All right. Welcome, everyone. Thank you. All right, we'll get started. Welcome, everyone. We're really glad to have here with us the team from Shopify. We have both Carrie Gillard, who is Head of Investor Relations, also joining here. Joining us in Arizona, here in the front row, is Amy Gilkes , also a member of the IR team. So both to Amy and Carrie, we want to thank you for making the trip here to Arizona and being a big part of this event.
Yeah. Happy to be here.
All right. We've got a great list of topics that we're going to try and get through. I don't know if we're going to be able to cover it all, but I'm going to, we're going to give it a go. Just to set the stage, we're going to start off with a little bit on the holiday trends. Then we're going to talk about GMV trends overall, bigger picture, this year, next year, and beyond. We're going to get into some of the growth drivers. We're going to talk about enterprise. We're going to talk about international. We're going to talk about the in-store business. We'll talk about Shop Pay. And we'll talk about some of the kind of pricing philosophy as we head into the next few years, so it's a lot to cover, but let's get started with some of the holiday trends.
So we're about 2/3 into the quarter. We just got through Black Friday Cyber Monday. Clearly, you guys put out a press release, so we have some of the numbers there. But generally speaking, broader into the holiday season, how is Shopify seeing things?
Yeah. So the press release that went out yesterday on our Black Friday, Cyber Monday weekend, right, really proud of what our merchants achieved, kind of $14.6 billion in sales over the weekend, up 27%, and 24% on a constant currency basis. So really, really good growth, really proud. A lot of the stats in there that we provide on our merchants is incredible. My first Black Friday, Cyber Monday with Shopify was back in 2022, which the business on that weekend did $7.5 billion. So the fact that in kind of only three years, we've essentially doubled just showcases kind of the growth of Shopify, the platform, and the merchants, and how we're helping them succeed, not only over this weekend, but really, really every day.
In terms of the trends that we saw, really, we talked a little bit about this on the earnings call, and it's been fairly consistent over the past couple of years of starting to see more shopping happening outside of kind of those kind of five key days, as well as merchants businesses kind of continuing to have their promotions, etc., running for longer periods of time. We also have more international in the mix, which has also been an important growth driver for us, which is a factor that we're contributing, as well. From a consumer perspective, consumers continue to buy from the brands that they love. They're being very intentional with their shopping, and the demand we're seeing has been pretty consistent across the board, across all of our verticals.
Excellent. All right. Thank you, Carrie. That was a great way to start things off. We're going to talk a little bit about GMV trends and some of the growth drivers. So clearly, Shopify is no longer a North American SMB e-commerce platform. It's evolved to much, much more than that. We like to say it's E, I, I, and B, so enterprise, international, in-store, and B2B are some of the new growth verticals that you've added. Maybe you could just talk a little bit about the evolution of the components of the growth algorithm, which ones are kind of the larger at the moment and which ones could become larger over time.
Yeah. I mean, Shopify's growth has been very consistent at both the GMV and revenue over the past couple of years, in part to, again, the platform that we've built and the fact that it can scale from, somebody starting a new business all the way up to the largest enterprises on the planet. In terms of how we think about our growth, right, we start with kind of looking at our online business, which is where we started, and that continues to grow really, really well. In many markets kind of around the world, if you look at the online growth, or e-commerce rates in those, we're growing anywhere from one and a half to 4x faster, our merchants are.
Seeing a lot of continued success in kind of our store, our online store presence, then to your point on kind of the other channels and kind of building out our unified commerce approach is really things like retail, and our offline business, which continues to grow incredibly well. Still a lot smaller today. It's still, I think, under 10% of our revenue at the end of last year. There's still a big opportunity for us to get more offline. It continues to win both small businesses as well as larger merchants. And as we move into the growth you just talked about of enterprise and that being a newer leg of growth for us, that is something that the offline offering works well for us of being able to offer them both online and offline and unifying their business altogether into one.
If I try to stack rank the growth, right, again, online is where the largest piece of our business is today. If I look at it from a merchant perspective or a merchant banding size perspective, we talked a little bit about this on our most recent call. The vast majority of our growth comes from kind of merchants in an annual GMV band of $25 million and under, right, because we are for the small businesses, and these smaller ones. The merchants that are kind of $25 million in annual GMV and above, they're growing really well and growing a lot faster. That is an area that we have only more recently really started to get behind more and put more concentrated effort in winning these larger merchants, and we are finding success.
