Shopify - Earnings Call - Q3 2025

Executive Summary

• Q3 2025 delivered broad-based outperformance: revenue up 32% to $2.84B, GMV up 32% to $92.0B, and free cash flow margin at 18% (nine consecutive quarters of double-digit FCF margins). Merchant Solutions grew 38% and Subscription Solutions 15%.
• Against S&P Global consensus, Shopify posted a revenue beat (+$84M), EPS roughly in line, and strong EBITDA/EBIT beats; gross margin ran slightly below consensus due to mix and payments penetration. Bolded beats: Revenue, EBITDA, EBIT; margin miss modest. Values marked with * from S&P Global.
• Q4 2025 guidance: revenue growth mid-to-high 20s YoY, gross profit dollars low-to-mid 20s, OpEx 30–31% of revenue, SBC $130M, FCF margin slightly above Q3; CFO flagged elevated payments losses and tax receivables timing as temporary drags, with losses already trending down.
• Strategic catalysts: accelerating international and enterprise momentum (ELC partnership), AI stack adoption (Sidekick scale; agentic commerce integrations incl. ChatGPT and Microsoft Copilot), rising payments penetration (65% GPV) and Shop Pay GMV (+67% YoY to $29B).

What Went Well and What Went Wrong

What Went Well

• Payments scale and conversion drivers: GPV penetration reached 65%; Shop Pay GMV rose 67% YoY to $29B, reinforcing checkout leadership and conversion lift.
• International acceleration and enterprise wins: International GMV grew 41% YoY (Europe standout); ELC strategic partnership underscores enterprise traction and brand mix diversification.
• Operating leverage and cash generation: OpEx down to 37% of revenue from 39% last year, free cash flow of $507M at 18% margin; CFO emphasized disciplined headcount and AI-enabled productivity.
  • Quote: “We build. We ship. We grow... GMV up 32%, revenue up 32%, free cash flow margin at 18%.” — Harley Finkelstein.

What Went Wrong

• Gross margin compression: Overall gross margin fell to 48.9% (vs. 51.7% LY), driven by mix toward Merchant Solutions and higher payments penetration, plus PayPal partnership accounting and AI/hosting costs.
• Elevated transaction/loan losses: Reached 5% of revenue due to onboarding experiments and capital growth, though trending lower into Q4 per CFO.
• MRR growth headwinds: Q3 MRR up 10% YoY with Plus at 35%, but standard MRR is lapping prior trial changes; comparability noise persists through Q1’26.

Transcript

Speaker 0

Good morning, and thank you for joining Shopify's third quarter twenty twenty five 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 uncertainties that could cause actual results to differ materially from those projected. Undue reliance should not be placed on those forward looking statements.

We undertake no obligation to update or revise these statements except as required by law. You can read about these assumptions, risks and uncertainties in our press release this morning as well as in our filings with The U. S. And Canadian regulators. We'll also speak to adjusted financial measures, which are non GAAP and not a substitute for GAAP financial measures.

Reconciliations between the two are provided in our press release. And finally, we report in US dollars, so all amounts discussed today are in US dollars unless otherwise indicated. With that, I'll turn the call over to Harley.

Speaker 1

Thanks, Carrie, and good morning, everyone. It's been another strong quarter for Shopify. I'll take you through the numbers and what we've built and shipped in q three shortly. But first, I want to zoom out as I always do. There is a real shift happening in the world of technology right now, and I know you're all going to ask about AI, and there's a lot to cover.

From enabling AgenTek Commerce with some of the biggest global leaders in conversational AI to our AI assistant sidekick supercharging merchants businesses to how we are using AI reflexively across the entire business and company to tighten our product loops and to ship world class solutions more efficiently than ever. But here's the thing. There's a bigger story behind the updates, and it's a story of the evolution of commerce. Now evolution teaches us to adapt or die, and Shopify is built for this pace of change. It's in our DNA.

So while you'll certainly see it in how we're leveraging AI, you will also see it in our international expansion. You'll see it in the development of our offline and B2B channels, and you'll see it in how we've dramatically lowered the barrier to entry. Every 26, a new entrepreneur makes their first sale on Shopify. I'm going say that again. Every twenty six seconds, a new entrepreneur makes their first sale on Shopify.

In fact, it's happened at least three times since I started talking here. That is TAM expansion at its best. And any of those merchants could easily become one of the world's biggest brands in a decade or less. As I said before, that's what we mean when we say we're not just growing our piece of the pie. We are growing the pie itself.

That is our superpower. Commerce never stands still and neither do we. We are always building for what's next. And now as we're entering what is likely to be a whole new era of agent to commerce, our scale and agility mean that Shopify is perfectly positioned to lead the way and empower more businesses using AI. AI is an incredible tool for us in what has always been our goal, to enable more entrepreneurs in the world.

More on that in just a moment. First, back to the numbers. While we're continuously evolving, the story of a result remains incredibly consistent. Normally, I hate repeating myself, but this is one place I'm very happy to do just that. For quite some time now, we've demonstrated that we can balance both growth and profitability.

Well, here it is again. Q3 delivered 32% GMV growth, 32% revenue growth, and an 18% free cash flow margin. And this is not just a one off. Revenue grew 27% in Q1 this year, 31% in Q2 and 32% in Q3. At the same time, free cash flow margin has held steady at 15% in Q1 to 16% in Q2 and 18% again in Q3.

Consistent, strong, executing just as we said we would. We are really proud of these results. Delivering these numbers quarter after quarter at our scale is a huge achievement. And this consistency is not an accident. It's incredibly intentional.

It's the direct outcome of how we operate. We build what merchants need, we ship relentlessly, and we grow consistently. This is the right balance for a growth company. Invest to capture opportunity, keep margins at a profitable level and deliver durable results quarter after quarter. It's how we operate, powered by a model built to accelerate merchant growth, a team built for execution and millions of businesses pushing from their first sale to full scale.

And that's why you continue to see consumers' favorite brands come to Shopify to power their businesses. More on that later. Now let me walk you through what we built and shipped in Q3 and how it's fueling our growth. I touched on AI at the start of the call. That's because simply put, we all recognize this could be the biggest shift in technology since the Internet, and Shopify is preparing to be at the center of it.

The products we're talking about today could very well become a quintessential piece of technology that will be used by everyone every day. That's how big this could be, and we believe Shopify is perfectly primed to help lead the way. Think of it this way. If AI is fueled by data, then Shopify has a clear advantage. We power millions of merchants and billions of transactions.

