Welcome to the Global-E First Quarter 2025 earnings call. This call is being simultaneously webcast on the company's website in the Investor Relations section under News and Events. For opening remarks and introductions, I will now turn the call over to Alan Katz. Investor Relations, please go ahead. Thank you, and good morning, everyone. It's great to join the Global-E team. With me on the call today are Amir Schlachet, Co-founder and Chief Executive Officer Ofer Koren, Chief Financial Officer and Nir Debbi, Co-founder and President. Amir will begin with a review of the business results for the first quarter of 2025. Ofer will then review the financial results for the first quarter, followed by the company's outlook for the second quarter and full year 2025. We will then open the call for questions. Certain statements we make today may constitute forward-looking statements. The information within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and the Safe Harbor Provisions of the U.S. Private Securities Litigation Reform Act of 1995 relate to our current expectations and views of future events. These forward-looking statements are subject to risks, uncertainties, and assumptions, some of which are beyond our control. In addition, these forward-looking statements reflect our current views with respect to future events and are not a guarantee of future performance. Actual outcomes may differ materially from the information contained in the forward-looking statements as a result of a number of factors, including those set forth in the section titled Risk Factors in our prospectus filed with the SEC on September 13, 2021, and other documents filed or furnished to the SEC. These statements reflect management's current expectations regarding future events and operating performance and speak only as of the date of this call. You should not put undue reliance on any forward-looking statements. Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that future results, levels of activity, performance, and events and circumstances reflected in the forward-looking statements will be achieved or will occur. Except as required by applicable law, we make no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise, after the date on which the statements are made, or to reflect the occurrence of unanticipated events. Please refer to our press release issued today, May 14, 2025, for additional information. In addition, certain metrics we discussed today are non-GAAP metrics. The presentation of this financial information is not intended to be considered in isolation from, or as a substitute for, or superior to the financial information prepared and presented in accordance with GAAP. We use these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. We believe that these measures provide useful information about operating results, enhance the overall understanding of past financial performance and future prospects, and allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making. For more information on these non-GAAP financial measures, please see the reconciliation tables provided in our press release issued today. Throughout this call, we provide a number of key performance indicators used by our management and often used by competitors in our industry. These and other key performance indicators are discussed in more detail in our press release issued today. I will now turn the call over to Amir, our Co-founder and CEO. Amir, please go ahead. I would like to start by welcoming everyone to our first quarterly earnings call of 2025, and also by extending a special welcome to Alan Katz, our newly joined VP of Investor Relations. Some of you have already met Alan, and all of you will at some point. Welcome on board, Alan, and good luck. As for our financial results, we have had a strong start to 2025, with the first quarter results coming in at or above the midpoints of our guidance ranges across the board. Despite the high level of uncertainties driven by the turmoil in duty tariffs and their potential adverse impact on global trade, we have continued to show strong GMV and top-line growth, coupled with strong execution and cost control. We finished Q1 with GMV of $1.24 billion, up 34% year -over -year, and with revenues of nearly $190 million, up 30% year -over -year. In terms of profit, our adjusted gross profit for Q1 was $86.3 million, up 31% from last year, and quarterly adjusted EBITDA was $31.6 million, up 48% compared to the same quarter last year, resulting in a 16.6% margin. As Ofer will share with you later in the call, taking into account the trading patterns in April and the first half of May, to date, we have yet to observe clear directional impact from the heightened U.S. import tariffs. However, these are very early days, as the removal of the de minimis on imports into the U.S. of goods that originate from China and Hong Kong, which is the most influential change for direct-to-consumer imports into the U.S., has only kicked in during the first week of May. Should this situation persist, some of our U.S. Inbound GMV, which represents approximately 12% of our overall GMV, may be negatively impacted from significant retail price increases driven by high tariffs and the removal of the import de minimis. Moreover, future escalation in tariffs and counter-tariffs between the U.S. and its trade partners may further increase uncertainty for merchants and consumers alike and weigh on merchant and consumer confidence around the world. For the time being, the situation remains highly dynamic. As just today, a reduction in excess tariffs and a 90-day pause of further actions between the U.S. and China, which was announced two days ago, is going into effect as they attempt to negotiate a new comprehensive trade deal. We are hopeful that this temporary pause will indeed lead to a broader de-escalation in tariffs around the world, but until then, uncertainties in the market are expected to persist. In parallel, as we discussed during our recent Investor Day in New York, while current uncertainty can lead to disruption or challenges, we see these effects as relatively short to midterm in nature. Over the longer term, we believe this type of increased complexity in the global trade environment provides us with an opportunity to add further value to our existing merchants and to grow with new merchants. The rising complexities of international trade typically bring more and more brands to realize the tremendous business value we can bring to them, as well as our ability to help them to successfully navigate the fast-changing global trade dynamics. As our merchants experience day in and day out, now more than