Chris Zhang

Chris Zhang from UBS inquired about Global-e's regional trends, specifically addressing observed softness in the U.S. outbound merchant region and its offset by growth in the U.K. and European Union.

Answer

Nir Debbi, Co-founder and President, Global-e, clarified that the slightly lower share of U.S. outbound was due to a mix of new launches from other origins, such as APAC and continental Europe, rather than a reflection of U.S. trading weakness. He noted it's not expected to be a consistent trend.

Chris Zhang asked about regional trends in merchant outbound activity, noting a perceived softness in the U.S. that appeared to be offset by strength in the U.K. and European Union, and requested a comparison to prior quarters.

Answer

Nir Debbi, Co-founder and President, Global-e, clarified that the slightly lower share of U.S. outbound activity in the quarter was due to a mix of new launches from APAC and continental Europe growing faster, rather than a weakness in U.S. trading outbound. He emphasized that this should not be interpreted as a consistent trend.

Chris Zhang of UBS Group AG asked for confirmation on the timing of the Shopify rev-share reduction and its impact on the EBITDA guide, particularly the implied Q4 margin step-up. He also inquired about the potential impact of making Shop Pay available on the 3P side.

Answer

CFO Ofer Koren confirmed the rev-share reduction will occur late in Q3, with its full effect in Q4, and is factored into guidance, which should improve adjusted EBITDA over time. Co-Founder and President Nir Debbi added that Shop Pay is expected to launch late Q3/early Q4 and be heavily adopted by merchants, but Shopify Payments itself is not planned for the 3P solution, only for the 1P managed markets model.

Chris Zang asked about the assumptions for new merchant launches embedded in the Q4 guidance, particularly concerning the ramp-up pattern for Shopify Managed Markets during the holiday season.

Answer

CFO Ofer Koren explained that significant merchant launches typically conclude by October ahead of the peak season. While some smaller merchants may onboard later, the standard cadence involves a pause until late Q1 and Q2 of the following year, and this pattern is reflected in the current outlook.

Asked for customer feedback on the new Catalyst offering and for details on foreign exchange assumptions in the full-year guidance.

Answer

Customer feedback on Catalyst has been positive, with customers appreciating its agility and speed. The future strategy involves offering pre-composed versions for specific industries. Foreign exchange exposure is immaterial to the business and not a significant factor in the guidance.

Asked for a timeline to achieve the Rule of 40 framework and for details on the financial impact of the recent restructuring, including any anticipated future costs.

Answer

The company cannot provide a definitive timeline for reaching the Rule of 40 but is committed to it, viewing 2025 as a transition year with strong profit and cash flow but moderated revenue growth. The recent restructuring resulted in a $9.9M charge in Q3, and an additional $3-5M in non-headcount-related restructuring costs (e.g., software contracts, real estate) are expected in 2025.

Chris Zhang asked for a prioritized list of near-term investment needs beyond digital and inquired about the customer impact of changing the loyalty points expiration policy.

Answer

CEO Robert Lisy stated that the core investment focus is exclusively on digital customer acquisition, as other business areas are fully staffed and efficient. He anticipates some costs, like customer care, will decrease as digital's share grows. Regarding the loyalty program change (expiring points in 90 vs. 180 days), Lisy asserted it is expected to have no impact on customer retention, as the key benefit of faster service for loyalty members remains intact.