Mark Zgutowicz

Mark Zgutowicz noted an acceleration in the 2023 cohort's GMV contribution in 2024 compared to the 2022 cohort's performance, asking for the reasons behind this and its implications for the 2024 cohort.

Answer

CFO Jeff Hoffmeister attributed the strength of recent cohorts to the ramping of multiple solutions over the past couple of years, including Tax, B2B, Point of Sale, enterprise initiatives, and better product-market fit in Europe. While not predicting the '24 cohort's performance, he viewed the trend of merchants adopting more solutions as encouraging.

Mark Zgutowicz of The Benchmark Company asked if management could quantify the expected contribution from the enterprise pipeline to growth in the first half of the upcoming year.

Answer

CFO Jeff Hoffmeister stated he could not provide specific numbers on the incremental top-line contribution from enterprise. He explained that due to long sales and implementation cycles, the full impact of the enterprise push is still in its early stages and would be more of a 2025 phenomenon, rather than a significant driver in early 2024.

Mark Zgutowicz of The Benchmark Company, LLC asked for commentary on Borderfree.com's 4% sales contribution for participating merchants and its growth outlook. He also inquired about Net Dollar Retention (NDR) trends in H1 versus H2 and the relative contribution of same-store vs. new merchant GMV.

Answer

Co-Founder and President Nir Debbi clarified the 4% metric represents the share of sales from the Borderfree.com channel for merchants who have adopted it, a figure that is in line with expectations and growing. CFO Ofer Koren stated that year-to-date same-store sales are consistent with historical averages and that the GMV contribution from new merchants is expected to be close to last year's levels.

Mark Zgutowicz asked how the Shopify merchant dashboard experience might change under the new agreement regarding 1P and 3P cross-border options. He also inquired if Shopify's increasing focus on enterprise clients is creating a stronger connection for Global-e with those larger merchants.

Answer

President Nir Debbi explained that the 1P dashboard will not change materially but will become more seamless on the payment and settlement side. He affirmed that Shopify's push into enterprise is a positive development for Global-e, as their platform was built for enterprise merchants and their strong track record and deep integration position them well to win this business.

Mark Zgutowicz asked for the services take rate assumption in the 2025 guidance and requested confirmation of the Shopify Managed Markets GMV mix for 2024.

Answer

CFO Ofer Koren stated that the service fee take rate is expected to be slightly lower in 2025, partly due to the absence of Ted Baker, which had a high service fee take rate. He confirmed that Shopify Managed Markets contributed approximately 5% of the company's total GMV in 2024, which was in line with their internal budget.

Mark Zgutowicz asked for the services take rate assumption within the 2025 guidance and requested confirmation of the Shopify Managed Markets' GMV mix for 2024.

Answer

CFO Ofer Koren indicated the service fee take rate is expected to be slightly lower in 2025, partly due to the absence of Ted Baker, which was a high-take-rate client for part of 2024. He confirmed that Shopify Managed Markets contributed approximately 5% of total GMV in 2024, aligning with the company's budget.

Mark Zgutowicz asked for an update on Shopify Managed Markets, specifically whether its GMV contribution for the year is tracking toward the lower or higher end of the previously stated $200-$300 million range.

Answer

CFO Ofer Koren responded that the GMV contribution from Shopify Managed Markets is tracking within the guided range for the year, neither at the high nor low end, and is progressing as planned. He reiterated expectations for continued growth but not a significant step-change in the near term.

Mark Zgutowicz asked for clarification on the divergence between weakening Creative revenue and strengthening data licensing, questioning how strong corporate and media performance aligns with subscription results. He also inquired about the second-half outlook and the apparent contradiction between stated agency weakness and perceived strength in a la carte revenue.

Answer

CFO Jennifer Leyden explained that the Creative segment's decline was consistent with Q1 and primarily driven by persistent weakness in the agency business, which is almost entirely a la carte. She clarified that the strength in 'Other Revenue' stemmed from large corporate content deals that included AI rights. Leyden noted that strong subscription growth, particularly in the corporate space, continues to be a key driver, and the company expects the agency business to remain challenged.

Mark Zgutowicz of The Benchmark Company asked for the expected drivers of the implied constant currency revenue acceleration for the remainder of the year, the assumption for data licensing revenue in the guidance, and details on Getty's litigation against generative AI companies and its copyright protections for exclusive content.

Answer

CFO Jennifer Leyden stated that data licensing revenue assumptions are unchanged at 2-3% of total revenue and that growth acceleration is expected from improvement in areas impacted in Q1, plus continued strength in subscriptions, video, and Unsplash+. CEO Craig Peters provided a detailed overview of the litigation against Stability AI, which seeks to clarify copyright law regarding AI training. He noted positive signs from regulators and confirmed Getty does not license its editorial content for AI training purposes.

