Welcome to Shopify's 2023 Investor Day. Please welcome to the stage, Head of Investor Relations, Carrie Gillard. Hi. Welcome, everyone, to Shopify's 2023 Investor Day. I'm Carrie Gillard. I'm Head of Investor Relations here at Shopify. It's wonderful to see all of you here in person, and for those of you watching on the video stream. We're gonna kick things off here in a moment, with Tobi and Harley. But before we do, I want to direct your attention to some disclosure stuff up on the screen. We will be making forward-looking statements during the presentation today that are based on assumptions and therefore are subject to risks and uncertainties that could cause actual results to differ materially from those projected. We undertake no obligation to update these statements except as required by law. You can read about those assumptions, risks, and uncertainties in our filings with the U.S. and Canadian regulators. Note that any references in our presentations to 2023 estimated results are based on the midpoint of the outlook provided previously for our fourth quarter on our Q3 earnings call. Okay, moving on. After our presentations for management, we will be concluding an interactive Q&A following the presentations. For those of you in the room, there should be a QR code in front of you, which you can scan and submit questions throughout the entire day, and for those of you online, there should be a tab where you can go and submit a question. All right, without further ado, let's get this started. Please welcome to the stage, Tobi Lütke, our Shopify's founder and CEO, and Harley Finkelstein, Shopify's president. Yeah, I don't need the badge. You don't need the badge. Everyone knows who you are here. Yeah. Thanks for joining, everyone. Hey, Tobi. Hey, good to be here. So it's been a minute since we've done something like this in New York, and yesterday we spent the whole day together talking to merchants, and I know your second most favorite thing after talking to merchants is investor days. So we're really, really glad you're here on this. But something actually that I was thinking about as we were just in the green room, almost 9 years ago to the day, 9.5 years ago, 8.5 years ago, we were in New York City, taking the company public, and many of you were there, many of you we actually met on the roadshow. But I was thinking back about some of the, some of the things we heard on the roadshow, some of the things that we thought were interesting. We didn't think them to... They were true, but they were interesting. Things like Shopify's TAM may not be big enough. Shopify may never scale in terms of throughputs. And even things like Shopify might not be able to handle big businesses. And I'm curious, you know, from your perspective, 8.5 years later, is that still funny to you? Well, no. It's not funny. I actually think that was maybe a controversial take. I think that might have actually been right. But let me get back to this. Let's, like, I'm gonna break for a second, and want to actually say- For sure. And, I think, we're gonna get together here just, like, because it's 8.5 years since IPO. It's hard to believe. So that I think rounds to a decade. That was an opportunity to really explain the company. We have done a lot of financial calls since, and, you know, given updates. But, like, it's really, I think it's important every once in a while to take it from the top, because I think this is... Those are the moments when everyone can just sort of separate the tactics from the strategy. Shopify is playing a very long game. That's we always said we would, and, we want everyone to have a really good model for how the company thinks, because actually, I think that's the kind of thing that lasts. And, that's the thing that people invest in, right? Like, it's, I've, so, so this is a great opportunity. I'm glad we're doing this. So I think, I think, look, I, I, I've heard, like, concerns with the TAM in the first times I did, like, raise of, of funding and, doing, doing, doing the roadshow. I think it's really, really fair, and I think it's actually reasonably correct. I, I think there is a, underappreciated component there, which is like: Will the TAM can be changed? I'd like, I think people can be right about the TAM is small for an online store business, but also, like, overlook that the TAM could be significantly better, bigger if certain conditions are met. And, the question, I think the better question there is, like, why was Shopify able to grow this market so significantly? And, I think this happened for, because I think what a company at its best can be, like, all great companies are following a vision, following a mission, to gain insight into the vision, and, a sort of a collaborative inquiry in some hypothesis, all at the same time. Our hypothesis is that new business formation, entrepreneurship, internet retail are very valuable and are constrained in their demand simply due to the friction of meeting it. But it is very, it was extremely hard to build these businesses, and it was very obscure. And I think the process of simplifying it has increased the market by itself. And I think that's like in a lot of ways, in the world of software, our intuitions are not that well-honed, right? Like, it's you know, for the longest time, the only places that anyone could actually reason, like, reason about were you know, the physical world. And in the world of atoms, everything is actually literally zero-sum, at some point anyway. It's hard to think about things that just grow in the sense that a digital company can. I think that's, you know, that's on my mind a lot, and I think I'm pretty proud of, you know, having had the chance to kick off such a collaborative inquiry into our hypothesis at some point in 2004 now. You know, like, still being on this mission, trying to figure out, like, where does this vision lead? Like, we can make it significantly easier to build businesses. Retail is very big. Internet is very big, both are growing. You can do a lot of it with partners. Also all these kind of ideas that have been around. Then you are making a product that is excellent for its customers, and that's kind of a key to it, right? Like, we just like the greatest thing about this business, the thing that... You know, one of the things that definitely makes me excited every morning to work on this is, we are building a product for the most kickass customers imaginable, right? Like, they, these are the people reaching for independence, the most entrepreneurial elements of the companies they are part of. So I think this is all kind of sums together and says: Well, you know, if you have a company that's merchant-obsessed, that, like, pushes portability or pushes the complexity down of building things and just does this for a long time with excellent execution, the market itself just increases tremendously. And I think that's, I mean, super good news for all of us here. It's interesting. Does that do you think that makes it easier for us to be... Like, our mission, is it an easier mission to be on, or is it a mission that is, it's, it's sort of easier to embrace because we're not just effectively selling something to someone who wants to buy it, we're actually, like, growing this piece of the pie that is called entrepreneurship? Yeah, and I don't want to make too much hay of that though, because, like, at the end of the day, we are putting a tool into people's toolbox. It's themselves wielding it for accomplishing their own goals, right? Like, we can make it more likely that they are accomplishing these goals, and I think that's a super, super cool, like, thing for us to be obsessed with. But, it is... We can push from behind. I'd like, with the push from behind, maybe we can make some businesses increasingly clear the bar that they might not have done if they would have, you know, spent their time in confusion or frustration, or spent all their time trying to build another shopping cart or something. Like, just like something that people have done enough times at this point. So that's good. We can, we can help them not fail. I'd, like... But success is base, right? Like, where, their failure is, we are partly implicated, and I think we take that as a very, very seriously as a, as, as a mission. So just in terms of that mission, some of you heard this. I was sort of did a bit of a media tour last week around Black Friday, Cyber Monday, which is, like, about 10 days ago at this point. So some of you heard some of these stats. BFCM, Shopify did about over $9 billion in sales. Our merchants sold, in terms of GMV, 24% up from last year. 61 million consumers bought from a Shopify store during that four-day period. But here's two things that I really love: 55,000 of our merchants had their best-selling day ever, and over 17,000 merchants had their first sale ever on Shopify. So obviously, those are very impressive numbers and things you and I are very proud of. But I actually want to talk about what is beneath all that, Tobi. I mean, you know, one of the things that I don't think people recognized or at least, you know, talked about, was the fact that we had checkout uptime of 99.99999%, that's five nines, which translates effectively into no checkout failures during the most important time period for our merchants. We handled, like, 29.7 petabytes of data, fifty-eight million requests per minute. It seems to me that some of the infrastructure decisions that are not necessarily as widely discussed are really, really important to this mission that we're on to power commerce. Can you talk a bit about those decisions on infrastructure? Yeah, I think, like, BFCM is always our sort of main, I don't know, celebration, but because we get to celebrate others, which we are, we love doing. We get to celebrate their successes. If you've looked at the BFCM globe that we put up during this time, and have spotted any fireworks, like on around the globe, those fireworks are launched every time someone has their first sale, like, on it. And so this is really, like, we show you the entire world, but we put fireworks up for people who get started. This is, like, really, really fits the mission of the company. It's in this case, it's like also a celebration of infrastructure build-out. It's hard to build software at that scale. It really is. And it's, there's a very important interplay between infrastructure work on a technical basis and feature work. Feature work is flashy. It's, you know, the things you can put into Editions. It's the things your customers ask you for, and, like, no one asks for: "Hey, build better infrastructure." So one thing you end up having is a lot of companies end up getting themselves into trouble because they're like, they're trying to build skyscrapers on top of sand. And if you want to do this, you kind of have to drive very, very, very deep pillars into the bedrock, and you better do that first, right? So, like, I think Shopify does the zig and the zag of infrastructure to features very well, partly because we think of ourselves as a very long-term company. We would love to be a long-term viable institution in the space of, you know, internet commerce, entrepreneurship, and so on. I think what you sometimes observe is when we go quiet or, like, we are building a lot, is that we are readying infrastructure, which afterwards can be mined for features. This roughly works like the way a gas tank relates to a gas pedal. You need to fill the tank if you wanna go fast. And so I think we are on the side now, where we have built a lot of infrastructure because we understand, like, the problem remains so deeply at this point, and around our checkout work and our, you know, storefronts. Like, it's just, like, all, all these kind of things are coming together right now to allow us to, you know, build really, really, really great value. You'll hear more about our efforts of, you know, upmarket, enterprise, and why all this is working. It's a good example of this because, you know, like, again, one of those hypotheses I talked about that we started with is that it is, it ought to be possible to build one piece of software that is flexible enough for the needs of merchants of all sizes. Because the concept of having to re-platform at, after you get to a certain size is sort of like equivalent back to the architecture of having to rebuild your entire house just because you want to redecorate a room. It's a massively disruptive and not actually a sensible ask. So we want something that's extremely scalable. The only reason why in the past e-commerce providers have sort of segmented themselves into different business strata is go-to-market strategy differences, cultural differences, and how hard it is to build software that addresses all these things at the same time. If you're fortunate of fires of allowing people to you know reach for independence and entrepreneurship in their lunch breaks as a plan B for their careers, then you know you are merit tested in certain parts of your software in a way that no enterprise software ever is. If those people after success then grow into multi-billion dollar businesses, you're merit tested there. The quality of software forged in such fires is higher than enterprise software in general. And us now addressing these areas is, like, really, really something we want to do, partly because a lot of our customers have grown with us, and now increasingly people are saying, "Hey, I also understand what you're doing, and we want—we would like to use this." Where we have been extremely successful from an infrastructure perspective along those lines has been in front ends. Like, from the very beginning, people could, like, very much customize the front ends of you know templates and so on. And that was a big breakthrough in this space, and why Shopify has initially been so successful as a very young company. It took us 20 years of kind of an ambition and multiple tries of different infrastructure builds to come up with an idea for how to do this for business logic as well, you know? You can really make Shopify front ends look anything you want, but, like, we sort of invited you to our view of how a retail business ought to be structured. And frankly, that is not a bad thing. It's also not as bad a thing that sounded like we just had a particular view of, you know, the organization, taxonomy, and all these kind of things, which was optimized for scalability. One thing a lot of traditional businesses have been finding out over the last especially 10 years is that, scalability, the ability to scale fast and grow fast, actually depends on the simplicity, of your business. Saying no is very, very important, and was not as important in times where things were moving pre-like, pre-digital, more digital times, where, like, every individual task, like your wholesale strategy, was implemented by a person who, kind of knew all your people who you're doing wholesale agreements with and could, like, apply whatever, complex business rules, to the cases. In the world of software, and especially of, where it's not a few, like wholesaler, but like actually tens of thousands, you need software that can implement such complex ideas. We have now built a piece of infrastructure, which is sort of uncelebrated, and that, that's a good thing, called Shopify Functions, that allows the CTO office of our customers to build software and customize it, and implement the most complex discounts and stacking rules and all these kind of things that are really unique to your business, that implement the incentive systems or community systems, or just like strategies of your business in different markets and all sorts of variables. I think that's a huge unlock for us. Now with this piece of infrastructure, we can make more and more parts of Shopify overridable, so to speak. I think we accomplish a goal that we set for ourselves to make a software that gets everyone started, where people don't duplicate. All the work you are doing within the