ever, with Global-E in place, they can have peace of mind during turbulent times. We have their back. As soon as there is a change in regulation or in tariff levels, we not only notify them, but we also take all the necessary steps, including rapid R&D developments and deployments if needed, to make sure that they remain compliant at all times. Not less important, we provide them with data-driven advice and unique features and capabilities that can help them to mitigate potential adverse effects on their international business. We very much see this as an opportunity for continued growth. Taking into account the dynamic nature of all these uncertain factors and their unclear directional impact on our performance in the remainder of the year, we are reiterating our full-year guidance for 2025. We will continue to monitor the situation closely and will update you in the future should our assessments change. Before we review our Q1 results and forward guidance in more detail, I would first like to share with you some of the recent and exciting business developments. First and foremost, I'm happy to announce that we have signed a new three-year strategic partnership agreement with Shopify, replacing our prior 3P and 1P agreements with a new streamlined and unified strategic agreement. For more than four years now, we have fostered a great partnership with Shopify, which has enabled Shopify merchants of all sizes to utilize our state-of-the-art third-party merchant-of-record solutions and turbocharge their global direct-to-consumer sales, as well as to enjoy the benefits of the innovative and seamless Managed Markets offering. The new multi-year strategic partnership agreement we have signed with Shopify incorporates all the mutual learnings from our joint work along the years, as well as the necessary adaptations to support the updated strategic directions and goals of both our companies. Under the new agreement on the 1P, or Managed Markets front, Global-E will remain the exclusive provider of merchant-of-record, or MRR, services for this Shopify-branded solution. Global-E and Shopify will work together on a revised setup to be launched at a later stage, and these deeper integrations will create a more seamless merchant experience. We believe that once in place, this updated product approach should expand Managed Markets' relevancy and appeal to a far larger cohort of Shopify merchants. It is important to note, though, that this new operating model, which is also expected to impact the commercial structure of Managed Markets for Global-E, is not expected to have a notable effect on 2025 results. Within 3P, the new agreement will enable additional third-party MRR providers to operate on the Shopify platform in the future. However, we are confident that Global-E will be able to maintain its competitive advantage, as we will be the preferred Shopify partner for international MRR services and will retain exclusive access to certain key features available on the Shopify platform. In addition, from a commercial perspective, we stand to benefit from revised commercial terms. Given Shopify's impressive progress in growing and attracting larger businesses globally, this is an exciting extension of our partnership, providing international direct-to-consumer e-commerce support for large sellers on the Shopify platform. This new multi-year agreement is an exciting next step in our relationship with Shopify, one of our most important and long-standing partners, and we are looking forward to seeing where this takes us. I would just quickly note that we had contemplated most of the details around this agreement when we provided our multi-year outlook at our Investor Day in March, so nothing changes from that perspective, and we remain on track to deliver against our long-term targets for growth and profitability. As I mentioned earlier, merchants are increasingly faced with challenging and highly dynamic trade and regulatory environments, which is exactly where Global-E can come in and drive meaningful value. Our suite of systems and solutions is not only highly robust, but also agile and flexible, thereby enabling us to quickly develop and deploy new capabilities as the needs of our merchants evolve. One clear example of that is our new 3B2C offering, developed in record time to enable global brands to leverage their international footprint in order to partially offset costs due to tariffs. By using this unique offering, merchants who have legal entities set up in various destination markets can now import goods into such markets as a B2B intra-company transaction before conducting a local in-market sale to the end consumer, thereby lowering the import duties burden. Given the sharp movements we have recently observed in trade tariffs, we have seen a lot of interest from merchants, both existing and new, in using this unique 3B2C offering to mitigate, as much as possible, unnecessary price hikes in key destination markets, while avoiding the costs and ongoing complexities and effort involved in creating full-blown multi-local setups for these markets. Another piece we delivered to our merchants during Q1 was an overhaul of our merchant portal. Beyond its new look and feel, the newly revamped portal enables far easier access to frequently used areas, such as order search and others. Most notably, the new portal hosts two important tools for our merchants: a real-time sales dashboard and a funnel analysis dashboard. These self-service BI tools are designed to empower merchants with easy access to their sales data, allowing them to track and analyze key e-commerce KPIs directly in the Global-E portal across all operational markets and using many different metrics and dimensions, keeping merchants in full control of their store's performance around the globe. Such increased visibility and control are always important, but even more so now, as merchants need to be able to understand in real time the impact of various pricing and business decisions they take in reaction to market and regulatory changes. In terms of sales progress in the quarter, we continue to experience strong demand for our services across markets, as dozens of brands went live with Global-E during Q1. In Europe, we launched with Subdued out of Italy, and with Vibe Footwear, our first large merchant based in Finland. We went live with several luxury brands, including Bally shoes from Switzerland and Zimmermann in Australia, as well as J.W. Anderson, an LVMH brand, and Thomas Pink, both out of the U.K. We also launched with Diane von Furstenberg in the U.S. During the quarter, we also expanded our portfolio of sports merchants, launching with