full integrated kind of latest version of our point of sale. we continued to roll out the full integrated kind of latest version of our point of sale We continued to roll out capital in more regions. we continued to roll out capital in more regions We've really gotten to the point where this is a very repeatable process. we've really gotten to the point where this is a very repeatable process I think we have payments now in 40 countries, essentially Europe fully covered. i think we have payments now in 40 countries essentially europe fully covered There's more to do this year and next year as well in terms of doing more in Europe. The opportunity for us is to really take that same playbook. There will be some modifications of it, but localization with AI has gotten as easy as it's ever been, right? Localization of the software, localization of the advertising, localization of everything the merchant interacts with. Take some of the things we've done in Europe, one, continue the momentum in Europe, two, think about, well, how do you do that same playbook in Latin America? Where you look at Latin America, we have merchants in all the countries in Latin America. We have some great merchants down there. But as a percentage of our revenue, it's still a small single-digit percentage. Same in Middle East, same with Southeast Asia, same with Africa. There's more to do this year and next year as well in terms of doing more in Europe. there's more to do this year and next year as well in terms of doing more in europe The opportunity for us is to really take that same playbook. the opportunity for us is to really take that same playbook There will be some modifications of it, but localization with AI has gotten as easy as it's ever been, right? there will be some modifications of it but localization with ai has gotten as easy as it's ever been right Localization of the software, localization of the advertising, localization of everything the merchant interacts with. localization of the software localization of the advertising localization of everything the merchant interacts with Take some of the things we've done in Europe, one, continue the momentum in Europe, two, think about, well, how do you do that same playbook in Latin America? take some of the things we've done in europe one continue the momentum in europe two think about well how do you do that same playbook in latin america Where you look at Latin America, we have merchants in all the countries in Latin America. where you look at latin america we have merchants in all the countries in latin america We have some great merchants down there. we have some great merchants down there But as a percentage of our revenue, it's still a small single-digit percentage. but as a percentage of our revenue it's still a small single-digit percentage Same in Middle East, same with Southeast Asia, same with Africa. same in middle east same with southeast asia same with africa There's all these regions where you say, take the European playbook, replicate it in some way, shape, or form, and continue to roll this out. Even without the introduction of any new products, and of course, we will continue to do that, you can roll this out in a way which I think gives us durable growth for a long time. There's all these regions where you say, take the European playbook, replicate it in some way, shape, or form, and continue to roll this out. there's all these regions where you say take the european playbook replicate it in some way shape or form and continue to roll this out Even without the introduction of any new products, and of course, we will continue to do that, you can roll this out in a way which I think gives us durable growth for a long time. even without the introduction of any new products and of course we will continue to do that you can roll this out in a way which i think gives us durable growth for a long time

Speaker 2: I want to maybe unpack that a little bit on one of the big drivers for you or for Shopify overall has been driving the merchant take rate higher, the overall take rate higher. I want to maybe unpack that a little bit on one of the big drivers for you or for Shopify overall has been driving the merchant take rate higher, the overall take rate higher. i want to maybe unpack that a little bit on one of the big drivers for you or for shopify overall has been driving the merchant take rate higher the overall take rate higher

Speaker 1: Yep. Yep. yep

Speaker 2: How do you think about the progression for merchants outside of the United States in attach for things like payments, capital? I know you mentioned that you've deployed it now into several more countries. How do you think about the progression for merchants outside of the United States in attach for things like payments, capital? how do you think about the progression for merchants outside of the united states in attach for things like payments capital I know you mentioned that you've deployed it now into several more countries. i know you mentioned that you've deployed it now into several more countries

Speaker 1: Yep. Yep. yep

Speaker 2: Should the long arc of that look fairly similar between the U.S. and other geos, or would it look different, and if so, why? Should the long arc of that look fairly similar between the U.S. and other geos, or would it look different, and if so, why? should the long arc of that look fairly similar between the u.s and other geos or would it look different and if so why

Speaker 1: No, it looks not identical, but very similar. We've seen very few differences, not only in attach rate, but just in general, as you think about it, not surprisingly, commerce is pretty straightforward. You, as a consumer, are trying to find a merchant. There's an exchange of money, the product is shipped, et cetera. The core engine, the core process, the core guts of commerce are very similar. As you think about what a merchant and what a brand is trying to do as they grow over time, there's a natural progression. As they get bigger, they're more likely to take on more products. They're more likely to do different things. They, for example, are more likely to get into cross-border. Yes, on day one, you can do cross-border things. As you get bigger, you're more likely to do that. No, it looks not identical, but very similar. no it looks not identical but very similar We've seen very few differences, not only in attach rate, but just in general, as you think about it, not surprisingly, commerce is pretty straightforward. we've seen very few differences not only in attach rate but just in general as you think about it not surprisingly commerce is pretty straightforward You, as a consumer, are trying to find a merchant. you as a consumer are trying to find a merchant There's an exchange of money, the product is shipped, et cetera. there's an exchange of money the product is shipped et cetera The core engine, the core process, the core guts of commerce are very similar. the core engine the core process the core guts of commerce are very similar As you think about what a merchant and what a brand is trying to do as they grow over time, there's a natural progression. as you think about what a merchant and what a brand is trying to do as they grow over time there's a natural progression As they get bigger, they're more likely to take on more products. as they get bigger they're more likely to take on more products They're more likely to do different things. they're more likely to do different things They, for example, are more likely to get into cross-border. they for example are more likely to get into cross-border Yes, on day one, you can do cross-border things. yes on day one you can do cross-border things As you get bigger, you're more likely to do that. as you get bigger you're more likely to do that You're more likely to do some things on the tax side. The opportunity for us, and you look at the attach, we don't break out attach rate by geography, but if you look at the attach rate in North America versus the attach rate in Europe, there's clearly opportunity. A little bit like payments. When you look at payments penetration that we have in North America versus what we have in Europe, there's clearly headroom there, too. We also see this in terms of cohorts. As you know, we think about our business a lot in terms of cohorts and how do you look at one cohort by year or one cohort by geography, and how do those stack over time? Very similar in terms of their trajectories, their growth rates. You're more likely to do some things on the tax side. you're more likely to do some things on the tax side The opportunity for us, and you look at the attach, we don't break out attach rate by geography, but if you look at the attach rate in North America versus the attach rate in Europe, there's clearly opportunity. the opportunity for us and you look at the attach we don't break out attach rate by geography but if you look at the attach rate in north america versus the attach rate in europe there's clearly opportunity A little bit like payments. a little bit like payments When you look at payments penetration that we have in North America versus what we have in Europe, there's clearly headroom there, too. when you look at payments penetration that we have in north america versus what we have in europe there's clearly headroom there too We also see this in terms of cohorts. we also see this in terms of cohorts As you know, we think about our business a lot in terms of cohorts and how do you look at one cohort by year or one cohort by geography, and how do those stack over time? as you know we think about our business a lot in terms of cohorts and how do you look at one cohort by year or one cohort by geography and how do those stack over time Very similar in terms of their trajectories, their growth rates. very similar in terms of their trajectories their growth rates The opportunity for us is to give the merchants in Europe the same set of products that we have in North America and et cetera, et cetera, in terms of roll it out. The opportunity for us is to give the merchants in Europe the same set of products that we have in North America and et cetera, et cetera, in terms of roll it out. the opportunity for us is to give the merchants in europe the same set of products that we have in north america and et cetera et cetera in terms of roll it out

Speaker 2: Understood. You mentioned payments multiple times there, and the penetration's very high, especially with U.S. merchants. How much more runway is there? Is it purely just rolling it out into additional geographies, or are there other gating factors that have kept payments penetration maybe outside of the U.S. looking different, and how should the shape of that look going forward? Understood. understood You mentioned payments multiple times there, and the penetration's very high, especially with U.S. merchants. you mentioned payments multiple times there and the penetration's very high especially with u.s merchants How much more runway is there? how much more runway is there Is it purely just rolling it out into additional geographies, or are there other gating factors that have kept payments penetration maybe outside of the U.S. looking different, and how should the shape of that look going forward? is it purely just rolling it out into additional geographies or are there other gating factors that have kept payments penetration maybe outside of the u.s looking different and how should the shape of that look going forward