retailer is now on your mission, your differentiation, your merchandising, your strategy, your implementation, your go-to market, your countries, your international expansion, and so on and so on. And instead of redoing things, while also the things that differentiate yourself are some things you can bring to the table and teach Shopify to do, while still scaling to the size of a flash sale, which like just... It's like an infrastructure's nightmare. It's almost like a cloud's worst nightmare turned into a product strategy is like one of those things that most people don't expose themselves to, but it's certainly true in the case of Shopify. So we are dealing with a very, very big ones, unknown, but we allow people to build software in such a way that they can do what they want with, with us dealing with the potential downsides, like of this. I think this is a great separation of concerns between us and our merchants. Yeah, I love that. I want to talk a bit about Tobi as sort of CEO. I've had the great honor and pleasure of working for you for 14 years now. But everything you do is, in your sort of CEO role, really centers around mission, strategy, culture. But I'm-- You know, you and I have these conversations that are always so fascinating around the difference between founder-led companies. And it's, it seems to me that founder-led companies tend to outperform their peers. I mean, research shows this. Many of you have mentioned this in one-on-one meetings or group meetings with us or on earnings calls. But I'm curious, from your perspective, why do you think founder-led companies are just a different breed of business, and what-- why do you think, what makes them different? Yeah. Well, okay. So, I think it has a lot to do with vision, right? Like, it's, it's like there is, there's just a different reason for why a company exists. Again, these things I say about collaborative inquiry into a question or, following a mission and vision, like, like a true, they have, like, a mode for companies that is distinct from that of, a more operationally led company that, like, creates a plan, for what to execute for the next year or beyond. And then, the source of legitimacy is different in this case, but the source of legitimacy that allows everyone in a company to go all in on, like, their work and figure out how to understand what they need to work on in these more operational companies, ends up coming from the plan. So, that has upsides and downsides. The downside is very apparent in times like this, which require a lot of thinking on your feet and changing. In founder-run companies or vision-forward companies, the legitimacy actually comes from the people who have the best ability to figure out, like, to translate what the mission is to the problems encountered in front of you. But it is more of a process of quick decision-making and so, decision-making over multiple stakeholders, time spans, and so on. So I think that helps because, Like, this is the way I think about my, leadership and picking the strategies, and tactics for the business. The strategy hasn't changed, right? Like, it's like entrepreneurs are super like are the engine of our economies. They require, like, it's fleeting, it's governed more by friction than policy in many ways. And, reducing friction causes more of, like, more consumption. The tactics we use about how to make this simpler depends not just on us and our infrastructure that I talked about earlier, but also, like, on the capabilities of a world, like, of software. We see AI come in and have a lot to say about how to build these kind of pieces of software. In a multi-year plan, I don't think people had ChatGPT foreseen, right? And so, I think that's an important, important bit. I think the future really belongs to the most adaptable companies, and there are actually times where maybe that isn't actually that important. Like, I think that, like, there are certain times where which are largely execution plays, right? Like, where we're like: Hey, we know what we need to do, let's just go do it. It's an alignment and organizational planning, and so on, exercise. And I don't think the founder-led companies would outperform the others. I think we are now in these kind of times where there's multiple tidal waves coming from all directions, new technologies emerging here, new, just like ideas everywhere. And we kind of have to take it from zero budget and reinvent the company based on its principles over and over. And that is not possible unless you have, like, your founder slot is still active within a company. Again, every company has a founder, but in some cases, they're involved, in some cases, they aren't. If a founder is still involved, you can take a new situation coming and reinterpret this, this situation for the mission, potentially invalidating priors that are set many, many, many, many years ago. It acts as a defense against the sunk cost fallacy in a way that I think is, you know, meaningful and probably worth study. This is sort of like what I'm trying to bring to the company, which is like, I think of strategy almost as best thought of as a function that implements the mission of a company, that you rerun over all factual truths, every moment. And like, it spits out your next move in the same way maybe a large language model spits out the next token. And rerunning this over and over, over time is better than derivatively adding layers and layers and layers of decisions, where the prior ones are simply going to be taken as foundational. Like, being a little bit more humorous around, about it, like, sometimes I interact with companies that are just, like, so doggedly in pursuit of their priors. Like, they just do not want to think, rethink some of the fundamental decisions. But, it always feels to me like, you know, the like a conference of a flat earth society. It's like, I'm sure those keynote speakers are killing it, but, like, the premise is wrong, so, like, I don't know what we're doing here, right? And, like, rethinking the entire thing every once in a while is a good idea in my mind. So the other obvious role that we all know that you love and really where your true passion lies is obviously in product. And I wanna talk a bit about product leadership here, 'cause I know it's where you spend a big chunk of your time, and frankly, all of us want you to spend a big chunk of your time there. But there are sort of two products that you have sort of developed and architected. One is the product that our merchant uses, the other is sort of the company product, sort of how we operate as a business, as a team day-to-day. And I'd love you to talk a bit about the products that we use, internal processes, GSD, Shopify OS. Like, why do you believe it's so important for you to build the product, such a great product internally for us to use as we build, like the machine building the machine, as it is for us to build a product for our merchants? Yeah, I think, well, it's really unique. It's... I don't know if it's unique. It might be. I think it's working extremely well, so it's gonna be very common, I think. Look, I started out as an engineer. I loved building software. I still really, really, really like building software. I spend my free time on it. I realized at some point that what I actually love is building things and figuring out how to make systems better. I fundamentally believe that everything, nothing is ideal. Everything can be improved. I think the best company in the world is, like, a four out of 10 on how good a company could be. So trying to be the first five out of ten on that scale is, like, super valuable, a huge alpha there. And, I, like, to me, this is fun. It's fun to rethink. Again, I'm trying very hard to not be subject to some cause fallacies or just derivatively do things, partly because very serious people tend to say that this is how something ought to be done. So on from first principles, how should you think about the principles of a business? Okay, so we built Shopify, very large systems design challenge, all these kind of things we talk about. A company itself is that. A company itself is, you know, has principles, which should be debatable. There needs to be a process by which the principles can be debated. Some prin... Of these principles have HR implications. How many PMs do you want per engineer? How many, you know, what does a company what does it look like? Like, what titles exist? There's a lot of companies where titling is like this sort of shared network drive that everyone has, write rights to. Like, people just come up. Like, even Shopify at some point had, accounts receivable Jedi, and I'm like, "That seems unsanctioned. Cool, yeah, accounts receivable Jedi. I think what you try to do is like: Okay, well, let's get at this system design. We happen to, like, have now, you know, as you, as I think all of you know, or maybe observed, the Shopify that went into COVID is, like, was different from the one that came out. Like, we, especially the executive team, is literally, we have a set of executives, we have in common. Everyone else is new, and everyone else in the team and many of, like, who you should meet today are, you know, either came from, as founders from companies Shopify acquired. Why? Because founders are very good at thinking first principle and, thinking on their feet and have been responsible for people's, you know, livelihoods, payrolls at certain point. There, there's a shared experience that exists amongst founders that is very, very powerful, and in times where a lot of things changes, like the beginning of COVID, that is a extreme premium. And, people who have joined us, like Jeff and, you know, Tia and Jess and others who are, like, excellent at their crafts, right? We are very much like, everyone is very, very good, at their particular job. What we are doing now is saying: Okay, well, take product thinking to everything in the business. Like, there's a thing called Shopify OS within, the company, which is our operating system. All these principles are stated, all these, like what? Again, the titles, the like levels, the groups. There is a system that can take all these principles and compute an entire model of what the company ought to look like in terms of its headcount, allocation, titles, payroll, and salaries, and so on. And then we compare that model of what comes out with the company we have and say: Okay, well, the diff between those two things is the job of HR to get to make it closer to that. That's a totally different way of working, but it's... Because it's fundamentally like every run of create, recreating this model starts from tabula rasa, just the principle stated. It also means that we can reason about changes to the business in a way that is, like, very, very hard to imagine without it. Like, we can say, well, what would happen if we are creating a new group like this? What would happen if, you know, like we change ratios between groups? What happens if the amount of tickets that are coming in, that are handled by AI versus not AI changes significantly, and how would the staffing change? Because all these things are inputs into such a model. That's just great engineering practices applied to the world of company building, which is something that in the process of bringing in a new team, I built a lot of excitement for, because I tried to do the more traditional thing, which is like, you know, hire experts and then, you know, trust and delegate. And yeah, like, it sort of works, but it's not ideal. You get a good version of a thing that everyone's building, and I think there's just a lot more in the tank. We also have an unfair advantage that, like a lot of engineering teams, the executive team has engineering in their background, and that there's like, like, and, and, and product. We can reason about how to bring a product to the company. I know you will hear more from, you know, Kaz and others about these kind of things. I think it's hard to kind of give a highlight reel here, but, like, the point is, the term you use is the machine that builds the machine, is a very good one. It's a good way to think about the business. And it turns out, I think, that, you know, if you look back in business history, like just like even, you know, hundreds of years, people tend to, like, build businesses all the time. They're very important and pull out of sort of whatever else is happening during the time, they pull lessons out. So like, you know, after the world wars, a lot of lessons are pulled out of chain of commands into businesses, and especially around the time of Taylor factories and so on, that was very, very valuable. I think, you know, in times of more peace that followed afterwards, you know, people pulled a lot of lessons out of sports, which, you know, like, I'm guilty of this as well, but we all talk in sports metaphors all the time, right? So, like, you see it this way, and these are valuable. Where we are now in a business world, it's like a—I think it's a whole lot weirder, because you have people that are running companies now that have experiences and backgrounds that are just like really divergent, and as like often come from totally different fields: engineering, internet, software. Software is a positive sum word. Like, it's very easy to just hunt atoms to compete for. That's alone causes differences. The way engineering problems are solved is a lot more of the model, a thing that causes something called a desired state to emerge of like a company and its titles, and then software that reconciles the state. Like, you can think about this almost like a thermostat. Like, you set it to whatever. That doesn't tell you that's the temperature right now. That just tells you, like, the thermostat is gonna coordinate with the heater and the HVAC to cause this to roughly be correct, right? This sort of not imperative, not immediately exact kind of way of thinking is actually very normal for engineers, and for the set of non-deterministic systems being built there, and it's actually an extremely useful source of information, inspiration for company building that's underexplored, and I think we are in a good position to cause a lot of that to come together. I love that. You know, there's a sign right outside the door that says, I think you coined this, "From Hello World to IPO." I want to talk a bit about the product that we build for our merchants. And in particular, one of the questions that we get from a lot of people in the audience and a lot of investors generally is: How do you think about when to build something ourselves versus when to partner? One of the things I'm personally proud of, I think you are too, is that we've become a really good partner company. Like, companies really love partnering with Shopify, not just in the short run, but over the long run. Some of the best companies on the planet come to us and ask for help with commerce. What are some of the principles you think about, Tobi, in assessing when we have to build something ourselves versus when we can leverage working with someone else? Yeah, I think, I think, so what I love is companies that are very, like, bright line defined on what's their main quest and then, like, stop at nothing to cause, like, to explore it, right? Like, and, I think fundamentally, like I am subscribed to a philosophy that, like, sees more companies that are very clearly defined a little bit more than sort of a, like, one conglomerate that does everything. I think both of them are, like, I don't think either of them is right. They are just different implementations. Again, in more, less, changing times, I think the conglomerates have just an advantage, but like in times where, like, I think a lot of problems need to... Like, everyone needs to rederive a mission from first principles over and over again in a changing landscape. I think main quest companies are, like, a little bit more advantaged. And again, because I spent a lot of my formative years building software, and