Mark Zgutowicz from The Benchmark Company requested a 2025 outlook, asking for color on revenue growth by segment, the amount of data licensing revenue expected, and visibility into client spending trends for agency, corporate, and media compared to the prior year.

Answer

CFO Jennifer Leyden stated that Getty does not guide by segment but expects stabilization in Agency, continued recovery in Media, and growth in Corporate. She noted that data licensing revenue is expected to be modest, continuing 2024 levels. CEO Craig Peters added that they are monitoring softness in the creative agency space, which is sensitive to macro uncertainty, but noted that the company's subscription net retention rate continues to improve and should remain strong.

Mark Zgutowicz of Benchmark inquired about the relative momentum of key growth drivers, the downtick in million-dollar customers, and progress on offshoring and the new pricing model.

Answer

CFO Lauren Dillard attributed the drop in million-dollar customers to known, atypical churn events like Oracle's ad tech exit, and expects the metric to rebound. CEO Scott Howe added that key growth drivers like Cross Media Intelligence, Commerce Media, and CTV are all in early stages with significant potential. Dillard also quantified offshoring and automation benefits as 'low double-digit millions' in annual cost savings, and noted the new pricing model pilot is progressing well but has no revenue upside baked into the current year's guidance.

Mark Zgutowicz highlighted the strong RPO growth and asked about the drivers of the renewal cycle. He also inquired about the contribution of Oracle and CTV to the Data Marketplace business.

Answer

CFO Lauren Dillard attributed the strong RPO growth to a successful quarter of large, multiyear renewals, noting that over half of the 20 $1M+ ACV deals renewed were multiyear contracts. Regarding the marketplace, she estimated the Oracle partnership added a 'couple few points of growth' and expects that to continue. She also highlighted CTV as a 'real bright spot,' with data purchased for CTV campaigns up nearly 50% in FY25.

Mark Zgutowicz asked about the revenue impact from Oracle's marketplace exit, how contract renewals influenced RPO, and the drivers of the Q4 operating expense guide.

Answer

CFO Lauren Dillard explained that Oracle's exit added a few points of growth to the data marketplace in Q3, an impact expected to continue. She noted that strong renewal seasonality and sales momentum drove the RPO increase, with Q4 also being a seasonally high renewal quarter. Regarding Q4 expenses, she stated the sequential increase is in line with prior years, driven by seasonal items like payroll taxes and the Ramp-Up conference, plus some project spend shifted from Q3.

Mark Zgutowicz asked about the key growth drivers for retail media over the next year, the timeline for standardization to become a tailwind, and the initial demand and potential revenue contribution from new auction-based display and on-site video products.

Answer

CEO Michael Komasinski identified growth drivers as new retailer wins, scaling new products like on-site video, and programmatic display. He noted strong uptake for auction-based display, with 16 retailers live and more expected soon, highlighting a significant gap to capture. He positioned the development of open RTB for retail supply as a key long-term growth driver for 2026 and beyond, which will improve fill rates and normalize demand flow.

Mark Zgutowicz asked about consumer spending patterns across different income demographics, the sustainability of Q1's OpEx leverage throughout the year, and the expected 12-month revenue impact from the large retail media client's reduced scope.

Answer

CFO Sarah Glickman noted that spending weakness was observed in discretionary categories like fashion and beauty across income levels, rather than being tied to a specific demographic. She explained that while Q1 saw strong OpEx leverage, Q2 has some planned expenses, but the company will use cost levers like hiring pace to maintain its full-year margin targets. She confirmed the client impact is a significant headwind that will lap after 12 months, starting in Q4 2025.

Mark Zgutowicz asked about the drivers of the retail media take rate upside in Q4, the relative contribution of off-site versus on-site volumes, and how much the Microsoft partnership is factored into the 2025 guidance.

Answer

CFO Sarah Glickman explained the Q4 take rate upside was primarily from significant growth in on-site sponsored ads and tiered fees for exceeding annual volume thresholds, not from lapping a client transition. She noted the Microsoft partnership's contribution is included in the 2025 forecast, with an expected ramp-up in the second half of the year after retailers begin launching in H1.

Mark Zgutowicz inquired about potential incremental operating expenses from the Microsoft partnership progression and the future trajectory of the Retail Media take rate, particularly after the first anniversary of its largest client's transition to an in-house model.

Answer

CEO Megan Clarken stated that no significant operating expenses are anticipated for the Microsoft client transition, as the necessary platform is already in place. CFO Sarah Glickman addressed the take rate, noting that while it may decline with scale as expected, the company has renegotiated contracts and expects continued growth in Retail Media.

Mark Zgutowicz sought clarification on the implied growth trajectory for the open web business within the Q2 and full-year guidance, and asked about the incremental impact from Oracle clients in Q1 and beyond.

