Key Takeaways DASH saw total orders rise 21% year over year, driven by growth in grocery, retail, and local delivery.Shopify's merchant solutions made up 75.4% of revenues, supported by new tools and AI-powered Sidekick. SHOP has outperformed DASH over the past six months as enterprise brand adoption continues to grow. DoorDash (DASH) and Shopify (SHOP) are major players in the e-commerce space. While DASH dominates food delivery with its restaurant partnerships and expanding grocery delivery services, Shop ...

Key Takeaways Shopify's GMV and revenues rose 32% in Q3 2025, with growth accelerating across consecutive quarters. An expanding merchant base and AI-powered tools are fueling performance and driving free cash flow gains. SHOP's valuation remains a concern, trading at a premium P/S ratio well above peers like AMZN and WIX.Shopify (SHOP) shares have returned 41.6% in the trailing 12-month period, outperforming the broader Zacks Computer and Technology sector’s rise of 20.4%. The outperformance can be attribu ...

Shopify (NYSE:SHOP) FY Conference December 09, 2025 07:00 PM ET Company ParticipantsKeith Weiss - Managing DirectorJeff Hoffmeister - CFOKeith WeissAll right, so we'll get kicked off here. Thank you, everyone, for joining us. My name is Keith Weiss. I run the US Software Equity Research Franchise here at Morgan Stanley, and I'm very pleased to have with us from Shopify CFO Jeff Hoffmeister. Jeff, thank you for joining us.Jeff HoffmeisterGreat, of course. Good to see you, Keith.Keith WeissSo, it's a super ex ...

Core Viewpoint - Shopify's stock experienced a decline despite reporting strong revenue growth, primarily due to increased loan losses impacting earnings. However, the stock has seen significant appreciation year-to-date and over the past year [1]. Group 1: Financial Performance - Shopify's Q3 revenue increased by 32% to $2.84 billion, surpassing analyst expectations of $2.76 billion [5]. - The company's gross merchandise volume (GMV) rose by 32% to $92 billion, with international GMV increasing by 41% [6]. - Merchant solution revenue jumped 38% to $2.15 billion, while subscription revenue grew by 15% to $699 million [7]. - Adjusted EPS slightly decreased from $0.36 to $0.34 due to higher loan losses, which accounted for 5% of revenue [8]. - Monthly recurring revenue (MRR) was reported at $193 million, below the expected $195 million [9]. Group 2: Growth Drivers - Shopify attributed its robust growth to advancements in artificial intelligence (AI), with over 750,000 shops using its Sidekick AI assistant [2]. - AI-driven traffic to Shopify stores increased seven-fold since January, and orders from AI searches rose 11-fold [3]. - The company continues to attract large brands, recently adding notable names such as Estée Lauder and e.l.f. [7]. - Strong growth in Europe was highlighted, with GMV surging 49%, contributing to 21% of total revenue [6]. Group 3: Future Outlook - Shopify forecasts fourth-quarter revenue growth in the mid-to-high 20s percentage range, aligning with previous guidance [9]. - The company is well-positioned for future growth, particularly in agentic commerce and B2B sectors [11]. - Despite a high forward price-to-sales ratio of over 15 based on 2026 estimates, the company remains attractive for potential investment [12].

Financial Data and Key Metrics Changes - Q3 delivered 32% GMV growth, 32% revenue growth, and an 18% free cash flow margin, consistent with previous quarters [8][36] - Revenue grew 27% in Q1, 31% in Q2, and 32% in Q3, with free cash flow margin holding steady at 15% in Q1, 16% in Q2, and 18% in Q3 [8][36] - Q3 gross profit grew 24%, with gross margin at 48.9%, down from 51.7% in the prior year [39][41] Business Line Data and Key Metrics Changes - Merchant solutions revenue increased 38%, driven by strong GMV performance, while subscription solutions revenue grew 15% [37][39] - ShopPay processed $29 billion in GMV in Q3, up 67% year-over-year, indicating strong adoption [18][58] - B2B GMV was up 98% year-over-year, with significant growth across various verticals [29][36] Market Data and Key Metrics Changes - International GMV grew 41% in Q3, with Europe showing a 49% increase [21][35] - Revenue from Europe accounted for 21% of overall revenue in Q3, up from less than 18% two years ago [21] - Offline GMV increased 31%, reflecting the growing importance of retail-first brands [28][36] Company Strategy and Development Direction - The company is focused on leveraging AI to enhance merchant capabilities and streamline operations [10][14] - International expansion and the development of offline and B2B channels are key strategic priorities [5][22] - The company aims to simplify the commerce experience for merchants, enhancing their ability to compete globally [19][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to adapt to changing market conditions and technological advancements [4][6] - The outlook for Q4 anticipates revenue growth in the mid- to high-20s% year-over-year, with expectations for continued strong performance [46][48] - Management highlighted the importance of maintaining a balance between growth and profitability, with a focus on long-term merchant success [44][49] Other Important Information - The company has maintained a flat to down headcount for over two years, focusing on productivity and efficiency [42][43] - The partnership with OpenAI and other AI leaders is expected to enhance the shopping experience and drive traffic to Shopify stores [53][54] Q&A Session Summary Question: Integration with OpenAI and its impact on transactions - Management noted a significant increase in AI-driven traffic and orders attributed to AI searches, indicating early success in this area [53][54] Question: Instant checkout solutions and their prioritization - Management emphasized the popularity of ShopPay and its role as a leading accelerated checkout solution, positioning it favorably among consumers [58][59] Question: Marketing investments and their efficiency - Management confirmed that marketing investments are driving merchant adoption effectively, with a focus on maintaining tight guardrails for spending [63][64] Question: Success in the enterprise business - Management highlighted the strong pipeline and success in attracting large brands, indicating a broad spectrum of verticals being targeted [68][69]