That gives us access to a world of data across a spectrum of commerce, And we're using that data to create better shopping experiences for both merchants and shoppers. This is the strength of our platform, massive scale paired with unmatched velocity. We think about the evolution of AI in three ways: how AI will help our merchants sell everywhere, how AI will help our merchants operate smarter and how we as a company will use AI to build better. Sell everywhere, operate smarter and build better. Let me take each in turn.

Let's start with how AI is helping our merchants sell everywhere, what's known as AgenTi Commerce. Put simply, AI is able to fundamentally change how we shop, moving from search to conversation, helping all consumers purchase more efficiently, And that's why we built the Commerce for Agents tools that we introduced on our last call, Catalog, Universal Cart, and Checkout Kit. These tools make it easier for agents to shop across merchant stores on a buyer's behalf. But here's the thing, agentic commerce is so much more than just the last click. Think about it in three layers, product discovery, purchasing experience, and the post purchase journey.

Now, if you're only looking at the payment or checkout layer, you're missing the bigger picture of what we're building, a seamless and intuitive shopping experience end to end. First, let's talk about discovery. We've structured data across billions of products so our partners can surface the most relevant items in seconds. It's clear where this is going. Shopping is becoming more conversational, more personalized, and much more efficient.

And that's why leading AI partners are already using catalog to power product discovery inside their experiences. I'm sure you all saw the announcement about our partnership with ChatGBT, which is a strategic play that we're really excited about. But let me be clear, we're also partnered with other leaders in conversational AI like Perplexity, and our goal is to power product discovery for all agents, making this the standard across the Internet. Up next on purchasing experience. Once a shopper finds what they want, Universal Cart and Checkout Kit make add to cart and checkout seamless inside the conversation.

ChatGPT along with Microsoft Copilot have already partnered with us here to make in chat shopping flows possible. And finally, post purchase. We're investing in tools that help agents keep customers engaged and informed, order status, return, support, reorder prompts so the experience stays smooth and merchants build durable relationships with their customers. Of course, different permutations will emerge as agent to commerce evolves, and we are preparing our merchants to be well positioned for whatever path wins. What all this should tell you is that our merchants are primed for success in the new world of agent to commerce, just as they will continue to be armed with the tools for their online store, physical retail stores, b to b channels, or wherever commerce goes next.

This is the advantage of being on Shopify. We are everywhere commerce is happening, and we always aim to get there first. Okay. Let's now talk about how merchants are using AI to operate smarter. We set an extremely high bar for every AI feature we build and ship.

We're not just here to keep pace with change. We're here to set the standard for what's possible in commerce technology. Sidekick, our on platform intelligent assistant, is a prime example of that commitment. And frankly, the rate of adoption speaks for itself. In Q3 alone, over seven and fifty thousand shops used Sidekick for the first time.

And to date, Sidekick has had almost 100,000,000 conversations with merchants, with 8,000,000 in October alone. And it's quickly becoming the default way merchants get things done. Hundreds of thousands of merchants are running core parts of their business using Sidekick. In fact, conversation can go from 50 to 100 turns deep, covering everything from analytics and building new customer segments to automating better SEO and so much more. Five years ago, none of this would have been possible.

And today, it's a reflexive daily habit for many of them. At this scale, Sidekick will only get smarter and more powerful. We've been betting on this from day one, and that bet was correct and it's already paying off. Sidekick is central to how so many merchants operate their businesses. Let me be clear.

This is not just about automation. This is also about autonomy. This is exactly what we had hoped for when we started out on this journey. It's also something we knew we were uniquely positioned to build, given everything we know about the merchant's business and commerce at large. This is what building a purpose built agent and deeply integrating to the platform looks like, and we are just getting started.

The last thing I'll touch on with AI is how we're using it to build better products. For years, we've been honing our internal capabilities in the same way we've been empowering our merchants, shipping fast, measuring what matters, and scaling what works using AI. Shopify's founder mode mentality really comes into play here. We're turning vast amounts of raw signal into shipped products and features quickly and relentlessly. This is what building with AI looks like at Shopify, using our scale to gain insights, our culture to move really fast, and shipping more of what truly matters so merchants win sooner.

Let me share one quick example to illustrate this. We have a tool affectionately known as Scout. Now Scout is an internal voice to customer system that indexes hundreds of millions of merchant feedback items, making them searchable within our tools. Any PM, designer, engineer, or frankly anyone at the company, including myself and Jeff, can ask a question and get grounded answers in seconds. That used to take weeks.

Patterns emerge by market, vertical and merchant size, allowing us to write clear specs, prioritize better, and ship with confidence. And Scout is just one of many tools we're developing to turn our own signals, whether it's support tickets, usage data, reviews, social interactions, or even psychic prompts into fast, informed decisions. If you take away one thing from this call, let it be this. AI is not just a feature at Shopify. It is central to our engine that powers everything we build.

Okay. That's a lot about AI, which should give you some idea about how much is happening behind the scenes over here. But now let's shift our focus to other key products and growth areas that are driving our results. Starting with Shopify Payments. Payments continues to lead the way for driving growth, hitting 65% penetration of GMV in Q3.

Shop Pay has seen significant growth as well, up 67% year over year to $29,000,000,000 this quarter. Now I want to underline what I just said because it's important to understand what we're building here. If there was ever one company that could own the checkout, we believe it can be Shopify, and that's no small feat. If we've made it look easy, then that means we're doing our job. But in reality, the checkout is an incredibly complex system.

It's the engine room of commerce. That one simple buy button is a contract between merchant and customer that has to cover a whole world of optionality from taxes, shipping and inventory to pricing and payments in any currency to bundles and upsells and subscriptions, our checkout scales in terms of volume and functionality, all while ensuring compliance with various regulations. Think of it like a really well made watch. The watch face or the buy button is just the tip of the iceberg. What's underneath is an intricately built network of complications that handles a world of nuance all designed to make the experience beautifully simple.

And it doesn't end there. Once the sale is complete, we handle refunds, exchanges, store credits, partial captures, and loyalty programs, all seamlessly allowing merchants to focus on growth instead of paperwork and building trust with their customers. So why does this matter? Because it demonstrates that we execute incredibly well at scale. No one else can handle this complexity as seamlessly and with such a focus on the merchant as Shopify can.

And for our partners, we keep it simple as well. Platforms like Microsoft Copilot can easily plug in to activate commerce quickly, embedding checkout and maintaining a native feel. And the result? We simplify online stores and checkout at scale, empowering our merchants and our partners to thrive wherever commerce happens today and wherever it goes next. So we've talked about AI.