again, most business executives, especially like the generations prior to ours, came from maybe a manufacturing background or something that involved atoms. There is a, like, yeah, you are gonna clock in on one side or the other on the positive sum or zero-sum thinking, and you can absolutely get a full model of other side and utilize it, but there's like a difference between the people who are like natives and immigrants to one side or the other. I do think that we have, like, just done, we've done a very good partnership with Stripe very early. Both companies grew, like, I don't know, 100, maybe 1,000 times market caps in the time since we did all these partnerships, and we are working very well together. My favorite thing about the company from a simplicity perspective is Shopify is, especially its business model, we are, we are 100% aligned with our merchants, right? Like we, people underestimate how merchant-obsessed Shopify is, and it's really, really easy for us because it's actually, it's just not a platitude, even though it sounds like it. It's just like, it's, it clarifies everything. And it works for a business model too, because the best thing we can do for our own revenue is to get our existing customers more successful and get more customers get started and go for their own growth. That's really, really beautiful, and we applied this to our theme partners and app development ecosystem, and now we are also on the same side of the table. Incentives are all stacked in such a way that them doing great work is good for us, merchants, themselves, sort of really, you know, enlightened self-interest really applied at multiple fractal levels of like a business's systems. Yeah. That also works really, really well between more mature companies. Like, we have great partnerships with, you know, Klaviyo, and great partnerships with, you know, obviously Stripe- Firm globally. a Firm globally. Yeah. And so I think what all of these have in common is, like strong belief in, a positive sum, strong belief that the prisoner's dilemma is actually not a dilemma, it's actually an intelligence test. If you just cooperate all the time, it's better for everyone. You get more points, right? Like, so I think that's a, you know, these are the kind of things that are really, really well, valuable. So we want to be very, very good partners, want to be known for being very good partners. I think we are very good partners. Yeah. I think also sometimes when we see something that our ambition of what we want to build is actually being built to someone's main quest, and they're just doing it at a world-class level, then it makes sense for us to actually work with them as opposed to simply, you know, do it ourselves. Exactly. I think, you know, it's much better to have an alliance of companies that are all like, you know, make common cause on their main quests because they all fit together beautifully. Yep. Okay, I have to ask a topic that is on a lot of people's minds here, which is that of AI. And, you know, we're really sort of leaning in here, and you've heard us talk a bit about AI a little bit. But you said something that I'm just gonna read the quote 'cause I really loved it. "Technological progress always arcs towards simplicity, and entrepreneurs succeed more when they simplify. But now we're at the dawn of the AI era, and the capabilities that are unlocked by that are unprecedented." I know that, you know, you often say that you feel we can do so much more when it comes to AI, but in particular, why do you think... Like, you've told me that you think Shopify is uniquely positioned to leverage some of this stuff, and I'm curious why. Yeah, I'm happy to talk about it. I'm a little bit worried at this point about AI virtue signaling. It's like- What is that? Like, it's sort of like at some point, we put dotcom behind companies' names, and they became worth more. So like, I think people should have good conversations about what it will actually do and like, like, or at least how to think about it in a product strategy sense, rather than just of doing this, like- And wavy ... fairy dust sprinkle. But actually, let me explain this. Like, let me just give a little bit of the background. Because, again, I think what you want is, like, to have an idea how Shopify is playing its positional game in over the long term as a company, and then what, how to employ the tactics that present themselves in as part of this. Well, look, the next year, Shopify started, like, has been around for 20 years. This- it has overseen a lot of major sort of platform shifts. We've come out of a time when people tried to figure out how to build internet software, what it might look like. We've seen mobile happen, SaaS as a concept emerge, and, you know, all, like, all these kind of transitions. Like I have, I've also been part of, like, in, in the '90s, like, sort of internet's, like, first initial use cases. So like I've really seen the predominant important transitions in the computing age, and I really have not seen anything like what AI is doing. It's that crazy, or crazier. I think on a more practical level, well, sort of, maybe practical is overstating it, but like, the types of software we've built on the internet for, in 20 years, and we created huge enterprise value through this, are early. They're very early. They are constrained by the platforms that existed. They are largely imperative. What that means is, like, they're like light switches, right? They are not declarative, like a thermostat. A light switch is like, turns on/off, breaks the circuit. Shopify, like, I think, transcends this sort of somewhat reductionist idea in many places. But like, if you want to play the reductionist game, you open a Shopify account, you go to settings, and what you will see is a lot of light switches. The difference between good software and bad software is how obvious the side effects are of the switches. Like, if you turn on a country that you want to ship to, what happens? Is the software clear? Does it allow you to reason about the decisions you make? Why? Why is that the important thing? Because there is a declarative desire, in the minds of the operator, right? The person, the entrepreneur says: "I would like to expand to Brazil." That is the declared goal. They want to do this well, right? Whatever that means. The best entrepreneurs have a model of what they want their company to be or the changes they want to make, and a expert understanding of the software that they're utilizing, and therefore, can run around the room and turn on or off all the right light switches to make the light up the room just so. If you've ever stayed in a hotel that we use one of our scene selectors, you've seen this done better, hopefully. Sometimes it's actually worse. But like, sometimes you say, "Okay, well, it's like evening time, and all the curtains close," and so on. It's like, basically, it terraforms everything it can reason about into some desired statement, okay? This is an important conversation because I think we are going to see a software transition, definitely in the enterprise and SaaS space and business software space, from a imperative time to a declarative time. The idea of, "I would like to expand into Brazil and do it well," is actually a executable statement in a world where software can reason about the semantics of human language, right? By itself, this is not enough to write code, but even like through AI it can. So what does the world look like where we can give everyone a like hyper-competent, non-judgmental, super smart, perfectly... You know, Shopify native Sidekick along the journey, that who can do tasks and join the team in this sort of capacity. This is all really early innings, because we are dealing with Gen 1. It's like the AI models we have right now related to what we want is about the same as like smoke signals were to the internet, right? Like, it's just like that. Like, we're gonna get way better stuff here, but like, even that stuff is unbelievably magical already. And so, there's just like a lot that can be done here, and I think the consequences of this are very hard to like, fathom right now. I believe the benefits are going to be like accruing to the, I think, the management teams, the strategies for companies that can, again, rederive their entire priors and recheck all their priors every single time some new capability comes along. I think we've already implemented a lot internally. Like Shopify's, or like the amount of productivity we have managed to unlock in so many parts of the business with AI, where like it's easier for us to run experiments and, you know, bits on a disk is easier than people on your payroll, than in a product. We run experiments and just like pretty magical. So yeah. Especially for entrepreneurs who effectively, you know, anything we can do that makes simplify their lives means their likelihood of success is that much bigger, and that's a particular sort of type of consumer of AI that could really benefit. I want to close on sort of a higher level question. You mentioned that next year it'll be 20 years since you started basically writing code, which would become Shopify. But one thing that a lot of you have heard us talk about is this idea of building a 100-year company. And I want to talk a bit about how you think about that 20 years in. We got 80 years left to go, which is, you know, we got some time there. But there's an importance baked into you, this, this incredible ambitions across the whole business, starting from you, though, around building this long-term company, making long-term decisions, whether it's about profitability, why that's sort of this oxygen to get there, or that's about, you know, mission alignment, or frankly, just the, the true obsession. I mean, I wasn't just saying this, like, we spent the day yesterday with merchants, and that's kind of our favorite thing to do. Can you talk a bit about that, this sort of hundred-year mission? Yeah, I, I think, I mean, look... It's hard to know, like, it's hard to say, like, that means this one thing. It means like, our desire to build something that is a lasting institution in an important space is like, you will-- like, you look at Shopify, and you see, here's the best thing that this team, this company, these entrepreneurs have built to fulfill this mission. Like, it's like people have been building companies for a very long time, right? Like, this is like, like, like personal agency reaching for independence is like, like out, you know, just like, it's very, very, very old. People will want to do this for a very long time. It is, it's something very, very innate, and I think therefore it's like, it's an important mission. The implementation of how to do this changes quite a bit over time, right? Like, again, like especially, people tend to take advantage of the latest and greatest of things that might give them an advantage to do so. What it means to me also is like, you know, just like there's a couple of, you know, like... I mean, obviously, you're not gonna wind up being a 100-year company if you don't run profits. Like, I'm a little bit old-fashioned in this way, maybe. Like, I'm a European, so I do think companies should make money. Actually, that fits much better in the current times now than it did into the sort of 2021 energy, which we are all, I think, trying desperately to forget about. But like, I think that works to our favor. I think Shopify has always been like this. We were a profitable company before taking the initial investments and so on. Like, it's, there's a sovereignty component that comes from profit, I think, because you're like, it means it is a means test. Like, the wonderful thing about a market, I don't, I mean, I have lots of thoughts on capitalism and you know, that like Shopify is fundamentally an equality of opportunity company. It's like fundamentally, it sort of sits in the smack center of enlightenment, liberal values of independence, merit, and like these kind of things. I think the entrepreneurial process is super, super important, obviously, even for, like, literally our core mission. But actually, I think the thing about capitalism is actually like almost unbeatable at the deallocation of unproductively allocated resources, and that's a really, really important process. We find that so many of our biggest customers, big business merchants, are like attempt number four or five, or people who came, or a small group of people who came out of an existing big retailer that like maybe overleveraged on, you know, on mall floor space or these kind of things. I think that's also something to celebrate. You've got to be trim. Like, you have to have these—like you have to have an engine that means tests everything. Like, you have, like the systems of your, inside of your company, your products, your... Like everything needs to be of merit. Like Shopify does not have a strong login, right? Like it's, we are, the absolute core, I think 99% of our customers are on monthly plans or something. It might, that might not be a real number. I actually don't know, but it's like most. And, so the, they can fire us any moment. The thing that makes people stay is merit. The software is very good, right? And that's, I think, the most pure relationship you can have, with customers. You don't want the distorting effects. So I feel like this is all important. So you want to, like, be tested by your environment. You want to be profitable because that means you can sustain yourself and reach this level of sovereignty. You don't want to pull future profits forward at a discount, right? Like, to come, like, meet certain milestones slightly ahead, or because that's valuable for people who have slightly different hierarchy stack from the long-term investors. Also, the investors are on the same side of the table. Again, it's really powerful if you just think about everyone kind of like, just being, like, in this together. And so I think that's most of the ingredients that you, like, that you utilize for this. This is how you're building a business. Like, encoding, the enemy of every culture is the tragedy of the commons and reversion to the mean and all these kind of things. It's like, at some point, your, like, unless your internal culture and your systems and beliefs don't have enormous internal scaffolding for to hold them up, they will fall to the ground and the system and the company and its culture will become a hopefully good version of what is generally believed to be part of the industry. If you want to do better than that, you have to have strong principles, and I think we are really finding more and more ways to encode some of these things into the tools, into the systems, and so on, to just hold, like, provide scaffolding for the long term. Because if you want to do better than... You know, this is such a simple statement, but if you want better results than what everyone else is getting, you must be different. Partly because the reverse of the sentence is simply that if you do the same, you get, clearly you will get the same, right? You, like, now, different might be worse or better, you know? So, like, you've got to, like, you're taking a big risk. This is why most people don't do it and say, like, "Hey, we're building a culture," which again, is like, an implementation of what general cultures are right now of companies in tech, and then we put our own brand on it. How to be actually different, right? Like, that's, then you can see outsized success. You can really be innovative. You can discover completely novel concepts. Some of them are going to be different in the bad kind. Many of them are different in a good kind if you really apply yourself and engage in good first-principle thinking. And then you make a mix out of the whole thing, and you build a company, and then you support the parts that you want to endure, and you say goodbye to the parts of a, you know, culture or values that are not fitting into the next version you're trying to build. And you do this over time, and I think it can be self-sustaining and powerful and hold together. So that's super fun, I think, from a job perspective. Very fun. Frankly, it's valuable for, I think, everyone involved, and so that's what we are doing, and that's hopefully what I get to do for the next, you know, 10, 20 years. 