Shopify Inc. (NYSE:SHOP) Q3 2023 Earnings Call Transcript

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Our ecosystem is critically important to the success of our merchants. If our partners succeed, our merchants succeed, and we succeed. This is by design, and it’s happening across all dimensions of our business. And in the past few months, we’ve had some exciting things happening for Shopify and our partners. For advertising product, Audiences, we recently announced integrations with TikTok, Snap, Criteo, joining our existing roster of channel ad partners including Meta, Google, and Pinterest. On the app side, our long-term partner Klaviyo, who officially launched their app in the Shopify App Store back in 2018, has successfully IPOed, which demonstrates the strength of Shopify’s ecosystem in helping our partners find success. Congratulations to the entire Klaviyo team on this huge achievement.

We announced our partnership with Amazon, which will release an app in Shopify’s app ecosystem in the coming weeks, giving merchants the choice to offer Buy with Prime directly within their Shopify Checkout. This new app will give U.S. based merchants who use Amazon’s fulfillment network the option to add Buy with Prime into their Shopify Checkout, and all of it will be processed by Shopify Payments. And finally, we have signed our commercial agreement with Flexport. As our preferred logistic provider, we look forward to partnering with Flexport to bring fast, affordable and reliable logistics offerings to our merchants. More choice means more opportunities to succeed, and that’s what we are building at Shopify, because Shopify is no longer just ecommerce in North America for small businesses.

We are a global unified commerce platform for merchants of all sizes. Whether it’s full stack, headless, or composable, we have a suite of capabilities that are built for every type of enterprise, every new entrepreneur, and every SMB that is looking for a fast and scalable solution that offers incredible value. No matter what a merchant might need, Shopify has a solution that is right for them, and we are building more every day to increase the optionality and the ways in which we can help businesses succeed. And the best part is that every single day, consumers’ favorite brands and the brands of tomorrow are all coming to Shopify. They trust us to provide them with the cutting edge tools to not only find success today, but to build brands that thrive in the future of commerce.

Some of the brands that launched since our last earnings call include Pucci, the well known French fashion house, and luxury retail brand owned by LVMH, Ted Baker, the UK fashion designer, as well as Anastasia Beverly Hills, the celebrity makeup artist, the makeup brand, and JLo Beauty, the beauty skincare line by Jennifer Lopez, all highlighting our continued ability to meet the needs of merchants across verticals and geographies. Our go-to-market strategy combined with our robust, multidimensional, unified commerce platform is attracting more brands with established online and offline presences to Shopify, brands like PAIGE Denim and Oak and Fort, who recently signed with Shopify because we can offer them optionality and scalability to power their businesses online, offline, and everywhere in between.

We also saw our go-to-market efforts lead to Shopify signing deals with enterprise level brands around the world, including luxury marketplace, Moda Operandi; footwear company, TOMS, Liberated Brands, the retail and ecommerce operator of Boardriders, which is home to brands like Quiksilver, Roxy, DC Shoes, Billabong, Element, and many more; premium wine company, Treasury Wine Estates; specialty beverage marketplace, BevMo! powered by GoPuff; our largest EMEA brand to date, Danish online and physical yarn brand, Hobbii; along with Austrian (sic) [Australian] beauty brand, AMR Hair & Beauty; and Snowpeak, a Japanese designed camping gear company, our largest brand signing in Japan. Beyond these brands, many others continue to come to Shopify, because we offer the best value for flexible, scalable infrastructure to help them succeed.

And our excitement around the enterprise opportunity is only growing stronger as we engage and sign more consumers’ favorite brands across geographies and channels. Before I hand it over to Jeff, let me just give you a quick update on how Shopify is working with brands to create incredible unique experiences that customers are absolutely raving about. Over the summer, the Shop app went on tour with Drake. It’s the first time in four years that Drake has gone on tour, so it’s a big deal for his fans all over the world. So we took the Shop app on tour with them and crafted something special for his fans that they can only get through the Shop app. We created a QR code and geofences with custom radiuses to drop his fans thousands of surprise Drake related gifts.

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