Good morning. My name is Shannon, and I will be your conference operator today. At this time, I would like to welcome everyone to the Shopify Q2 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 would like to ask a question during this time, simply press star then the number one on your telephone keypad. If you would like to withdraw your question, press the pound key. Thank you. I would now like to turn the call over to Miss Katie Keita, Director of Investor Relations. Miss Keita, you may now begin.
Good morning. Thanks everyone for joining us for Shopify Second Quarter 2015 Conference Call. On the call today are Tobi Lütke, Shopify's Founder and Chief Executive Officer; Russ Jones, our Chief Financial Officer; and Harley Finkelstein, our Chief Platform Officer. Because this is our first earnings call, in addition to Russ discussing our second quarter 2015 performance and our outlook for the third quarter and full-year of 2015, Tobi will also give a brief overview of Shopify, including our vision, strategy, and priorities. Harley is on hand for the subsequent Q&A session. Some of our discussion and responses to your questions 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 filings with both the Canadian securities regulators as well as the U.S. Securities and Exchange Commission, including our final prospectus dated 20 May 2015. 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 U.S. 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 US dollars. With that, let me turn the call over to Tobi.
Good morning. Let me start off by saying that this is a little bit different for us because as a company, we have never really talked much about ourselves. The Shopify story has always been told through our merchants, and any attention on us has mostly been around what we are doing for them. This is partly because we are up here in Ottawa, Canada, away from where most people are building their tech companies. It's been easier for us to spend our time heads down building great software over the last decade. We think this has been a really, really good thing. Now that we are public, there's obviously a lot more attention on us. Let's take this opportunity to give you an idea of how we think about business, so that you will know better what to expect from us in the years ahead.
It's no secret that Shopify has a certain distaste for the state of industry that we are part of. We remember the 1990s, the early years of the Internet, and the potential and opportunities online were deemed endless. People quite sincerely discussed a future utopia where almost everyone would own their own business and enrich the planet in some way. This vision of the future sort of got replaced by a lot of cynicism due to failures of internet commerce during the dot-com bubble. Shopify thinks that this idealism of early Internet time just got temporarily paused due to what happened around 2000, 2001. Frankly, we see a path to reaching this potential again, as it was first imagined all those years ago.
To do that, we need to accomplish three things at the same time, things that our industry has absolutely failed to do over the last decade and a half. First, we have to make software that's incredibly approachable by anyone. It sounds very basic, but it's actually very far from true and very far from the status quo. There can be no major learning curve necessary. There can be no need for taking training programs or any obvious things to sell products on the Internet. If you have to book a course before you can even attempt to use software, then we as an industry have already failed. Secondly, make software that allows entrepreneurs to succeed. Ideally, using Shopify leads to significantly higher success rates compared to the median business statistics.
Again, if our software can't make someone significantly more successful than using other software, then what the heck are we doing? Lastly, make software that can scale up to being a platform for mid-market merchants selling millions of dollars. This kind of goes without saying, but if you look at the history of our industry, re-platforming has been the thing that everyone was supposed to be doing. You start your business on eBay with an initial audience, then go to find some open source software, mostly because it's free, and then you call someone after you make some more money, you call someone from GSI, eBay Enterprise, whatever, and then re-platform to that again, and then again, and again, and again. From the perspective of a merchant, this is completely unrealistic.
Clearly, a platform needs to exist that people can adopt very early in their career and then just simply continue using it. No one outgrows Facebook as a social platform, neither should you outgrow your commerce platform, especially not your commerce platform. I imagine that you can see that these are competing priorities, and any business that has competing priorities that need to be unified in a single product sets up for a lot of hard work. Nonetheless, over the last 10 years, we've been successful in balancing these interests. Due to that discipline we've had, we built a significantly better product for our market. I think our recent growth is a direct result of this. This comes from a very intuitive understanding of our merchants' needs because many of us at Shopify are or have been merchants ourselves.
In fact, this pedigree is the entire reason for Shopify's existence. 10 years ago, when we tried to sell snowboards online, we found it to be extremely difficult and far too complex. It was clear to us that there were many places to sell, but no one was focused on building a single back office for all this. Our own experience as merchants has enabled us to build the software platform that we wished we would have found ourselves. One that is simple, intuitive, and with a single back office serving multi-channel front ends. It helps us work hand-in-hand with our merchant base, which is growing to be quite substantial now. These past few months are a great example of how we intend to grow the product in the future.
