Good morning. My name is Steve. I will be your conference operator today. At this time, I would like to welcome everyone to Shopify's third quarter 2015 financial results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during that time, simply press star, then the number one on your telephone keypad. If you'd like to withdraw your question, press the pound key. Thank you. I'll turn it over to Katie Keita Please go ahead.
Good morning. Thank you all for joining us for Shopify's third quarter 2015 conference call. On the call today are Tobi Lütke, Shopify's Founder and CEO, and Russ Jones, our Chief Financial Officer, who will each share some brief prepared remarks. Harley Finkelstein, our Chief Platform Officer, is also on hand for the subsequent Q&A session. Some of our remarks today may contain forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in these forward-looking statements. Information concerning such risks and uncertainties is contained in our press release this morning, as well as in our filings with the Canadian Securities Administrators and the U.S. Securities and Exchange Commission. You can access these on the investor relations section of our website. Also, our commentary today will include adjusted financial measures, which are non-GAAP measures.
Reconciliations between GAAP and non-GAAP financial measures for our reported results can be found in our earnings press release. Non-GAAP financial measures exclude the effect of stock-based compensation and non-recurring sales and use tax. We believe that these non-GAAP measures provide useful information about our operating results, enhance the overall understanding of past financial performance and future prospects, and allow for greater transparency with respect to key metrics used by management in our financial and operational decision-making. Non-GAAP financial measures are not recognized measures for financial statement presentation under US GAAP and do not have standardized meanings, may not be comparable to similar measures presented by other public companies, and should not be considered as a supplement to, and not as a substitute for or superior to, the corresponding measures calculated in accordance with GAAP.
All growth rates discussed on the call are year-over-year, and all amounts are in U.S. dollars. With that, I will turn the call over to Tobi.
Hey, good morning, everyone. Thanks so much for joining us. This has been a really, really busy quarter for us. We shipped a lot of product, which I'll get into, and we also surpassed 200,000 merchants at some point during the quarter three, which is just such a wonderful milestone. You probably wonder, how did Shopify get better this quarter? I would really like to focus on two major areas. Really, one is we expanded our channels offerings, and two is that we deepened the existing functionality, and I'll get into both of those things individually. Related to channel expansion, we just released sort of early access to the Twitter channel, which has been really well-received. This is joining our work with Facebook and Pinterest that I talked about in the last call.
Both of them are now in general access, meaning this is available to all participating and all qualifying merchants in the U.S. right now. This is marking us as the first platform that supported all three of the major social networks, which is also a really great accomplishment. Facebook especially got a lot deeper, so Facebook has shipped their in-page shop tab, which is just a really great addition for people who have good Facebook presence. This is a very good mobile-optimized experience, which is, of course, important to us.
On top of that, Facebook has also shown their shopping feed, which is another really interesting product because what it does is it allows, you know, all the people who are using Facebook to really just go and just, you know, window shop through the entire platform and just look at what's out there and what might be relevant to them. This really goes to show that now a lot more companies are starting to think about how products should be discovered in this sort of next chapter of the Internet. Another thing we announced is the Amazon channel. You probably read about the press release related to that.
Our merchants, the ones who are participating in this, can now allow their buyers to log in with their Amazon account, pay with the credit cards that they already have stored in Amazon, and if they have their products in the Amazon warehouses, then they can directly ship them from there, which is a really, really good sort of infrastructure update for our merchants who are participating in this. As part of this, we are also working really hard on adding Amazon's Marketplace as a channel to Shopify so that just like how our merchants have like sell on Facebook and Pinterest now, they can also sell on amazon.com, which of course, is a place where a lot of people purchase items on the Internet.
We've been on record that we think this sort of federated commerce is really the future of internet buying and internet selling. You know, like for about a decade, e-commerce was very much focused on websites. Now it's really moving past the website and into all these other places where people are already spending their time. What's great is due to all this complexity that arises from that, merchants really need a single system that they log in and from which they can see how their business is doing, what orders are coming in, what needs work, what other things they need to focus on.
They put their products into this single system. Then from there, the products travel into all these various marketplaces, into their point-of-sale system, onto the, you know, Amazon.com, on Twitter, on Pinterest and so on. That's increasingly becoming Shopify, and that's of course, really, really good, and it's a testament to the hard work that the team has done over the last year trying to build the first, you know, real operating system of a federated commerce world. Related to deepening the functionality, we've really focused a lot on shipping because it's one of the last areas where there's just a lot of frustration in the process of setting up new businesses. It's incredibly important to ship well.