We've talked about the checkout. But you'll see this laser focus in everything we built. In Q3, every upgrade we shipped cut friction, simplified selling and put merchants within reach of new markets. I'll give you a few examples related to our payments business. Merchants using Global Ease managed markets products can now offer Shop Pay as a payment method.

Our Clarna partnership now includes local currency displays and streamlined payouts. And Shop Pay installments launched in The UK following Canada that rolled out earlier this year. So why am I talking with these specific rollouts? Because it shows how each integration makes it easier for merchants to convert wherever they do business, and we're not close to being done. There's significant runway ahead, especially internationally where our adoption rates are increasing but still remain lower than our core market of North America.

We see that momentum continuing. In Europe, penetration gains for Shopify Payments in Q3 were more than 50% higher than the gains in the same quarter a year ago. This is how we continue to capture growth and drive greater payment penetration by making the hard things simple and putting merchants at the center of every transaction. Let's stay on international because frankly, the results speak for themselves. International GMV grew 41% in Q3 on top of 42 in Q2 and 31% in Q1.

The momentum is real, and we're still only scratching the surface. Europe's market share continues to make gains, while revenue from the region now accounts for 21% of our overall revenue in Q3, up from less than 18 percent two years ago. On top of the payment product enhancements I already mentioned, Q3 was packed with solutions across our business that further break down barriers and open new markets for merchants everywhere. I'm going to drill into the details here because it's important to understand the velocity of progress we are making internationally to add more products in more markets. In point of sale, we launched Shopify Payments for POS to three additional countries and rolled out tap to pay in seven more countries.

Shopify Capital has now doubled its footprint from where we started the year with Ireland and Spain launching in Q3. And Shop App expanded track with shop and translations in six new markets making it a top destination for local buyers around the world. On the cross border front, as I mentioned earlier, Shop Pay is now available for merchants using our managed markets product. Let's talk about shipping and fulfillment next because we made big strides here this quarter. We expanded merchant optionality across the stack for both international and local.

This quarter alone, we partnered with Amazon multichannel fulfillment, Big Blue, DHL fulfillment network, Go Bolt and Maple all to give merchants more fulfillment flexibility. We partnered with Australia Post, Royal Mail and DHL Express Canada to give more carrier diversity. And we launched DHL Express DDP, DHL eCommerce DDP and enabled Canada Post DDP so merchants can collect duties at checkout. With a single integration, we've empowered merchants to eliminate the customs delays that kill international sales. But this is not just about adding integrations.

It's about giving merchants the optionality to choose the best solution for their business, whether that's the lowest cost, fastest delivery, or best cross border experience, all managed from a single platform. As regulations shift and merchants needs evolve, this depth of choice gives our merchants even more ways to be successful while continuing to build an ecosystem that is truly world class. And while we're scaling horizontally across geographies, we're also growing vertically across merchant types and channels. As you know, we've built multiple on ramps into Shopify online, offline, B2B and enterprise so brands can start and scale on their terms. And that is why the biggest brands and retailers are choosing Shopify.

Just last week, the Estee Lauder Companies announced they're coming to Shopify. This is a global beauty empire with eighty years of heritage and more than 20 iconic brands under one roof, Clinique, Mac, LaMeyer, Bobby Brown, and more. And now they're trusting us to power their next chapter. So why are industry legends like Estee Lauder, Mattel, Aldo, Hunter Douglas all moving to Shopify? Because our technology wins on speed, on scale, on agility, and our price to value ratio is unmatched.

But it's more than just tech. Estee Lauder is still a family led company at heart. For them, this isn't just business, and it isn't for us either. We simply outcare everybody else. Sometimes that means me spending the weekend on calls with both potential and existing merchants, and sometimes it's Toby jumping in to explain a new feature to a merchant.

But all the time, it's the roughly 8,100 people at Shopify who are relentlessly merchant obsessed showing up every day to help them win. And that mix of world class technology and true partnership, that's what sets Shopify apart and that's what's driving us forward. And you can expect to see that continue to set us apart as we scale. Every day, we are seeing some of the world's biggest brands with complex, high volume operations choose Shopify to unify its channels, to cut complexity, and to move faster. This quarter alone, we have signed an incredible mix of brands that shows just how versatile and scalable Shopify is.

Affordable billion dollar beauty giant e. F. Cosmetics, Italian luxury label twin set, iconic American snack brand and household staple Welsh's, three d printing company Formlabs, the sport betting company FanDuel, and the 170 year old French retailer LaDurey. And in the growing baby category, we just welcomed Stoca. Anyone who has small children at home will know this company.

Their signature high chair has sold over 60,000,000 times. And just like Estee Lauder, they have an incredible heritage, a 90 year old company, and they're bringing Shopify in to supercharge the next chapter. And I hear stories like this every day. It's one of the things I love most about what we're building, partnering with generational businesses and setting them up for future generations to come. Meanwhile, some of our other recent signings are now ramping up on Shopify.

Since we last spoke, brands like Michael Kors, David's Bridal, Goop, Majuri, and Dooney and Burke, they're all live on Shopify. That's a serious list of companies I just mentioned, on top of the incredibly diverse brands we mentioned last quarter, which included everything from coffee to luxury outerwear to mining equipment. What's most exciting is that we're increasingly welcoming more brands from all corners of commerce. And this growing merchant diversity, both in The U. S.

And all over the world, makes Shopify more resilient, expands our addressable market, and fuels our growth. No matter how the market shifts, Shopify is built to thrive. We're widening our reach, we're deepening our offerings and we're laying the groundwork for long term success from entrepreneur all the way to enterprise. Now I want to quickly touch on offline as it's one of our long term growth drivers that is continuing to power forward. Offline GMV in Q3 was up 31% and we welcomed a host of incredible brands to Shopify.

These are retail first brands led by in person experiences that are expanding to more channels and looking for a unified commerce solution. Iconic names like UGG Australia, Comme des Garcons are choosing Shopify to power their stores, expand their reach, and deliver seamless experiences online and offline. These are not small wins. Our progress with retail anchored brands is another strong signal that Shopify is becoming the platform for all brands selling everywhere, in store, online, and across countries, channels, and markets. Finally, a quick note on B2B.

Our momentum remains strong and steady. Following two years of consistent growth over 100%, we nearly doubled B2B GMV again in q three, up 98% year over year. This isn't just one cohort or one region. We're seeing broad GMV growth across both new and established merchant cohorts. For example, in Canada, q three B2B GMV was up over a 155% year over year.