We did a bunch of things that get us closer to our vision to take commerce beyond the website to help make it happen everywhere. The internal initiative over the last year, which we haven't publicly shared before, has been to power the internet's Buy Buttons. A lot of the components of this strategy have been starting to ship, and it's always interesting when these initiatives go from internal slogans into shipping products. Let's have a look at how this manifested itself over the past few months. First, we enabled merchants to create Buy Buttons, which they can put on any blog or site they control. Even though this was just announced in May, already thousands of merchants have taken advantage of this, which is a big reason why you might see a proliferation of Buy Buttons generally across the internet in your daily browsing.
We launched our Mobile Buy SDK, which developers can use to put direct product purchases into their mobile applications. Whether this be existing applications like games or new applications they create specifically to allow their customers to browse and purchase items from them through a native mobile application. We launched Buyable Pins with Pinterest. People are often using Pinterest for planning projects or events that are very meaningful to them, such as weddings. Much of this revolves around finding the right products for a particular occasion or project. Pinners will be able to purchase these products directly through Pinterest from Shopify stores. Thousands of merchants are implementing these Buyable Pins already. We also announced our beta test of Buy Buttons on Facebook, which is exciting because Facebook has been the largest driver of social traffic to Shopify stores.
We've been working closely with the team at Facebook and are really happy with the progress we've made together in the social commerce space. Adding new sales channels like these is important for a number of reasons. It helps our merchants be more successful, which translates into our successful increase of GMV across the platform. It also helps us attract new merchants to the platform as we offer more ways to sell their product. Finally, it gives our current merchants a really good reason to stay. We also see it as our job to help our merchants get started. This is why we created the Build a Business competition. On the IPO roadshow, we said that one of our biggest competitors is actually non-consumption.
We feel that there are a lot of people out there who have what it takes to build a great online business, but they just haven't realized it yet. Internally, we hope to make starting a Shopify store as much fun as watching HBO. We started the Build a Business contest to prove the theory that people just need a catalyst or, frankly, a kick in the butt to get started. Now the fifth Build a Business contest has just wrapped up. This is also a really fun competition because it highlights the cool things our merchants sell. For instance, amongst this year's winners, the company called Trunkster that makes a GPS-enabled suitcase that can charge your phone while sitting in the airport, and that's just complete genius.
We announced all six winners earlier this month. They are all probably companies you've never heard of, which is sort of the point. To go from an idea to selling in a very short time. Counting all of the participants in the contest, these startups have collectively generated a quarter billion dollars in sales in the first eight months of their existence. I think that's really impressive. All of these things have been in the works for some time. It's gratifying to see them launch. Luckily for us, there's a lot more work left to be done. Fun as the roadshow was, it's great to be back and focused on the Shopify platform again with our R&D product engineering design teams. Thanks for tuning in. With that, I'll turn it over to Russ for financials.
Thanks, Tobi, and thanks to everyone who is participating in our call this morning. We will strive to make these calls as efficient as possible. I will touch briefly on how we performed in the quarter, including our key metrics, and then end my remarks with our expectations for the third quarter and the full-year. This should leave plenty of time for your questions. Starting with revenue. In the second quarter, our revenue totaled $44.9 million, which reflects a 90% increase over last year's second quarter results. This strong growth was driven by great performance in both revenue categories, Subscription Solutions and Merchant Solutions. The larger piece, Subscription Solutions, grew 64% to $25.5 million, while Merchant Solutions grew 140% to $19.5 million.
Just as a reminder, included in subscription solutions, in addition to the monthly subscription amounts for both online and offline subscriptions, are sales of apps, themes, and domains. For Q2, our ending MRR or monthly recurring revenue increased 67% to $8.5 million, and the number of merchants using our platform now exceeds 175,000. Within merchant solutions, Shopify Payments was the biggest driver. Also included in this category are revenues from transaction fees, partner referrals, and the sale of point-of-sale hardware. For Shopify Payments, the strong performance was driven by the growth of GMV or gross merchandise volume processed through Shopify Payments due to both more merchants using it as well as higher average GMV per merchant. In Q2, GMV for the quarter exceeded $1.6 billion, twice the GMV achieved by merchants in Q2 of 2014.