80, maybe. I don't know. Maybe. Yes, let's go. Okay. Thank you for this. Hopefully we'll see you again on Investor Day before 80 years from now. Yeah. Thank you all for joining us for this. Tobi, thank you for being so candid and so transparent. Thank you. Thanks. Thanks very much. All right. Thank you. Next up, we have, I think Glen Coates is going to join us. Glen is VP of Product for Core. So please welcome Glen Coates. Good morning, guys. Good to be here. So yeah, my name's Glen. I lead core product here at Shopify, and I am here to talk just about the product. It is our number one priority. It's the reason we get out of bed in the morning. I'm gonna talk a little bit about where the product is today, how we got here, what our strategy is for where we're taking the product in the future. But most importantly, why do merchants and developers love and default to Shopify for building their businesses? Before we go to the actual product, I want to talk a little bit about some things of where the product is today that you might not know. This thing you probably do know. We talk about this a lot. As of 2022, about 10% of all U.S. e-commerce was on Shopify. We say this all the time. This is in the U.S., but the thing you may not know is that in Europe, we're not far behind. In 2022, about 6% of all e-commerce in Western Europe was on Shopify. That number is growing fast and catching up to the U.S. Shopify isn't just about D2C. We launched Shopify B2B in mid-2022, and as of Q3 of 2023, GMV for B2B was up double the same quarter a year prior. By August of this year, we had done as much GMV in 2023 as we did in all of 2022. B2B is a big business and growing fast. Of course, we are not just about online. You've probably also heard us talking a lot about Point of Sale on earnings, in the news, but what you probably don't know is how big this business is. We expect to do $450 million in revenue, this year on POS, and that too, is growing quickly. The results of all of this is, of course, the household names, the world's best brands, the world's fastest-growing D2C innovators, either being on Shopify already or coming to Shopify quickly. The reason for this is the product. Brands come to Shopify for the product first and foremost, and it's not just what the product is today, which is pretty awesome, but it's also how fast the product is improving. If you've been paying attention to Shopify. com for the past couple of years, you will have noticed these things. These are the Shopify Editions. We put one of these out every six months or so, and each one of these catalogs, all of the features and improvements that we have brought forward in that six-month period, and each one of them contains more than 100 improvements to the product. There'll be another one of these early next year, but this one is the one that we shipped in summer of 2023, and as all of this scrolls past and you struggle to read them all, note that each one of these updates is, in many cases, the entire six-month roadmap of another company, in some cases, a public company. And so yeah, our business is big, it's growing fast. The world's best brands are either on Shopify or coming to Shopify, and yes, we ship faster or better than anyone in the industry. But why do we build what we build? How do we think about product? How do we think about a product strategy, different, different to the rest of the market? And why are we such a force in this market? I'm going to spend a few minutes now giving you an outline of five evergreen strategic pillars of how we build our product. That should give you a clue as to why the best brands of today are on Shopify, and why the best brands of tomorrow are going to be built on Shopify. Number one is our original strength, being the easiest way to start a digital native business. Now, from the beginning, this is probably the main thing that Tobi got right, because he tried to make it so easy to get started building a business online when we got into the 2000s and millions of people thought, "You know what? Maybe I could actually start my own business on the internet. Maybe I could do it." Little known fact, the name Shopify actually comes from the word simplify, and so much of what we do in the product is just about that word, about making things easy, making things simple. Taking things like the mess of servers and code and website design and shipping and taxes and payments and all that crap, and we melt it into the background so that entrepreneurs can focus on the very hard job of having a product that their customers want and love. Now, there are hundreds of examples of this all through the product, but I'm going to make it a little bit real for you with one actual example. I'm going to show you how you can launch your business into a new country on Shopify in 20 seconds. Literally, you just click on Settings, click on Markets, got a U.S.-based shop, I want to be in Canada. I say, cool, let's look up Canada, click it, boom, add it. Click Add. Let's say I want my Canadian prices to be 20% more than they are in the U.S. Keep it simple, just type in the 20%, click Save, and my store is now literally live in Canada. The country selector appears in the right place, the prices are correct, and it all just works. There's literally hundreds of examples of things like this that would take days or weeks and a team on another platform, and that just took 20 seconds, and we cannot overstate how important this kind of thing is. But if that seemed easy, and Tobi talked a little bit a second ago about imperative versus declarative interfaces, of course, we're not done yet. You may have noticed this, Tobi put out a video that got a lot of play earlier this year about Sidekick. Sidekick is the new AI assistant for Shopify that we are working on actively. And so Shopify has always had the easiest-to-use, imperative interface. If you think about software like a car, we have the best car, you can drive it where you want. We're now going into the world of declarative, which is like Uber. It's like: I don't want to drive the car, I just want to tell you where I want to go. Can you please figure out how to get me there? Because I don't actually want to drive right now. Sidekick is going to be a step function change in helping entrepreneurs get started. Even if they don't know where that button is in Shopify to launch the new market or change that setting, Sidekick is going to help them do that, even more easily than in the past. So why does being the easiest place to start a digital native business matters? So the first thing is literally the mission of the company, right? Lowering barriers to entry helps there be more entrepreneurs and more entrepreneurship in the world, and that really is the tide that raises all boats. But being the easiest means that we are the default places that businesses start on the internet, which means that somewhere in that million, millions of businesses that are on Shopify today is the next Allbirds, is the next Skims, is the next Supreme. We don't know where they are, but they're in there somewhere. And when businesses start on Shopify, they tend to stay on Shopify as they grow up, which means that the world's leading brands of tomorrow are going to be on Shopify as well. Third thing I'll say about this is that it turns out that enterprise businesses are also full of human beings, surprise, surprise, and they also appreciate having software that's really easy to use for when they want to launch that new project, that new division, that new initiative, they would like to just be super easy. Speaking of scaling, number 2 is being the ideal way to sell globally in all channels. It turns out that when a business hits product-market fit, they go out into the world, they start launching new regions, new products, new team members, all of this stuff. They start having real-world problems, and they need help with that. And so one of the most valuable things we do for our merchants is that we solve more problems in the box than any other platform out there. And I'm gonna walk you through what I think of as kind of 8 dimensions of commerce. This is things where you might want to solve one problem one way or the other, and this is the part of our strategy that I really like to think about as the, "How about both?" Right? Do you want A or B? What about both? Wouldn't it be nice to get both? And as I walk through these eight things, I want you to think about: can you name any other company that would say yes to all the stuff I'm about to walk you through? The first thing we help people with is we help them sell both online and in person with, of course, our storefronts and our point of sale. We make that super easy, and these are two things that are integrated together. It's not two different systems, it's one system. And we are the only commerce platform in the market that can say yes to doing both of those things in one place. We not only... Oh, got the clicker out of order. Pretend you can't see that. We help people sell domestically, which is where people mostly start, but then with just a click of a button, like I showed you a second ago, with Markets and Markets Pro, we help businesses sell internationally as easily as they do at home. We help you do both. We help people sell to consumers and also to businesses. Again, we don't make you launch two different websites. It can be one website with shared inventory, orders, returns, logistics. We help you do it all from one place. Of course, the world of commerce is multi-channel, so not only do we help you sell first-party on your own website and your own point of sale, but we help you sell third-party through the social and marketplace channels that is so core to brands' reach today on the internet. As of earlier this year, we launched Shopify Marketplace Connect, which helps merchants get their products out on Amazon, eBay, Etsy, Walmart, and other channels even easier than before because we help merchants do both first-party and third-party. We help merchants sell in the front office. Again, we have all of our front office tools, online stores, point of sale, but we also support merchants in the back office. Some companies will do one or the other, an ERP might help you in the back office, other web companies might help you on the front office. We do both. Integrated orders, returns, fulfillments, inventory, all in one place. And of course, we help you do it not just on desktop, but also on mobile. That's both for the merchant side, whether you want to run your business from desktop or you want to run it from your phone, and also for your customers. We make it easier than ever before for a brand to build a native mobile app to meet their customers where there are, where they are. We don't just give you an amazing website and an amazing checkout to convert your buyers, but we also give you integrated marketing tools as well as analytics to help you understand, well, those people that I brought to my website, why did they come? Who came? What did they buy? Why did they buy? How can I bring them back? We don't just give you one side of the funnel or the other, we give you both. And of course, finally, we have our core software offering, which is the admin storefronts and checkout that powers everything. But we also pair that with, we also pair that with merchant services for payments, shipping, tax, and all those other crucial functions of the business to get you out there in the world. Some companies do software, some companies do services, and we do both. Now, the reason this matters, why does this matter? Can't you just buy all these things individually? Why do you need them all in one place? Well, the reason is that when you're on Shopify, this isn't 8 different problems. This isn't sixteen different deployments with a bunch of integration glues, holding them together. This is one system where each time you need a new problem solved, you just click a button, and it comes on, and it's one system all in one place. You know these companies, enterprises often are struggling under the weight of their own integrations. They can't adopt new technologies, they can't move fast because they're struggling under the weight of the glue that's holding everything together, and they can't spend the time on the wood of the business that they wish they were focusing on. And so this is a huge part of the value that we offer to our customers, is that it's everything in one place. Just reflecting on this as, as a consumer, I think about, like my AirPods, right? My AirPods, they... Do AirPods sound the best? I don't know. They sound pretty good. But the thing about AirPods and the reason I will only ever use AirPods is because they connect effortlessly to my phone, my iPad, my watch. All of these things work beautifully together, and I never have to worry about how they connect. Now, we solve a lot of problems in the box, but of course, we cannot solve everything in the box, which brings me to the third part of our strategy, which is Shopify having the best developer platform and ecosystem in commerce... The 20% that we cannot do inside the box is met with our app platform. So we start with the world's best primitives for commerce, handling those hard problems of products, customers, orders, inventory, and markets. We then put extensibility on that. Tobi talked a little about functions and the way we've extended the back end. We make these primitives extensible with Metafields, Functions, Flow, App Bridge, so that app developers can put their own spin on it and solve unique problems. We give them great developer tools that are a pleasure to use, and then importantly, we give them the App Store and the Theme Store to go to market and find those merchants who will be their customers. Being a member of our developer ecosystem is basically the best choice if you're a new developer starting a business today. The result of this is the 10,000+ apps in our App Store. We have the richest app ecosystem with the most solutions in it of any commerce platform on the planet. We're so proud of all of our developers and what they've built. Earlier this year, we launched Built for Shopify. This is our new program, which sets a new standard for quality and integration of apps built on the Shopify platform. And, as of this program, I think is only about six months old, and we are already at more than 200 apps that have met the new standard. And I think something like 10% of all app installs in Shopify stores are now certified Built for Shopify, and we expect this to go up and up over time. The benefit for merchants is, of course, that these apps feel tightly integrated to Shopify in the same way as the, core features of the product. It's a win for merchants, it's a win for developers, and it's a win for Shopify. The fourth part of our strategy, this really comes from the top, this comes from Tobi. I think it's worth saying that one of the structural advantages that Shopify has is that, and I think Tobi will be a bit embarrassed by me saying this, but I think Tobi is probably one of the most internet-native human beings on the planet. I think Tobi sees the future of the internet in 5-10 years more clearly than almost anyone I've ever met. It's actually nice that he's here right now because it proves that he's a human being and not just an IP address with a face. And it's no secret that Tobi is a pretty hard marker when it comes to the quality and performance of the product we build. Just ask anyone who's been to a product review. The reason that matters is this: the Shopify admin is one of the best performing, most beautiful, most joyful to use products