Speaker 1: Yeah. Similar to the comments we just discussed, there's no difference, it's just a matter of continuing that progression. We have not broken out payments by region, but as you would suspect, the payments penetration in North America is higher than it is in Europe. With the additional country, the 15 countries we rolled out last year, part of this is getting those countries' payment penetration levels higher in those, continuing to do local payment methods, which is something which, especially in Europe and as we do more internationally, helps on the capture rate. You get a merchant on platform and a higher percentage of their total transaction activity happens on Shopify. Of course, there are some things like cash, it would seem like there's less and less of that. There'll be a natural governor to avoid us getting to 100% penetration rate. Yeah. yeah Similar to the comments we just discussed, there's no difference, it's just a matter of continuing that progression. similar to the comments we just discussed there's no difference it's just a matter of continuing that progression We have not broken out payments by region, but as you would suspect, the payments penetration in North America is higher than it is in Europe. we have not broken out payments by region but as you would suspect the payments penetration in north america is higher than it is in europe With the additional country, the 15 countries we rolled out last year, part of this is getting those countries' payment penetration levels higher in those, continuing to do local payment methods, which is something which, especially in Europe and as we do more internationally, helps on the capture rate. with the additional country the 15 countries we rolled out last year part of this is getting those countries' payment penetration levels higher in those continuing to do local payment methods which is something which especially in europe and as we do more internationally helps on the capture rate You get a merchant on platform and a higher percentage of their total transaction activity happens on Shopify. you get a merchant on platform and a higher percentage of their total transaction activity happens on shopify Of course, there are some things like cash, it would seem like there's less and less of that. of course there are some things like cash it would seem like there's less and less of that There'll be a natural governor to avoid us getting to 100% penetration rate. there'll be a natural governor to avoid us getting to 100% penetration rate We still see a lot of opportunity in North America, and our payments penetration rate in Q1 was up 3 points over Q1 in 2026 versus Q1 in 2025. There'll be some natural headwinds in Europe for these countries where we just rolled out payments in terms of the total payments penetration level. That should turn into a tailwind as these countries continue to have more success and that rolls out further and further. We still see a lot of opportunity in North America, and our payments penetration rate in Q1 was up 3 points over Q1 in 2026 versus Q1 in 2025. we still see a lot of opportunity in north america and our payments penetration rate in q1 was up 3 points over q1 in 2026 versus q1 in 2025 There'll be some natural headwinds in Europe for these countries where we just rolled out payments in terms of the total payments penetration level. there'll be some natural headwinds in europe for these countries where we just rolled out payments in terms of the total payments penetration level That should turn into a tailwind as these countries continue to have more success and that rolls out further and further. that should turn into a tailwind as these countries continue to have more success and that rolls out further and further

Speaker 2: I want to talk about Shop Pay specifically. I want to talk about Shop Pay specifically. i want to talk about shop pay specifically

Speaker 1: Yeah. Yeah. yeah

Speaker 2: The checkout function, which is, it's dangerous for an impulse shopper like myself because you don't have to enter in anything. You just basically give your number. The checkout function, which is, it's dangerous for an impulse shopper like myself because you don't have to enter in anything. the checkout function which is it's dangerous for an impulse shopper like myself because you don't have to enter in anything You just basically give your number. you just basically give your number

Speaker 1: Yes. Yes. yes

Speaker 2: It's trouble, is the best way I'll put it. Help us understand what the value proposition for the merchant there is. It's trouble, is the best way I'll put it. it's trouble is the best way i'll put it Help us understand what the value proposition for the merchant there is. help us understand what the value proposition for the merchant there is

Speaker 1: Yep. Yep. yep

Speaker 2: Why that drives conversion, which is probably the trickiest thing for a merchant, I'm guessing. Why that drives conversion, which is probably the trickiest thing for a merchant, I'm guessing. why that drives conversion which is probably the trickiest thing for a merchant i'm guessing

Speaker 1: It's exactly what you just alluded to. Because if a merchant knows that if they offer Shop Pay, that it's going to help on their conversion, that consumers will go there, they will see a brand which they trust for good reason. Shop Pay has the brand and the trust and the awareness that it has, not because we spent a bunch of marketing dollars on it. It's because we built a product that is exceptional in terms of, again, all the context and the speed of everything it does, which has created that level of trust that you and other consumers have. Shop Pay, along with the Shop App, of course, are the two things where we have a consumer-facing element to our business. That is a consumer-facing brand, which is there to lend strength to what we're trying to do on the merchant side. It's exactly what you just alluded to. it's exactly what you just alluded to Because if a merchant knows that if they offer Shop Pay, that it's going to help on their conversion, that consumers will go there, they will see a brand which they trust for good reason. because if a merchant knows that if they offer shop pay that it's going to help on their conversion that consumers will go there they will see a brand which they trust for good reason Shop Pay has the brand and the trust and the awareness that it has, not because we spent a bunch of marketing dollars on it. shop pay has the brand and the trust and the awareness that it has not because we spent a bunch of marketing dollars on it It's because we built a product that is exceptional in terms of, again, all the context and the speed of everything it does, which has created that level of trust that you and other consumers have. it's because we built a product that is exceptional in terms of again all the context and the speed of everything it does which has created that level of trust that you and other consumers have Shop Pay, along with the Shop App, of course, are the two things where we have a consumer-facing element to our business. shop pay along with the shop app of course are the two things where we have a consumer-facing element to our business That is a consumer-facing brand, which is there to lend strength to what we're trying to do on the merchant side. that is a consumer-facing brand which is there to lend strength to what we're trying to do on the merchant side If you go to a merchant and you can say, all right, think about the impact of Shop Pay on your abandoned cart. Literally take what your abandoned cart number was last year, multiply it by the uplift in conversion that you get from Shop Pay, and basically explain to me why it is that you want to let those dollars just leak out the door, so to speak. It's a very powerful conversation to have with them. It has clear, tangible impact on their business, and that's a function of, Tobi likes to use the word flywheel a lot. It's a function of that flywheel, right? It's the consumer brand which lends to the merchant, which allows the merchant to be more successful, and it continues in that pace. If you go to a merchant and you can say, all right, think about the impact of Shop Pay on your abandoned cart. if you go to a merchant and you can say all right think about the impact of shop pay on your abandoned cart Literally take what your abandoned cart number was last year, multiply it by the uplift in conversion that you get from Shop Pay, and basically explain to me why it is that you want to let those dollars just leak out the door, so to speak. literally take what your abandoned cart number was last year multiply it by the uplift in conversion that you get from shop pay and basically explain to me why it is that you want to let those dollars just leak out the door so to speak It's a very powerful conversation to have with them. it's a very powerful conversation to have with them It has clear, tangible impact on their business, and that's a function of, Tobi likes to use the word flywheel a lot. it has clear tangible impact on their business and that's a function of tobi likes to use the word flywheel a lot It's a function of that flywheel, right? it's a function of that flywheel right It's the consumer brand which lends to the merchant, which allows the merchant to be more successful, and it continues in that pace. it's the consumer brand which lends to the merchant which allows the merchant to be more successful and it continues in that pace

Speaker 2: I believe a few years ago, Shopify made Shop Pay available for non-Shopify merchants. Right? I think it's clear how it expands the opportunity, how does the adoption of that look like, or how has the reception been, and has that led to merchants actually wanting to adopt the core platform as well based on that experience? I believe a few years ago, Shopify made Shop Pay available for non-Shopify merchants. i believe a few years ago shopify made shop pay available for non-shopify merchants Right? right I think it's clear how it expands the opportunity, how does the adoption of that look like, or how has the reception been, and has that led to merchants actually wanting to adopt the core platform as well based on that experience? i think it's clear how it expands the opportunity how does the adoption of that look like or how has the reception been and has that led to merchants actually wanting to adopt the core platform as well based on that experience