On a cumulative basis, the Shopify platform has now processed over $10 billion of GMV, which clearly demonstrates its scalability and the success our merchants are having running their businesses on it. We expect our strong GMV growth to continue as we continue to add both more merchants and sales channels. Gross profits grew 76% year-over-year to $25.3 million for the quarter versus $14.3 million for Q2 of 2014. Although we continue to increase our level of investment in all operating expense areas, adjusted operating expenses in the quarter came down significantly as a percentage of revenue versus Q2 of last year from 86%-61% of revenue. This improvement further highlights the importance of merchant solutions, which by its nature has lower sales and marketing and R&D costs associated with it.
Adjusted operating loss in Q2 was $1.9 million versus $6.1 million loss in Q2 of 2014. With weighted average shares outstanding of 53 million shares in Q2, we reported an adjusted $0.03 loss per share for the period, compared with a $0.15 loss a year ago, albeit on fewer shares outstanding in 2014. We believe our excellent Q2 performance, along with the addition of new sales channels for our merchants, continues to advance our leadership position in the marketplace and positions us well for continued strong growth for the second half of 2015.
For the third quarter of 2015, we expect to achieve revenues in the range of $47 million to $48 million, which represents a 72%-76% growth year-over-year, and an adjusted operating loss in the range of $4 million to $5 million. For the full-year, we expect to achieve revenues in the range of $181 million to $183 million, which is a growth of 72%-74%, and an adjusted operating loss in the range of $12 million to $14 million. Before closing, I want to remark on the enthusiasm with which our IPO was received. We deeply appreciate the confidence our investors have placed in us and look forward to delivering on our vision over the years to come. With that, I will turn the call back over to Katie so we can start the Q&A.
Thank you, Russ. Shannon, can we open the lines up for questions now?
Certainly. At this time, I would remind participants if they'd like to ask a question, they may do so by pressing star and the number one in their telephone keypad. Again, if you have a question, you may press star and the number one on your telephone keypad. Our first question comes from the line of Terry Tillman from Raymond James. Your line is now open. Please go ahead.
Hey, good morning. Congrats, first of all, on your first quarter out of the gate post the IPO. Great results. I just had a couple of questions for Tobi or Russ. You know, in terms of It's actually, first question is more of the financial question, so maybe it's for you, for Russ. You had really strong upside in the quarter on the revenue front. I think it was like $7 million, plus even in the back half of the year, it looks like it shakes out to where, you know, kind of a similar upside in both third and fourth quarter based on this new updated guidance.
The bottom line doesn't really change much for the better. Is this a way we should think about going forward? Upside situations, you're going to take that revenue upside and spend it back into the business as opposed to showing more operating leverage? Maybe you could just help us philosophically on that first.
Thanks, Terry. Yes. In terms of our strategy there, our goal is as growth accelerates, our plan is to keep reinvesting. The opportunity in front of us is so large that that clearly makes sense. In terms of the back half of the year, a couple of things to note. Q3 is a quarter that we do increase the level of investment just in terms of preparing for the holiday season. Whether it's additional capabilities in the data center, additional sales and support resources, all factor into that. In addition, of late, we've seen a very strong growth in hiring, the cost of that additional workforce will also factor into the back half of the year. Certainly for the short-term period, that is our expectation is as we continue to grow and we see more and more opportunities, we'll continue to invest heavily to continue on obtaining that growth.
Okay, got it. Just my follow-up question relates to just a broader theme question in terms of omni-channel. We're seeing a lot of retailers and consumer brands really talk about transforming their businesses to take advantage of omni-channel, a lot of it more on the tier 1 or the enterprise side. How do you all see omni-channel affecting your business, maybe with smaller or mid-sized merchants you deal with? Maybe you could also relate that to Buy Button. Is that doing anything to lift incremental GMV, or is it just more of a shift maybe from their own online store? Thanks again. Nice job.
Thanks, Terry. This is Tobi Lütke speaking. What's really interesting about the sort of omni-channel situation in our market is that omni-channel in the enterprise is at the sort of embryonic stage where it's the topic of keynotes at conferences and, you know, some board of directors get together and say, "Okay, let's go more into more channels at the same time," and then that might be implemented over the next 12 months or something like this. On the low side, we've actually have a significant amount of businesses, even part of our Build a Business contest, median age being about four or five months, that are currently selling across five different channels and don't think anything about it.