So our growth algorithm really across the board is there's a lot of opportunity to keep winning the small businesses both locally and globally, as well as larger enterprise ones up market. International in the more recent history has been the kind of, driver of more of our kind of outsized growth. In any given quarter, really led by Europe, international is growing in the kind of high 30s%, low 40s%, which is pretty impressive. The growth we're seeing is pretty balanced between both same store kind of merchants who've been on the platform for a year versus new, which also suggests that our cohorts remain really, really strong. I think we feel really great that we have so many different growth levers that are all contributing, and we're continuing to execute really well against.
All right. Thank you, Carrie. All right. We're going to move on to enterprise. So I often start this off as a question where it's think back in all of our time covering stocks now for some time and think about the investors here and all your coverage. How many times have you seen a company that has, let's say, a low single-digit share of any market but is winning four out of 10 new opportunities, which are some stats that Shopify published that's not our estimate? So with that context, in terms of those four out of 10 that you've been winning, maybe you could talk a little bit about those drivers. You've called out the integration partners, the Commerce Components. You've talked about the enterprise sales teams. Let's just talk about all of that, bringing it together and how it's helping you win the RFPs.
Yeah. So the effort and focus on building out up market has been something that's been in the works for now, like around three years, and so to Tim's point, part of that was building out and really being concentrated in going up market, and step one of that was offering and providing commerce components or breaking apart the stack a little bit so that larger enterprises could take a singular item, versus feeling like they had to fully migrate over. Then it was about building out those partnerships with SIs or the system integrators, making sure that they were trained up on our product, trained up on what we offer, so that we could be more competitive and get our foot in the door.
And then it was about building up a team that could then also kind of more effectively go out and reach out to these large enterprises and drive growth. What you've seen then is we've started to win some pretty meaningful and large brands, right? Some more recent wins have been Estée Lauder, Canada Goose, which are incredible, and we're very excited to have those brands coming to us. But what's helping us get in there is because it's now been three years, right? We have more time on. The cycle for enterprise is a longer cycle, from when they kind of initially engage to ultimately are on platform and contributing to the GMV that shows up. And so that longer cycle with where we're at means we're still very early days in what that opportunity can be for us. But we like where we're positioned.
We like the kind of funnel and the go-to-market process that we've built, and we think we'll continue to find success in bringing more of these larger merchants on platform.
All right. Excellent. So you and I had a conversation about this a few weeks ago, so I think it's a good one to maybe we can share with the audience, which is around how investors should be thinking about, at least in the early days, some of the monetization of the enterprise customers. The way we framed it was that some of them are starting with, and you've talked about this on your earnings call, with the Commerce Components first and the Shop Pay button. So a lot of that monetization is coming through payments rather than SaaS upfront, but there's a mix of both, and maybe you could just elaborate on this topic.
Yeah. So one of the beautiful things about Shopify is that we have a lot of on-ramps into it. There is not one way in. There is, especially for enterprise, we offer a lot of variety. It is things like what Tim just talked about of them taking just a singular component, taking our Shop Pay, which is our accelerated checkout, which just converts better and drives. Many of you have probably used the purple button yourselves. And so we offer that as a way in when they could take just a single component, give it a try, hopefully it drives more sales, and then over time potentially get them to take more or other things. We also then offer they can come to us full stack and just make a full complete switch and do an integration with them there.
We also have then if they want to start with just online or just retail, right, or just B2B. We offer a variety of ways for these large enterprises to consider coming to us, taking all or taking a little. What that means then is that it gives us a lot of opportunity, to get our foot in the door as well as drive kind of longer sustainable growth over time because we can ideally then hopefully win more of the business on each of those enterprises over time. With where we are today, from where we kind of started, we have seen some of that happening, right? So we have now enough proof points of brands who have come to us and started with just Shop Pay off platform and are now on the full platform and full stack, right?
We have examples like a Mejuri who came to us and took only online, and then after a couple of months was like, "your product is so great. I actually want to do it in my whole offline and have taken it," right? So the kind of expansion and ways in which enterprises can find success with us, especially these up-market brands, continues to be kind of a factor that helps us with securing some of these.