Atlético Madrid in Spain. Our efforts to grow in Asia-Pacific continue to gain traction as well. During Q1, we launched with Japanese brands United Arrows, Sakai, and Bandai Namco, the multinational video game publisher of Pac-Man. We also launched with 3x and SAMO ONDOH in Korea and T2T and Scarlet & Sam in Australia, among others. Lastly, we had a significant expansion of our business with several brands, most notably with the launch of Adidas Hong Kong, one of the biggest markets Adidas has launched with us to date. With the traction we are seeing in the pipeline, dozens of other brands going live, and expansions across our various geographies, we believe we can continue on our growth path towards our long-term targets, as merchants continue to leverage our services to support their global direct-to-consumer sales. Before I hand it over to Ofer, I want to highlight another important step in our journey as a mature public company. Starting in Q2, we expect to move to GAAP profitability, as the amortization of the majority of the Shopify warrants will be done. By the start of 2026, these are expected to be fully amortized. We expect to be GAAP profitable also moving forward, signifying our ability to continue generating long-term, durable, and profitable growth. I will now hand it over to Ofer to take us through the quarterly numbers in more depth, as well as our reaffirmed 2025 guidance and the Q2 outlook. Thank you, Amir, and thanks everyone for joining us today for our earnings call. As Amir mentioned, we are off to a strong start in 2025. Q1 came in yet again well above the rule of 40, driven by the continued growth of volumes processed through our platform and healthy margins. Before I go into the details of the quarter, I'd like to point out again that in addition to our GAAP results, I'll also be discussing certain non-GAAP results. Our GAAP financial results, along with the reconciliation between GAAP and non-GAAP results, can be found in our earnings release. GMV in Q1 was $1.243 billion, up 34% year -over -year, and approximately 1% above the midpoint of our guidance range for Q1. While the elevated geopolitical and macroeconomic uncertainty has thus far resulted in only a modest impact on trade volumes in the first quarter, we remain attentive to the potential for a broader effect of the turmoil in global duty tariffs on consumer spending and e-commerce trade. In Q1, we generated total revenue of $189.9 million, up 30% year -over -year, and again, 1% above the midpoint of our guidance range. Service fees revenue were $84 million, up 23%, and fulfillment services revenue were up 36% to $105.9 million. Growth of the fulfillment revenue was favorably impacted by GMV mix, while growth of service fees was impacted by the bankruptcy of Ted Baker U.K. and E.U. distributor, as well as a GMV mix share of larger merchants in trading compared to Q1 of the previous year. Progressing through the income statement, non-GAAP gross profit was $86.3 million, up 31% year -over -year, representing a gross margin of 45.4% compared to 45.3% in the same period last year. GAAP gross profit was $84.1 million, representing a margin of 44.3%. Moving on to operational expenses, we continue to invest in the development of our platform to further enhance and expand our various offerings. R&D expense in Q1, excluding stock-based compensation, was $24.5 million, or 12.9% of revenue, compared to $20.1 million, or 13.8% in the same period last year. Total R&D spend in Q1 was $28.1 million. We continue to allocate resources towards sales and marketing to support growth, while remaining focused on operational efficiency. Sales and marketing expense, excluding Shopify-related amortization expenses, stock-based compensation, and acquisition-related intangibles amortization, was $23.3 million, or 12.3% of revenue, compared to $17.2 million, or 11.8% of revenue in the same period last year. Shopify warrants-related amortization expense was $37 million. As a reminder, we expect this expense to decrease significantly in Q2 and to be completely gone at the beginning of 2026. Total sales and marketing expenses for the quarter were $63.9 million. General and administrative expenses, excluding stock-based compensation, were $7.7 million, or 4.1% of revenue, compared to $8.3 million, or 5.7% of revenue in Q1 of last year. Total G&A spend in the first quarter was $11.2 million. We continue to show rapid adjusted EBITDA growth in the quarter. Adjusted EBITDA was $31.6 million, up 48% from Q1 2024. Adjusted EBITDA margin was 16.6%. The net loss in the quarter was $17.9 million, compared to a net loss of $32.1 million in the year-ago period. The net loss was driven mainly by the amortization expenses related to the Shopify warrant. Moving on to the balance sheet and cash flow statements, we've ended the quarter with $445 million in cash and cash equivalents, including short-term deposits and marketable securities. Free cash flow used in Q1 was $72.6 million, compared to $55.1 million used the year ago. As a reminder, we typically see an outflow of cash in the first quarter, driven by post-peak working capital dynamics. In Q1 2025, operating cash flow was also negatively impacted by delayed VAT returns due to an audit we went through. The audit ended successfully, and the funds were received in Q2. Cash flow used by operating activities was $72.1 million, compared to $54.3 million used the year ago. Before we move on to our financial outlook and guidance for Q2 and 2025, I'd like to share our view given the current environment. We witnessed an increased level of uncertainty due to the current turmoil in global trade caused by the changes in duty tariffs, but no clear directional impact at this stage. Hence, we are leaving our full-year 2025 guidance unchanged. Now, let's go through the Q2 and full-year guidance. For Q2 2025, we're expecting GMV to be in the range of $1.387 billion-$1.427 billion. At the midpoint of the range, this represents a growth rate of 30% versus Q2 of 2024. We expect Q2 revenue to be in the range of $204 million-$211 million, representing a year-over-year growth rate of 23.5% at the midpoint. For adjusted EBITDA, we're expecting a profit in the range of $35 million-$39 million, or a margin of 18% at the midpoint. For the full year of 2025, as mentioned already, we are maintaining our guidance ranges. We continue to anticipate GMV to be in the range of $6.19 billion-$6.49 billion, representing a 30.5% annual growth rate at the midpoint of the range. Revenue is expected to be in the range of $917 million-$967 million, representing a growth rate of 25% in the midpoint of the range. For adjusted EBITDA, we're expecting a profit of $179 million-$199 million. We believe that the current environment presents an opportunity for Global-E. More than ever, merchants are excited by our value proposition in the face of an increasingly complicated and fast-changing international e-commerce environment. Moreover, we believe that the long-term partnership with Shopify will continue to play an important role in our growth journey. The market opportunity in front of us remains massive, and we continue on our path to support merchants worldwide in expanding their direct-to-consumer business. With that, Amir, Nir, Alan, and I are happy to answer questions you may have. Operator. Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star, followed by the one on your touch-tone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star, followed by the two. If you are using a speakerphone, please lift the handset before pressing any keys. In an effort to give everyone an opportunity to ask a question, we ask that people ask one question and one follow-up question. Your first question comes from Will Nance with Goldman Sachs. Your line is now open. Hey, guys. Good morning. Thank you for taking the questions. I wanted to maybe start off on some of the macroeconomic commentary you had. It sounds like to date you haven't seen any kind of directional impact from the escalation of some of the trade discussions that we've had. I wanted to come back to some of the comments you made at the beginning of the year because I think you were one of the few companies that we cover that I think had the foresight to embed some of the initial impacts of potential trade policies into the guidance from the beginning of the year. I was wondering if you could just maybe remind us what's baked in in terms of the potential for demand destruction, as well as some of the shifts to a multi-local offering in the outlook for the full year. If you could maybe just give us a sense for how we're sort of tracking against those assumptions to date and kind of what you would need to see in order to embed the more macroeconomic pressure. It sounds like you haven't seen much to date. Thanks. Yeah. Will, thank you for that. As we discussed in our prepared remarks, we definitely see greater uncertainty in the geopolitical and macro environment. As you mentioned, we have sort of incorporated a certain impact in our full-year guidance in the previous quarter. Since then, we have seen some limited impact. Same-store sales are slightly lower than our multi-year average. As we mentioned, even though the trade tariffs dynamics are creating a lot of uncertainty, we have not identified any clear trends in trading patterns. Thus, despite the higher uncertainty, we maintain our guidance for the full year, and we believe that our performance will be within the guidance range. Got it. Okay. That is helpful. Just on the Shopify partnership, I wanted to maybe focus a little bit on the renewal. I guess on the managed market side, it sounds like you guys are going to work towards an updated rollout that can accelerate the growth of that product. Any changes or any thoughts around the timeline for continued expansion of managed markets? Just on the third-party side, I was wondering if you could talk about the loss of exclusivity. Specifically, it sounds like you'll retain preferred provider status. How are you thinking about that? How did you weigh the cost-benefit of that relative to the enhanced commercial terms on the 3P side? Appreciate you taking the questions today. Hi, Will. First, we're very happy to extend our long-lasting relationship with Shopify for a new multi-year agreement. They have been a great partner for us for more than four years now, and we are looking forward to continuing building this partnership. Moving in from the exclusivity to the preferred partner status, it does give us exclusivity on certain key features on the 3P side, as well as alignment with Shopify on future feature releases. Moreover, for the last four years, we have managed to build a robust capability and integration into Shopify that, combined with our general scale expertise and track record within Shopify and outside, gives us, I would say, strong beliefs that we will maintain our leadership position. We do believe that the transition might cause some increase to potential competition. However, as I said, we did establish ourselves in the market as a whole, as a market leader for cross-border and global e-commerce services, especially on Shopify, where we were the only player for the last four years, building a competitive moat based on our expertise and track record. Moving into the decision of Shopify to move out of the exclusivity model and transition into a preferred, we believe that Shopify wants to provide more flexibility to its merchants, especially in light of winning businesses with enterprise merchants from other platforms. Such large merchants replatforming may have existing relationships with other providers, including, in certain cases, international e-commerce. Nevertheless, we are remaining as a preferred provider and have the most robust integration, so we feel quite confident on our competitive moat. I think there was a question also relating to the 1P. If you can remind me what it was. Yeah. Thanks. It was just the any impacts of the new structure to the timing of rollout of product releases on managed markets. We do continue, as we indicated also in our Investor Day, we do continue to build with Shopify and streamline what we identified that needs further streamlining in the build to reduce friction. We are aiming for future releases over time of the new capabilities. We will do it on a gradual basis over the coming quarters within future releases. Thanks for taking the question. Your next question comes from Brian Peterson with Raymond James. Your line is now open. Hi, gentlemen. Thanks for taking the question. Ofer, I know you mentioned that you did not see any clear direction on GMV trends thus far, but I am curious if you did see any instances of pull forward of early ordering ahead of tariffs, any pricing changes. I understand maybe that's not across the broad base, but are there pockets or geos where you're seeing certain trends that you'd call out? Just love to get more perspective there. Thank you for the question, Brian. Yes, we have seen, we haven't seen, again, any clear direction. We have seen pockets of influence. One that I would note is that since the beginning of May, we have seen some softness with certain merchants trading high-sharing mix with goods with China or Hong Kong origin into the U.S.. That would be one notable example. However, these are