It's a major contributor for how much to the quality of experience for the buyers. Because after someone puts money down on a product, they would really like to have it fast and in great working order. Merchants spend a lot of time setting this up, and this is something we are now helping with, or actually rather making go away. If you sign up for a Shopify store, you automatically get signed on to Shopify Shipping. It's optional to use, but it's just way better than alternatives. This is great. Shipping usually is very complex, very important to get right. It's very hard to have visibility of where all your packages are. It's very hard to get the best rates.
It involves a lot of renegotiation, and all this is going away with Shopify Shipping. This is something we launched with USPS. It is a traditional carrier, but like obviously it's the by far the leading carrier in the United States, at least on our platform. To sort of really understand the vision of where we're going with our shipping product, we also worked very hard with Uber on a product called UberRUSH.
If you're in New York City and you order something which happens to be available within about 25 miles of where you currently are, you're gonna get during checkout an option to just get the thing rushed to you immediately in a couple of hours, and that's powered by all the various Uber drivers who are already in New York City and might not have currently a fare. It really, again, I think it's a great glimpse at the future of how all these different solutions or by all these different companies that are currently coming up in this sort of fantastic wave of technological progress, are kind of coming together to make something like commerce just so much better for everyone. With that, you know, overall status at the company, everyone's like really excited.
I think we're moving super fast. People are very focused, and are hungry for, you know, what's coming. This time of the year is always marked by like us releasing a lot of product, which is partly because we are now heading into the Black Friday, Cyber Monday part of the year, which that we want to stop shipping so many things and really focus very much on stability of the platform because that's a, like this is really the high season in the retail industry, and this is just where Shopify needs to, like just be a super solid foundation for everything that's going on. Great. With that, I'm just handing it over to Russ for the numbers. Thank you.
Thanks, Tobi. Thanks to everyone who is participating in our call this morning. I'm pleased to report that it was another solid quarter all around, with stronger growth than we were anticipating in revenue, as a result, also a better bottom line. Revenue in the quarter reached $52.8 million, 93% higher than the third quarter of 2014. Shopify's revenue is composed of both subscription solutions and merchant solutions. Let's now look at the performance of each of these. Subscription solutions revenue expanded 67% year-over-year to $29.6 million in Q3. This increase is directly tied to the rise in monthly recurring revenue or MRR, which rose to $9.8 million as of September 30th, compared with $8.5 million at the end of Q2 2015.
MRR growth resulted from the continued addition of new merchants to the Shopify platform. As Tobi noted, we surpassed 200,000 paying merchants during the third quarter. Just as a reminder, we surpassed 175,000 merchants during our second quarter. Growth in revenue, growth in revenues from apps, themes, and domains also contributed to our subscription solutions revenue performance in the quarter. Turning now to merchant solutions. Merchant solutions revenue grew 141% over Q3 of last year to $23.2 million. The key contributors were again Shopify Payments, where we saw both increased adoption as well as the higher average gross merchandise volume or GMV per merchant. Total GMV exceeded $1.9 billion in Q3, 101% higher as compared to Q3 of 2014.
Gross profits grew 77% year-on-year to $28.7 million for the quarter versus $16.2 million for Q3 of 2014. Operating expenses excluding stock-based compensation expenses declined to 58% of revenue compared with 61% last quarter and 71% a year ago. As we continue to benefit from increased leverage, particularly in sales and marketing and R&D. Although the percentage declined, the dollar spend did grow as we continue to make the investments required to execute on our vision, which we believe will fuel our long-term sustainable growth. Adjusted operating loss in Q3 was $2 million, versus $3.2 million loss in Q3 of 2014.
With the weighted average shares outstanding of 76 million in Q3, we reported an adjusted $0.03 loss per share for the period, compared with a $0.09 loss a year ago on 39 million shares outstanding. We are heading into Q4, the busiest seasons for our merchants and historically the strongest revenue quarter for us with excellent momentum. As a result, we are increasing our outlook on Q4 and for the full year 2015. For Q4, we expect to achieve revenues in the range of $59 million-$61 million and report an adjusted operating loss in the range of $4 million-$5 million.