From a vertical perspective, B2B continues to deliver strong results across the board with Home and Guarded standing out at 150% year over year GMV growth in Q3. Shopify's platform is delivering for merchants no matter the size, vertical or market. Now before I hand it over to Jeff, I want to close out where I started. Shopify is evolving at a pace that is entirely unmatched while maintaining consistent durable growth. We're three quarters into 2025 and we've delivered exactly what we said we would, relentless growth, consistent margins, and unwavering execution.

We build, we ship, we grow. We're also about to kick off what will be my sixteenth holiday season, or as we call it, BFCM here at Shopify. This moment has evolved too. It used to be a few peak sales days, but now it stretches across the whole quarter. And it's more global than ever.

And more than ever before, AI will play a significant role in how shoppers discover and buy, and we are ready for it. Our merchants are primed to win. They've got AI tools that didn't exist a year ago. They're shipping internationally with options that didn't exist a year ago, and they're doing it all on infrastructure designed to handle peak demand at global scale. This is Shopify at full speed.

And with that, I'll turn the call over to Jeff for a deeper dive in the numbers and trends we are seeing. Jeff,

Speaker 2

over to you.

Speaker 3

Thank you, Harley. Q3 was another exceptional quarter for Shopify, continuing the strength of what has been an impressive year. Before I dive into the numbers on a line by line basis, I want to examine our GMV from a few different angles in order to give you a holistic view of what we are seeing in our business. Let's examine GMV by merchant size, cohorts, geographies and channels. Note that all growth rates mentioned are year over year unless specifically stated otherwise.

First, regarding merchant size. We saw strong growth across all merchant sizes. In Q3, merchants with annual GMV below 25,000,000 generated the significant majority of our GMV, and we saw a relatively equal balance between GMV from merchants in the $2,000,000 and below band and merchants in the $2,000,000 to $25,000,000 band, two trends that have been relatively consistent for a while. Merchants with GMV greater than $25,000,000 grew at a faster pace in Q3, but admittedly that is the smallest segment of the three bands I discussed. Next, looking at our cohorts.

Q3 was another strong quarter where our growth was fueled by both recent quarterly cohorts and the strength and durability of previous cohorts. In fact, one of the elements of our business that I believe is frequently underestimated is the stickiness and continued growth of cohorts from two, three or more years ago. Year over year growth in GMV was primarily driven by the strong performance of our 2024 and 2025 cohorts, but our earlier cohorts also continue to perform well. Notably, the 2025 cohort is currently outpacing and generating more GMV than previous year's cohorts at the same age. Moving to regions.

Europe continued to be a standout, driving significant growth with GMV up 49% or 42% in constant currency. Approximately half of our GMV dollar growth in Q3 on a constant currency basis came from markets outside North America. We experienced stronger growth from existing merchants compared to new acquisitions in Q3 across all regions. In terms of channels, Offline GMV increased 31% as we attract more retail first brands globally. Our B2B GMV was up 98%, fueled by existing merchants embracing our offerings our go to market initiatives targeting more B2B specific verticals and merchants.

Finally, verticals. We saw strong performance in apparel and accessories, health and beauty, home and garden, and food and beverage. We also continue to experience rapid growth in emerging verticals like pet supplies, which grew over 50, and arts and entertainment, which was up 45%. Our merchants have consistently delivered over 20% GMV growth for nine consecutive quarters, with q three GMV growth rate of 32% representing the highest growth rate quarter that we've had since the COVID impacted growth rates of 2021. In short, our merchants are performing well across size, cohorts, geography, vertical and channel.

Let's now turn to our Q3 results. In Q3, we reached $92,000,000,000 in GMV, marking a 32% increase or 30% increase on a constant currency basis. This strength was driven largely by North America, which outperformed our expectations, driven by an acceleration in growth rate fueled by stronger contributions from both Standard and Plus merchants. Revenue for the third quarter was up 32% or 31% on a constant currency basis. The strong GMV trends I mentioned drove this revenue growth, with these results coming in ahead of expectations largely on the backs of outperformance in North America.

Looking at the two components of revenue. Merchant Solutions revenue increased 38%, with the strength in GMV driving the significant majority of the growth. To a lesser extent, we also saw increased penetration of Shopify Payments, which reached 65% for the quarter. This quarter's higher GPV penetration was driven by continued adoption of payments by more merchants around the world and the strong performance of those merchants and the expanded partnerships with PayPal and Klarna. These dynamics were partially offset by our continued growth in Europe, which accounted for a larger share of GMV, but which has lower payments volume penetration compared to North America.

Over time, we expect that this will become less of an impact for payments penetration as we continue launching payments in more countries. Subscription Solutions revenue grew 15%, primarily driven by a larger percentage of subscriptions coming from higher priced plans and, to a lesser extent, higher variable platform fees. Q3 MRR was up 10% year over year, led by growth in our Plus plans, which represented 35% of MRR for the quarter. We had two headwinds impacting our year over year growth rates in MRR. MRR for Q3 last year benefited from the one month paid trial, which drove MRR higher and made for a tougher comparison this year.

Second, we are also lapping the Plus pricing changes, which went into effect in 2024. We will have some year over year comparability headwinds on MRR until Q2 of next year as our rollout of the three month trials happened in Q4 of last year and Q1 of this year. We now have had a full quarter where all of our regions are back on three month trials, which clears up a lot of the noise and comparability of our recent merchant acquisition efforts. We're seeing the results of these efforts settle generally in line with historical trends and are pleased with this part of our business. Gross profit grew 24%, coming in slightly ahead of our expectations driven by the outperformance in revenue, primarily due to stronger growth of payments.

Gross profit for Subscription Solutions grew 14%, slightly less than the 15% revenue growth for Subscription Solutions, with gross margin coming in at 81.7%. Gross margin was down slightly year over year as a result of higher hosting costs needed to support higher merchant transaction volumes and our continued geographic expansion, as well as higher AI usage. This downward pressure was partially offset by lower support cost. Gross margin for Subscription Solutions was almost exactly the same as last quarter and healthily above the multiyear trend line of 80%. Gross profit for Merchant Solutions grew 33%, with gross margin coming in at 38.2 compared to 39.7% in 2024.

The decrease was primarily driven by the same factors we have seen throughout the year, including the impact from the expanded partnership with PayPal, which will become less of a headwind in Q4 and beyond as we will have now lapped the initial expansion of the partnership and lower noncash revenues from certain partnerships, which carry a high gross margin. This brings our overall Q3 gross margin to 48.9% compared to 51.7% in the prior year. This year over year change in gross margins is driven by the mix shift from subscription solutions to merchant solutions this year that I have mentioned above and on prior calls, coupled with the continued strength of payments overall. Increase in payments penetration will generally drive lower margins initially, but payments is often the on ramp for merchants to adopt other merchant solutions products. So that is a trade off as many of you think through modeling how our business trends over time based on your assumptions regarding payments penetration levels.

