Core Thesis - Shopify Inc. is experiencing strong growth driven by its transformation into an asset-light platform, with a focus on merchant solutions and transaction-based revenue [2][3][6] Financial Performance - Revenue increased by 32% year-over-year to $2.84 billion, with Gross Merchandise Volume (GMV) reaching $92 billion [3] - GAAP operating profit rose to $343 million, and free cash flow reached $507 million, marking the ninth consecutive quarter of double-digit free cash flow margins at 18% [3] - Merchant solutions now account for 75% of total revenue, reflecting a strategic shift from subscription-based SaaS to transaction-based revenue [3] Business Model Transformation - Shopify has transitioned from a capital-intensive logistics operator to a lean, asset-light platform, which has led to reduced operating expenses and improved profitability [2][5] - The sale of its logistics business has contributed to this asset-light model, enhancing operating profit and free cash flow despite a slight decline in gross margin [5] Growth Areas and Risks - Shopify Payments processed $53 billion this quarter, achieving a 58% penetration rate, providing a stable, high-margin income stream [3] - Shopify Capital, which provides loans to small and medium-sized businesses (SMBs), grew rapidly but incurred $148 million in transaction and loan losses, up 155% year-over-year, indicating heightened credit risk [4] - Subscription solutions grew at 15% year-over-year, but monthly recurring revenue (MRR) growth slowed to 10%, suggesting market saturation among smaller merchants [4] Valuation and Market Position - Valuation analysis indicates a forward price-to-sales ratio of 8.2x for FY26, with a discounted cash flow range of $145–$170 per share, suggesting Shopify is fairly valued at $156.59 [5] - Long-term upside is contingent on managing lending risks, platform governance, and competition from Amazon, positioning Shopify as a fintech-driven e-commerce platform with significant potential [5]

Business Focus - Circle's business is poised for significant growth through transaction-based revenue [1] Market Observation - Transaction-based revenue represents a major opportunity for Circle [1] Data Resource - A chart is available for tracking relevant information [1]

Business Focus - Transaction-based revenue is the next significant growth opportunity for Circle's business [1] Market Observation - The provided chart is important for monitoring Circle's business [1]

Revenue Performance - Circle's CCTP transfer volume reached approximately $6.9 billion in July [1] - CCTP transfer volume increased by about 500% year-over-year [1] Strategic Focus - Circle's long-term dependency on rates & distribution partners is a key consideration [1]