Speaker 1: Yeah. It has. We've been very careful on how widely we do that. We are starting to do it more. The Agentic plan is also part of that initiative in terms of how do we look at the evolution of payments and Shop Pay, and where does this take us? I don't have statistics to share with you in terms of what percentage of Shop Pay standalone has then led to merchants taking the full platform. I would say across the board, everything we've been doing in product development over the last year or two has really put us in a spot where, I think from a competitive dynamic, we're doing some pretty incredible things. Let me take a step back. Yeah. yeah It has. it has We've been very careful on how widely we do that. we've been very careful on how widely we do that We are starting to do it more. we are starting to do it more The Agentic plan is also part of that initiative in terms of how do we look at the evolution of payments and Shop Pay, and where does this take us? the agentic plan is also part of that initiative in terms of how do we look at the evolution of payments and shop pay and where does this take us I don't have statistics to share with you in terms of what percentage of Shop Pay standalone has then led to merchants taking the full platform. i don't have statistics to share with you in terms of what percentage of shop pay standalone has then led to merchants taking the full platform I would say across the board, everything we've been doing in product development over the last year or two has really put us in a spot where, I think from a competitive dynamic, we're doing some pretty incredible things. i would say across the board everything we've been doing in product development over the last year or two has really put us in a spot where i think from a competitive dynamic we're doing some pretty incredible things Let me take a step back. let me take a step back Some merchants will be at a spot where they'll say, "I want only so many wallets on my checkout," and others are like, "The more the merrier." For the merchants who get to the point, "Well, hey, I have three, four, or five, whatever checkout methods on my checkout page. Do I want to add another?" It's very hard to refute the statistics of Shop Pay and what that does for the business and the conversion and the uplift and everything we've talked about. It's just a matter of kind of getting them to add that, and that kind of leads to obviously a lot more in terms of the upsell. Some merchants will be at a spot where they'll say, "I want only so many wallets on my checkout," and others are like, "The more the merrier." For the merchants who get to the point, "Well, hey, I have three, four, or five, whatever checkout methods on my checkout page. some merchants will be at a spot where they'll say "i want only so many wallets on my checkout," and others are like "the more the merrier." for the merchants who get to the point "well hey i have three four or five whatever checkout methods on my checkout page Do I want to add another?" It's very hard to refute the statistics of Shop Pay and what that does for the business and the conversion and the uplift and everything we've talked about. do i want to add another?" it's very hard to refute the statistics of shop pay and what that does for the business and the conversion and the uplift and everything we've talked about It's just a matter of kind of getting them to add that, and that kind of leads to obviously a lot more in terms of the upsell. it's just a matter of kind of getting them to add that and that kind of leads to obviously a lot more in terms of the upsell

Speaker 2: Great. I know when most people think about Shopify, they think online for obvious reasons. The in-store or the retail side of it has gotten really large in brick and mortar as well. How do you think about the point of sale opportunity from here? How do you get more of your merchants that have had tremendous success online to put it inside the store as well? Great. great I know when most people think about Shopify, they think online for obvious reasons. i know when most people think about shopify they think online for obvious reasons The in-store or the retail side of it has gotten really large in brick and mortar as well. the in-store or the retail side of it has gotten really large in brick and mortar as well How do you think about the point of sale opportunity from here? how do you think about the point of sale opportunity from here How do you get more of your merchants that have had tremendous success online to put it inside the store as well? how do you get more of your merchants that have had tremendous success online to put it inside the store as well

Speaker 1: Yeah. The thing that we offer in our point of sale solution, which really only we offer, is the best technology on both the online commerce stack, which of course we've had for a long time, married with the best technology on the offline side, and doing it in a way where you have one platform, set of analytics, everything to look at in terms of your customer information, your inventory information, all your transaction, all your payments, all that stuff in one platform. That's been one of the pulls for us on the point-of-sale solution. Roughly 80% of commerce, as you know, is still offline, that's something that we want to continue to grow, and we will continue to grow, and the traction has been there. Yeah. yeah The thing that we offer in our point of sale solution, which really only we offer, is the best technology on both the online commerce stack, which of course we've had for a long time, married with the best technology on the offline side, and doing it in a way where you have one platform, set of analytics, everything to look at in terms of your customer information, your inventory information, all your transaction, all your payments, all that stuff in one platform. the thing that we offer in our point of sale solution which really only we offer is the best technology on both the online commerce stack which of course we've had for a long time married with the best technology on the offline side and doing it in a way where you have one platform set of analytics everything to look at in terms of your customer information your inventory information all your transaction all your payments all that stuff in one platform That's been one of the pulls for us on the point-of-sale solution. that's been one of the pulls for us on the point-of-sale solution Roughly 80% of commerce, as you know, is still offline, that's something that we want to continue to grow, and we will continue to grow, and the traction has been there. roughly 80% of commerce as you know is still offline that's something that we want to continue to grow and we will continue to grow and the traction has been there The other thing that we've seen really starting about a year ago is up until then, most of the stuff we were doing on point of sale would've started with an online merchant. Now we're seeing a lot of, and Harley's talked about some of these on some of the earnings calls in terms of some of the brands that have started on the point of sale or have taken us for the point of sale only solution, and what that's meant. We're getting wins on both sides of the equation. It also helps, especially on the large enterprises, as we think about going to them and just basically saying, "All right, so we have point of sale." We have point of sale, we have B2B, we have all the cross-border stuff, we have all the tax stuff. The other thing that we've seen really starting about a year ago is up until then, most of the stuff we were doing on point of sale would've started with an online merchant. the other thing that we've seen really starting about a year ago is up until then most of the stuff we were doing on point of sale would've started with an online merchant Now we're seeing a lot of, and Harley's talked about some of these on some of the earnings calls in terms of some of the brands that have started on the point of sale or have taken us for the point of sale only solution, and what that's meant. now we're seeing a lot of and harley's talked about some of these on some of the earnings calls in terms of some of the brands that have started on the point of sale or have taken us for the point of sale only solution and what that's meant We're getting wins on both sides of the equation. we're getting wins on both sides of the equation It also helps, especially on the large enterprises, as we think about going to them and just basically saying, "All right, so we have point of sale." We have point of sale, we have B2B, we have all the cross-border stuff, we have all the tax stuff. it also helps especially on the large enterprises as we think about going to them and just basically saying "all right so we have point of sale." we have point of sale we have b2b we have all the cross-border stuff we have all the tax stuff We have all these things where it becomes hard for them to say that we don't have everything they need, especially with the addition of all the Agentic plan. We have all these things where it becomes hard for them to say that we don't have everything they need, especially with the addition of all the Agentic plan. we have all these things where it becomes hard for them to say that we don't have everything they need especially with the addition of all the agentic plan

Speaker 2: You mentioned large enterprise just now. You guys have had a lot of success with several large logos. I think a notable one is LVMH recently announced. Help us understand what has changed on the enterprise side that's bringing more of those larger merchants that are maybe a little bit more hesitant to embrace change. What's driving them to you now? You mentioned large enterprise just now. you mentioned large enterprise just now You guys have had a lot of success with several large logos. you guys have had a lot of success with several large logos I think a notable one is LVMH recently announced. i think a notable one is lvmh recently announced Help us understand what has changed on the enterprise side that's bringing more of those larger merchants that are maybe a little bit more hesitant to embrace change. help us understand what has changed on the enterprise side that's bringing more of those larger merchants that are maybe a little bit more hesitant to embrace change What's driving them to you now? what's driving them to you now