Thank you, Carrie. And just a minor follow-up to that. Since some of these enterprise merchants are starting with the payments, it would imply a pretty healthy payments attach rate within enterprise. Is that fair to say?
Yeah. It usually starts with that, right? It's not a, again, not a one-size-fits-all approach. Every entrepreneur or every enterprise for that matter has specific needs and things that they're coming to us for. But what we're finding today is that the vast majority are coming and taking payments, right, and taking the storefront. So it's showing up most through, yes, merchant solutions within our payments business.
All right. Great. Last one on enterprise. So you mentioned this earlier, so maybe we could elaborate on it, but you also give some great numbers on the earnings call around the size of merchants and what kind of components they make up. Now, we've published our estimate of what we think enterprise GMV is. Maybe you could just talk directionally around how much that business is within the mix and some of the stats that you've disclosed.
Yeah. We haven't actually ever given the percentage of what enterprise or larger merchants represents. We tend to look at our, our business more on cohorts and then kind of this GMV banding, because again, we merchants have different paths and they have different choices for what they want and what they need. We talked about the fact that the $25 million and above GMV is growing faster, or those merchants in that category is growing faster, but still makes up a smaller portion today. So it is still a very big opportunity for us to win some of these larger merchants, which should be a growth driver hopefully for, for many years to come. There's a lot of different ways that we, we can slice our, our GMV and, and our merchants.
And what we've is great is that it's very broad-based, and any way you slice it, we're continuing to see really strong growth, whether that's across verticals. So again, apparel and accessories is like our largest vertical, but we're making a lot of headway into a lot of other ones. If you look at it from an existing merchant versus a new, we're still continuing to see a lot of really good strong growth across both. So we feel really kind of well-positioned with the ways we're driving growth. There isn't any one single piece. Enterprise is just one way and one growth lever amongst the many that we see ahead of us.
All right. I think we covered enterprise quite well. Let's move to international. So you mentioned some of the growth rates just a few minutes ago. Maybe you could talk a little bit about the drivers there and then also mixes. Is that more SMB? Is it more enterprise? If you had to compare it relative to the contributions within the U.S., and then we'll come back on a follow-up on payments penetration.
Yeah. So international has done really, really well for us. This is an area where we have been investing a lot more in the past couple of years, both on the marketing front and the product front, and what you're seeing today is kind of the manifestation of those investments playing out with the strong growth that we're seeing. When you look at international or global in total, right, the same kind of metrics or stats apply. So same store sales versus new, it's been fairly balanced. In any given quarter, it might skew a little bit more of the GMV growth from new versus same store, but on average, it's been fairly kind of consistent on where the growth is coming from.
And that's in part because, again, the cohorts we have are really strong from an existing base, and then the ones we're adding are also then contributing a lot to us. Europe in particular has been an area where we've added a lot more products that are really helping us kind of continue to offer something unique to those customers. So we've added 15 more countries on the payment side this year alone. Our capital product, we added four countries, so it went from four at the beginning of the year to now eight. So we've doubled the amount of countries with that product offering. A product like installments is now in Canada and has recently rolled out to the U.K. And tax is also one that we've rolled out more recently.
There is not as many products available internationally as there are in North America, but we are working to get more of them in local markets so that we can also then help those local merchants continue to grow, and flourish and have them adopt more of the products that we offer.
All right. Excellent. Well, that's a good segue into, and we can cover the international piece as we get into this. We can kind of morph it all together, but Shopify Payments GPV penetration. So it's up to 65% now as of Q3. And we often get asked by investors as we build out our longer-term models for Shopify and we're putting a payments penetration into the outer years of the DCF. We often get asked, "Well, can it go to 100%? And what are the reasons why or why not?" Our answer, at least often to that, is there are three Cs, a P, and some E. So PASH, countries, categories, PayPal outside the U.S., and then some exceptions and/or some minimal parts of enterprise. So again, three Cs, a P, and some E as the reasons.
The question is, does that allow eventually the payments penetration to get into that 90%+ range? And how should investors be thinking about the continued evolution from the 65 level?