certain pockets, and we haven't seen any clear directional impact thus far. Got it. Maybe just as a follow-up, as you're thinking about your broader e-commerce relationships outside of Shopify in terms of some of the larger players there, how influential are those vendors in terms of bringing in new enterprise customers to you? Does that change at all with the lack of exclusivity with Shopify? Thanks, guys. Hi, Brian. It's Nir. We don't expect to see any major shifts in dynamics on the competitive side. Global-E has been the clear market leader in global e-commerce across basically all e-commerce platforms, from Salesforce to Magento to Hybris and into Shopify, competing on a level playing field. We are quite confident that with our unique track record, expertise, and the preferred situation on Shopify, we will not see any significant change in the dynamics also on the Shopify platform. Your next question comes from James Fossa with Morgan Stanley. Your line is now open. Thank you so much. Appreciate the comments this morning, everybody. I wanted to touch on really quickly how you're thinking about your NDR expectations relative to kind of where you started the year. It sounds like maybe same-store sales are turning a bit lower, but you can correct me if that's right or wrong. On the other hand, it seems like your large enterprise merchant partners that were signed up in the back half of 2024 are ramping quite aggressively. Just any commentary you have on evolution of the NDR component in your forecasting? Yeah. Sure, James. Thank you for the question. As I mentioned, we haven't seen through the weeks, there is some volatility, but generally speaking, we haven't seen any sort of notable change. On average, same-store sales is slightly lower than our historical average, but we expected this going into the year. As you mentioned, yes, we have seen a very nice ramp-up from sort of the larger new merchants already in Q4. Actually, we see very positive trade patterns with some of those merchants in Q1 as well. We are quite happy about that. Yeah, there is definitely it's an interesting year. There is definitely some uncertainty, but up till now, it has been trading close to our expectations. Got it. I wanted to ask just on a few moving parts and how it's impacted your first-quarter GMV growth as well as your outlook. Can you help us overpass FX? We know that, or at least we've seen headlines that there may have been a ransomware attack on Marks & Spencer and then the bankruptcy and closure of Forever 21. Just wondering how those are impacting the GMV and trying to get a sense for constant currency GMV growth, excluding some of these items. I'll break your question into two elements. On the ethics and its impact on the quarter results and focus going forward, we don't see any material impact. There were some changes within the quarter, but it changed direction. No material impact there versus constant currency. As you related to M&S, it's one of our largest clients. They are, unfortunately, facing some kind of a cyber attack. It does affect trading. For the last period of time now, I've not been trading online with Global-E and outside Global-E due to the attack. However, it did not have any material effect on our Q1, as it was only partial affecting Q1. We do hope that it will be resolved within the coming period, so it will not have a major effect on our Q2 and rest of the year. We did bake some of it into our Q2 guidance already. All in all, the macroeconomic, as you stated, there are some foreclosures. It is a difficult time for merchants. The global turmoil coming out of the changes in tariffs around the world does not do it any easier for merchants, and consumer sentiment is not at its peak. However, we took that into account once we gave, at the beginning of the year, the guidance for the year. We have seen a slight slowdown from there, but all in all, we don't see any clear change from what we've seen at the beginning of the year. Your next question comes from Chris Zhang with UBS. Your line is now open. Hi. Thanks a lot for taking my question. My first question is around the details in the announcement saying that Managed Markets will now leverage Shopify Payments for future versions of Managed Markets. The first part of my question is, will this be also applied to the existing Shopify Managed Markets volumes, and what's the timeline of the rollout of Shopify Payments to Managed Markets, and how do you see that impact your revenue on the service side? Because Managed Markets, I believe, previously includes the payments revenue as well as the 2.5% FX conversion fee. The changes would happen within the coming quarters with future releases. You are correct that today, Managed Markets payments are going through the Global-E platform, acquiring accounts in the future, as indicated. It will be done directly with Shopify. This will have a certain impact on the economics going forward. Once acquiring is moved into Shopify Payments, we will net it out on our side, and it will not be recorded as part of our revenue. Further explanation on that, I will pass it to Ofer. He can share some more. Yeah. So in terms of, as Nir explained, there are certain elements such as payments, which is the main one, but there are some others that will be handled by Shopify. Once this goes live, we will not record those elements as revenue. However, we do aim at seeing a positive impact on our sales and marketing expense on the other side, where we record the rev share component. Overall, we expect this model to have a limited impact on the bottom line. It opens up a massive opportunity to further scale up the adoption and to increase GMV once it's live and it's pushed forward. That's the way we view it. All right. Really appreciate the answer. That's really helpful. My second question is around potential—apologies for the a little loaded question—is around the margin trajectory throughout the rest of the year. It looks like the second quarter, EBITDA margin is a bit light, and that implies an expansion in the second half, EBITDA margin. Part of that is probably within your normal seasonal patterns, especially for the back half of the year. Would you maybe be able to talk about some of the drivers of the EBITDA margin, your investment levels you're seeing for the rest of the year? Also, in terms of free cash flow, the margin seems a bit light, but there are also some seasonal patterns and you still expect very strong free cash flow conversion from your EBITDA this year. Thank you. Sure. Thank you for the question. Regarding margins, on the gross margin side, we expect gross margins to be slightly higher compared to Q1 