Operating expenses were $1,000,000,000 for the quarter or 37 of revenue. To put this leverage into context and focusing on how Q3 has trended the past three years, we've reduced our operating expenses from 45% in 2023 to 39% last year and further down to 37% this year. Our discipline on headcount has been the key force behind our increased operating leverage. For over two years, total headcount has consistently been flat to down, both sequentially and year over year, as we redeploy talent to the highest impact work. Our team's productivity is rising through automation, better tooling and the reflexive use of AI, so we can build, ship and deliver more for our merchants.

In Q3, transaction and loan losses represented 5% of our revenue, an uptick above our historical trend line. This increase stems mostly from higher losses in our payments business resulting primarily from some testing and experimentation with merchant onboarding. Our payments loss rate is already turning back towards historical levels as some recent changes have already had an impact in lowering these loss rates. We also saw an increase in capital losses, driven primarily by the continued volume growth of our capital business, but with a slight increase in the loss rate for the quarter and with Q4 trending below Q3 and year to date. Operating income for the quarter was $343,000,000 or 12% of revenue.

Stock based compensation for Q3 was $116,000,000 and capital expenditures were $6,000,000 for the quarter. Q3 free cash flow was $5.00 $7,000,000 or 18% of revenue, coming in slightly ahead of our outlook. For the first nine months of the year, free cash flow margin is at the same 16% as last year at this point, delivering on the consistency of free cash flow margins that I've highlighted in past calls. Moreover, we have done this all while accelerating our year to date revenue growth rate in 2025 versus 2024. Note that subsequent to the end of the quarter, our convert became due and settled on November 2.

If you pro form a our September 30 cash balance for the settlement of the convert, we sit at $6,000,000,000 of cash and marketable securities and no debt. Before we move to our outlook, an update on some of the items that I've discussed the past two quarters regarding tariffs and where we are or are not seeing an impact on our merchants businesses. In short, the trends that we are seeing remain very similar to what we have called out on our two preceding calls. Two items to highlight briefly. Cross border GMV was 15% of GMV in Q3, consistent with prior quarters.

The U. S. Inbound and outbound demand within that, which as a reminder is roughly half of the 15%, has remained relatively steady. We still see that our merchants have, in the aggregate, raised their prices some since the April tariff announcements in The U. S, but the level of pricing increases is, in fact, slightly lower than the trends that we were seeing last quarter.

Turning to our outlook for the fourth quarter. We expect Q4 revenue growth to be in the mid to high 20s year over year. A few items for appropriate context. We are up against a high benchmark from Q4 last year, which was the highest growth quarter in 2024. Also, as a reminder, we will lap the expanded partnership with PayPal, which benefited last year's Q4 revenue growth rate.

Finally, we have factored into Q4 guidance FX tailwinds that are expected to be slightly higher than what we experienced in Q3. We expect Q4 gross profit dollars to grow in the low to mid-20s. We expect Q4 gross profit to be impacted by essentially the same dynamics that I discussed earlier in the call regarding our Q3 gross profit. We anticipate that our Q4 operating expenses will be 30% to 31% of revenue. Q4 stock based compensation is expected to be $130,000,000 Finally, on free cash flow.

We expect Q4 free cash flow margin to be slightly above Q3. Two items will affect Q4 margin by a couple of 100 basis points in the aggregate. One, the higher payments losses that I mentioned earlier, which are already trending back towards historical levels, but which we expect will remain elevated in Q4 and some tax receivables, the timing of which are outside of our control and which we expect to negatively impact Q4 net working capital. Even with these two factors and based on the Q4 outlook that I have provided, we are on track to achieve a free cash flow margin for 2025 similar to 2024. As I mentioned consistently, we believe that these free cash flow margins strike the right balance between profitability, discipline, and investment in future growth.

Let me end where it matters most, merchants. We build. We ship. We grow. We execute.

Our performance metrics are aligned with merchant outcomes. Our strategy remains unchanged, deliver results, elevate merchant value, and foster long term growth. With that, I will turn the call back over to Carrie.

Speaker 0

Thanks, Jeff. We will now take your questions before turning the call back to Harley for some final words. Please use the raise hand feature in Zoom to ask your question. If you are dialing in by phone, you will need to press 9 to join the queue and 6 to unmute yourself. We ask that you limit yourself to one question so we can try to get to as many questions as possible.

Our first question comes from Colin Sebastian at Baird.

Speaker 4

Great. Good morning, and I appreciate the opportunity here. We see that the integration with OpenAI has already begun. So just curious on the initial observations from those transactions. I guess, quickly you'd expect incremental contribution from or versus other channels, And and, generally, your expectations for how volumes will originate through AI platforms would be helpful.

Thank you.

Speaker 1

Hey, Colin. Harley, I'll take that that first call. Look. I mean, if you just look at the the sheer numbers, you know, outside of even OpenAI just around AgenTic in general, since January, we've seen AI driven traffic to Shopify stores up, like, seven x. And we've actually seen orders attributed to AI searches up, like, 11 x since that.

So the data is showing it's already growing. And we we actually just recently did a survey for, to consumers to better understand some BFCM trends and something like 64% of shoppers told us they're likely to use AI to some extent in their in their buying. But look, we've been building investing in this infrastructure to make it really easy to bring shopping into every single AI conversation. The fact that we're already working with, you know, the leaders in the space should, I think, you know, be a testament to the fact that we wanna make sure merchants on Shopify, excuse me, are better, are better prepared than those that are not. It's still obviously very, very early, but what we're really trying to do is laying the rails for agent to commerce.

Now in terms of how those could affect, you know, Shopify, that's the beauty of the business model. The business model is really is perfectly aligned with merchant success. The more money they make, the more money we make. And so the way we think about, the agentic channel, like any other channel for that matter, whether it's a marketplace or it's social commerce, is that the more money our merchants make, the more customers are able to sell to, we're able to obviously share on that upside through the GMV, through payments. That's kind of the way we look at it.

But in particular, to your question, you know, this this this partnership with OpenAI around conversational commerce is really exciting. And, again, it's just one more surface area that merchants on Shopify are gonna be to service customers.

Speaker 0

Thank you for your question. Our next question comes from Craig Maurer at Financial Technology Partners.