Speaker 1: I think it's a couple of things. Part of a multi-year effort too. As you know, it's been roughly four years ago when we put a particularly concentrated effort into getting more and more merchants. It was never a technology question because we, even before then, were doing some of the biggest flash sales on the planet, and so we could handle all the activity. It was just a matter of how do you get a go-to-market motion, which gets that technology, that product capability out in front of the largest enterprises. As you'd naturally start with, maybe we'll call them the small end of the large enterprises, or call them medium-sized merchants if you want, and then you get those wins, which begets slightly larger enterprises, and continues to build on itself in terms of size. We've seen a lot of that. I think it's a couple of things. i think it's a couple of things Part of a multi-year effort too. part of a multi-year effort too As you know, it's been roughly four years ago when we put a particularly concentrated effort into getting more and more merchants. as you know it's been roughly four years ago when we put a particularly concentrated effort into getting more and more merchants It was never a technology question because we, even before then, were doing some of the biggest flash sales on the planet, and so we could handle all the activity. it was never a technology question because we even before then were doing some of the biggest flash sales on the planet and so we could handle all the activity It was just a matter of how do you get a go-to-market motion, which gets that technology, that product capability out in front of the largest enterprises. it was just a matter of how do you get a go-to-market motion which gets that technology that product capability out in front of the largest enterprises As you'd naturally start with, maybe we'll call them the small end of the large enterprises, or call them medium-sized merchants if you want, and then you get those wins, which begets slightly larger enterprises, and continues to build on itself in terms of size. as you'd naturally start with maybe we'll call them the small end of the large enterprises or call them medium-sized merchants if you want and then you get those wins which begets slightly larger enterprises and continues to build on itself in terms of size We've seen a lot of that. we've seen a lot of that We've also seen an interesting dynamic, too, where a lot of times some of the largest merchants look at what some of the small and up-and-coming brands are doing in terms of everything from kind of the customization and kind of the presentation of the brand and all the interesting things they're doing on the commerce side, and they look at some of the smaller brands and say, "I should be using that platform." You see some of the biggest fashion houses, for example, look at, again, some of the emerging brands and be like, "I should be doing that." It's interesting because you would've thought some of the small ones would look to some of the big ones rather than the reverse. We actually see both of those dynamics at play. Part of it is that momentum. We've also seen an interesting dynamic, too, where a lot of times some of the largest merchants look at what some of the small and up-and-coming brands are doing in terms of everything from kind of the customization and kind of the presentation of the brand and all the interesting things they're doing on the commerce side, and they look at some of the smaller brands and say, "I should be using that platform." You see some of the biggest fashion houses, for example, look at, again, some of the emerging brands and be like, "I should be doing that." It's interesting because you would've thought some of the small ones would look to some of the big ones rather than the reverse. we've also seen an interesting dynamic too where a lot of times some of the largest merchants look at what some of the small and up-and-coming brands are doing in terms of everything from kind of the customization and kind of the presentation of the brand and all the interesting things they're doing on the commerce side and they look at some of the smaller brands and say "i should be using that platform." you see some of the biggest fashion houses for example look at again some of the emerging brands and be like "i should be doing that." it's interesting because you would've thought some of the small ones would look to some of the big ones rather than the reverse We actually see both of those dynamics at play. we actually see both of those dynamics at play Part of it is that momentum. part of it is that momentum The other thing, too, is just from a technology and a product perspective. That's all the things we just talked about. Point of sale has continued to grow and continued to strengthen in terms of what that solution offers. Our cross-border product, our Managed Markets product continues to get better. The stuff that we're doing in agentic, no one else has anything like that. If you are a large enterprise and you're looking to move your platform, whether you're moving off an existing solution from another provider or you're moving off an in-house solution, how do you justify moving to a platform that doesn't have an Irrespective of when you think agentic plays out, how quickly it plays out, to what magnitude it plays out, do you really want to adopt a platform that doesn't have a thoughtful, strong, proven offering in agentic? The other thing, too, is just from a technology and a product perspective. the other thing too is just from a technology and a product perspective That's all the things we just talked about. that's all the things we just talked about Point of sale has continued to grow and continued to strengthen in terms of what that solution offers. point of sale has continued to grow and continued to strengthen in terms of what that solution offers Our cross-border product, our Managed Markets product continues to get better. our cross-border product our managed markets product continues to get better The stuff that we're doing in agentic, no one else has anything like that. the stuff that we're doing in agentic no one else has anything like that If you are a large enterprise and you're looking to move your platform, whether you're moving off an existing solution from another provider or you're moving off an in-house solution, how do you justify moving to a platform that doesn't have an Irrespective of when you think agentic plays out, how quickly it plays out, to what magnitude it plays out, do you really want to adopt a platform that doesn't have a thoughtful, strong, proven offering in agentic? if you are a large enterprise and you're looking to move your platform whether you're moving off an existing solution from another provider or you're moving off an in-house solution how do you justify moving to a platform that doesn't have an irrespective of when you think agentic plays out how quickly it plays out to what magnitude it plays out do you really want to adopt a platform that doesn't have a thoughtful strong proven offering in agentic That's hard to justify. What we're doing in terms of differentiating on that side has helped a lot, too. Part of it is, again, as you know, is just the length of the sales cycle. Even with everything we're doing, the sales cycle generally can be 9, 12, 18 months long, and the bigger the enterprise, generally the longer it takes. The more products that they take, sometimes that can slow it down because you may say, or they may say to us, "We're completely good on the commerce stack. I have a couple questions on point of sale, or I have a couple questions on this or that," and kind of it just elongates it. The win rate has been very strong. That's hard to justify. that's hard to justify What we're doing in terms of differentiating on that side has helped a lot, too. what we're doing in terms of differentiating on that side has helped a lot too Part of it is, again, as you know, is just the length of the sales cycle. part of it is again as you know is just the length of the sales cycle Even with everything we're doing, the sales cycle generally can be 9, 12, 18 months long, and the bigger the enterprise, generally the longer it takes. even with everything we're doing the sales cycle generally can be 9 12 18 months long and the bigger the enterprise generally the longer it takes The more products that they take, sometimes that can slow it down because you may say, or they may say to us, "We're completely good on the commerce stack. the more products that they take sometimes that can slow it down because you may say or they may say to us "we're completely good on the commerce stack I have a couple questions on point of sale, or I have a couple questions on this or that," and kind of it just elongates it. i have a couple questions on point of sale or i have a couple questions on this or that," and kind of it just elongates it The win rate has been very strong. the win rate has been very strong

Speaker 2: If you think about, you mentioned AI, and you'd want to buy the future-proofed solution, right? If you think about, you mentioned AI, and you'd want to buy the future-proofed solution, right? if you think about you mentioned ai and you'd want to buy the future-proofed solution right

Speaker 1: Yep. Yep. yep

Speaker 2: Or you want to bet on the technologies of the organization that's laser-focused on that. Has it changed actually where maybe the starting point in the conversation is with the large enterprise, where you may have originally talked to, let's call it the head of e-commerce? Is it now you're talking to the board or the CEO? Has it changed either who the stakeholders are and/or where the conversation starts, and does that tilt things in your favor more? Or you want to bet on the technologies of the organization that's laser-focused on that. or you want to bet on the technologies of the organization that's laser-focused on that Has it changed actually where maybe the starting point in the conversation is with the large enterprise, where you may have originally talked to, let's call it the head of e-commerce? has it changed actually where maybe the starting point in the conversation is with the large enterprise where you may have originally talked to let's call it the head of e-commerce Is it now you're talking to the board or the CEO? is it now you're talking to the board or the ceo Has it changed either who the stakeholders are and/or where the conversation starts, and does that tilt things in your favor more? has it changed either who the stakeholders are and/or where the conversation starts and does that tilt things in your favor more

Speaker 1: It's changed a little bit, but it actually has not changed as much as you would think, because especially if you're displacing an in-house solution, there's a natural desire, if you spent a lot of time, effort, years, management attention on building something and customizing it exactly the way you want, there's going to be, for a host of reasons, just starting with human nature, there's going to be some resistance about it. That's something that we've faced for a few years. That's still there. Yes, the stronger our solutions get, the more there is a pull to having conversations with the CEO, with the founder. The selling motion actually has not changed that much, only because even a couple of years ago, you're still dealing with a lot of the same dynamics. It's changed a little bit, but it actually has not changed as much as you would think, because especially if you're displacing an in-house solution, there's a natural desire, if you spent a lot of time, effort, years, management attention on building something and customizing it exactly the way you want, there's going to be, for a host of reasons, just starting with human nature, there's going to be some resistance about it. it's changed a little bit but it actually has not changed as much as you would think because especially if you're displacing an in-house solution there's a natural desire if you spent a lot of time effort years management attention on building something and customizing it exactly the way you want there's going to be for a host of reasons just starting with human nature there's going to be some resistance about it That's something that we've faced for a few years. that's something that we've faced for a few years That's still there. that's still there Yes, the stronger our solutions get, the more there is a pull to having conversations with the CEO, with the founder. yes the stronger our solutions get the more there is a pull to having conversations with the ceo with the founder The selling motion actually has not changed that much, only because even a couple of years ago, you're still dealing with a lot of the same dynamics. the selling motion actually has not changed that much only because even a couple of years ago you're still dealing with a lot of the same dynamics