for the remainder of the year, mainly due to mix of revenues and also some minor efficiencies that we expect to achieve. Regarding adjusted EBITDA, we do not see any notable change in OpEx. We continue to control costs and progress according to our budget. As you mentioned, we do have seasonality, so naturally, adjusted EBITDA margins are expected to be higher in the back half of the year and more specifically, definitely in Q4. In terms of free cash flow, nothing material has changed here, and we do expect just the EBITDA to convert very nicely into free cash flow and to be at least the free cash flow is expected to be at least at adjusted EBITDA level and probably higher. Your next question comes from Samad Samana with Jeffries. Your line is now open. Hi. Good morning. Thank you for taking my question. Maybe first, just look, I know the Shopify question has been asked, but if we could maybe get a little bit more of a precise statement on what has changed in terms of the commercial agreement, given the equity that you gave them pre-IPO and now not having exclusivity. I guess, what in the revised agreement tilts in your favor, right, in terms of will the unit economics look better? Just help us understand, other than the extended duration, what the benefit is from Global-E's perspective of the revised agreement. I have one follow-up. Sure. Starting with the question you asked, we do have a long-standing partnership with Shopify. As you indicated, four years ago, we allocated warrants in the company. Most of them would actually finish to amortize this quarter, and the rest of it would be by the end of the year or early Q1 2026. As for the change that is happening now, this new three-year agreement is actually transitioning us from an exclusive to a preferred provider. As part of it, Shopify gets more flexibility for its merchants. On the other hand, Global-E gets first an exclusive feature set that would not be open to other providers, as well as improved commercials. You should expect it—we should expect it to be reflected over time in a reduction in our S&M in the back part of the year, mainly Q4. Understood. Maybe just, I guess, a follow-up. If we step back over on the guidance, how much of it is the reiteration is based on not seeing a change in trends versus, I guess, did you guys debate maybe the spending guidance given some of the unknowns? Just help us walk through the process of determining that you guys could maintain the guidance and any potential conservatism that you've embedded in there or outlook that things may change down the road. Just, again, help us understand the guidance conversation. Yeah. Thanks a lot, Samad. As we discussed in the prepared remarks, we do see a greater uncertainty in the geopolitical and the macro environment, with a lot of it coming out of the whole trade tariff dynamics. As said, when we looked at our forecast for the remainder of the year, we did not identify any clear kind of directional trends in trading patterns. Despite the higher uncertainty, we believe that we can maintain our guidance for the full year and that our performance at the end of the year will fall within that guidance range. Your next question comes from Andrew Bauch with Wells Fargo. Your line is now open. Good morning. Thanks for taking the question. Maybe if I could ask around the top-of-funnel dynamics that you are seeing. I know that in the beginning of the year, we talked about some hesitancy in launching new cross-border commerce experiences or relationships may have been put on hold because of the uncertainty in the market. That is pretty intuitive. I was wondering if anything has changed there pre and post-Liberation Day, China pause, and when we could potentially see some of the complexity-driven demand stimulating top-of-funnel once again. Hi. Hello. Thank you for the question. We have seen a constant moving of merchants and prospects along a funnel. There was a slight hesitation for a few weeks once the turmoil started. Since then, we have seen movement of merchants back into launches and back moving towards signing within the stages of the funnel. As for the more complex solutions, we are expecting to launch within the coming weeks the first merchants that are going to use our 3B2C offering. We have seen demand for it from existing merchants as well as new prospects. As I said, the first are going to launch with that in the coming weeks. This will enable them to, I would say, enjoy a lower impact on the tariff due to the better offering. The complexities, and as we've seen it historically in Brexit and in other situations, actually drive merchants to look for solutions as they understand that they don't have enough flexibility within their own systems. We start to see that interest, I would say, trickling into our funnel. Got it. My follow-up would be services yield came in a little bit light relative to our expectations. We were thinking consistent with fourth quarter. How should we be thinking about services take rate through the remainder of the year? Is first quarter a good kind of modeling level for that line? Yeah. We do believe that the first quarter would be a good modeling benchmark. As we already mentioned in previous quarters, on a year-to-year comparison versus Q4, the loss of Ted Baker, which has the higher service fee take rate due to the demand generation services, weighs on the service fees growth. In addition, and this also applies directly to your question, there is a higher share of larger merchants GMV in the mix. It is driven by the large merchants onboarding in the back half of 2024. Also, among those larger merchants, there is also some domestic activity with merchants such as Harrods and Manchester United at the lower take rate. This sort of impacts the mix. We also had certain cases due to the changes with tariffs of extra duties that were charged after parcels were shipped, which we decided to absorb in the interest of merchant relationships. This is also something that we've experienced. All in all, I think that, as I mentioned, we do expect service fee take rate to remain at the current levels for the remaining of the year. Your next question comes from Scott Berg with Needham. Your line is now open. Hi everyone. Thanks for taking my questions. I wanted to follow up on a statement Amir had made around the de minimis impact or the change of the de minimis rule in the United States probably has the largest impact on volumes coming into the United States. Can you help us handicap how much of that 12% of last year's GMV volume that came into the United States. was from the de minimis rule, or just trying to understand if that's a significant or