Yeah. We haven't ever given what it can reach to. It will not go to 100 for some of the things that Tim just mentioned, but we do believe that there is opportunity for us to drive our penetration higher, right? A couple of years ago, I think if you had said we could get to 65%, I think people would have scoffed, but yet here we are, right? So I think there's still opportunity both in North America where we have higher penetration and higher adoption. There is still room for it to go higher. There's also room on the international side following on what I just said, right? We just launched payments in 15 countries. So adoption penetration is lower there, but it's something that we do anticipate will grow over time. So there is an ability for it to continue to penetrate higher.
In the nearer term, though, because international actually is newer, it actually can be a bit of a headwind to payments penetration, until it can get up to parity more. So it, it can go higher across the board. We haven't said how much higher. Things like cash is always going to be a payment method, which is going to kind of just be what it is. In terms of kind of other third-party, payment providers, some merchants have some of those as well. That will also be a factor to always consider of, of what, where, why we will never fully get to 100%.
Excellent. I think you covered that quite well. And it's a good point on the international. So the GMV is growing faster, but with a relatively lower GPV attach. So it kind of puts a little bit of pressure on the 65%. Okay. All right. Great. Well, I think we can move on to the next topic, which is very related, which is the Shop Pay button. So it's been accelerating for the last few quarters in a row here, recently reached 67%. And maybe we could just talk a little bit about the underlying U.S. growth versus the international. Clearly, the international is much faster than the 67%, which puts it at a very impressive number.
Yeah. International is in the same boat, right? Again, Shop Pay is available where Shopify Payments is available. So it is still on the earlier curve of adoption and usage internationally because it just hasn't been as available there. There's no reason why, though, it can't continue to also gain greater kind of recognition and usage with consumers as the kind of accelerated checkout feature that it offers, right? I think we feel well-positioned with Shop Pay to continue to kind of gain that momentum, right? The reason Shop Pay is so effective is because it is so fast, it's so easy to use, and we make it incredibly frictionless for a consumer, which is great for a merchant because it usually leads to more sales.
That is a product that we continue to work on its speed, and some of removing as much friction as possible so that it can kind of stay in the lead, if you will. But yeah, a lot of opportunity for it to continue to grow.
Great. And it's also got some adjacent or additional benefits, right? So kind of relates to the first topic on enterprise. When maybe just bring it to life a little bit, when you're having these conversations with enterprise merchants, the Shop Pay button, I'm assuming that's one of the lures.
Yeah. So it's one of the things because again, it's driving an accelerated checkout and every second counts when you're trying to get a person to go from looking to buy, right? And that's what matters. So if we can help a merchant, you know, there's some older studies at this point that have actually proven out the kind of lift we can drive to having a merchant, a customer actually purchase faster. Those are really important stats for a business who's trying to get somebody to buy and draw a new customer in. The benefit of Shop Pay, though, extends beyond that, right? I mean, if you think about Shop Pay and you, those of you who use the purple button, right, you buy your product, all your information loads very seamlessly in a one-page checkout and boom, you've placed your order.
All of your information's in there. Then you get sent essentially to what's the Shop App, where you can track that order, right? The Shop App is a place that only merchants that are on Shopify have access to, right? It's a unique thing that makes Shopify special and different, and what that does is that you can track the inventory across a bunch of different things. So to that exact point for Black Friday Cyber Monday weekend, I bought a pair of Vuori leggings. I bought some bar stools from this company called Denver Modern, and my kids' latest Hiya subscription was set to come out the door. Within my Shop App, I can see all of those different brands all in a single spot, and I can track my orders and track what's coming to me. You can't get that anywhere else.
And that as a consumer makes your life very easy. The easier my life is made there as a consumer, right, the more likely I am to go back and buy. And when that purple button shows up again, it's going to enable me to just have a much easier and much more enjoyable consumer shopping experience. So those are the things that Shopify offers in a unique way that again ties back to the bigger ecosystem than just the Shop Pay checkout button that is helping us kind of continue to be a differentiator. And we use some of this information to help with winning businesses large and small.
All right. Excellent. Thank you, Carrie. We're going to move on to the in-store business of the point of sale. It's already a low double-digit portion of your GMV, so it's already a big portion. It's driving growth. Maybe you could talk a little bit about the product and how it's winning against some of maybe the more legacy retail point of sale providers.