Speaker 2: Maybe last on the go-to-market side, in terms of the sales organization, is headcount there where you want it to be? I know there was maybe some compensation changes that you had announced, or that were disclosed late last year. How has that maybe affected change of behavior inside of the sales organization? Maybe last on the go-to-market side, in terms of the sales organization, is headcount there where you want it to be? maybe last on the go-to-market side in terms of the sales organization is headcount there where you want it to be I know there was maybe some compensation changes that you had announced, or that were disclosed late last year. i know there was maybe some compensation changes that you had announced or that were disclosed late last year How has that maybe affected change of behavior inside of the sales organization? how has that maybe affected change of behavior inside of the sales organization

Speaker 1: Two parts to your question. First, from a headcount perspective, yeah, we are where we believe we need to be, and again, it's kind of three or four years ago we really started building out the sales force. You may have changes in the composition of the team, but you still, from the size of the sales force, we're still doing what we need to do, and as you know, headcount has come down each of the last three years. It's kind of stepped down slowly each year. That's something we've been very disciplined about. As it relates to some of the changes in the compensation system, as you know, big enterprises that sell, big companies that sell into enterprises, you're going to make changes in the compensation plan. You're going to make tweaks. You're going to continue to evolve it. Two parts to your question. two parts to your question First, from a headcount perspective, yeah, we are where we believe we need to be, and again, it's kind of three or four years ago we really started building out the sales force. first from a headcount perspective yeah we are where we believe we need to be and again it's kind of three or four years ago we really started building out the sales force You may have changes in the composition of the team, but you still, from the size of the sales force, we're still doing what we need to do, and as you know, headcount has come down each of the last three years. you may have changes in the composition of the team but you still from the size of the sales force we're still doing what we need to do and as you know headcount has come down each of the last three years It's kind of stepped down slowly each year. it's kind of stepped down slowly each year That's something we've been very disciplined about. that's something we've been very disciplined about As it relates to some of the changes in the compensation system, as you know, big enterprises that sell, big companies that sell into enterprises, you're going to make changes in the compensation plan. as it relates to some of the changes in the compensation system as you know big enterprises that sell big companies that sell into enterprises you're going to make changes in the compensation plan You're going to make tweaks. you're going to make tweaks You're going to continue to evolve it. you're going to continue to evolve it In any given change, some people will like the change more than others or vice versa. That's one of the reasons why in the last earnings call, Harley had a statistic, and I had a statistic as well, both as it relates to merchants. Everyone has their own definition of enterprise. Harley and I talked about GMV of $100 million and above and some of the progress and the strength they're seeing there. That strength and momentum speaks to us doing some good things, and as I alluded to just a couple of minutes ago, the product capabilities gap that we have versus others continues to widen. We feel good about what's going on in the quote enterprise. In any given change, some people will like the change more than others or vice versa. in any given change some people will like the change more than others or vice versa That's one of the reasons why in the last earnings call, Harley had a statistic, and I had a statistic as well, both as it relates to merchants. that's one of the reasons why in the last earnings call harley had a statistic and i had a statistic as well both as it relates to merchants Everyone has their own definition of enterprise. everyone has their own definition of enterprise Harley and I talked about GMV of $100 million and above and some of the progress and the strength they're seeing there. harley and i talked about gmv of $100 million and above and some of the progress and the strength they're seeing there That strength and momentum speaks to us doing some good things, and as I alluded to just a couple of minutes ago, the product capabilities gap that we have versus others continues to widen. that strength and momentum speaks to us doing some good things and as i alluded to just a couple of minutes ago the product capabilities gap that we have versus others continues to widen We feel good about what's going on in the quote enterprise. we feel good about what's going on in the quote enterprise

Speaker 2: Look, you're one of the few companies, I believe in all of software right now, that has reduced headcount and accelerated growth. Maybe there's some magic to that as well. It's fairly remarkable. I want to switch gears. We've talked about external AI and the AI e-commerce infrastructure. We've talked about products you're developing. Let's talk about the company's internal innovation, especially as we just talked about headcount. How is Shopify using AI internally, and where have you seen the biggest impact from internal adoption? Look, you're one of the few companies, I believe in all of software right now, that has reduced headcount and accelerated growth. look you're one of the few companies i believe in all of software right now that has reduced headcount and accelerated growth Maybe there's some magic to that as well. maybe there's some magic to that as well It's fairly remarkable. it's fairly remarkable I want to switch gears. i want to switch gears We've talked about external AI and the AI e-commerce infrastructure. we've talked about external ai and the ai e-commerce infrastructure We've talked about products you're developing. we've talked about products you're developing Let's talk about the company's internal innovation, especially as we just talked about headcount. let's talk about the company's internal innovation especially as we just talked about headcount How is Shopify using AI internally, and where have you seen the biggest impact from internal adoption? how is shopify using ai internally and where have you seen the biggest impact from internal adoption

Speaker 1: Well, as you know, a lot of attention on Shopify started with Tobi's memo a little bit over a year ago in terms of how we think about internal uses of AI, and not surprisingly, I think for a lot of people in tech, it starts with R&D product development. We had a lot with support as well in terms of some of the things that we were doing interestingly on the support side. R&D for sure first, support is a fast follower, but it's really even six, nine months ago, it's all parts of the organization. It's everyone from finance to talent/HR to legal to sales. All elements of the organization are using AI in a very thoughtful way. Well, as you know, a lot of attention on Shopify started with Tobi's memo a little bit over a year ago in terms of how we think about internal uses of AI, and not surprisingly, I think for a lot of people in tech, it starts with R&D product development. well as you know a lot of attention on shopify started with tobi's memo a little bit over a year ago in terms of how we think about internal uses of ai and not surprisingly i think for a lot of people in tech it starts with r&d product development We had a lot with support as well in terms of some of the things that we were doing interestingly on the support side. we had a lot with support as well in terms of some of the things that we were doing interestingly on the support side R&D for sure first, support is a fast follower, but it's really even six, nine months ago, it's all parts of the organization. r&d for sure first support is a fast follower but it's really even six nine months ago it's all parts of the organization It's everyone from finance to talent/HR to legal to sales. it's everyone from finance to talent/hr to legal to sales All elements of the organization are using AI in a very thoughtful way. all elements of the organization are using ai in a very thoughtful way Just like we've been thought leaders in terms of encouraging people to use it, we've also been thought leaders in how do we make sure that we're getting the right model for the right person and the right use case at the right time, such that we just don't have people running off and using the most expensive model when they don't need to. We have circuit breakers that we look at. There's a couple of reports and dashboards in particular our CTO, Mikhail, and I look at, how do we look at those on a weekly basis and find things over week-over-week change? Just like we've been thought leaders in terms of encouraging people to use it, we've also been thought leaders in how do we make sure that we're getting the right model for the right person and the right use case at the right time, such that we just don't have people running off and using the most expensive model when they don't need to. just like we've been thought leaders in terms of encouraging people to use it we've also been thought leaders in how do we make sure that we're getting the right model for the right person and the right use case at the right time such that we just don't have people running off and using the most expensive model when they don't need to We have circuit breakers that we look at. we have circuit breakers that we look at There's a couple of reports and dashboards in particular our CTO, Mikhail, and I look at, how do we look at those on a weekly basis and find things over week-over-week change? there's a couple of reports and dashboards in particular our cto mikhail and i look at how do we look at those on a weekly basis and find things over week-over-week change We look at the types of models that are being used by department, by level of seniority, all these things, and kind of when should we be using an open source model versus when should we be using some of the more expensive latest versions of the Anthropic's and the ChatGPT's and Gemini's, et cetera. We're very intentional about that. Part of the reason we can be so intentional about it is because Tobi has such a deep understanding around what model is necessary. As you know, you probably hear as investors, a lot of CFOs talking about, well, how do I manage these costs? From my vantage point, Tobi leads the charge on this stuff. Mikhail and I make sure we're being really thoughtful on this, but Tobi's out there making sure we're being highly intentional. We look at the types of models that are being used by department, by level of seniority, all these things, and kind of when should we be using an open source model versus when should we be using some of the more expensive latest versions of the Anthropic's and the ChatGPT's and Gemini's, et cetera. we look at the types of models that are being used by department by level of seniority all these things and kind of when should we be using an open source model versus when should we be using some of the more expensive latest versions of the anthropic's and the chatgpt's and gemini's et cetera We're very intentional about that. we're very intentional about that Part of the reason we can be so intentional about it is because Tobi has such a deep understanding around what model is necessary. part of the reason we can be so intentional about it is because tobi has such a deep understanding around what model is necessary As you know, you probably hear as investors, a lot of CFOs talking about, well, how do I manage these costs? as you know you probably hear as investors a lot of cfos talking about well how do i manage these costs From my vantage point, Tobi leads the charge on this stuff. from my vantage point tobi leads the charge on this stuff Mikhail and I make sure we're being really thoughtful on this, but Tobi's out there making sure we're being highly intentional. mikhail and i make sure we're being really thoughtful on this but tobi's out there making sure we're being highly intentional