a small portion? Hey, Scott. It's Nir. Yes, indeed. Inbound into the U.S. reflects around 12% of our activity. Within it, around 30% of it is goods that are country of origin, China and Hong Kong. The vast majority of it is within the $800, so it is affected. However, if you compile it all, we have around 3% that are affected. We've seen different kinds of effects on different merchants and the way the consumer behaves. Overall, they have seen a higher impact in particular. If you look at the broader base, the impact so far was relatively light. Got it. Very helpful. When we think of the change in the Shopify kind of partnership going forward, especially on the one-piece side, I guess, help us understand the statement on the ability to maybe accelerate the impact and growth in that business with new merchants there. Obviously, we heard about the change in the commercial side, but I guess trying to understand over the next year or two what's going to be done to maybe help accelerate the number of merchants that are actually using Managed Markets Pro going forward. Yes. The way we see it in Shopify as well, and this is a reason we are transitioning the solution and the future releases and are taking a lot of resources in order to provide it. We are looking for a functionality that would make it more seamless for merchants and will align the process more closely with our domestic store. Once we are able to provide that, and I think we spoke about payments and reconciliation and settlement as one of those changes, it will allow a much broader adoption. We expect to see many more merchants using it over time. Your next question comes from Brent Bracelin with Piper Sandler. Your line is now open. Thank you for taking the question here. I wanted to go back to the guide here maybe with a slightly different tact. You onboarded some really large customers in fourth quarter of last year. It's a pretty big step up in volumes and creates a tougher compare. Your second-half outlook here implies growth can remain here in this 30% range for GMV growth. What gives you confidence you can hold that even with tougher compares in a more challenging environment? Is there something specific in the funnel where you have good line of sight and visibility to new large merchants coming onto the platform? Just walking through Victoria's Secret, Harrods, Manchester, all volume coming on in Q4 last year, creating a tougher compare this year, and why you think you continue to kind of have outsized growth in Q4 this year. Thanks. Yes. Thank you for the question, Brent. I think that, as we've mentioned previously, while we don't have any expected launches with the size of a Harrods, we do have a very robust project schedule this year. We expect to see—we have seen launches, as we mentioned, but we expect to see many more launches throughout the year. It's less concentrated, but still, we have very nice-sized merchants, including a few large ones that are expected to launch in the next few months. As we've mentioned, in terms of project launches, things have gone more or less according to schedule. In terms of the way that the tariff turmoil impacts volumes, as we mentioned, we haven't seen any clear directions there. That's the reason we have not changed or maintained our guidance for the full year. Helpful color there. And then Nir, for you on 3B2C, any way you can frame the volume of interest? A lot of change happening. It may or may not unfold as change, but can you quantify merchant interest in 3B2C? I know it's new, but help us understand what you're seeing there. Thanks. Hi, Brent. We do see high interest in the solution. However, we are looking at what would be the impact now with the announcement that is taking effect just today with the reduction of tariffs on China because it does change economics for certain merchants on the attractivity of the model. In general, we do believe that it's a significant opportunity. As I said, we have merchants already in project stage that would launch within weeks on the 3B2C solution. The solution is compelling and does get market traction. Your next question comes from Mark Zgutowicz with Benchmark. Your line is now open. Thank you. Just as it relates to the new Shopify commercial agreement, I'm just curious if you talk about 1P exclusivity versus the 3P, does the dashboard for Shopify merchants look any different going forward? Do they see, in terms of options for cross-border transactions, are there more options? Just trying to get a sense of that. And then in terms of its future contribution to GMV, just trying to get a sense of how you see that trending. Obviously, Shopify is moving more into the enterprise side, and I'm just curious if you're seeing a better connection to those enterprise-type merchants that they're bringing on their platform. Thanks. Hi, Marc. Hey, it's Nir. First, on the 1P side, the dashboard and what the customer actually sees, they will not see a material change because today their dashboard and the management is coming out of the Shopify admin. It will stay this way. Some elements of friction around the payment settlement side would actually be more seamless for them as they will be reflected within Shopify the same as our domestic operations. Instead, they would see an improvement. In terms of 3P and the effect for it, if you combine it with growth in enterprise merchants on Shopify, this is actually a positive development for Global-E. Global-E was built on the 3P side out of enterprise merchants. We have the largest and a very fast growing growth still of large enterprise brands across luxury and non-luxury retail brands, etc. I believe that once those clients continue and come to Shopify with our great track record on Shopify and the development of our integration into Shopify, I believe this would be good for us. Your next question comes from Maddie Schrage with KeyBanc. Your line is now open. Hey, guys. Thanks for taking my question. I just was wondering if you could hit on the model impacts that you expect from maybe a merchant taking the 3B2C solution versus going the multi-local route. Thanks. Hi, Maddie. The main difference is actually the amount of effort that a merchant needs to invest in order to roll out the domestic operation as well as economics, not on the unit level, but the economics of coming out of the overhead that comes with a local operation. The reason that we believe that 3B2C would take a nice portion is the same as what we've seen today. On the multi-local offering, it is good for a certain size of merchants, for a certain kind of SKU base that you have because domestic operation across multiple locales is a very expensive