Speaker 5

Good morning. Thanks for the opportunity. Wanted to follow-up on the prior question. One debate we've been having with investors is how in an instant checkout flow, accelerated checkout solutions might get prioritized in terms of presentment. So I was curious your view on how over time when you have tons of instant checkout solutions available in the market, how those might be prioritized or presented to consumers and at the same time, how you're positioning as the merchants platform might advantage say, Shop Pay in that type of scenario?

Thanks.

Speaker 1

Timmy, look. That's the that's the value of of Shopify in these relationships. The reason that we're able to be front and center, whether it's obviously OpenAI or it's companies like Microsoft or or or Perplexity is that, you know, fundamentally, what's most important is that, these Agentyx, Agentyx products have the best brands. The best brands are on Shopify. Now in terms of the Shop Pay thing, mean, look.

Shop Pay in q three processed almost 30 I think it was $29,000,000,000 in GMV, which is up like 67% year on year. It's now processed over $280,000,000,000. So the fact that it is the number one accelerated checkout on Shopify means it's it's becoming very popular amongst consumers that are very discerning when it comes to buying from the brands they love, which again are on Shopify. So our our, our mission is to make sure that merchants and Shopify are best set up. The way that we we bring it to these partners is that we make sure that it's it's the easiest way for these agentic products to get access to all the brands that the consumers are looking for, but also to do in a way where the technology stack is really simple.

This idea of creating this agentic kit, which allows, these partners to plug in, checkout to plug in our catalog means that it's it's it's kind of a no brainer to work with Shopify. In terms of which, you know, accelerated checkout they'll use, the more people that you shop pay, which, of course is growing amazingly well, means that we just we'll have more of an advantage. Now, again, this is still very, very early days for AgenTic. Obviously, we've been we've been planning for this for years now, but we'll see how, how things progress. But we think Shopify and our merchants are incredibly well positioned here.

Speaker 0

Alright. Thank you for your question. Our next question comes from Andrew Boone at JMP Securities.

Speaker 2

Thanks so much for taking the question.

Speaker 3

I wanted to go back to

Speaker 2

the marketing investments and and given the fact that MRR is just a little bit complicated at this moment. Can you just help us understand the guardrails and what you're saying in terms of the efficiency of that spend? And then how should we think about that as we think about next year? Thanks so much.

Speaker 1

Yeah. Maybe I'll start there on the, on on the marketing side, and then Jeff can jump into some of the MRR stuff. Look. I I think we've said it on almost every single call, but but Shopify, we are a growth company. And we are focused on on driving merchant growth, which which leads and fuels our growth.

If we see opportunities to lean and accelerate growth in key areas, you know, we're gonna make that decision. But ultimately, marketing is an area where we have a lot of flexibility. So let me be very clear. We really like this approach. Our investments in marketing are working really well.

It's driving merchant adoption across verticals, across industries, across across geos. I mean, obviously, you're seeing that happen really well right now in Europe. And in for q four, we don't expect any change in in the environment. So we're gonna keep spending money where it makes sense. That being said, we have very tight guardrails to make sure that where we spend marketing dollars, we do have the appropriate returns.

And and you guys have heard us talk about this on on previous calls where we just see, you know, opportunities for us to double down in one particular area, or one vertical. We we double down on it. We see the payback from that fairly quickly. So we're gonna keep doing that, but this is an area marketing is an area where we have a lot of levers. And when we do see opportunities, we're a growth company, we wanna win.

Maybe I'll hand it to Jeff on some of the MRR side.

Speaker 3

Yeah. I I would add two points. One, Andrew, I think as we look at and I referenced this a little bit on our call, when we look at our merchant acquisition engine overall, we're very pleased with what it's doing. I recognize some of the noise, as you allude to, in looking at MRR in terms of some levels of comparability. I would point out, and I gave the percentage of MRR, which was plus versus the remainder obviously being standard and point of sale.

And when you look at the standard piece, this was the first quarter where we had sequential growth. We were up 4%. The last few quarters, it's been flat, but that's purely a function of the paid trials. Q3 was really the first quarter where you had a clean sequential comparison because Q1 was when we were essentially finishing the migration back to three month trials. So that was in terms of looking at Q2 versus Q1, that was not a clean comparability opportunity for you.

When you look at Q3 versus Q2, it's up 4%. We're still going on a year over year basis. We're going to still have some headwinds until we get to Q1 of next year because of the timing of the paid trials. But we certainly expect with what the merchant acquisition engine is doing, as Harley mentioned, no change in marketing philosophy that we feel good about what we can do in terms of merchant adds.

Speaker 0

Thanks for your question, Andrew. Our next question comes from Siti Panigrahi at Mizuho Securities.

Speaker 6

Thank you. I just want to dig into the enterprise business. Could you talk about the success there and changes to the go to market and pipeline there? And then specifically, as you expanding on the enterprise segment, displacing some of the incumbents, how should we think about the take rate, from that segment?

Speaker 1

Thanks, Citi. I'll take that question. Look, I mean, just to say the thing, I mean, the enterprise is migrating Shopify. I mentioned last quarter, some of the largest companies in their respective verticals are coming. Obviously, now companies like e.

L. F. Cosmetics or Estee Lauder joining us is should should should tell you, that the pipeline that we are seeing is is is quite incredible. Not to mention, you know, brands that we talked about a couple quarters ago, Michael Kors, David brought David's Bridal, Goop, Majuri, they're now fully launching on it as well. So I think it's not just that we're winning the enterprise in one particular vertical.

It's a broad spectrum verticals, and I think that strengthens our platform. We're also being able to go after, you know, more international merchants now with proper go to market in in in places like Europe, for example. Obviously, our our core markets, North America, Australia, New Zealand, Canada are still doing very, very well. But it's still I mean, you know, it's it's hard to say this because I'm mentioning all these great names, but it's still fairly early days for enterprise. I think we are the best position to attract merchants while making sure the existing ones also improve efficiency.

This is also you know, we're seeing a lot more partner led deals. We're seeing Europe and Japan do really well right now. I think a lot of these companies are these large enterprise, especially the the more, the older ones, ones that been around for for decades. They're having conversations in their boardrooms talking about where do we go to future proof our platform? Where do we go to make sure that we don't miss out on agent to commerce?

And and all roads and all all all roads lead to Shopify. So whether it's food or manufacturing or education or even automotive, these are verticals traditionally we didn't go after. And now we're winning them. And we're winning them both from in house built custom solutions. We're also, winning them from some of the larger we're displacing a lot of the the larger existing enterprise platforms.