Speaker 2: As a follow-up to that, I think people think about the value created by AI internally. They express it in different ways. It's either, hey, it's driving productivity- As a follow-up to that, I think people think about the value created by AI internally. as a follow-up to that i think people think about the value created by ai internally They express it in different ways. they express it in different ways It's either, hey, it's driving productivity- it's either hey it's driving productivity-

Speaker 1: Yeah. Yeah. yeah

Speaker 2: Which maybe drives revenue, versus it makes people more productive, so maybe I can lower headcount or lower costs. How are you thinking philosophically as the CFO between that trade-off of if I get X productivity, I want to maintain headcount, or would I rather take that productivity and reduce headcount? How do you think about essentially a form of reinvesting savings or productivity gains? Which maybe drives revenue, versus it makes people more productive, so maybe I can lower headcount or lower costs. which maybe drives revenue versus it makes people more productive so maybe i can lower headcount or lower costs How are you thinking philosophically as the CFO between that trade-off of if I get X productivity, I want to maintain headcount, or would I rather take that productivity and reduce headcount? how are you thinking philosophically as the cfo between that trade-off of if i get x productivity i want to maintain headcount or would i rather take that productivity and reduce headcount How do you think about essentially a form of reinvesting savings or productivity gains? how do you think about essentially a form of reinvesting savings or productivity gains

Speaker 1: Yeah. Shopify is, as you've alluded to it, we are a high-growth builder company. Will we, like everyone, be thoughtful around headcount and make sure we're doing the most we can with what we have? Yes. On the margin, we're going to say, "Let's take the engineers we have. Let's continue to build some amazing things." We do Editions twice a year, as you know. We continue to crank out more products. Let's think about taking this team and have them do even more for merchants. That's really the starting philosophy for us. As you think about with headcount, again, for the last three years, it's been essentially down some, you can call it flat if you want, but it's been down, and the growth has continued. Again, four quarters of 30%, three years now, we're going on 25% each quarter. Yeah. yeah Shopify is, as you've alluded to it, we are a high-growth builder company. shopify is as you've alluded to it we are a high-growth builder company Will we, like everyone, be thoughtful around headcount and make sure we're doing the most we can with what we have? will we like everyone be thoughtful around headcount and make sure we're doing the most we can with what we have Yes. yes On the margin, we're going to say, "Let's take the engineers we have. on the margin we're going to say "let's take the engineers we have Let's continue to build some amazing things." We do Editions twice a year, as you know. let's continue to build some amazing things." we do editions twice a year as you know We continue to crank out more products. we continue to crank out more products Let's think about taking this team and have them do even more for merchants. let's think about taking this team and have them do even more for merchants That's really the starting philosophy for us. that's really the starting philosophy for us As you think about with headcount, again, for the last three years, it's been essentially down some, you can call it flat if you want, but it's been down, and the growth has continued. as you think about with headcount again for the last three years it's been essentially down some you can call it flat if you want but it's been down and the growth has continued Again, four quarters of 30%, three years now, we're going on 25% each quarter. again four quarters of 30% three years now we're going on 25% each quarter The growth is there. The headcount is flat to down. There's some things, and we've talked a bunch about kind of all the different dynamics and operating expenses, but that just leads you to being able to create more and more opportunities, in terms of what that means for free cash flow margins. The growth is there. the growth is there The headcount is flat to down. the headcount is flat to down There's some things, and we've talked a bunch about kind of all the different dynamics and operating expenses, but that just leads you to being able to create more and more opportunities, in terms of what that means for free cash flow margins. there's some things and we've talked a bunch about kind of all the different dynamics and operating expenses but that just leads you to being able to create more and more opportunities in terms of what that means for free cash flow margins

Speaker 2: When you think about the impact that adopting these tools had on your R&D flywheel. When you think about the impact that adopting these tools had on your R&D flywheel. when you think about the impact that adopting these tools had on your r&d flywheel

Speaker 1: Yep. Yep. yep

Speaker 2: Can you speak a little bit to, I think that's an area where a lot of software companies have talked about a positive impact. How are you guys thinking about development, and how has that impacted the product shipping that you guys have done? Can you speak a little bit to, I think that's an area where a lot of software companies have talked about a positive impact. can you speak a little bit to i think that's an area where a lot of software companies have talked about a positive impact How are you guys thinking about development, and how has that impacted the product shipping that you guys have done? how are you guys thinking about development and how has that impacted the product shipping that you guys have done

Speaker 1: Yeah. Well, we definitely spend a lot of time thinking about for the pull request and kind of the code development, how much is being written by AI versus how much is being written by the engineers, how much testing of code are we doing, and what percentage of the code we're cranking out is being monitored by the LLM. We haven't talked extensively about those percentages, but you can, again, you could assume, given some of the leadership and thoughtfulness we've had and the things we've talked about, that we feel pretty good about where we are and kind of how we're continuing to accelerate this pace. I don't see any slowdown. Again, we have an Editions session coming up, and as we continue to talk about all the things we're cranking out, I don't see any slowdown in any of that. Yeah. yeah Well, we definitely spend a lot of time thinking about for the pull request and kind of the code development, how much is being written by AI versus how much is being written by the engineers, how much testing of code are we doing, and what percentage of the code we're cranking out is being monitored by the LLM. well we definitely spend a lot of time thinking about for the pull request and kind of the code development how much is being written by ai versus how much is being written by the engineers how much testing of code are we doing and what percentage of the code we're cranking out is being monitored by the llm We haven't talked extensively about those percentages, but you can, again, you could assume, given some of the leadership and thoughtfulness we've had and the things we've talked about, that we feel pretty good about where we are and kind of how we're continuing to accelerate this pace. we haven't talked extensively about those percentages but you can again you could assume given some of the leadership and thoughtfulness we've had and the things we've talked about that we feel pretty good about where we are and kind of how we're continuing to accelerate this pace I don't see any slowdown. i don't see any slowdown Again, we have an Editions session coming up, and as we continue to talk about all the things we're cranking out, I don't see any slowdown in any of that. again we have an editions session coming up and as we continue to talk about all the things we're cranking out i don't see any slowdown in any of that