This result would put the full year 2015 at a revenue of $194 million-$196 million and our adjusted operating loss in the range of $9.5 million-$10.5 million. With the exceptional growth in the quarter, one of your key cash questions I assume is how much of the upside came from the initiatives Tobi discussed, namely buy buttons, new channels and Shopify Shipping, and how much do we expect them to contribute to our growth going forward? While merchants are now selling on all the new channels and Shopify Shipping, which launched in late September, is beginning to be adopted, they are still in their infancy, and we do not expect a significant impact in 2015.
As more merchants begin to take advantage of these enhancements over the course of next year and beyond, we expect to see benefits on several levels. Not only does adding new leading-edge channels and back office capabilities help attract new merchants to Shopify, it also gives current merchants a reason to continue building their business on the platform. Moreover, we believe that these new channels will help generate incremental GMV for merchants because it brings them closer to their customers. Incremental GMV generally translates into greater merchant solutions revenue, primarily through Shopify Payments and going forward, Shopify Shipping. As always, we appreciate your interest in Shopify, and if you're a stakeholder, we thank you for your continued support and for being an important part of what we think is a rare opportunity.
Retail is at a really interesting juncture, one that brings a wealth of amazing opportunities for companies that know how to seize them. We think that these will unfold over the course of the next several years and are doing our best to accelerate the shift that we know is inevitable. This passion, along with our leading market position, extensive partner ecosystem, and really talented team, is helping Shopify pioneer the future of retail. With that, I will turn it back over to Katie so we can start the Q&A.
Thank you, Russ. Steve, can we start the question and answer session now, please?
Of course. Ladies and gentlemen, as a reminder, if you'd like to ask a question, you may do so by pressing star, then number one on your telephone keypad. Again, if you'd like to withdraw your question, please press the pound key. Your first question comes from the line of Michael Nemeroff from Credit Suisse. Your line is now open.
Okay, great. Thanks for taking my questions and congrats on a nice quarter. Tobi, I had read an article this quarter that talked about you and talking about the Plus product and how you wanted to focus a little bit more of the company's attention on it. You know, a couple of questions around that. Could you give us a sense of how Plus performed in the quarter? What things structurally do you need to do differently than for the company and maybe on the product and organizationally to help that grow? For Russ, you know, GMV, the GMV per merchant, by our calculation, went up pretty nicely. Was that a function of the Plus product?
Maybe if you can give us some color on that'd be helpful. Thanks.
Yeah. Thanks for the question. Okay. Plus is a small but exciting part of the business. Like you probably read this article in relation to us starting an office in Waterloo, which where a lot of the sort of Plus activity within the company is going to be concentrated. It's not gonna be like an office which is dedicated to Plus, because that's just not sort of like our offices aren't defined that strictly. But like it's clearly something we started a while ago because our own customers who started with us on the platform just grew quite large and wanted to be served with a product sort of that's more appropriate to them.
Half of, you know, Plus customers are upgrades and homegrown businesses, as we call them. You know, outbound interest is getting like it's increasing. I mean, just even the whole process of Shopify getting going public just has like increased our attention on the product. Probably honestly, just quickly, what's driving this is just the simplicity, right?
Like, this is absolutely a world where you would, from the time you put your RFP together to the time you actually have it working and you have your first sale, people are spending a year and $1 million, right, on average, which, the, our Plus product is just extremely disruptive to that just because, again, as a company, we built a product that was forged into, in the fires of people, building entire businesses during their lunch break, right?
If your product is good enough to, like, allow people to run entire business in the hour during their lunch break, or in the evenings, then the same tools with more features that are built in the same way in larger businesses also are going to allow you to just Like move way faster. Speed is just like, speed has been the missing ingredient in a lot of companies' calculations about their e-commerce efforts. The Plus is a very timely product in the marketplace due to that.
Then, Russ, the effect that Plus is having maybe on the GMV per merchant. Then one follow-up for us is maybe if you could give us some geographic breakdown or I know you announced the milestone of 200,000 plus merchants. Could you tell us, you know, maybe where those merchants are coming from, North America, outside the U.S., et cetera? Thanks.
Yeah. In terms of your question on the average GMV per merchant, it did go up in the quarter. Plus did contribute, so did our point-of-sale solution as well as just merchants in general are being more successful on the platform. All of those contributed to that increase. In terms of where we're getting merchants, it continues to be throughout the various geographies. As we noted before, we have merchants in over 150 countries using the platform. U.S. continues to be strong, we're also seeing good growth in other geographies like Canada, U.K., and Australia. It's not one particular geography, it's just every area is contributing to that growth.