on the planet. The reason that matters is because our merchants spend a lot of time in this thing. They spend all day doing their work in this thing. It matters that every pixel is handcrafted. It matters that it's a joy to use, because this is a big part of why merchants love and default to Shopify for their current business, and their next business, and the next one after that, and the next one after that. But it's not just the emotional experience of using a product that's a pleasure to use. It's also performance. In commerce, performance is king, performance is conversion, performance is dollars to the bottom line. And this is why we spend so much time on infrastructure. We have 300 points of presence around the globe, putting us within 50 milliseconds of every consumer on the planet. The reason we're able to achieve this is the 350 infrastructure engineers who work on this every single day, so that our merchants don't have to, alongside our partners at Google and Cloudflare. And what does this actually add up to? Well, I'm sure you heard this number out there on the street, by independent study, the Shopify checkout converts on average 15% better than the competition. That's 15% more dollars to the bottom line. Who can say no to making 15% more money? And the number of businesses where this is the difference between the business working and not, is staggering. And this is why we do it, because technical and design excellence actually makes people more money. Now, I would love to believe that the Shopify checkout converting 15% better than anyone else is purely a result of great engineering and great design. I mean, that would make us feel really good about ourselves, but that is not the whole story, and that brings us to the fifth part of the strategy, which is Shopify. Through all of our fortune, we have millions of businesses on the platform. We have hundreds of millions of visits going through every day, the billions of GMV going through the system. We take all of that scale, all of that data, and we put it back into the product for the benefit of our merchants. We do this in a number of ways. The one that you're probably the most familiar with is Shop Pay, the purple button that you probably click a little bit too often. Shop Pay, as of a few months ago, is now the number one checkout method on Shopify. It's been more popular than all the other wallets for some time. Recently, it became more popular than guest checkout with a credit card. The reason is that it converts 10% higher on average than all the other wallets. It converts 50% higher than guest checkout, and weirdly, even just the presence of that purple button on the page, even if you don't click it, causes a 5% boost to lower funnel conversion. Other examples, Shopify Audiences. For merchants who are opted into sharing their data, we help them buy better ads on the internet, in some cases, producing reductions in CAC of 50%, which is really something. Another example, Shopify Capital, because we see these business, we're literally helping the merchants run their businesses, we know more about the businesses than the banks can, and as a result, we can underwrite loans more effectively than the banks can, which allows us to offer a better lending product. We have a 70% renewal rate on Shopify Capital from first loan to subsequent loans, which is kind of unheard of. Now, these are three examples. There are gonna be many more of these in the future, but when you add it up, these five evergreen pillars of our strategy is why merchants and developers love and default to Shopify. We're the easiest place to start a business. Once you start scaling, we're gonna solve more problems for you in the box than any other provider, and we've got more problems solved for you out of the box through our app ecosystem than any other provider. We're gonna give you a product that is fast and is a pleasure to use, and it's gonna make you more money because we're putting our scale back into the product for your benefit. And this value prop is something that is irresistible and frankly, like, doesn't—the rational actor test is gonna mean that it's kind of a bad decision to start a business anywhere other than Shopify at this point in history. That's where we got to today. This is evergreen. We've been doing this for a long time. I hope this is helpful, but this isn't really news. I wanna now move forward to 2024 and a few of the key problems that we're looking at solving in the coming year that are gonna help our merchants even more. The first one is large and complex products. So historically, Shopify's product data model has tended to be better suited to simple products than complex ones, and in 2024, we're solving that. So all of those products that have complex colorways, complex attributes, complex configurations, all of the very large variant counts, we are solving these problems so that merchants of all industries, all sizes, all product catalogs, can represent their products on Shopify in high fidelity. and the great thing about this is it's gonna increase the fidelity of Shopify's data set around all the products being sold throughout the world in independent commerce, which helps us help them when they go out to Google, Facebook, Amazon, all these marketplaces, to make sure that those listings on those marketplaces perform as well as they do on their own online stores. Speaking of large and complex businesses, one of the problems that we're really excited about solving for enterprise merchants is around what we call staging, and that is the process of taking products, content, data from a development environment out to production safely and in the right way. So one of the things we're gonna be helping our merchants do is have staging environments where data can be prepared, it can be seamlessly migrated over to production, with just the click of a button, and then scheduled to go live at the right time for that sale, for that product launch, for that new season. This is, like everything else we do, something that is toil-full, difficult, process-heavy in other software, and will just be a click of a button on Shopify. Moving from enterprise to enterprise retail, something we did in 2023 was we improved the support for retail locations from, up to 1,000 retail locations to make sure that we're ready for enterprise retail. And again, the best thing about Shopify is the fact that retail and the online store, they're not two different things, they're one thing. And so we wanna help bring those experiences together for our enterprise retailers by making, improvements to buy online, pickup in store, going one way, and then buy in store, ship to home, going the other way, so that wherever those buyers meet the merchants, they have the experience they want. And not just that, but also solving the problem of split carts so that if the buyer wants to buy online, pick up in store or a mix of the two, they have the opportunity to get the experience they want. On top of that, for international retailers, we are gonna be improving support for local payouts so that each region can get, you know, can settle the funds the way that they need to, and also support for, location-specific, pricing and publishing of products so that the right merchandising can be done for each retail location individually. The last thing that's really exciting about retail is, we're gonna be deepening our integration between Shop, see above, most popular wallet on the internet, and the point-of-sale experience, so that when a buyer comes into the store, they're gonna be able to use all of those great features of Shop, like Shop Pay Installments, pay with the Shop app, get, receipts and order tracking right there on their phones, just like they do on the online stores. Again, one system, everything working well together. Now, physical retail stores are not the only physical go-to-market that our merchants care about. In B2B, the salespeople who go out into the field and represent a brand in the market are a critical part of their go-to-market strategy. And one of the problems we're gonna be solving in 2024 is, improving the roles and permissions in a Shopify store so that a brand can add their, in-house or contract salespeople to the account and only give them visibility to the accounts, or the regions that they're supposed to be covering. Again, preventing that merchant from needing two different bits of software to manage the online store and the sales reps, it's just one thing with the permissions set correctly. On the topic of international, so, we've always had great built-in support, bundling services for payments, shipping, tax, duties, so on and so forth. But in the past, support for these services has not been evenly distributed across all countries. It's been better in some than others, North America mainly. We're making big investments in 2024 in solving this problem by creating new payments and shipping platforms that are gonna allow our partners to build native integrations to the local payment providers and carriers, so that no matter which country you're in, no matter which country you are launching into, you will have access to equally high-quality merchant services anywhere on Shopify. I'll close out here with the final thing here, talking about AI. I think it's actually legally required for me to talk about AI because it's 2023. I think if I don't talk about this, Ilya Sutskever actually comes and fires me on the spot. But it's okay, he'll reinstate me on Monday, so it'll be fine. I wanna talk a little bit about why we're different here, right? Like everyone, you've probably been to a million conferences this year where people say, "Yeah, we're gonna build AI into the product. It's gonna be totally new, and it's gonna be amazing," and yada, yada, yada, yada, yada. But everyone's working off the same base models. Everyone's got the same tools. So how are we different? What are we actually doing differently? What are the structural advantages for a company like Shopify with AI? And I really think about this on two axes. The first is, if you think about AI as an assistant, maybe riding beside you in the car, who can take the wheel when you don't want to drive anymore, how much that assistant can help you is fundamentally limited by how good is the actual car, right? That's why everything that I said above matters so much. That's why it matters that we solve eight dimensions of commerce, why it matters we have the App Store. The assistant can only help you as much as the vehicle you're riding in, and so it matters what the product capabilities are that the assistant is actually working with. Number two is, okay, great, you're sitting in an F1 car with your assistant. The assistant wants to take the wheel. How good of a driver is the assistant? You've all probably figured out by now that in AI, data is actually king, right? The data is what matters, and see above 10% of U.S. e-commerce, millions of stores, hundreds of millions of buyers. Shopify has a unique ability to train the world's most capable, most intelligent assistant, because we have the scale. It really just does come down to scale. And so that sets us up with two structural advantages that I'm really excited about. But I'm not gonna finish talking about Sidekick. I'm gonna talk about a different AI product that I think is pretty cool. This is Shopify Inbox, which is something we don't talk about that much. But if you paid attention to the last edition, you'll notice this little feature that we had in early access, which is suggested replies from the AI agent to the incoming chats from the website visitors. Helping merchants answer their chats more quickly, of course, goes straight to conversion. The faster you answer the chats, the more likely the visitor is to convert. But this is just the beginning. I think we might be entering a new era of how businesses interact with their customers, and I kind of think of this as a fourth mode. Now, if we go back in time, the first mode is the most traditional one. It's the retail store, where you meet your customers in person. Then we move forward to mode number two, which was the website, of course, Shopify's home turf. We move forward to mode number three, which was social and marketplaces and those shared spaces where businesses met their customers. But as the world reconfigures their brain around ChatGPT and a different way of interacting with software, chat interfaces are gonna become a new frontier where businesses meet their customers where they are. I like to think about, you know, whether, whether it's a business or a creator, could I just open up like WhatsApp or Messenger or even text, and text a creator and say, "Hey, you know, when are you on tour at the moment?" Get a link back to the tour dates. "Is there a new album?" Get the link back to Spotify. "Oh, does the T-shirt from the last tour still available?" Get that link straight to checkout. This is just gonna be a new way that consumers go and meet the brands that they're excited about interacting with. The great thing about Shopify is we get to solve all of these problems for our merchants. It's not all gonna go there, but whether they're meeting them in store, on the website, on a marketplace, on social, or in chat, Shopify has the platform that is gonna allow merchants to be everywhere. Even cooler is the fact that our app platform allows us to not just solve the problems we know in-house, right? We know the products, the orders, the customers, all of the business rules that will allow the agent to answer these questions correctly. But we even have the app platform that would allow the apps to answer the questions that they would handle about the subscriptions, about the returns, about the loyalty programs, all of these other things that you would want to see in this experience... we have the foundations to provide. Okay, that's a little bit about where we're going in 2024. This is the strategy for why merchants love and default to Shopify, and now I'm going to hand it over to Kaz, who's going to talk a little bit about how we build the company to make all this possible. Hey, folks. My name is Kaz Nejatian. I'm Shopify's VP of Product and Chief Operating Officer. I help lead our products and merchant services, shop and retail, and lead our support, growth, operations, and revenue teams. I'm here to talk to you a little bit about the company of Shopify. You've heard us say Shopify is a product company. We take great pride in being the type of company that prioritizes building products over making profits. And a little insight into the company, we actually start every exec meeting at Shopify with this slide. We say our priorities are priority number one, build the best product in the world and the team and the culture to support it. Priority number two, make money so we can do more of number one. And priority number three, never reverse one and two. This prioritization has actually worked out decently well for Shopify. We're almost at a $200 billion GMV run rate. We made $5.6 billion in revenue last year. We haven't really slowed down in 2023. We're going to add about $1 billion in top line this year. That's pretty good for a company of our size. But building, like Glen said, people come to Shopify for the product, and building great products year after year, it just wasn't luck, right? It's because we as a company, well, and Tobi especially, are really good at making product decisions. We have a long history of making good product decisions. That's why you're here, that's why I'm here. And we know a secret about making great decisions. We make great decisions from a position of strength, right? Most companies decide they want to become product companies when they realize their existing product kind of sucks. It's a really bad time to make that decision. It's really hard to turn that around. For us, this has been core to our DNA, and my job as the CEO of the company is to make sure that Shopify is operationally