Yeah. This comes back again to kind of like on ramps and ultimately the platform and what we have built and how easy it is and what a joy it is to use kind of our product and our admin, right? It's just very designed. It's designed nicely. It's easy to use. It's intuitive. And so as businesses are considering upgrading their offline side, if they already are on Shopify and already have online, we're obviously a very natural choice, right? They know how it works. They're already using us there. We can now unify and connect all of that information on the back end. So moving over to online, or offline, excuse me, for Shopify is very straightforward. When we're out though in the markets trying to win new businesses, some of these larger retail-first type brands, right?
Imagine the 30 stores, I don't know, in the, in the Northwest that are all, you know, I'm, I'm mostly a retailer. I have an online presence, but I mostly care about my 30 stores, right? They're looking to upgrade to something modern, something quick, something that unifies again their data and information in a unique way. That's what Shopify can provide, right? Obviously, there's a hardware component to it, but the software, the platform side of it, what we offer is competitive from a pricing perspective, very easy to use, and again, integrates back into that online side, which allows them to have again a unified, unified look at their, their customers. So POS for us is an area of opportunity to continue to grow.
We've added a lot of features so that we can handle more from an inventory perspective, handle more locations, do some of the things that matter for retail versus online. But the selling point, usually comes down to again, the connection back to online. The cost is usually again, for the value of what you're getting is pretty competitive. And if you're looking for something more modern that is again, getting updated quickly, frequently with a rapid pace of innovation that we're bringing to both online and offline, Shopify becomes kind of a clear choice.
All right. Thank you, Carrie. All right. We're going to move into this one. It starts to get into a little bit more of the financial side of things, but we'll talk a little bit about some of the revenue drivers and some of the considerations investors should have as they start to model out 2026 and 2027, and then if we have time, we'll talk a little bit more about the pricing thoughts. So as we look into 2026 and 2027, there's a long list of items that we're considering. One is the plus pricing that you took in 2024, which has effectively a three-year lag and starts to really come into the model more in 2027. We'll have the removal of the paid trial headwinds, which starts actually here in Q4, starts to lap a little bit.
We have the potential for further pricing on the core side, given the last pricing was back in 2023. And then we also have some greater contributions as we think about coming from some of these growth verticals that we talked about earlier. And if I would add one more, maybe it's on the smaller side, but the 15% commission on the first 1 million of sales is also something that should impact numbers to a smaller extent maybe next year. So with all that as context, maybe you could add to that or elaborate some more.
Yeah. I mean, I would say, right, like a lot of what's driven the growth in 2025 was the same factors that drove a lot of the growth in 2024, right? And it's a lot of these growth drivers we've talked about, right? International continues to do well. We're winning more and more up market, right? We're kind of expanding our retail offering, and getting more businesses to take the offline side. So for 2026, it's going to be more of kind of leaning into all of these as these are all still have lots of legs of growth left on them, and leaning into the investments to continue to do that. I wouldn't put one over the other. I'd just say we feel like they're all going to continue to grow as well as we continue to roll out more products into more countries, right?
So product expansion will also continue to help us as we can get capital into more places. We can get installments into more places, payments into more places. As we roll out more product offerings, there's also more growth to come from those. So I think when we look out to 2026 and 2027, not looking at pricing, the things that are driving the growth so far are the things we expect to continue to drive the growth going forward. Pricing is obviously going to play a role in that at some point. It played a role a bit a couple of years ago to Tim's point on 2023 on the standard side and in 2024 more on the plus side.
It's not something that we sit here today and say, well, yes, we're going to take pricing and that's going to be a lever of growth. It is certainly something that we can do and will contribute to growth. With where we're sitting today, it's not something that we're doing. So I would more think about our growth in 2026 based off of the factors, and all of these growth drivers I just laid out.
All right. Excellent. I think that covers the pricing philosophy quite well. So I think we should move on to the next topic, which is, and you got, you hit on this a little bit in terms of your Black Friday experience with the Shop App, but there's the Shop App and there is the Campaigns offering. So one, you recently gave a stat on the Shop App seeing about 140% year-over-year growth into GMV running through that app. And then some small subset of that is monetizing what is effectively an advertising product, which is Shop Campaigns. Maybe you could talk a little bit about that offering and how that, maybe longer term could evolve to a maybe a larger advertising type of product for your merchants.