Thanks very much. I'll get back in the queue. Appreciate it.
Your next question.
Thanks, Michael. Next question, please.
Your next question comes from the line of Ross MacMillan with RBC Capital Markets. Your line is now open.
Thanks very much. 200,000 plus merchants is a very impressive number. It's a very strong merchant add quarter. I was just curious, Tobi, do you think there was any sort of additional tailwind this quarter from the Amazon merchant conversions, or is this just really a reflection of broader strength in the platform? Just curious as to kinda what drove the acceleration this quarter.
It's very hard to attribute them so straight up. I mean, it's like there's a lot of contributing factors for the growth. I wouldn't say that like Amazon has been like very happy with what's going on there, but it's not that that makes up a difference. It's a hundreds of little factors, frankly, it's a lot of the work we've done half a year ago, right? Like half a year ago, we shipped features which are now generally being used, because, you know, features need to like take a while for adoption on the platform.
People love them, and then people tell other people about them, and then that's enough to get another cohort of people to say, "Okay, well, we are done with whatever system we are using. We should really be using Shopify." This is just how sort of the flywheel of growth, like gets ever faster.
That's great. My follow-up for Russ. The take rate on merchant solutions continues to move higher. Is that just a function of deeper penetration of payments, or are we starting to see any other impacts on that? I was curious just in, I guess in the same vein, the merchant solutions gross margins were down a little bit, 280 basis points sequentially, and I'm just curious about the mix this quarter of payments versus other things in that line. Thank you.
Yeah. In terms of the biggest contributor, it is Shopify Payments on two fronts. one, more and more merchants are picking Shopify Payments as their payment solution. Two, more GMV is going through Shopify Payments. It's those, the combination of the two which is really driving that. Shopify Payments is the largest piece currently of the merchant solutions, and so it's really just a mix. As Shopify Payments starts to become a bigger piece, you will see some margin impact there in terms of the percentage. Just a reminder that internally, we really do focus more on margin dollars.
Again, as we add more merchants and get more subscription revenue and those merchants then use our merchant solutions, that combination is really a very powerful business model and adds to that gross profit, which really is at the end of the day what's the important piece.
Great. Thanks again. Very impressive results.
Thanks, Ross. Steve, next question, please.
Your next question comes from the line of Terry Tillman with Raymond James. Your line is now open.
Hey, thanks for taking my questions. I guess I would characterize it as an amazing quarter, so great job. I guess the first question just relates to Shopify Shipping. I have a three part to that question. In terms of how do we think about take rate on the shipping solution? What kind of initial signs have you seen on the attach rate of it? Lastly, what kind of gross margin impact you could see as opposed to like the payment solution?
Yeah. Really too early to really go into a lot of depth on Shopify Shipping. In terms of the margin, it will be recorded on a net basis, so it will have a much higher gross margin and then, for example, Shopify Shipping. From a revenue point of view, again, a smaller impact there. So far we're seeing a good pickup that. The way you should think of shipping is it's a journey similar to what we did on Shopify Payments, and so we'll continue to roll it out in other geographies. We'll continue to add other carriers to the solution, and so it's just gonna get more and more powerful as an offering. Over time, we'll see more and more revenue and gross profit coming from that.
Okay. All right. Thanks.
I think one thing maybe to add quickly to the shipping thing is, the growth will not be the same as payments just because shipping, like payments is sort of a mathematical decision to a certain degree and the additional features you get from a platform, you know, so quality of life improvements, where shipping is an integral process within our customers' businesses. The attach rate to new businesses we expect to be very high, because people are just going to go. People who don't have processes yet are going to establish them based on what the platform sort of makes like obvious for them.
To our existing customers, like we think we are gonna make this obviously compelling enough for people to adopt, but I don't expect that to happen like quarter four, right? Like people are gonna have the way they get packages out of the door and how they buy labels set, and quarter four is where you want to where your processes just have to perform. It'll be a slower growth.