excellent, so that we, as a company, can make all non-product decisions from a position of strength also, right? I think if we can do this, we can create the same type of sustained advantage for Shopify the company, that Shopify the product has had. But before I take you through why we want to build Shopify the company the way we built Shopify the product, I think it's important to talk a little bit about why Shopify as a company is different. I'm a nerd. I'm an honest-to-goodness nerd, so I read a lot about the history of companies. If you read a lot about history of companies, you'll notice that Shopify is rare in the world of startups, right? We've never changed our mission. We're still on the OG mission, but our TAM is growing. We haven't had to have a large pivot. What we've always known is becoming more obvious to the world, that intersection of internet and retail is really big, it's growing fast, and Shopify merchants are taking an ever-increasing chunk of it. You're maybe wondering what these bubbles are. This is a past decade of Shopify cohorts. You'll notice an interesting thing: as our cohorts age, our merchants become more successful and Shopify's revenue from the cohort increases. Shopify is an incredibly good business because the way our product works. This is the holy grail of SaaS, negative churn in a cohort and across all cohorts. This makes Shopify unique among software tools. We're one of the only tools that grow with our users. As our merchants grow, as their GMV grows, as they become more complex, our product organically grows with them. From Hello World to IPO, Shopify is that unique piece of software that has our merchants' back, propelling them forward at every turn. I'm not sure if you all saw this book outside. There's some copies of it lying around, but this is a 2019 version of this book. We've given it to you mostly unedited. It's not our most recent product principles we have. But we give this to every single employee that starts at Shopify, 'cause every single employee at Shopify works on a product. My goal is to apply the decisions and the principles that we've encoded in this book to Shopify the company. Same quality bar, same system thinking, and same constraints, right? And if we do this right, to be blunt about it, Shopify will be a for-profit company that grabs more out of every dollar invested for our merchants than any company. Look, we say priority number two is making money, but just because its priority is priority number two, doesn't mean we're bad at it. We've actually found out that when you're an operationally excellent company and have a great product, you make a lot of money, and it's our job to take that money and help increase the world's entrepreneurship pie. When it comes to building a company, being a product company means something interesting. Think of your favorite product. All good products make the important things easy and everything else possible. Some of you work at big companies. You know that most big companies make the important things incredibly difficult and make all side hustles really easy. All good products are purpose-built, right? A Gymshark shirt looks nothing like an Allbirds shoe. Almost every company within a block of you looks exactly the same as every other company. Same HR rules, same sales processes, same software. We want Shopify to look different. We want it to be more like a great product than a company. We want it to do different things than most companies do. Let me tell you how this applies to my top three priorities as the company's COO. First, we want Shopify to be operationally excellent and have the highest talent density of any tech company. Second, we want Shopify to have the world's best growth engine, one that identifies entrepreneurs before anyone else, one that identifies platform switchers before anyone else, and onboards them to Shopify successfully. Third, not least important, we want to make more money and generate outsized returns so we can build better products. Let's start with operations. Most companies today are modeled after the U.S. Army in World War II, and not the army at the end of the war, the one that was winning, the army at the start of the war. In fact, companies that were started last week are modeled after the U.S. Army in World War II. These companies are built after a thing, it's not just pre-software, it's pre-Turing machines, and they're very poorly optimized. Let me give you one example. Most companies are built around managers, the people who don't build things. Our commitment is to make Shopify a crafter's paradise, where people can deepen their skills, get recognized for their expertise. We've pushed, and are going to continue to push the company away from layers and layers of management towards a crafter-focused companies. Now, look, engineering and R&D velocity are things that are, like, hard to quantify. They're, like, very subjective measures, but luckily, Shopify's leadership team is full of nerds and product people and engineers, so we kind of, like, know it when we see it. I'm going to share some numbers with you today, and most non and non-R&D metrics will lead to the same direction. So our senior engineers at Shopify are spending 22% less time in meetings than they used to. Crafter-to-crafter pair programming, building the actual product, is up 40% year-over-year. The number of pull requests per engineer, year-over-year, is up 37% at Shopify, and the number of projects completed by product manager is up 56% year-over-year. The average product project at Shopify took 100 days last year, it'll take 80 days this year. This is faster, better, more. We've also reduced the average number of reporting layers at Shopify. This is important because the deeper a company is, the higher the coordination tax becomes, and flatter companies just tend to be faster, and we want Shopify to be incredibly fast. Tobi talked a little bit this morning about these principles that we've encoded into Shopify OS, and I'll talk about them a little bit, too. In fact, I'll show you a little bit of the OS. But we do this work because we want to be different in a very key way than most other companies. At most companies, leaders are not in the details, right? If you're leading the U.S. Army at the beginning of World War II, you can't be in the details 'cause you can't know everything. So most companies end up developing heuristics, like person with X title gets to make Y decision, which is why when companies get big, everyone becomes a vice president. But titles are a really dumb way to determine expertise. We don't want Shopify to be governed by an org chart. So we built a piece of software. Let me show you GSD. We built GSD because the hardest thing to do in a large tech company is align the company on the mission, on a thing. Most big tech companies look like a bunch of people here working really, really hard, doing the exact opposite thing of a bunch of people over there. A lot of action's happening, but not much movement. GSD is a lightweight operating system that provides visibility on projects across Shopify, right? Everyone at Shopify works on a project. Those projects ladder up to missions. Those missions ladder up to themes. This is not just in R&D, it's also in finance, it's also in operations, across the whole company. All missions at Shopify are reviewed every six weeks. So Tobi, Claire, and I get in a room and review every single mission in the company. So that means, at most, any mission in the company can be six weeks off track. If we need to make a change, we make a change. Things that take months, quarters, years, at most companies, can take a maximum of six weeks at Shopify. Now, you may ask, why do we build all this custom software? Well, first, if you want to be different, you have to use different tools. But there's a more fundamental reason. Like Tesla builds cars, but they spend a surprising amount of time building bespoke robots that build the cars rather than building the cars directly. We build software. We spend a lot of our time building software to build software. This has been incredibly rewarding for the company, but we're taking this further, right? Shopify OS, I'm pretty sure Tobi actually wrote this code that I'm showing on the screen. Shopify OS... Yes, he's nodding. Shopify OS is a piece of software that makes Shopify's culture readable, not just by humans, but also by machines. We've codified the way the company operates into a structured database, kept in a repo, that allows us to leverage and do what we do best, which is write software to run the company using structured data as input. In practice, this means Shopify is a very odd company. At most companies, lots of people spend lots of time on annual planning and five-year visions. The dinosaurs spend many weeks coming up with an annual plan in December, usually, and by January third, that plan is useless because a bunch of things have changed. We at Shopify can plan for the entire company as frequently as we want. We can change a set of inputs and know immediately what the outputs will be. We can use our GSD to prioritize the company differently, change the shape of a project, change the size of a craft, change the expertise on a team. This is usually done in Notepad or Excel sheets at most companies. At Shopify, the shape of the company is perpetually projected forward every hour, if we want it to be. So we know the consequences of every decision and the cost of every decision. Within minutes, we can know what will happen if we pull a lever. This helps us immensely in planning for the company, but it also helps people who work at Shopify. So this summer, we invested some time in automating HR tools. I know you all love HR. But usually, when you're in a company and you want something to change in HR, you send an email, you send a Slack message or a Teams message to an actual human being, whose title is usually talent support operations. "Hey, I need so-and-so to get a raise." "Hey, I need to answer how many vacation days does so-and-so have left?" Or, "I want to hire a new person in this job." We've been able to write code to reduce the number of workflows handled by talent operations by 50%. Let me give you my favorite example is we just finished an Impact Cycle at Shopify. During that Impact Cycle, when we reviewed the performance of everyone in the company, 3,500 questions were asked by managers that were immediately responded by the machine. No waiting for someone to answer a question. The machine answering the question directly, removing human-to-human interaction and reducing the odds of mistakes. No matter where you look across the company, the business, the product, engineering, design, support, HR, we're finding ways to make things happen faster. People at Shopify don't waste time waiting for responses. Usually, problems like this exist in companies because our API is missing. At Shopify, we're just building the APIs, and we think that will help make Shopify have the ability to stay flat over a very, very long time. Okay, I've nerded out enough about this, I think. Before I keep going, let me tell you the results of what happens when you do this work. I want to tell you about why we, why we're building the best growth engine in SaaS. But before I tell you why, I want to show you a number. This is Shopify's merchant support from 2019 on. I think most companies would look at this and say, "Yes, please get me some of this." It's really good. But one of my core principles is that when you're ahead, you need to do everything you can to get further ahead, and we're not happy with good. So in 2022, we turned on a bunch of growth products that we've been working on for a while, and this is the results. That inflection point you see, midway through 2022, 2022, is us turning the work we had done for the product into doing it for the company. In the 12 months since we did that, we've added as many merchants as the 24 months before it combined. I'm going to show you a bunch of charts that look kind of like this, but underneath it all, I want you to remember this: what I'm showing you isn't unique because we've just gotten good at any one thing, right? That's not it. We've always been really good at building products. We're just applying those principles now to literally everything else, starting with where it began in merchant, in small merchants. But we're going to do this for everything. Whenever something is ready for growth, we have a product-based system to grow it. This is Shopify's lead funnel from 2019 on. Again, you see that inflection thingy. We had 25 million stores try to enter the world of commerce using Shopify this year. Not all of them are going to succeed. Many of them will. My mom's a Shopify merchant, so I'm rooting for her. But I can tell you one more strength here, the next Bombas, the next Allbirds, the next APL is on Shopify today. They're going to become either small businesses or massive businesses, but their journey will start on Shopify, and we're doing everything we can to meet their potential. Achieving this growth, by the way, isn't just an overnight thing. It's about having a platform that we've built over many years and just activating growth. There's an odd thing about Shopify's growth team. Most companies' growth teams are actually called marketing teams. We call ours a growth team for a reason. We have engineers, product managers, designers, and data people building products in our growth team. The first thing they did was build Growth X4. The first thing they built was built products for our merchants, right? They built onboarding, they built navigation guides to help merchants succeed, to help them get onboarded faster. But once we built those things for our merchants, we turned those engineers, designers, product managers, and data people to build tools for Shopify. So we started building, kind of an exoskeleton with software machines around our growth marketers. Things that in most companies are done manually by people, like spend optimization, automated bidding, creating, or this is one of my favorite, predicting the lifetime value of a bid in a paid search before you place that bid. Our CDP, everything, software as an exoskeleton around people. So we've built, you know, custom Shopify-only versions of products that companies like HubSpot, ExactTarget, and Marketo build for general application. We've built these for ourselves, again, because our growth looks different than most companies. Because we've built these tools over the last 12 months, we've been able to increase experimentation volume at Shopify by 500%. We've eliminated lots of third-party tools, and we've freed our talent from the toil of doing the manual work of clicking enter into an ad machine. These investments are paying off. I can tell you that winning is fun, and our tools are allowing our growth marketers to win on a really big scale. Merchants are choosing Shopify more than any other option. This is online store Shopify against our top 5 competitors. You'll see that our share is almost doubling. Merchants just aren't choosing Shopify, they're succeeding with Shopify. One of the measures we're obsessed with, you heard Tobi talk about it, is the first sale. The second the merchant makes their first sale. You can see, like, that around the same time, same growth tools, allowed us to significantly increase merchants who made their first sale on Shopify. It's not also just that we're getting much better at growth and our merchants are becoming much more successful. It's... Oh, did I miss this slide? We're not good slide-ware. It's that we're finding new channels that allow us to get more efficient and better our spend. So this is a chart that shows our spend on various channels for growth in Shopify. Most companies in SaaS are highly reliant on paid search. Over the past year, we've now developed eight other channels. And you'll tell, hear Jeff talk about this this afternoon, about how we're incredibly focused on a payback