Financial Data and Key Metrics Changes - Q3 delivered 32% GMV growth, 32% revenue growth, and an 18% free cash flow margin, consistent with previous quarters [8][36] - Revenue grew 27% in Q1, 31% in Q2, and 32% in Q3, with free cash flow margin holding steady at 15% in Q1, 16% in Q2, and 18% in Q3 [8][36] - Q3 gross profit grew 24%, with gross margin at 48.9%, down from 51.7% in the prior year [39][41] Business Line Data and Key Metrics Changes - Merchant solutions revenue increased 38%, driven by strong GMV performance, while subscription solutions revenue grew 15% [37][39] - ShopPay processed $29 billion in GMV in Q3, up 67% year-over-year, indicating strong adoption [18][58] - B2B GMV was up 98% year-over-year, with significant growth across various verticals [29][36] Market Data and Key Metrics Changes - International GMV grew 41% in Q3, with Europe showing a 49% increase [21][35] - Revenue from Europe accounted for 21% of overall revenue in Q3, up from less than 18% two years ago [21] - Offline GMV increased 31%, indicating strong performance in retail channels [28][35] Company Strategy and Development Direction - The company is focused on leveraging AI to enhance merchant capabilities and streamline operations [10][14] - Shopify aims to expand its international presence and enhance its product offerings to lower barriers for merchants [5][22] - The strategy includes building a robust ecosystem that supports various merchant types and channels, including B2B and offline sales [24][28] Management's Comments on Operating Environment and Future Outlook - Management highlighted the importance of AI in transforming commerce and enhancing merchant success [10][30] - The company expects Q4 revenue growth to be in the mid- to high-20s% year-over-year, facing a high benchmark from the previous year [46] - Management remains optimistic about maintaining consistent growth and profitability while investing in future opportunities [44][48] Other Important Information - The company has a cash balance of $6 billion and no debt following the settlement of a convertible note [45] - Operating expenses were $1 billion for the quarter, representing 37% of revenue, down from 45% in 2023 [42][43] - The company is seeing increased transaction and loan losses, primarily due to higher losses in the payments business [43] Q&A Session Summary Question: Integration with OpenAI and its impact - Management noted that AI-driven traffic to Shopify stores has increased 7x, with orders attributed to AI searches up 11x since January [53] Question: Instant checkout solutions prioritization - Management emphasized that ShopPay processed $29 billion in GMV in Q3, indicating its popularity among consumers [58] Question: Marketing investments and efficiency - Management confirmed that marketing investments are driving merchant adoption and are closely monitored for efficiency [63] Question: Success in the enterprise business - Management highlighted the strong pipeline in the enterprise segment, with notable brands migrating to Shopify [69]

Shopify (NYSE:SHOP) Q3 2025 Earnings Call November 04, 2025 08:30 AM ET Speaker0Good morning, and thank you for joining Shopify's Third Quarter 2025 conference call. I am Carrie Gillard, Director of Investor Relations, and joining us today are Harley Finkelstein, Shopify's President, and Jeff Hoffmeister, our CFO. After their prepared remarks, we will open it up for your questions. We will make forward-looking statements on our call today that are based on assumptions and therefore subject to risks and unce ...