If, if anything, the driver there are the small guys, the people who start and the people that just don't, haven't realized that this is supposed to be hard, partly due to them having better tooling available through software like Shopify. Buy Buttons are a really, really good example. I mean, the fact that many of our customers sell, like online/offline through our Shopify POS product in our online store, and of course, the social media players are now coming into the picture as well. We expect omni-channel to be sort of a transitionary term at very soon. This is doing that, like having a business that sells across maybe 10 channels is simply gonna be called e-commerce again. Just because it's not something anyone will see as an optional thing and everyone will see as what everyone's doing.
Thanks, Tobi.
Thank you, Terry. Shannon, next question, please.
Certainly. Your next question comes from the line of Ross MacMillan of RBC Capital Markets. Your line is now open. Please go ahead.
Thanks very much, and congratulations from me as well. Russ, first one for you. I was just curious, when I look at the merchant, net new merchant adds, how did that play out relative to your plan in the quarter? I'm curious if you could provide any color on how you think that might trend in the second half of the year.
Yeah. We always expect good merchant growth each quarter, and Q2 was no different. In fact, relative to our original view on the quarter, the merchant growth was a bit stronger than we had expected. Typically, what we see is in Q3 that sort of quarter-over-quarter growth slows down a little bit, and then Q4, as people get ready for the holiday season, it can pick up. In summary, Q2 was a little bit ahead of where we thought it would be, but we still expect good growth. Maybe not the same sort of quarter-over-quarter increases that we saw in Q2, but still strong growth for the second half.
Thanks. Just on an addition to that, just on the MRR number. I think if I calculate it per average merchant, it looks like that is growing. Is that just a function of mix, i.e., if I take the base and think about, you know, which versions, SKU versions custom merchants are using, it's really that? Is it anything to do with, you know, other uplift factors in the MRR?
We're starting to see a little bit of uplift in terms of both merchants that have been on the platform upgrading, as well as merchants either upgrading to Plus or coming to Plus. Overall, it hasn't been a big change in terms of the average that we get per merchant, because we still have a lot of merchants coming in at the low end, which was critical for the business.
Maybe one, this last one maybe for Tobi Lütke. Obviously, the merchant solutions today is predominantly payments, but you talked about betaing shipping and some other services. Could you maybe just provide an uplift, sorry, an update on how you're expecting those to roll out as we look out into 2nd half of this year and into next year? Thank you.
Shipping is the one thing we've sort of leaned forward a bit on our roadshow. We said that's something we are working on and something we are looking to release this year, and that's still the plan. You'll see that, you will see the launch, and you'll see that potentially have a impact on merchant services. I mean, it'll obviously be a small one in the beginning. Other than that, I mean, we are actually So, this is probably going to be a dance which we will have reoccurringly on these calls. Like, to me personally, this is personal stylistic.
I find it's very, very important for me to sort of retain my ability to surprise and delight my customer base with features that hopefully they didn't see coming. I'm not gonna comment too much on the other things we are working on. We make our decisions based on, for our product based on, what is it that our customers are currently doing, that costs them a lot of time or potentially costs them a lot of money and that we could provide in a better way for them, and those are the kind of things we prioritize.
In certain cases, there might be a possibility for us to play a role that then impacts the merchant services line. That's not part of the decision-making of we should build a feature because we are really chasing the maximum amount of value for our customers. If that's on offer, if that's possible, if that's part of the scope of the area we're looking at, then you'll see us launch more things. Yeah.
Great. Thank you, and congrats again.
Thank you.
Your next question comes from the line of Brendan Barnicle of Pacific Crest Securities. Your line is now open. Please go ahead.
Thanks so much, guys. You guys have a very interesting ecosystem of agency freelancers and business development channels. Any update on that? Any update in terms of the numbers of folks there or how you're thinking about that, those relationships going forward?
On both sides of the coin, we have partners obviously that refer merchants to Shopify, and we have partners that build apps and themes for us. In both cases, that's growing at a healthy pace. We're not disclosing the exact numbers on that at this point for competitive reasons, but in both cases, we're seeing continued growth there. You know, as we mentioned last year, more than 5,000 partners referred shops to Shopify, and we expect that to continue to grow.
Great. Russ, in the press release, we had a average share count for the June quarter. Obviously, you know, you didn't have the public shares the whole time. Do you have a total end of period share count for us so we can use for kinda evaluation and other purposes?
The average that you can expect for Q3 is just above, I think it's just above 73 million shares. If you just look at in our financial statements, the totals that are listed there for the end of Q2, that's really then the number that you can use for Q3 with just a slight uptick as options get exercised and things that happen of that nature.