setup to do. Not only on the registrations and accounting, which is the more simple part, but on the domestic setup with the 3PL, logistics, payment providers, etc. That is being easily solved with 3B2C where Global-E takes all the heavy lifting and makes it only a registration and accounting setup for the brand. We do believe that some merchants would decide to go fully local, and this is where our multi-local would be a good solution. Some merchants would opt for the 3B2C according to their own specific parameters. Got it. Just a quick follow-up. I'm wondering if you guys could give an update to your Borderfree.com launch. I'm wondering how things are tracking versus expectations and if there's anything remaining to build out on that product. Thanks. We are very happy with the progress of Borderfree.com since we launched it in Q4 of last year. We continue to see increased adoption of merchants to the Borderfree platform. In terms of the contribution that Borderfree yields for the merchants, we see a continuous improvement. I think that just when we discussed in the Investor Day, we managed at that time to hit around 2.5% to almost 3% contribution out of Borderfree.com to merchants using that service. Today, we are already over 4% of contribution that is generated by traffic coming out of Borderfree.com. As we continue to evolve and we have a lot more to do in order to bring that solution into where we want it to be, we expect it to continue and increase and cross the 5% mark. Long-term, we do believe that the solution would create for the participating merchants anything between 5% - 10% on average. Your next question comes from Koji Ikeda with Bank of America. Your line is now open. Yeah. Hey, guys. Thanks for taking the questions. Apologies if this has been asked. I didn't jump in from a couple of questions, but a couple of calls here this morning. I did want to ask about the 3B2C offering that was talked about in the press release. Can you talk a little bit more about that and how easy was it to formulate that offering? Was that a pull request from customers? How does this dynamic of the 3B2C play into potential take rates going forward? Basically, 3B2C helps merchants work in a challenging and a high-rate taxation environment. It allows them just to set up a legal entity within the destination markets without a local setup that involves bringing inventory and storing it in the market, integrating multiple solutions from carriage and payments into the market, which is heavy lifting, and enjoy importing on a commercial basis with lower tariffs using the Global-E setup for the operations and for the payments, allowing them to enjoy the best of both worlds. It is a complex setup, so we cannot explain it now in a very short term more than that, but it does have traction in the market, and this does help a certain group of clients and as well prospects. Got it. Thank you. One thing I think a lot about with Global-E is two fronts. One is potential effects to inbound tariffs from countries out there, but also inventory affected by tariffs for U.S. retailers and merchants that are sending product outbound from the U.S. Is there any way to think about how much GMV or maybe what percentage of customers that are U.S.-based that might have large inventories that might be affected by tariffs or how tariffs play into that? Thank you. At least on the export side where we operate with U.S. brands, when they import into the market, yes, indeed, they are paying more tariffs, but when they export it with Global-E to consumers worldwide, they are actually able to reclaim the import duties. On this, it does give even an advantage for the cross-border sales versus the domestic sales. On that, we see a positive. On the general trading in the U.S., it does make trading slightly more expensive, but this is not part of our business with them. Thank you. We will now take our final question from Matthew O'Neill with FT Partners. Your line is now open. Yeah. Hi, thanks for the last one here. Maybe just talk a little bit about how everything that's going on sort of post-liberation day has impacted the demand side from merchants. I'm thinking of things like their propensity to look to expand into demand generation and things like that. Some of the other service lines, has it kind of inspired them to accelerate any potential plans, or are prospective customers kind of sitting on their hands a little bit until things quiet down? Thank you. Hi, Matt. As Ofer indicated, we did see mixed signals without any clear direction coming out of the turmoil on the tariffs. On the one hand, it makes trading more complex. On the other hand, merchants try to find a way to grow within that environment. Some take an approach that is spending more, as you indicated, more demand generation in certain different geographies. On the other, you see merchants that are being affected adversely due to their mix of products. As I said, we are slightly below the historical averages for same-store sales, but generally, we did not see any clear indication yet about the long-term impact of the changes. Thanks a lot. Makes sense. There are no further questions at this time. I will now turn the call over to Amir for closing remarks. Thank you, everyone, for your questions. As I think is evident from all of them, there is a lot of things happening here at Global-E. As we conclude yet another strong quarter here, I wanted to remind everyone that we are also celebrating our fourth anniversary as a public company. I want to take this opportunity and on behalf of really the entire team here at Global-E, I would like to thank all of you here on the call, not just for joining us today, but also for your ongoing support along so many years. I also like to take this opportunity to thank Erica and Mike of Sapphire IR, who have led our nvestor relations since our IPO. This is not goodbye. As Alan steps into his new role, it is nevertheless an opportunity to thank both of you as well as the rest of the Saffer team for your dedication and relentless work in helping us to bring the Global-E story in front of the market in the best and most professional way possible. I think it's clear to everyone that Global-E is only at the beginning of its exciting journey. As we discussed at our Investor Day just this March in New York, we have a significant runway ahead of us as we continue on our journey to fulfill our mission to power better global e-commerce for brands worldwide. We look forward to speaking with many of you during the quarter and updating you on our future earnings calls. Until then, goodbye and take care. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.