Speaker 2: I want to talk about pricing in that context, right? You've rolled out Catalog, you've rolled out Sidekick, you're rolling out, those are some of the headline features, but you're constantly rolling out new product and shipping it to your customers, and that flywheel's accelerating. It's been a few years now since you've raised price on both the standard and the Pro SKUs. How do you think about how adoption of some of the newer features you've rolled out, how will that impact your thoughts on pricing, broadly speaking? I want to talk about pricing in that context, right? i want to talk about pricing in that context right You've rolled out Catalog, you've rolled out Sidekick, you're rolling out, those are some of the headline features, but you're constantly rolling out new product and shipping it to your customers, and that flywheel's accelerating. you've rolled out catalog you've rolled out sidekick you're rolling out those are some of the headline features but you're constantly rolling out new product and shipping it to your customers and that flywheel's accelerating It's been a few years now since you've raised price on both the standard and the Pro SKUs. it's been a few years now since you've raised price on both the standard and the pro skus How do you think about how adoption of some of the newer features you've rolled out, how will that impact your thoughts on pricing, broadly speaking? how do you think about how adoption of some of the newer features you've rolled out how will that impact your thoughts on pricing broadly speaking

Speaker 1: Yeah. Well, as you know, we've always thought on kind of the spectrum in terms of value versus maximizing price for merchants. We've always been very focused on the value side of that equation. When we changed the pricing on standard plans three years ago, it had been 13 years, actually, since we changed it. When we changed on +2 years ago, it had been almost seven years. I think you'll see probably more frequency from us in terms of how frequently we change those prices. Of course, I don't have anything as it relates to pricing to announce today. We'd roll that out with merchants. But from our vantage point, we want to, again, stay focused on value. Sidekick has really helped delivering more value to merchants. Yeah. yeah Well, as you know, we've always thought on kind of the spectrum in terms of value versus maximizing price for merchants. well as you know we've always thought on kind of the spectrum in terms of value versus maximizing price for merchants We've always been very focused on the value side of that equation. we've always been very focused on the value side of that equation When we changed the pricing on standard plans three years ago, it had been 13 years, actually, since we changed it. when we changed the pricing on standard plans three years ago it had been 13 years actually since we changed it When we changed on + 2 years ago, it had been almost seven years. when we changed on + 2 years ago it had been almost seven years I think you'll see probably more frequency from us in terms of how frequently we change those prices. i think you'll see probably more frequency from us in terms of how frequently we change those prices Of course, I don't have anything as it relates to pricing to announce today. of course i don't have anything as it relates to pricing to announce today We'd roll that out with merchants. we'd roll that out with merchants But from our vantage point, we want to, again, stay focused on value. but from our vantage point we want to again stay focused on value Sidekick has really helped delivering more value to merchants. sidekick has really helped delivering more value to merchants Let's help them be more and more successful, that will kind of inure, again, back to our revenue, back to our margins and everything we're trying to do. I think we're very thoughtful in monetization. We're always looking and testing the prices, and we may test, for example, in a specific geography, maybe we're testing the pricing on point of sale, or we're testing the pricing on this plan or various things. Yeah, we're always out there testing, but as it relates to any big pricing plan, I have nothing to announce today. Let's help them be more and more successful, that will kind of inure, again, back to our revenue, back to our margins and everything we're trying to do. let's help them be more and more successful that will kind of inure again back to our revenue back to our margins and everything we're trying to do I think we're very thoughtful in monetization. i think we're very thoughtful in monetization We're always looking and testing the prices, and we may test, for example, in a specific geography, maybe we're testing the pricing on point of sale, or we're testing the pricing on this plan or various things. we're always looking and testing the prices and we may test for example in a specific geography maybe we're testing the pricing on point of sale or we're testing the pricing on this plan or various things Yeah, we're always out there testing, but as it relates to any big pricing plan, I have nothing to announce today. yeah we're always out there testing but as it relates to any big pricing plan i have nothing to announce today

Speaker 2: Great. Then, margins is an area where, since you joined, Shopify has seen essentially a step-function increase on GAAP margins and free cash flow margin. I think investors have been really appreciative of the progress there. This year, free cash flow margins, I think, are expected to be largely flattish, plus or minus. Just help us think through maybe the broader free cash flow margin expansion trajectory and what the puts and takes there are. Great. great Then, margins is an area where, since you joined, Shopify has seen essentially a step -function increase on GAAP margins and free cash flow margin. then margins is an area where since you joined shopify has seen essentially a step -function increase on gaap margins and free cash flow margin I think investors have been really appreciative of the progress there. i think investors have been really appreciative of the progress there This year, free cash flow margins, I think, are expected to be largely flattish, plus or minus. this year free cash flow margins i think are expected to be largely flattish plus or minus Just help us think through maybe the broader free cash flow margin expansion trajectory and what the puts and takes there are. just help us think through maybe the broader free cash flow margin expansion trajectory and what the puts and takes there are

Speaker 1: Yeah. I think, if you look at free cash flow margins in 2025 and 2024, you see some pretty significant similarities in terms of two things. Number one, where you ended up for the full year, free cash flow margins, and let's call them roughly high teens for both of those, and then kind of how they progressed through the quarter, right? Generally, kind of Q1 and Q2, had generally been, let's call it kind of mid-teens, and you see a little bit of inflection in Q3, and then Q4 is generally, of course, the big holiday shopping season. While the numbers differ a little bit, that pattern, kind of that intra-quarter pattern throughout the year, again, holds true for both of those years. Yeah. yeah I think, if you look at free cash flow margins in 2025 and 2024, you see some pretty significant similarities in terms of two things. i think if you look at free cash flow margins in 2025 and 2024 you see some pretty significant similarities in terms of two things Number one, where you ended up for the full year, free cash flow margins, and let's call them roughly high teens for both of those, and then kind of how they progressed through the quarter, right? number one where you ended up for the full year free cash flow margins and let's call them roughly high teens for both of those and then kind of how they progressed through the quarter right Generally, kind of Q1 and Q2, had generally been, let's call it kind of mid-teens, and you see a little bit of inflection in Q3, and then Q4 is generally, of course, the big holiday shopping season. generally kind of q1 and q2 had generally been let's call it kind of mid-teens and you see a little bit of inflection in q3 and then q4 is generally of course the big holiday shopping season While the numbers differ a little bit, that pattern, kind of that intra-quarter pattern throughout the year, again, holds true for both of those years. while the numbers differ a little bit that pattern kind of that intra-quarter pattern throughout the year again holds true for both of those years We're obviously not going to give guidance for the full year this year. I've been very specific that nothing's changed in terms of how we think about free cash flow margins and how we look to generate the returns. We've had, as it relates to the last couple of years in kind of getting to these free cash flow margins, there's when you think about operating expenses and some of the changes, some of the dynamics in there, things that we've talked about on prior calls. Headcount has been flat to down. We've had year-over-year compensation dollars have been up as a function of a couple of things. Obviously, you're going to do merit-based pay increases. We've had a little bit of mix shift from just the percentage of employees or in certain departments to a little bit more, which are weighted towards R&D. We're obviously not going to give guidance for the full year this year. we're obviously not going to give guidance for the full year this year I've been very specific that nothing's changed in terms of how we think about free cash flow margins and how we look to generate the returns. i've been very specific that nothing's changed in terms of how we think about free cash flow margins and how we look to generate the returns We've had, as it relates to the last couple of years in kind of getting to these free cash flow margins, there's when you think about operating expenses and some of the changes, some of the dynamics in there, things that we've talked about on prior calls. we've had as it relates to the last couple of years in kind of getting to these free cash flow margins there's when you think about operating expenses and some of the changes some of the dynamics in there things that we've talked about on prior calls Headcount has been flat to down. headcount has been flat to down We've had year-over-year compensation dollars have been up as a function of a couple of things. we've had year-over-year compensation dollars have been up as a function of a couple of things Obviously, you're going to do merit-based pay increases. obviously you're going to do merit-based pay increases We've had a little bit of mix shift from just the percentage of employees or in certain departments to a little bit more, which are weighted towards R&D. we've had a little bit of mix shift from just the percentage of employees or in certain departments to a little bit more which are weighted towards r&d That's naturally going to have a little bit of dollar lift on some of that. Marketing continues, as you know, we talk about our operating expenses as a percentage of revenue. That continues to click down. If you look on a comparable quarter like Q1 of this year versus Q1 of last year, or Q2 of last year versus Q2 2026, those percentages continue to click down. Sales and marketing has continued to click down as a percentage of revenue, even though marketing dollars year-over-year have been up some, et cetera. The other thing, too, to call out is we've historically not spent a ton of time talking about taxes. I know we shouldn't spend a ton of time now. We've also now effectively gotten to what is, I would call, a kind of normalized tax rate, just based on assumption and kind of geographic spend. That's naturally going to have a little bit of dollar lift on some of that. that's naturally going to have a little bit of dollar lift on some of that Marketing continues, as you know, we talk about our operating expenses as a percentage of revenue. marketing continues as you know we talk about our operating expenses as a percentage of revenue That continues to click down. that continues to click down If you look on a comparable quarter like Q1 of this year versus Q1 of last year, or Q2 of last year versus Q2 2026, those percentages continue to click down. if you look on a comparable quarter like q1 of this year versus q1 of last year or q2 of last year versus q2 2026 those percentages continue to click down Sales and marketing has continued to click down as a percentage of revenue, even though marketing dollars year-over-year have been up some, et cetera. sales and marketing has continued to click down as a percentage of revenue even though marketing dollars year-over-year have been up some et cetera The other thing, too, to call out is we've historically not spent a ton of time talking about taxes. the other thing too to call out is we've historically not spent a ton of time talking about taxes I know we shouldn't spend a ton of time now. i know we shouldn't spend a ton of time now We've also now effectively gotten to what is, I would call, a kind of normalized tax rate, just based on assumption and kind of geographic spend. we've also now effectively gotten to what is i would call a kind of normalized tax rate just based on assumption and kind of geographic spend That's been one of the things over the last year or two that's been, even though free cash flow margins have been the same, that's been one of the headwinds for us. That should largely be behind us. We feel really good about head count and the ability to continue to be disciplined there, and continue these growth rates. That's been one of the things over the last year or two that's been, even though free cash flow margins have been the same, that's been one of the headwinds for us. that's been one of the things over the last year or two that's been even though free cash flow margins have been the same that's been one of the headwinds for us That should largely be behind us. that should largely be behind us We feel really good about head count and the ability to continue to be disciplined there, and continue these growth rates. we feel really good about head count and the ability to continue to be disciplined there and continue these growth rates