Okay. All right. Thanks for that. My follow-up question, this will be simple. This won't be a multi-part. This is just a one-part question. In terms of fourth quarter, people, you know, will hone in on how you're doing in terms of adding new customers, should we expect that that will be a kind of a more of a low mark for 4Q because of the seasonal nature of the business? Do you think because of the growth investments you've made, that you could see non-seasonality in terms of still signing lots of customers in 4Q? Thank you.
We don't have any real firm expectation in terms of that. We'll continue to see good growth. I mean, as impressive as our platform and our ecosystem is, our marketing team is equally impressive, they continue to come up with innovative ways of experimenting to get us new merchants. They're definitely not gonna slow down in Q4, but we don't have any sort of set expectation there. I mean, to a large degree, merchants do wanna be up and running prior to the holiday period. But we will still see people post that get added to the platform.
Thanks, Russ. Thanks, Tobi. Thanks, Katie.
Sure thing, Terry. Thank you. Next question, please, Steve.
Yes, your next question comes from the line of Brendan Barnicle from Pacific Crest Securities. Line is now open.
Thanks so much. Russ, you know, you guys have mentioned the strength in Q4 that you look forward to. If I look on a year-over-year basis, we've got revenue that decelerates despite an easier compare from a year ago. Obviously, we're getting into law of large numbers, but is there anything aside of kind of the size of large numbers and, you know, a little prudent conservatism that would suggest that we'd see, we should see any meaningful deceleration in the type of growth in Q4 that we've seen preparing you the rest of the year?
Yeah, as we're noted in our guidance, we are increasing Q4 by roughly $8 million or 15%. We are seeing good growth in Q4. It is a bit of as the numbers get bigger, you do see a bit of just natural deceleration in terms of percentage growth. It's also a little bit beyond our control in terms of the merchant solution piece, 'cause really now we're talking about how successful 200,000 merchants are gonna be in over 150 countries. The variability associated with that is something that we try to, I wouldn't say be conservative, but be careful in terms of how we look at things.
Sure. You've talked about the attach rates on payments by merchant. Do you have any stats on the percentage of payments on GMV that those merchants are using?
Yeah. That number continues to grow. Each quarter, the percentage of GMV that's going through Shopify Payments has been increasing. I don't wanna be any more specific than that, but That we are seeing good performance there.
Just lastly, as we step back and look at all these new announcements and, you know, Tobi, you mentioned, you know, the new channels and relationships that you guys have. Should we start to think about your total addressable market differently, or is that expanded out in some new ways and are some updated stats that you guys might have around that?
It's a really good question. I think the thing to keep in mind is, like you can spend a lot of time trying to, you know, come to, like some kind of a precision of what the market is. I mean, at the end of the day, like our market is people who want to build online businesses, and people who want to sell products. I mean, that's a really big market. There's been established patterns, like through the sort of the ideas behind the shopping cart that really were sort of the online version of a Sears catalog, if you will, right?
That was sort of a first pattern we managed to get properly onto the internet, based on sort of the restrictions of early browsers and so on. What we see now is just a like widening of what's, you know, what's possible. Like we now know how people consume the internet. It's via phones mostly. We know now how people spend their time online. It's on social media sites and all these kind of things. In the same way how, you know, like throughout the history of like urbanization and cities, we kind of constantly and the retail industry has kind of figured out where and how to sell products. The internet is going through kind of the same evolution and in a just more rapid pace.
It's really tough to nail down exactly what the size of the market is, and what the opportunity is. We actually don't try. We just want to, like, we have really sort of strong ideas about, you know, how we want to assist in other people building these kind of businesses and growing and scaling these kind of businesses. We're trying to just build the best software we can and then see what happens.
It's a good question, but it's kind of, like, it's hard for us to answer because it really. Like, I've never in the 10 years prior to going public, I didn't spend, like, a percent of the time, thinking about the size of the market as I had to do when I was on the road. Just to, like, help you understand the way the company's thinking about these kind of things.
Sure, sure. Understood. Thanks so much.
Sure thing. Thank you, Brendan. Next question, please.
Question comes from the line of Richard Davis with Canaccord Genuity. Your line is now open.
Hey, guys. Thanks. It's DJ on the line for Richard. Tobi, you touched on Facebook a bit in your prepared remarks, but, you know, when they introduced the shop section, I think there was some confusion in the market that this was, in some way, you know, competitive to what you guys are doing. Just wanna make sure we're crystal clear on the relationship here. Can you help us understand how this impacts your business, you know, either positively in a, you know, in the sense of a channel to kind of expand GMV or perhaps negatively as a, as a forum for customers to market their goods away from the Shopify platform?