And I think it's because of the product and and frankly, on the value side, the price to value of Shopify's enterprise product is simply best in class. And so, you know, we're to keep winning these larger deals. I'm deeply involved in this particular area of our business. I I often am on the calls with the CEOs of these companies. And and what I hear is that they're looking to future proof their business.

They wanna sort of have, you know, what they call their final migration, and Shopify is that is that partner for them. So I think you can continue to see some of those incredible brands, consumer savior brands continue to migrate to Shopify.

Speaker 3

Yeah. And, Sidney, the only point I'd add because you referenced the attach rate. One of the things that you see in our enterprise business, of course, is is with all these brands that Harley talked about is we have more and more success bringing more and more of these large GMV brands on the platform. That obviously gives encouragement to even more brands to follow behind and continue to adopt all the great solutions we have. And so I think we're at the front end of the funnel in terms of a lot of these larger enterprises, maybe starting with just payments.

But when you look at what we're seeing over time, compare that funnel to how many are also taking point of sale or taking other elements of our business, whether installments, some of the cross border things we're doing. And so this, in a good way, is a multiyear step direction as we continue to have merchants take on, especially the larger merchants take on more and more products from us. So we feel good about while there's short term headwinds to attach rate, what that means long term for our business is a positive.

Speaker 1

It is also quite interesting, you know, to watch some of these merchants, these very large enterprises first come to us for a very specific, you know, commerce component. So they'll come to us really just to talk about Shop Pay or just to talk about Checkout. I mean, our Checkout, obviously, we think is is is the best in the world. And and frankly, Checkout is so complicated, we've really nailed, Checkout on a global scale and and for for with with for scale for massive merchants. But it's so interesting to see them first come to talk to us about exploring, hey, we just wanna talk about checkout.

And then within a couple of weeks, it's a full stack. It's hey, we want all of Shopify now. That sort of land and expand strategy that we've been implementing for, you know, the last couple of years or maybe the last two or three years or so, it's really starting to work out. And it's really cool to see these brands moving from just one thing to saying, yeah, just just give us all of Shopify.

Speaker 0

Alright. Moving on to the next question comes from Michael Morton at MoffettNathanson.

Speaker 7

Good morning. Thank you for the question. Harley, today, you've talked about product search. Toby talked about it changing on the cheeky pint. And I would love to know I know Shopify has a motto, you'll always be where commerce occurs.

But as you see product search changing in conversational commerce, what do you envision happening for the product discovery funnel? Does that compress? And then in your world over the next several years, how do you see the winners and losers, of the ecommerce landscape evolving? Is it more merit focused on brands as Toby referred to in the past? Anything on how how you see the world playing out, not your product road map, but what you see commerce looking like several years from now, I think would be really beneficial to investors.

Thank you.

Speaker 1

Yeah. Great question. We think about this a lot. Let me say this. I I think there's going to be different permutations of how agent to commerce will evolve, how conversational commerce will evolve.

It's really exciting. We're all talking about it. We're all excited about it. But the way that Shopify and the way that that it certainly, you know, Toby sees it, you know, ultimately, who who is, you know, who's really thinking about the visionary around our product. He's the one that really understands more than anyone on the planet how commerce and and and certainly retail is evolving, is that whatever permutate permutation will emerge that we have to be prepared for whatever path wins.

That was the same thing when, you know, social commerce starts to get a lot of attention or when, you know, when this idea of it's not ecommerce versus physical commerce, but it's gonna be this idea of commerce everywhere. We think that one of the advantages of being on Shopify will be that we're that we are everywhere that commerce is happening, and we always aim to get there first. So in terms of exactly how these conversations are going happen, what we're building right now are these deep connections to AI agents. So when a shopper asks, it's a Shopify merchant who appears, and that is powered by our catalog. The idea of this catalog where buyers ask for products and the agent searches millions of items and displays interactive product cards directly in the chat where the product is robust, it's in real time, it is accurate inventory, localized pricing, even as like smart product clustering.

That's what we're bringing to these agentic tools. And I think, you know, in terms of your question around who is going to win on the on the on the brand side or the retailer side, the one thing that I I will say is is and this has been happening for years, but you're seeing it now more than ever is that consumers are really voting with their wallets to buy from brands that they absolutely love. And we've always said that Shopify is the place where consumers go to buy things that they want, things that they have a connection to. More and more, if not entirely, those brands are on Shopify. The reason that I spend time on these earnings calls, and and frankly, you know, all day long talking about all the brands coming on to Shopify is I love the fact that these brands are coming on.

It's it's it's, you know, very personal and it's also very you know, there's a lot of pride for us at Shopify that the biggest companies in the are choosing it. But what I'm also trying to suggest is that consumers favorite brands are on Shopify and they're and those consumers, they have a different connection with those brands than maybe they historically did where it was just some some sort of, you know, staple item. And so I think brands that have incredible product and incredible brand and incredible connection with the consumer, those are the ones that are going to win ultimately. And we're really fortunate that those are the brands that are, you know, that are on Shopify.

Speaker 0

Thank you for your question. Our next question comes from Todd Copeland at CIBC.

Speaker 8

Great. Thanks, and good morning, everyone. I'm wondering if you can talk about your view of the state of the consumer by geography and post tariffs now that we've seen a little bit of data there. Thanks very much.

Speaker 1

Yeah. Maybe I'll start with the consumer, then, Jeff, you can talk a bit about tariffs. Look. Consumer confidence for us is measured at checkout. That that's the truth.

That's what we look at. And on Shopify, shoppers keep buying. They keep returning, and demand remains really resilient across channels and and categories. So I can only comment on what we see at Shopify, but whether it's, you know, the GMV. But, you know, like I said earlier, consumers are more selective right now, and they're buying from brands they love, and those brands are on Shopify.

And I think, you know, even our our q four outlook suggests that. But we're not complacent. I mean, is not a place where we rest on laurels ever. We're we always monitor these macro factors, whether it's consumer spending, it's household savings, tariffs, frankly, even even FX trends, and and and supply chains, with a lot of our partners. But the strength of our merchant cohorts are pretty clear.

I think quarter after quarter, they're they're growing faster than the broader market. In terms of geo, I mean, obviously, is definitely gaining traction for us. I mentioned that in my prepared remarks, which we expect to continue. But, again, you know, if if you look at consumer confidence measured at checkout, you know, you saw it through the GMV this quarter, $92,000,000,000. We see that our the consumers that are that that care about brands that are buying from brands they love, they're buying them from Shopify stores.

Speaker 3

Yeah. And, Todd, on some of the tariff pieces, I on my call sorry. On my prepared remarks, I mentioned that there's not been a whole lot of change what we've seen this quarter versus the prior quarters. There was a little bit of a downtick in what we're seeing in terms of merchants, in terms of how they're raising their prices. We've basically been tracking that since April when there was a bunch of tariff changes, obviously, in The U.