Terrific.
Yeah. In terms of the exact number that we think of, it's just over, just under, sorry, 76 million shares.
Sorry, it's under, you said 73 earlier, so 76 should be what we use for Q3?
Yeah. Yeah. That's correct.
Okay. Great. Thank you very much. Thanks, guys.
Your next question comes from the line of Michael Nemeroff of Credit Suisse. Your line is open. Please go ahead.
Great. Thanks for taking my questions. I'll echo my congratulations on a great start to public life. Just a lot of my questions have been answered already. Just on the Shopify Plus, just if you could maybe give us some anecdotes, some companies that have recently signed on and what the competitive landscape looks like there, that would be helpful. Then I have a follow-up for Russ, please.
Sure. Excuse me. This is Harley here. Shopify Plus, as we've mentioned on the roadshow, is still very much in early days. We've seen some really good growth in the first half of the year. We've seen companies like UPS, the New York Stock Exchange, World Vision, Red Bull, Grateful Dead, all sign up for Shopify Plus. We've also seen celebrities like the Kardashians bring their clothing brand Dash onto Shopify and Gwyneth Paltrow's Goop come onto Shopify Plus as well. We're seeing increase there, but it's still early days. Because of that, it's not a material percentage of overall revenue. But certainly it's an area that we are excited about.
In terms of competition, I think that, you know, we are getting much larger brands that are coming to Shopify Plus from some of the enterprise platforms, but really the focus is on that mid-market and also ensuring that smaller shops that start on Shopify are able to grow and do many millions of dollars without ever having to re-platform away from Shopify. Plus is a new area for us, and we're excited by it, but that's about all we're saying at this point.
Great. Thanks, Harley. For Russ, could you give us a sense what the penetration is of Shopify Payments currently? I know it was greater than 75% at the time of the roadshow, but it was increasing pretty quickly. If you could just maybe give us a sense for that. Also, Russ, if you could just remind us again how Plus impacts the model for those that may not be aware going forward.
In terms of payment penetration, that continues to increase. In North America, we just crossed 80%. 80% of the North American merchants are using Shopify Payments. In terms of the U.K., which we launched in November of last year, we're now at 55%, we've seen good take-up on that as well. In terms of the Plus, there's two areas that it impacts the business. First is on the subscription. Plus has a much higher Monthly subscription amount than our regular plan. Generally, any Plus company or customers add to the subscription revenue or subscription solutions. On the merchant solution for Plus customers that actually want to use the Shopify Payments, we'll share in that as well.
Thanks, Russ. Just one follow-up again, if I may. On the guidance, you know, quite a bit stronger than what we were expecting, even given what you had thought that you were gonna do for the rest of the year. What's really driving that? Is it merchant momentum? Is it the overall GMV per merchant growth? Is it Plus traction? Well, maybe if you could just give a, you know, prioritize what is driving such strong growth right now that you're so confident in the rest of the year.
Yeah. There's two things that are really driving the growth. One is the number of merchants using the platform that continues to increase. One that we have a little bit less sort of control or predictability around is the success that those merchants are having. The fact that the merchant base processed over $1.6 billion of orders in the quarter, which just to calibrate that for people, that was the total amount that we processed in 2013. As that number keeps growing, it increases our confidence of achieving strong numbers.
That's great. Thanks. Congratulations.
Thank you.
Your next question comes from the line of Richard Davis from Canaccord. Your line is open. Please go ahead.
Hey, thanks. I answered it as non-material, but we got a couple questions from people with regard to Amazon Launchpad. Could you kind of comment on any implications with regard to your business? Then my follow-up would be, since the IPO, have you been able to calculate any kind of tangible impact on brand awareness or unaided lead activity? Thank you.
Yeah. Okay. I guess the best thing that happened about the Amazon Launchpad is that, for the first time, you know, like, we are named in headlines on TechCrunch, which is really good experience for us. Like I said in the beginning, Shopify has been this sort of headstone that built great software company up here in Canada. So it's gratifying that suddenly, like, people are trying to kill us, that, you know, I think companies in the valley get to experience a lot earlier in their lifetime. About the actual product, like, Amazon, much like Shopify, launched a lot of experiments for various parts of the market.