Yeah, no, I mean, to me, I mean, we helped build this system, like behind the Shopify, like, so behind the Facebook shop area of, you know, Facebook pages, Shopify stores predominantly. The vast majority of them are. You know, again, we don't really care what channel, like how, you know, buyers find the products. What we want is there to be a Shopify store behind it that deals with the incoming order, and, you know, the shipping and like, we can help with getting the payment collected and all these kind of things. Like, again, we are fine to be in the background and so this has actually been very, very positive.
It's not terribly unlike, you know, there being, buy it, buttons on Pinterest or buy now buttons on Twitter. It's all just part of the same, the same, sort of change we are witnessing on the internet, which we call federated commerce.
Yeah. Okay. Got it. Russ, as we kind of look forward, how are you thinking about a break-even timeframe, either, you know, free cash flow or operating income?
We're still internally targeting sort of the end of 2017. I mean, as you can see, we're executing very well. Our losses are relatively small. Operating cash flow again in the quarter was positive. Our goal is really to keep investing to basically take full advantage of these opportunities. We're not moving that target, and if it comes to 2017 and we still have some great investments that can even increase our long-term potential higher, then we'll invest at that stage. We don't have a fixed number, but just looking at the numbers and the growth, we're still targeting end of 2017.
Okay. Got it. Thanks, guys.
Thank you, DJ. Next question, please.
Your next question comes from the line of Brian Essex with Morgan Stanley. Your line is now open.
Great. Thank you. Good morning. Thank you for taking the question. I was wondering if I could circle back a little bit on the topic of, you know, buy buttons and Facebook pages. I understand that you're trying to, you know, enable your customers with incremental distribution channels, but are you seeing any pull onto your platform from the other direction? Maybe how are your affiliates responding to some of the developments that you're offering on the platform? Are you seeing better traction on that end of the platform as, you know, they promote this better functionality over your platform or expanded functionality over your platform?
This is Harley Finkelstein here. From the affiliate side or the partner side, obviously, our partner ecosystem continues to grow. You know, each quarter we see thousands of partners that send merchants our way. I think that the reaction from the ecosystem and the affiliates and partners have been very positive. Keep in mind that those partners that bring new merchants to Shopify, they're also being asked about all these new channels and the fact that they can say, "Well, we built on Shopify, and Shopify is already integrated into Facebook and Pinterest and Twitter and eventually Amazon as well," is really positive. In terms of, you know, I think what you're asking is the growth that we're seeing just from people that want to sell on Pinterest directly.
That's great because that means that if they come to us just to sell on Pinterest, they may decide then that they wanna build an online store as well with Shopify or sell as well on Facebook. For us to become to use the term that Tobi was referring to, the federated commerce platform for anyone that wants to sell products, is very positive for us and that's what we've been seeing.
Great. You know, on that Amazon data point, I think that's extremely interesting in that they can, you know, probably handle logistics. Anything else in the way-I know you're not gonna build out any physical assets, but any other initiatives on the logistics side of the equation that might enable you to go upmarket, you know, more than you already have?
You mean specifically with Amazon?
Not necessarily specifically with Amazon, but maybe how you think about that with shipping and logistics piece of the puzzle. You know, not in a sense of integrating with printing off a shipping label, but maybe how your customers might be as you might think about going upmarket, how your customers may think about the logistics side of the equation and what role you might play in that.
Yeah, so-
More through partnerships and, you know, ability to enable their logistics and shipping requirements.
I mean, shipping is this wonderful, like interesting field, right? At a fundamental level, you have a package with some items in it on one side, and you need it on the other side. Sort of for simplicity reasons, I think we all decided to like make this predominantly the problem of three major carriers, at least in the United States. Just sort of tell them where the package is, they pick it up and then deliver it. I think that works really well. There are shortcuts and optimizations that are worth like considering, especially because our platform is just getting really big and there's a lot of packages.
A certain percentage of those, like often really are the package that needs to be sent out is a couple blocks away from where it needs to go.
Yeah.
Like that on a just fundamental logic, from a perspective of logic, it just seems silly to give this to send this into a sorting center that might be like 60 miles away.
Right.
Right? In most cases, we really want to give this to, you know, Uber, which can drive it over right away, which is amazing customer experience.