S. It's ticked down a little bit versus what we had seen before. Pretty much everything else has been consistent versus last quarter. When we look at the trade routes, when we look at the percentage that is inbound versus outbound in The U. S, when we look at what we're seeing on de minimis, we've not seen any significant impacts on our merchants, at least from what we can tell from the data we have.

We obviously put a lot of primacy in our proprietary data. We don't have as much visibility, admittedly, into some of the P and Ls of our merchants. So we can see from a price perspective what they're doing. Some of them are obviously choosing to, as they think about some of these price levels, pass those on to consumers in some way. And I think others are basically seeing that they're choosing not to do that, and it's impacting some of their own P and Ls.

But you can see this in our GMV. Our merchant base remains strong. They're adapting quickly, and we're trying to do everything we can to help them on cross border. So from a tariff perspective, between the April announcements and then obviously the the elimination of de minimis, things have been relatively constant from from our vantage point.

Speaker 0

Thank you for your question. Our next question comes from Trevor Young at Barclays.

Speaker 9

Great. Thanks. Can you expand upon Shopify campaigns? How do merchants get ramped on the campaigns? How do the economics work?

And what do you foresee as the revenue opportunity from that initiative over the next few years? Thank you.

Speaker 1

Yeah. I mean, look. I think customer acquisition remains one of the hardest problems that merchants face. We've been working on this for quite some time now. And I the way we're sort of looking at it is is solving this problem in kind of two primary ways.

The first is is on shop campaigns, which I'll get to in a second, specific to your question. The second is on sort of discovery and merchandising enablement, which which shop app obviously plays a role in with helping, you know, merchants drive more traffic, increase lifetime value, then Shopify Collective plays a role there as well. Specifically on campaigns though, I mean, we're really trying to do is we wanna run commerce native performance ads across these high intense services. And our strategy has been and continues to be to reinvest any gains we achieve through the ads business back into the growth. We wanna ensure our advertising inventory and our scale continues to grow.

And the proof has been really great. I mean, we've seen nine x year on year increase in in budget commitments for merchants, this quarter for campaigns. In fact, if you if you just look at q three twenty twenty four to q three twenty twenty five, we've actually seen a four x year on year growth in merchant adoption of campaigns. So it's it's growing really well. And on the product side, this thing keeps getting better and better.

We introduced gross sales, which is this new default high reach objective in campaigns. We just shipped an AI powered ranking improvement, which is showing some really good early results for in terms of performance gains. But but net net, I mean, what we're trying to build with campaign is the scaled ROI positive ad engine that really brings merchants more buyers and also unlocks more brand discovery to connect new consumers. So again, is an area that we're gonna continue to work on. We think that early signs have been good, but whenever there's a merchant pain point, we always much prefer to solve it, for them than have them solve it themselves.

And and I think customer acquisition, is is one of those that we're to keep working on, and and it's it's already going pretty well.

Speaker 0

Thank you for your question. And our last question will come from Mark Zugodowicz at Benchmark.

Speaker 10

Thanks so much. Harley, on on the last quarter's call, you mentioned more to come on advertising opportunities. And if we think about your merchants spending roughly 20% of their GMV on advertising, is there a longer term strategy in terms of a piece of that that you want? Maybe if you could talk a little bit about that. And then specific to chat ChatGPT, I'm curious if there are rev ad rev share opportunities there with in the future with promoted or sponsored listings for you.

Thanks.

Speaker 1

Yeah. I mean, I'm not gonna talk about any any particular economics of any particular deal. What I will say when it comes to how we make money from these channels is we've always been able to monetize when our merchants do better. So this idea that merchants sell more, Shopify makes more, we monetize through GMV, we monetize through Shopify payments, that will always be the case across any new channel. And any any specific, you know, individual deal that has additional economics, you know, we're not we don't we don't disclose.

To the first part of your question around sort of ads, as I said in the last question, it still remains one of the hardest problems merchants face. We think we can do a better job. We have a ton of data, we have a ton of scale to do this with. The goal here with when it comes to advertising for us is that we wanna drive greater scale against this opportunity. The way that we do this is we we were testing, we're measuring, and we're we're reinvesting to drive really great outcomes for merchant in the future.

I still think it's still in early stages. I will, I'll give you a little, you know, nod to the fact that, you should tune in to our next Shopify edition, if you're interested in ads because we're gonna spend some time on that as well. But this idea of focusing both on campaigns and and then also focusing on the discovery and the merchandising elements through the shop app and collective, you're already sort of seeing quite a few bread crumbs that we're laying down here to show that this is an area that we think we can we can add even more value to. And, you know, it's one more thing that we do. We wanna make sure that, the relationship that we have with the millions of stores you Shopify is way more than simply being just some software provider.

We are their partner in commerce. And as commerce gets bigger and more complicated and more interesting that they can continue to rely on us to be their partner. It's the reason why the biggest brands come to us, and it's the reason why they stay with us. Maybe, I think it was the last question. So maybe I'll just spend a quick second, or two, just on some closing remarks, as I I've been doing the last couple of quarters here.

I just wanna kinda say this, in case it's not clear, but I I hope what is what is obvious now to all of you is that we are doing exactly what we said we're that we do quarter after quarter. You know, we built AI agent tools last year. Now we're partnered with everyone that matters. We built Sidekick two years ago, well before any of the, you know, any of the hype around that. And in q three, seventy five thousand, excuse me, 750,000 shops used it for the first time.

8,000,000 of our eight eight million used it, you know, in in in October alone. We saw 8,000,000 conversations happen there. So we built enterprise on ramps into Shopify almost half a decade ago. And now the Estee Lauder companies, David Bridal, Al Aldo, Michael Kors are all choosing us. We're not guessing the future of commerce here.

We're really building it. And then the thing that I'm most impressed with and most proud of at Shopify is that I think we're balancing three critical things simultaneously here. You're gonna see us investing aggressively to capture these opportunities. You're seeing us maintain profitable margins. I think that demonstrate our our discipline.

And you're also seeing us deliver durable results quarter after quarter. And that is I mean, that is compound execution. And I don't think there are many companies out there that can do all three at once at this scale, and we are doing that. So, with that, I just wanna say thanks for joining the call. And on behalf of Jeff and Carrie and I and the entire Shopify team, we're back to building for our merchants.

Thank you so much for joining.

Speaker 0

And that concludes our third quarter twenty twenty five conference call.