Yeah. So advertising, and finding customers, right, is always one of the biggest pain points that our merchants have. We're looking to obviously try to help them in kind of two ways in which we're building products. And the first is on this kind of customer discovery side through things like the Shop App. The Shop App, as I just said, is a great way for tracking, but the Shop App itself also works as a kind of channel for merchants to not only discover new customers, but reengage and drive kind of better relationships with their existing customers, right? Repeat purchasing and building that kind of brand loyalty is incredibly important to businesses just as much as it is about bringing in new customers.
And so the Shop App gives us the space and opportunity to do that again in a unique way that is only available to those who are on Shopify. We've done a lot in the product there to enhance kind of search functionality, give brands the space to kind of showcase who they are to either attract new customers, or not, or connect with their existing ones. And so it continues to be something that we're building out. And why you're seeing more in-app GMV than is a result of that, right? The being in the app is an enjoyable experience and we're doing things that help kind of merchants find new customers within it.
On the broader side though, on the Campaigns, which is kind of our more traditional advertising type product, it's still really, really early days here with what we're doing there, but we are continuing to kind of invest behind it and seeing some interesting things. So Campaigns is essentially helping our merchants with more of a fixed CAC, or a fixed cost, giving us their kind of ad dollars and we go find new customers for them and bring those customers to them. With the merchants that have been using it so far, we're seeing pretty good results and good success there. I think this is something that as we look into the future years, advertising could become more meaningful for Shopify. But it is definitely on the earlier, earlier stages today. I'd say kind of stay tuned for some of our additions and things to come up.
We'll likely have more on kind of what we're doing there.
All right. Great. We will definitely do that. All right. In the time we have left here, let's hit on Agentic Commerce. So clearly, and we've said Shopify has been a fast and first mover on this, and you've really positioned your merchants to be able to take advantage of any and all volume that's coming through the Agentic channel per se. And I think that's been a hallmark of Shopify over the years, whether in the past if it was social channels and now it's Agentic, but the story is the same. So maybe just talk a little bit about, and we've had conversations about this again, maybe we could share with the group around some of the mechanics there. I just want to clear up some of that in terms of unit economics, how they're the same and not very different.
This is more of a volume driver for the business. Then lastly, a little bit more around just on the mechanics of how a merchant would go about kind of opting into this program.
Yeah. Agentic Commerce is obviously a big area of focus and interest for everybody. It's something that Shopify has been building for a while, right? We talked back in August about our kind of Agentic toolkit around our catalog, our universal cart, and our checkout kit. And then internally we have our Sidekick tool as well, which helps our merchants. We kind of look at AI: Agentic Commerce, which is the consumer side, AI for our merchants, and then AI for our kind of internal use. Agentic Commerce, which is the one that's of topic for everybody these days, it's still really early in where this is all going.
What we've done is built a catalog that basically helps categorize all of our merchants' data and information in a way that makes it easier for these LLMs to go query or pull that data on our merchants and hopefully then serve them up to customers who are using the different agents to go kind of search and discover. It's something that we are deeply bullish about of it becoming a way in which consumers are likely to shop. How fast and when and the pace of it all, I think it's still too early to say, but we are definitely building for a world where Agentic shopping is a thing. In our partnership that we announced with OpenAI earlier this year, that kind of falls into when we look at Agentic Commerce across the layers of discovery, purchase, and post-purchase.
It kind of falls in that purchase. So enabling kind of instant checkout within a LLM or within an agent. It's still early days there, but for us, we view this very much as just optimizing our merchants' GMV and giving them the ability to find customers wherever. If a customer wants to, if a person wants to search in an, GPT for their next pair of shoes, like we want to make sure our merchants are served up there. If they want to find them on their site, we want to make sure the merchants are, are found there as well. So the economics from a Shopify standpoint is essentially the same. We're just trying to optimize for our merchant success and drive their sales.
Those sales ultimately will benefit us because we have a merchant-based success business model, and we will then get the economics in the same way we would have had it happen on the storefront or within the checkout within the OpenAI.
Carrie, I have to say thank you so much. I mean, it's a pleasure our team working with you and Amy and the team at Shopify. We really appreciate you making the trip here to Arizona, and I'm sure the investors do as well. Thanks for being a big part of our conference.
Thank you.