Yeah.
to a bicycle courier if you want to.
Sure.
Like if they are interested in building this kind of capability out. This is really how we are thinking about this. Packages need to go from A to B and we are gonna build software to increasingly make this easier for everyone to just get this transfer made in the most efficient way possible. This is like clearly, this is a multi-year project. There's gonna be large partnerships.
Yeah.
There's gonna be a lot of software that needs to be written. We're really good at that, so that's good. I think by the end, we're gonna have something like a, shipping becomes a really compelling part of our platform on top of all the other compelling parts that already exist.
Okay. Very helpful and fantastic quarter. Thank you.
Great. Thank you. Next question, please.
Your next question comes from the line of Arvind Ramnani from Gordon Haskett. Your line is now open.
Hi. Thanks for taking my question. When you think of various opportunities to drive revenue growth, you know, there's certainly multiple areas of growth. You know, there's kind of partnerships. There are, you know, additional features you can add. There's kind of geographic opportunities. Kind of how do you prioritize the various opportunities at this stage? I'm sure, you know, sort of, I mean, at some point it's you gotta prioritize what you're really gonna go after. The second question is, you know, how do you decide sort of when to partner with a kind of a larger platform or sort of build some of the feature sets organically?
Yeah. I mean, like, okay. Deciding the roadmap, I mean, that's essentially like the roadmap essentially is the strategy of a company, which is what my like main occupation of this business is, like setting the roadmap and setting the strategy of what we are working on. We have been working sort of backwards from, you know, we try to simplify things. Again, like, I think I gave like sort of a glimpse of that, like in the last answer when we talked about shipping. Like shipping is a very complex field, a multi-billion dollar industry with many big players and many existing workflows and existing ideas. At the end of the day, it's a package which goes from A to B, right?
You know, if shipping would be like if we just in this moment came up with idea that, hey, wouldn't it be great if you could take a package and have it somehow transported somewhere else? If that would be like a completely novel idea right now. Like, how would we build this industry, if, like it would be a startup in the space, how would we try to tackle this? Like, trying to solve these kind of fundamental problem from a very sort of organic, and legacy free, perspective is what we do.
Afterwards, we are like engaged in the next step, which is like, okay, given those opinions about what we want to build and what the final outcome we want, we want to have, how do we get there in the best way? In most or many cases, the answer is, well, partner with a bunch of people who are really good at this kind of thing. Sometimes you find, hey, there's actually no one who's kind of has that same idea, so why don't we go and build this from scratch? You know, like so this is just how we solve all these problems. This is how we thought about payments, how we do shipping, how we thought about online stores in general.
How we decided that commerce is going to change and going to turn into a very much a multi-platform, federated commerce kind of endeavor. Those are, you take that plus, take into consideration all these massive macro trends that are going on. I mean, you know, mobile is a crazy force in our market. It's a massive wave that can easily sweep away everyone who doesn't pay attention to it, right? We need to keep both in check. We need to know what's coming. We need to know, you know, how important is Bitcoin to this market? You know, how important are drones delivering items? How important are all these kind of things that are coming?
I mean, you make good choices on which ones matter soon, we need to, like, know this earlier than, you know, other people, hopefully. Start building software, start prioritizing it, figuring out when is the right moment to work, to work, because we know software history is littered with the corpses of companies which had the right idea but were way too early. I mean, like, this is really the secret sauce of the business. I think this is where our track record has been strongest, getting these things right. This is what I spend a lot of my time on, and I have a fantastic team to help with information acquisition and making these choices.
This is all mixed down into a, you know, somewhat sequential, a little bit parallel, list of items that are being popped off a stack by the various teams that we've built across the company, and then they're being implemented by the engineers or the deals are being written by the BizDev team and this is how we're driving the platform forward.
Great. That's very helpful and, good luck for the rest of the year.
Thank you, Arvind.
Ladies and gentlemen, as a reminder, if you would like to ask a question, you may do so by pressing star then the number one on your telephone keypad. Again, that's star then the number one, if there are any further questions. I'm showing there are no further questions at this time.
Great. Thank you, Steve. I will turn the mic over to Tobi for a few closing remarks.
It's not like I have a lot to say. Sounds like we left no stone unturned. No further questions, that's good. Thanks everyone for joining and see you next time.
Ladies and gentlemen, this concludes today's conference call. You may now disconnect.