period per channel. And doing, you know, spinning up eight new channels is really, really difficult. But what is easy to do once you've built a product to spin up a new channel, is whenever you need one, you can just spin one up. And this has, like, really interesting results. This is paid search on Shopify and new merchants that we've gotten from paid search. So you'll notice, that over the past 12 months, we've reduced our paid search budget by $100 million, while merchants from this channel have dramatically grown. We're spending less money getting more merchants, and we're now taking the money we've saved and finding new channels. So we're diversifying our channel base, which is very good for, you know, defensive reasons, but it's also very good for offensive reasons, right? The eight channels I showed you are similar to a slide that Glen showed you earlier. These are channels we've optimized in the U.S. But not much rest of the world yet. This allows us to have a runway and not fall victim to classic marketing language. Like, you know, they say 50%, 50% of my marketing budget's working, I just don't know which 50%. I can tell you exactly which% of Shopify's marketing budget is working. And it doesn't, this approach doesn't work just for online store. That's Plus upgrades driven by our search by our growth team, without ever talking to a salesperson, you'll notice the increase. And that chart is the retail paid pro merchants using our all-new Point of Sale, which honestly is closer to magic than it is to software, using the same growth engine. I've shown we've done this in online store, in Plus, in all-new Point of Sale. The job now is taking that growth engine that we've built, starting next year, and attacking different funnels. Whenever a product is ready for growth, we can turn our engine on and grow it. Before moving on, I need to talk to you about attach rate. I know everyone in the room wants to know if our attach rate can go higher and if we have the levers to make it work. The answer is yes. I joined Shopify in 2019, and when I got there, the first question that people would ask me back then, I think our payment penetration rate was 40%, and the question was: "Can this go higher?" Today, payment penetration rate is around 60%, and it has a lot of headroom to go. But the thing that's important to recognize is that payments just happens to be the oldest merchant services product we have. There isn't that much unique about it, and I say that as a guy who loves payments. The other products we have are just among a similar path, right? They're just not as old as Shopify Payments. So if you look at the last few years, you'll see this dramatic increase in our attach rate. What we're doing is just applying the same product principles to growing payments that we have elsewhere. You're gonna see the same work across a bunch of other places in Shopify. But I think the best way to actually tell you the story of how we're productizing support and revenue and sales at Shopify is to welcome Bobby Morrison, Shopify's Chief Revenue Officer, to the stage. Bobby? Thanks, man. Okay, well, thanks for hanging in there. My name is Bobby Morrison. As Kaz outlined, I'm the Chief Revenue Officer here at Shopify. I'm excited to share with you a little bit more of what we've been up to since joining the firm. Kaz walked through how millions of entrepreneurs are finding Shopify every single year, but some entrepreneurial journeys start elsewhere, and our mission is to make commerce better for everyone. So my goal today is to walk you through exactly how we're doing that in the rest of our business. A little backstory, I joined Shopify back in August of last year. My charter was pretty clear: to productize the commercial business in really three ways, uplevel the operating maturity of the team, build a world-class and differentiated go-to-market, and three is to make sure we do all of those things at scale. Combination of which we think delivers operating leverage. I'll let you guys be the decision or decision-maker on that. Without any further ado, probably the best way to look at the impact and illustrate some of the changes that we've made since joining is to just dig into the numbers. We'll walk through some of the numbers. We'll then get into the underlying foundation and some of the transformational changes we've made. Then I'll dive into three key growth vectors in the business that I think are important. Some of them are surrounded by myths, some of them we've already talked about today, and hopefully wrap things up with everyone well informed. Okay, so with that, the first thing you should take away is that the changes that we've made are working. What you see listed here is lifetime revenue bookings. You should think of this as new business coming to Shopify, contracted in a particular quarter over a three-year period. And what you see is a quarter-on-quarter improvement over the last four quarters, and we have momentum. We're growing faster than ever before. The second thing you should take away is that we're doing it profitably. Part of upleveling the commercial operating model of the business is instilling fiscal and operating discipline, and we're doing that by deploying new compensation and incentive models that have profitability baked into them. We're doing that by changing the shape of the commercial organization and reallocating our resources to places that we believe deliver the highest rate of outcome and performance in the marketplace. We expect this trend to continue. One of the things that actually, Bobby, is interesting is that most companies, we hold our sales team to much, a very interesting definition of lifetime. Lifetime is three years for Bobby. But most companies would be really happy with that, either of these two charts. What we've done is allowed Shopify's growth to become more profitable in the year the contract is signed by a new merchant, which is, I think, incredibly rare in the world of SaaS. Very good. Yep, you got it. All right, so moving forward, you probably have two other questions: Where is this growth coming from, and is it durable? So let's unpack those one by one. So where the growth is coming from, one of the things we look at is imports versus exports. And I don't think we've shared this data with you guys before. Imports, meaning how many do we take from the competition, and how many of our existing customers leave us and go to the competition? Well, let me walk you through some of those numbers, broken down by segment.... In the mid-market this is a number, this is a part of the business that we've done extremely well for a very long period of time. You would probably know it as Plus. Mid-market, we define as $2 million-$20 million in GMV, we're winning 43-1. That means we're taking 43, you laughed, so I had to laugh with you. 43 of the customers, of customers come to us from the competition for every one that we lose. The number one takeaway is same thing that Glen said, when customers re-platform to Shopify, very rarely do we see them leave. As a matter of fact, we actually help them grow, and as we stretch up market, here's the other part of the story. In large, we're winning 26-1, and in enterprise, $125 million and above, we're winning 38-1. We are absolutely disrupting the competitive environment at all three levels in all three segments in the marketplace, and we're absolutely taking share. The next thing is, well, is it durable? So now I'm gonna get into the underlying foundation. Now, many times you look at this kind of a slide, and this foundation sounds just like every other one. It's probably a little bit boring, but let me just tell you, our foundation's gone through a pretty big transformation. 70% of my leadership team across marketing, sales, support, operations, customer success, partner channel, are brand new to their role. Each of them was particularly selected because of their ability to drive high impact at scale in the business. These are builders, not operators. It's an important distinction here at Shopify. While they bring their best practices from their prior role, what we're doing is taking that insight, and we're applying it in a founder-led way that's giving us a competitive advantage in the marketplace. The second is around our culture, so everyone's talked about it. It's unique. You don't really understand it, Kaz, until you've actually been here. It took me a little while. I actually wrote a blog post about this when I first came to Shopify. I'd encourage you all to read it. "First six months in the job, why everyone should work at a founder-led company." There's a speed and innovation, a boldness about this business that I've never seen before, and I've worked for some pretty successful firms in the past and learned quite a bit. We wanted to package that superpower of what was already here and build on top of it operating discipline, go-to-market excellence, and extreme prioritization of resources to try to point that engine into the market in a unique and dynamic way, and that's exactly what we're doing. The last is around execution. Our operating rigor, reward systems, and extreme accountability is driving a different type of execution in the business than we ever have before. We are building a commercial maturity up to the scale and capability of some of our product teams. All right, so now let's move forward. Most companies, if you were gonna come in and you wanted to juice the numbers, the first place you would go is you would drop dollars into marketing. You maybe you would attack the funnel at a certain stage, but that's not where we decided to start. I wanted to start at the systems layer of the business. We focused on 12 key functional capabilities. Some of these were existing, some of them we had to build from scratch. All of them have a good, better, best version of themselves, and we're still early stages of getting these up to full maturity. But in most businesses, you would stop there. They're disconnected, 12 functional capabilities. We actually see these as a series of interlocked dependencies. Well, or the same thing that you saw, Kaz- It's Growth X4- Growth X4 is our, like, is our secret that keeps getting out. Let's see if I hit it again, if it comes back. If you go back, I think... There we go. This is always fun. All right, well, let me just tell you what it is, and then when the screen comes up with the flywheels, we'll- I'll explain it. We see these as a series of interlocked dependencies, a group of four flywheels that when connected the right way, and we think we've done this, they actually become self-healing. They're anti-fragile. I'm not gonna have time to walk through all of those connected flywheels with you today, but I will have an opportunity to take you through maybe one, which is the insights flywheel. And if you guys in the booth can go back a couple of slides, that would be super helpful. That would be the other way. One more. Okay. Okay, so we talked about, so let me just talk about the insights flywheel. Now, in particular, I'll spend time on one particular component here, which is, Voice of Customer. So lots of decisions are made, Kaz, as you know, lots of decisions are made from a variety of different inputs, but there's two that are like the Holy Grail. One is, what are your data and analytics continue to tell you? And the second is, what are you hearing from your customers? And the challenge with trying to get the Voice of Customer right is that it's always sourced from disparate places. In a past life, I've seen this as high as 100 different data points coming into a company, always giving you just a veneer of the customer experience, either from a product view, from a customer lifecycle view, maybe it's from a support lens or a drop-down menu of the top reasons customers have called. We've now been able to solve this, and we've done it by applying AI across all transcripts in our embedded base so that we can get real-time customer feedback fed into a single pane of glass. We started with our support groups and across our existing customer base. Over 150,000 data entry points come into this voice-of-customer portal. We bring that in every single week, and we combine it with data and analytics, and it catalogs and categorizes every single client engagement we have. We have our finger on the pulse and heartbeat of our customers. We have anomaly detection baked into that, and we can make key decisions in our business in real time, adjusting to what we see in the market. So let me walk through the flywheel real quick. Anomaly detected or key decision needs to be made. Voice of customer is aggregated and pulled in, cross-validated and sized with data and analytics, and then maybe as an example, we would hand that off to the, to the product. This is actually one of my favorite new tools at Shopify. I grew up in startup land, and Shopify is just a very big startup. They say startups have two main jobs: talk to customers and write code. Talking to customers becomes a real problem at our scale, right? 'Cause you don't want to listen to every customer, but you want to talk to lots of customers. What this allows me to do as a product builder is go into, I don't know, checkout, click a button, and hear everything every Shopify customer has said about checkout, summarized by AI, but be able to click deep into the actual conversation. So it's like having lots of conversations all the time. We do this at product meetings. We actually have product reviews where someone says: "Hey, we want to solve X problem because Y customers feel Y." Well, let's see if they actually feel that way. It allows us to be much closer to customers despite having, you know, millions of them. I think it's a really, like a power tool, where a Shopify engineer has more access to customer feedback than a startup engineer does today. It's a really powerful tool in our quiver. As we go forward, we're gonna be able to replace that product in the cog with marketing, L&D, sales play designs, anything else we want to put in, because in Q1, we'll be pulling in all pre-sale engagements into this. We'll be able to answer that question with high confidence: What are top reasons customers are buying? What are the top reasons they're not, and where do we need to make adjustments in our go-to-market engine? It's a super powerful thing. All right, so before I move on to the next section here, just to summarize, we're growing faster than ever before. We're doing it profitably. We're taking share in the market, and what we've built is starting at the systems layer, therefore, it's durable. Now, we're gonna, we're gonna pivot to three key growth vectors, myths that are in the marketplace. Again, we've talked about some of these already today, but I'm gonna try to poke on them a little bit more with the go-to-market lens. First is that we're just for entrepreneurs. The second is that we're just an e-commerce company, and the third, we've talked about this quite a bit, we have a finite TAM. So let me take them one by one. All right, so we've talked about how millions of entrepreneurs are coming to Shopify every single year. Small part of the business, that's the SMB side. I want to talk about the other part, mid, large, and enterprise. Jeff is going to get up in just a moment and show you how this part of the business is becoming a disproportionate part of our growth and a bigger part of our overall revenue streams, and the thing that we're really excited about as we move forward. So let's go into that in greater detail. So over the past 15 months, we've completely transformed our go-to-market motion. We've started with transforming our orchestration, we've shifted our marketing resources and started to point them aggressively and offensively in market, and we've built a different type of partner ecosystem on top of the one that was already existing. So I'll take these one by one, starting with orchestration. So one of the things we had to determine when we