Answer

Interim CFO Jill Putman and CEO Lisa Utzschneider clarified that measurement growth is expected to improve from Q1's 4% to a mid-to-high single-digit rate for Q2 and the full year. They also noted that while publisher revenue will remain strong in Q2, its growth rate will be lower than Q1's 33% due to the specific timing of Oracle customer onboarding.

Mark Zgutowicz of The Benchmark Company inquired about the progress of verticalizing Taboola's sales force, the dynamic between scaled advertiser growth and average revenue per advertiser, and the sustainability of Q1 native margin yield improvements.

Answer

CFO Stephen Walker responded that the sales team restructuring is complete and in the 'second inning' with promising early signs. He explained that while scaled advertiser growth (up 9%) and average revenue per advertiser (down 3%) can be inversely correlated, the average revenue remains at a historical high. He also confirmed there were no one-time benefits to the Q1 yield improvements, attributing past dilution to new supply additions like Apple and Yahoo.

Mark Zgutowicz asked about the development timeline for the Realize platform, key investment milestones for 2025, and the learnings from the recent Yahoo supply tests.

Answer

CEO Adam Singolda stated Realize was in development for about a year and the focus for 2025 is tracking advertiser retention and spend growth. CFO Steve Walker added that major sales and marketing investments were made in late 2024, with 2025's focus being on R&D while maintaining a 30%+ EBITDA margin. He also confirmed the Yahoo testing has now unwound, with some carryover effect on Q1 ex-TAC margins.

Mark Zgutowicz of The Benchmark Company asked about the company's Tier 1 ad sales capacity and if it limits monetization of premium supply like Apple. He also requested a ranking of the near-term revenue potential from the new global OEM partner, Chinese advertisers, and the Microsoft Outlook integration.

Answer

CFO Stephen Walker explained that while sales capacity isn't necessarily a limiting factor, the company is actively investing in sales teams to target high-potential direct-to-consumer and emerging enterprise advertisers. He noted that a key growth driver is also expanding budgets from the existing advertiser base, which is now seeing strong returns on the expanded supply. Walker declined to force-rank the three new revenue opportunities but affirmed that all are considered significant long-term growth drivers.

Mark Zgutowicz asked for a breakdown of how affordability initiatives are directed between restaurant vs. grocery and domestic vs. international markets. He also inquired about how Q1 promotional activity compared to the previous quarter and year-over-year.

Answer

CEO Tony Xu explained that affordability initiatives are applied across every category and geography because customers always seek more value. The company's strategy is to continuously improve selection, affordability, and service quality to build value and reinvest back into the customer experience, rather than targeting specific segments with promotions.

On behalf of Mark Zgutowicz, Alex Lavigne asked how GoDaddy characterizes its upmarket opportunity today compared to a year ago, particularly as Airo influences the top of the funnel.

Answer

CEO Aman Bhutani stated that GoDaddy's commerce offering has become very compelling for micro-businesses, including those with up to $1 million in sales. However, the current strategy remains focused on efficiently converting its large existing customer base rather than aggressively pursuing a new upmarket segment. He noted this approach is driving healthy GPV growth as existing customers adopt the new offerings.

Mark Zgutowicz asked for 2025 margin expectations for the A&C and Core Platform segments, the reason for corporate cost deleverage in Q4, and the drivers behind the aftermarket business acceleration.

Answer

CFO Mark McCaffrey did not provide segment-level margin guidance but reiterated that overall margin expansion is driven by A&C mix shift balanced with investments. He attributed Q4 corporate costs to finishing infrastructure projects with no lingering impact. He characterized the aftermarket business as a low single-digit grower with volatility from large, unplanned transactions.

Mark Zgutowicz asked for more detail on the volume growth trajectory from the restaurant business and questioned whether the recent declines in AOV and transaction revenue represent a new baseline.

Answer

CEO Fidji Simo explained that Instacart does not break out restaurant metrics because the offering is deeply intertwined with and boosts the core grocery business. CFO Emily Maher added that the restaurant partnership's growth contribution will likely moderate in the second half of the year. She expects a similar AOV impact in Q2 but noted that transaction revenue, while variable, should remain within its long-term target range, balancing investments with operational efficiencies.

Mark Zgutowicz posed a macro question about whether Klaviyo has anticipated or heard of any downstream impacts from potential tariffs on its customers.

Answer

CFO Amanda Whalen responded that while the company is monitoring the geopolitical landscape, it does not expect a direct impact from tariffs. She expressed confidence that even if customers are affected, they will continue to rely on Klaviyo's platform to efficiently drive revenue and maintain consumer relationships through all economic cycles.

Mark Zgutowicz from The Benchmark Company asked if Shopify's growing success with enterprise clients is creating a downstream pipeline benefit for Klaviyo and how the company is positioned for this trend.

Answer

CEO Andrew Bialecki confirmed the partnership with Shopify strengthens as both companies move upmarket. He credited their joint success to the complementary nature of their platforms and the deep, decade-long integration, stating it's a model they aim to replicate with other major platforms.