This is one which is sort of, fits into the help hardware startups to, like, find early traction kind of category, which, I mean, that might be going on sometimes on Shopify, but it's like, it's just a different attempt at the same thing. All these things do, like are similar in that, they expand the market, right? It's fun to be named in a headline, but I don't think that's true. Like Amazon actually has a Shopify killer, which is called Amazon Webstore, but you can't find that anymore because they shut it down because they gave up on that. Yeah, I don't think this is like them coming in at the same thing from, in another way.
IPO impact on the business brand. I think that Pacific Crest is actually a good example of what's going on. It's been very helpful for hiring, clearly, which has been really remarkable. Harley mentioned a bunch of people who have signed Plus contracts. Internally, jokingly, some people called the IPO Shopify Plus growth hack. I'm not sure that was the initial intent behind it, but that's the sort of what it's starting to feel like. It's been very positive for us overall.
Great. Thank you very, very much.
Your final question comes from the line of Brian Essex from Morgan Stanley. Your line is open. Please go ahead.
Good morning. Thank you for taking my question. Thanks, congratulations from me as well on a great IPO. I guess I wanted to focus in on payments a little bit. You know, it looks like take rate accelerated quite nicely. I know on the roadshow, you guys indicated that about a third of GMV was processed over the platform. Any update in terms of what the penetration rate might now be for the volume processed over the platform and what the key catalysts for that acceleration are?
The percentage of total GMV now going through Shopify Payments for Q1 was roughly 31%. For Q2, it went up to 34%. Probably the biggest catalyst of that is that the merchants who get onboarded onto Shopify Payments are now selling more and being more successful. By its very nature, that's putting more volume through Shopify Payments. As well as in the U.K., in addition to the new merchants being onboarded, existing merchants now are switching over to the platform as well. That's why from a merchant point of view, the penetration has increased to the 55%. Over time, we'll see that continue.
Is there a trend or, you know, maybe some stickiness from legacy payment platforms, you know, whether it's, you know, PayPal or other merchant acquirer agreements that your customers might have that generally lead them to, you know, migrate onto the platform? Or, you know, are there other things such as your Buy Button which are getting a better traction and better penetration rate in the market?
Yeah. I think having payments as part of our back end really strengthens the back office part of Shopify. As more of these new sales channels come in, that will really send more volume through the Shopify Payments. All of that is good for the business.
I guess lastly.
In terms of Yeah, sorry. Just in terms of why people move over from other systems, I think a really key part is that by doing your payment processing through Shopify, now you can see the order go all the way through the system, and you don't have to worry about manual reconciliations. You get a much deeper view of your business if you use an integrated solution. A fair amount of volume still goes through PayPal, which is an important partner for us as well, and we get a rev share on any of the volume that goes through PayPal. It's really up to the merchant to decide what the best solution is. In general, if they're starting from scratch, they'll just choose Shopify Payments, and if they have something already in existence, chances are over time they'll move over to Shopify Payments as well.
Great. Thanks. Lastly, I just wanna touch on the Buy Button really quick. You know, any color on the economics of, you know, interest versus, you know, and how that trickles through to your P&L versus maybe, you know, what a Facebook might provide?
Yeah. It's really too early to say on both of those. They're really in a early launch phase. Both of them will give the merchant additional sales channels, you know, additional GMV, which then if they use the Shopify Payments will flow through that. That'll be the big area that we see. Having more Shopify sales channels makes the merchant more successful, so they'll stay on the platform longer. Over time, that does generate more subscription revenue as well. The primary economics for us will be higher GMV.
Great. Very helpful. Thank you very much.
As there are no further questions on the phone lines, I would now turn the call back to Katie Keita. Ms. Keita, please take over.
Thanks, Shannon, and thanks everybody for dialing in today. We have a few closing remarks from Tobi.
Thanks everyone for tuning in. Again, this is all a really great experience. We've had great fun meeting a lot of people on the roadshow. Shopify is a little bit of a, it's a complex company. I agree. It's, I've done lots of fundraising even before going public, and it always took a little while for people to understand sort of exactly the scope of the business and what we are doing 'cause it's so optimized for merchants value.
I hope that, as we spend more time together, that we will be able to, like, build our trust level up with you guys and everyone who cares about how we go about solving solutions and how we are going about solving kind of problems that our customers face. Because we are trying to build a really good company here, and, frankly, we're actually having a lot of fun doing that. Thanks for joining and, I guess we'll talk to you in a couple of months again. Yep.
This concludes today's conference call. You may now disconnect.