Speaker 2: I'm glad we're not spending more time on taxes. April 15th is. I'm glad we're not spending more time on taxes. i'm glad we're not spending more time on taxes April 15th is. april 15th is

Speaker 1: Yeah. You and me both. Well in the rearview mirror. Yeah. yeah You and me both. you and me both Well in the rearview mirror. well in the rearview mirror

Speaker 2: Yes. As is the Intuit Fireside. We're done with taxes for the day. Yes. yes As is the Intuit Fireside. as is the intuit fireside We're done with taxes for the day. we're done with taxes for the day

Speaker 1: Great. Great. great

Speaker 2: Maybe I'll close out on this. If you zoom out and think big picture, the next three to five years, what do you think will matter most in Shopify sustaining that 20%+ growth? Let's not even index to a specific percentage, but staying in the high growth category, right, which you guys have been remarkably durable at. Is it merchant acquisition? Is it better monetization? I'm going to quit giving you any more. I'll start with those two, but what would you say are the three or four biggest contributors to sustaining high growth for Shopify? Maybe I'll close out on this. maybe i'll close out on this If you zoom out and think big picture, the next three to five years, what do you think will matter most in Shopify sustaining that 20%+ growth? if you zoom out and think big picture the next three to five years what do you think will matter most in shopify sustaining that 20%+ growth Let's not even index to a specific percentage, but staying in the high growth category, right, which you guys have been remarkably durable at. let's not even index to a specific percentage but staying in the high growth category right which you guys have been remarkably durable at Is it merchant acquisition? is it merchant acquisition Is it better monetization? is it better monetization I'm going to quit giving you any more. i'm going to quit giving you any more I'll start with those two, but what would you say are the three or four biggest contributors to sustaining high growth for Shopify? i'll start with those two but what would you say are the three or four biggest contributors to sustaining high growth for shopify

Speaker 1: Yeah. You asked me a question about monetization. Monetization will, I'm sure, to a certain extent, be a part of it, but it's really merchant acquisition, merchant retention, as a function of great products. It's a function of great products in a bunch of different areas. We spent a decent amount of time talking about international. I think that is a significant tailwind for us, and that's an opportunity to just continue to do more of what we've been doing in more geographies. We spent some time on enterprise. That is a significant opportunity. We didn't talk a whole lot about B2B. I think that is a very interesting opportunity for us because it's building a presence for us with merchants in industries historically we've not served, right? Yeah. yeah You asked me a question about monetization. you asked me a question about monetization Monetization will, I'm sure, to a certain extent, be a part of it, but it's really merchant acquisition, merchant retention, as a function of great products. monetization will i'm sure to a certain extent be a part of it but it's really merchant acquisition merchant retention as a function of great products It's a function of great products in a bunch of different areas. it's a function of great products in a bunch of different areas We spent a decent amount of time talking about international. we spent a decent amount of time talking about international I think that is a significant tailwind for us, and that's an opportunity to just continue to do more of what we've been doing in more geographies. i think that is a significant tailwind for us and that's an opportunity to just continue to do more of what we've been doing in more geographies We spent some time on enterprise. we spent some time on enterprise That is a significant opportunity. that is a significant opportunity We didn't talk a whole lot about B2B. we didn't talk a whole lot about b2b I think that is a very interesting opportunity for us because it's building a presence for us with merchants in industries historically we've not served, right? i think that is a very interesting opportunity for us because it's building a presence for us with merchants in industries historically we've not served right A lot of segments of B2B are used to using software that's clunky, a little painful, and we're giving them something that's very different, and we're seeing as people, as consumers engage with Shopify in various forms, and then you go back into the workforce and you think about, all right, so how do I take the brand awareness I have with Shopify and maybe think about that in a B2B context. We're seeing some interesting things in B2B. I could go on and on on cross-border, on point-of-sale, and agentic and how this plays out, which is also a potentially huge tailwind for us as well. It's a compilation of all these S curves, and how do they all, in the aggregate, continue to do more for us. That's the biggest thing. A lot of segments of B2B are used to using software that's clunky, a little painful, and we're giving them something that's very different, and we're seeing as people, as consumers engage with Shopify in various forms, and then you go back into the workforce and you think about, all right, so how do I take the brand awareness I have with Shopify and maybe think about that in a B2B context. a lot of segments of b2b are used to using software that's clunky a little painful and we're giving them something that's very different and we're seeing as people as consumers engage with shopify in various forms and then you go back into the workforce and you think about all right so how do i take the brand awareness i have with shopify and maybe think about that in a b2b context We're seeing some interesting things in B2B. we're seeing some interesting things in b2b I could go on and on on cross-border, on point-of-sale, and agentic and how this plays out, which is also a potentially huge tailwind for us as well. i could go on and on on cross-border on point-of-sale and agentic and how this plays out which is also a potentially huge tailwind for us as well It's a compilation of all these S curves, and how do they all, in the aggregate, continue to do more for us. it's a compilation of all these s curves and how do they all in the aggregate continue to do more for us That's the biggest thing. that's the biggest thing Great products will help us get more merchants and have merchants be even more successful. As we talked about Sidekick and that it truly does the flywheel on all this stuff. Great products will help us get more merchants and have merchants be even more successful. great products will help us get more merchants and have merchants be even more successful As we talked about Sidekick and that it truly does the flywheel on all this stuff. as we talked about sidekick and that it truly does the flywheel on all this stuff

Speaker 2: Well, Jeff, you guys have done a remarkable job at Shopify. I know it's great to spend some time with you today digging into it. Thank you so much- Well, Jeff, you guys have done a remarkable job at Shopify. well jeff you guys have done a remarkable job at shopify I know it's great to spend some time with you today digging into it. i know it's great to spend some time with you today digging into it Thank you so much- thank you so much-

Speaker 1: Thanks, man Thanks, man thanks man

Speaker 2: for your time. Thank you. We're done. for your time. for your time Thank you. thank you We're done. we're done