Core Insights - The article highlights recent research reports on major stocks including Tesla, UnitedHealth, Shopify, and Waterstone Financial, emphasizing their performance and market conditions [2][5][8][11][14]. Tesla, Inc. (TSLA) - Tesla's shares have outperformed the Zacks Automotive - Domestic industry over the past year, with a gain of 85.4% compared to the industry's 72.9% [5]. - The company is facing challenges with declining EV sales, recording its first annual decline in deliveries in 2024, which has continued into 2025 [5][6]. - Operating margins are shrinking, and expenses are rising, with Musk indicating that upcoming quarters may be difficult [6]. - The Energy Generation & Storage unit remains a strength, and the expansion of the Supercharger network is ongoing [6]. - Tesla has launched a robotaxi service, which has received mixed reactions, but the company sees potential for significant cost and scalability advantages [7]. UnitedHealth Group Inc. (UNH) - UnitedHealth's shares have underperformed the Zacks Medical - HMOs industry over the past year, declining by 37% compared to the industry's 31.3% [8]. - The company is experiencing cost pressures, higher medical utilization, and a significant debt burden, which threaten margin stability [8]. - The Medical Care Ratio (MCR) is expected to increase to 89.4% in 2025, and the earnings outlook for 2025 has been trimmed [8]. - Despite challenges, UnitedHealth benefits from balanced growth across its segments, driven by rising healthcare demand and disciplined execution [9][10]. Shopify Inc. (SHOP) - Shopify's shares have outperformed the Zacks Internet - Services industry over the past year, with a gain of 99.2% compared to the industry's 51% [11]. - The company is expanding its merchant base through new tools and AI-driven solutions, enhancing customer engagement and operational efficiency [11][12]. - Shopify's international growth, particularly in Europe, is a key catalyst for its prospects [12]. - However, the company faces gross margin pressure due to increased hosting costs and a new paid trial program, which may impact operating profit [13]. Waterstone Financial, Inc. (WSBF) - Waterstone Financial's shares have outperformed the Zacks Financial - Savings and Loan industry over the past year, with a gain of 14.9% compared to the industry's 10.9% [14]. - The company demonstrated earnings resilience with a 35.2% year-over-year net income growth in Q2 2025, despite challenges in mortgage banking [14]. - Improved return on assets (ROA) and return on equity (ROE) indicate enhanced profitability driven by cost discipline [14]. - The Community Banking segment showed robust income growth, although mortgage banking remains a drag due to declining originations and rising non-accruals [15][16].

Core Insights - Shopify (SHOP) is experiencing significant revenue growth, with a 31.1% year-over-year increase in Q2 2025, reaching $2.68 billion [1][10] Partner Ecosystem - Shopify has signed deals with notable brands such as Starbucks, Canada Goose, and Burton Snowboards, indicating its ability to serve diverse industries [2] - The expanding partner ecosystem includes major companies like Microsoft, TikTok, and Google Cloud, which enhances Shopify's merchant base [3] AI and Technology - The company is leveraging AI to enhance consumer shopping experiences through tools like Catalog, Universal Cart, and Sidekick, improving customer engagement and operational efficiency [4] Future Growth Expectations - Shopify anticipates continued growth in its merchant base due to its strong partner referral system, projecting mid- to high single-digit revenue growth for Q3 2025 [5] Competitive Landscape - Shopify faces competition from MercadoLibre (MELI) and Amazon (AMZN), with MercadoLibre reporting a GMV of $15.3 billion, a 21% year-over-year increase [6] - Amazon's "Buy with Prime" service intensifies competition, as it offers faster delivery options, with a 30% increase in same-day or next-day deliveries compared to the previous year [7] Stock Performance - Shopify's stock has increased by 34.9% year-to-date, outperforming the broader Zacks Computer & Technology sector [8] - The stock is trading at a premium with a forward Price/Sales ratio of 14.42X compared to the industry average of 6.45X [11] Earnings Estimates - The consensus earnings estimate for 2025 is $1.44 per share, indicating a 10.77% year-over-year growth [13]

Core Insights - Shopify (SHOP) shares have appreciated 34.9% year-to-date, outperforming the broader Zacks Computer & Technology sector's return of 16% and the Zacks Internet - Services industry's gain of 23.6% [1] - The company is introducing new merchant-friendly tools, such as Shop Minis, Shop Cash, and Sign in with Shop, which are contributing to its growth [1] Financial Performance - Merchant solutions revenues in Q2 2025 reached $2.02 billion, a 36.6% increase year-over-year, driven by strong Gross Merchandise Volume (GMV) and increased penetration of Shopify payments [2] - GMV in Q2 2025 was $87.84 billion, up 30.6% year-over-year, with offline GMV increasing by 29% and B2B GMV surging by 101% [2] - Shop Pay processed $27 billion in GMV, reflecting a 65% year-over-year growth [2] International Expansion - International GMV grew 42% year-over-year in Q2 2025, with Europe leading this growth [3] - Shopify Capital is now available in Germany and the Netherlands, enhancing access to growth funding for more merchants [3] Clientele and Partnerships - Shopify's clientele includes notable brands such as Starbucks, Canada Goose, and Michael Kors, contributing to its growing popularity [8] - The Shop App experienced a 140% year-over-year growth in native GMV, driven by events like Shop Week [8] - Shopify's partnership with Microsoft integrates its Checkout Kit into Microsoft's Copilot, enhancing the shopping experience [12] - Collaboration with Roblox opens new avenues for reaching a younger audience [13] Competitive Landscape - Shopify faces stiff competition in the e-commerce marketplace from major players like Amazon and Alibaba [14] - Amazon is expanding its offerings and has launched Generative AI tools to enhance the shopping experience [15] Earnings Estimates - The Zacks Consensus Estimate for Shopify's 2025 earnings is $1.44 per share, indicating a year-over-year growth of 10.77% [16] - The consensus for 2025 revenues is $11.21 billion, reflecting a year-over-year growth of 26.24% [17] Valuation Concerns - Shopify stock is currently considered overvalued, with a Value Score of F, trading at a forward price/sales ratio of 14.53X compared to the sector's 6.74X [18] Investment Outlook - Shopify is benefiting from strong growth in its merchant base and expanding international footprint, suggesting long-term growth potential for current investors [21]