were building our go-to-market and our orchestration models was: how did we want to show up in the marketplace? The very first thing that I wanted to make sure we did was we were listening to our customers, and we were meeting their needs. Our customers really told us three things consistently: know my business, know my technology, and make an expert recommendation. Know my business means not just know my business, my company, but my industry, my landscape, my competitive environment. The first thing we did going into 2023 is we aligned our business by industries. The second was know my technology. Not just the technology that Shopify offers, but all the other things that it happens to to interface with, the inventory management, order management systems, how data is managed across my business. So we decided to invest in our Solution Engineering, architects, and a new Professional Services team so that we could surround our customers with the right technical expertise to help our biggest clients make the right decisions. And then last was make an expert recommendation. It was very clear that we wanted to uplevel the skilling throughout the organization, so we launched a certification program in-house, starting with our customer success, we call it Merchant Success at Shopify, and making sure that they were grounded deeply in the core capabilities of our product and in the roadmap that's coming down the road. Now, in most organizations, this structure would be set up functionally, AE by vertical, Solution Engineering team separate, professional service team on the outside, and customer success someplace in the corner. The challenge with that is that you end up with a massive orchestration tax. Hand-raising happens, ticketing, give me a resource for this account, a new resource for another account, and it causes you to move slow. We did it different. And as a matter of fact, in that environment, it looks a whole lot like this is my version of six-year-old soccer. You can tell I'm the, I'm the go-to-market guy, not the creative guy, because there's no scrolling or, innovation there. But anyway, it's like six-year-old soccer. Everyone's crowded around the ball. You may score every once in a while, but it's definitely not an effective use of resources. So what we decided to do was to actually cluster these roles by pod, and there's multiple pods clustered within, in each industry go-to-market motion we have. It eliminates all the orchestration tasks, and we can show up with all those superpowers surrounding the customer over and over and over again. It's a little bit like an NFL football team. But it also shows that, like, you're from Texas, when six-year-old soccer is what other people do, and NFL football is what we do. Yeah. I like that better. I realize where I am, but go Cowboys! I just want to say that out loud. So in this model, everybody has a primary, secondary, and tertiary responsibility. Everybody understands that they can only be successful if the person to the right or left of them is doing their job well.... All of this is orchestrated by a set of plays that we developed and launched in market, data-driven, results-backed, that we put into the marketplace by geo, by segment, by customer type, by persona. We run those plays to score points, and right now, those plays are working. Okay, so let me shift then to the next part, marketing. So now we've got this well-designed set of plays that we want to run in market, but we have to bring that attention to the marketplace as a whole. One of the things we went out and did is we started to build a war chest of third-party affirmations to help us tell our story. These are case studies, big customer testimonials, white papers, third parties, like some of that you see up here. We wanted to make sure that it wasn't just Shopify saying that, in this case, Gartner, that we're ready to take on enterprise. We needed to prove it to these third parties, and that's exactly what we went out and did. We've established a great working relationship with Gartner. We have it with all the others. I expect some of these to come out in the coming weeks and months. But Gartner said, "Shopify, you're enterprise ready." But here's, that's not the best part. Here's the best part. We were also ranked the highest in our ability to execute. That means on time and on budget. That is a huge driver in an OpEx-compressed market for enterprise clients to make decisions. They're looking for on time and on budget in an industry that has historically been very, very bad at both of those things. G2 Grid says the exact same thing about Shopify's retail point-of-sale solution. You can see the- I like the ocean that's between Shopify and everyone else on the G2 Grid. Like, Shopify's all-new point of sale is honestly just such an amazing product. You know, we didn't rehearse any of this, so it's interesting to see what he's gonna say every time he chimes in, which is kind of cool. All right. You stack on top of this, the fact that there's other third parties who have said, "Guess what? Not only are you 15% better than everybody else in conversion, but you're 36% better than the one with the cloud around its name." Package all this up, and we are playing offense in the market, and you're gonna see a lot more of it as we go forward. And we have some inside scoop that tells us that we're shaking up the competition a little bit, too. So that's always good to see. Okay. Last is partners, and I know this has come up multiple times in conversation, so I do want to make sure I spend a little bit of time on it. We have an amazing partner ecosystem. It's grounded in the devs that are in the marketplace today, and we've built, I think, one of the strongest in the industry. But as you move up market and start engaging with enterprise clients, it's very clear that you need a different type of partner ecosystem to win. So we've been hard at work doing just that. In 2022, we went out and got Accenture and Deloitte. In 2023, we've been working very hard to bring all these other strategic partners on board. Now, here's a data point none of you have heard before. $20 billion in GMV is in pipe right now from the partners that you see listed on this board, and we've had multiple, multiple, multiple wins as a result of these relationships. We've been focused on onboarding, enablement, cross-training, getting deep into technical capability, and when we show up together, we show up in a co-sell motion that is very different than anything else that we've ever done at Shopify before. This is helping to unlock doors on some of the brands, and I'm getting ready to walk you through in just a minute. So here are some of the brands who have said yes to Shopify this year. Some of them you have seen already, some of them you haven't because they've just closed this quarter, and I'm gonna touch on one a little bit later on that just closed last week. Their journeys are all different. Zulily came to us from a referral from another enterprise client, billion-dollar brand. Suntory is a switching environment. TOMS came from one of our competitors as well, as part of a campaign that we put out in the market, and we created awareness and demand. At the end of the day... Oh, well, and Gymshark and JB Hi-Fi, obviously, these have been with us for a while, but they awarded us new parts of their business that had previously been with the competition. Regardless of where the journey starts, three things are pretty clear that enterprise customers tell us over and over and over again: we win because of the best TCO, we win because we have the best converting platform on the planet, and we win because we future-proof them with our speed of innovation. Those are critical, and in the environment we're in today, we are seeing that really resonate across some of our biggest enterprise partners and clients. So I could show you another chart, you've already seen enough of them, of hockey sticks up into the right of mid-market and large and how it's performing, but I thought this might be a better view for everybody in the room. The mid-market of today is the enterprise of tomorrow. 18% of our mid-market accounts are growing at over 40%, and the reason why 25% of our large accounts are growing over 40% is because we actually are now surrounding our fastest-growing hyper-growth customers with increased density of technical capabilities and support to help them get to the next level of growth. That is intentional and by design, and something that we deployed earlier this year. Okay, on to growth vector number 2. So we're stretching up market effectively. Now we're creating new on-ramps to Shopify with our offline and B2B offering. So let me talk a little bit about offline. So in 2021, we launched the product, and we decided to test and learn and get more input by selling it directly into our embedded base, pretty much exclusively. In 2022, we decided to take that organization and embed it into what we call our cross-sell or our attach teams in the business, along with some of the other products that Kaz mentioned earlier. It was very clear, though, coming in, and I spent a little bit of time in the first 90 days really getting deep into this. It was pretty clear that this motion was different than other cross-sell motions. It needed to be a standalone business, and we had early indicators that this business would actually be great to take to market for re-platformers. That's exactly what we did. We pulled it out of the cross-sell team, created a dedicated group around it, and went to market and started going after switchers, and it's working. 68% of the business we did in Q3 came from people who did not have Shopify as e-commerce already. That is exciting because that is a new on-ramp, a different type of customer, a non-traditionally digital native customer who's now seeking out Shopify and having a brand new experiences with us coming through our offline product. That now creates a new type of cross-sell for us as we go forward, and it's something we're very excited about. But this, this room actually realizes this. Go to Hudson Yards and try to find a store that doesn't have Shopify's point of sale. Like, just like every other store will be on the all-new point of sale, and it's just like, go to SoHo and try it. And the all-new Point of Sale is really becoming a new on-ramp for Shopify, and it's just a wonderful product. Yeah, it's, it's been fascinating. There's a couple other things that are emerging that are new as well. So let me walk through a couple of these journeys. FIGS, SKIMS, Baby list, they were growing. The next stage of their growth was to add retail to their existing online digital-first business. Paige Denim came to us in Q1 for e-commerce, in Q3, launched retail. buy buy BABY, Oak + Fort, and Banana Republic Home came to us for both online and offline at the exact same time, looking for what we call a unified commerce solution. More and more brands are starting to recognize that unified commerce, the collective capabilities of online and offline meshed together, actually create the amazing customer experiences that they want, and we're starting to see more and more of that show up in the business. Okay, I'm gonna pivot to B2B. The left side of this, my left, your- I guess it's your right, my left, the white part you've already heard. What you haven't heard is some of the stories behind the brands that you see listed here, and there's one in particular I want to spend some time talking about. Just last week, we finalized and closed Carrier. They said yes to Shopify. Carrier is a $4 billion GMV B2B customer. Carrier said yes to Shopify, not just because of our B2B capabilities, but they said yes to Shopify, in particular, because of our roadmap and because of our speed of innovation. As they looked at all the other alternatives, including the incumbent provider, they were not satisfied with the roadmap and innovation that was coming out of those shops. We brought our product teams in, and they did an amazing job, and this is a big shout-out to Glen, who is in the room, who was a part of this. Speed of innovation matters, especially in environments like B2B. Little footnote, they also took our DTC storefront, another unified commerce engagement. We're doing more and more of these types of deals, and our teams are getting better and better at helping our enterprise clients see value with this amazing platform that we have called Shopify. Okay, now we're on to growth vector number 3, and myth, finite TAM. We take all of what you've seen, entrepreneurs coming on in the small space, the growth in mid-market through enterprise, online, offline, and B2B, and we wrap around them a warm blanket of services that help our customers succeed. We call these Merchant Solutions. These merchant services, much of what you see here listed on the screen, are exactly meant to come along our customer side and help them just in time. As they go through various stages, they need access to capital, we have that for them. They need access to new markets, we have that for them. And so one of the ways that we make sure that we get the right products in front of our customers at the right time is really two things: One, we have an incubation process by which we intake new products as they launch to ensure that they're ready, and the second is AI. So maybe we can spend, Kaz, a little bit of time on this one. So this incubation team is really... It's brand new. We just launched it about two quarters ago, and it was designed because it was clear we had an opportunity to tighten up our value prop and go-to-market motions as new products, new features came down the line. Every new product that we put into the marketplace goes through this process. We validate, go-to-market excellence, and then we launch. It allows us to be successful and scale faster, and not too dissimilar from how product operates. It's a good product, too, right? If you arrive at a page on Shopify from somewhere else, we know that. Therefore, we show you a different type of page. The Shopify home feed is custom-made for you. But most sales companies just show up and try to sell you everything. Whatever sticks, we'll try to sell you. That just creates an odd environment between the customer and the seller. What our incubation sales teams do now is have expert recommenders. They know the journey that leads to that product being needed, therefore, they're much, much more efficient because they don't have to do much convincing of the customer. And this is actually an interesting thing that I think is going to actually not matter just for cross-sell. It will matter for our entire support and sales org of following the path that we follow in product, in sales. So it's leading to the numbers you see here. Productivity is up materially year over year. We've also worked very hard to make sure that we build in, as I mentioned before, profitability into the compensation designs, which means we're also leading with those that are best for Shopify as well. We then overlay with this, a new- This is so cool. Copilot Magic. It's one of my favorite things, and it basically takes out all the administrivia, all the work. I'm putting you in the salesperson's mind. All the work that a sales rep has to do to curate and figure out, is this the right customer to call, or should I call this one? What should I be talking about? There's a ton of back-channel work that takes place.... Copilot Magic takes all of that out. It will also score your client engagements. It'll tell you what your opportunities are to get better. It will help you address those opportunities coming out of that call and rewrite the email for you back to the client, and it takes that administrative out, so our sales teams can spend more time doing the thing we want them doing, which is talking with customers, and it's driving the improvements that you see listed on the screen. So I'm almost done. I'm just gonna bring this home. We have three key growth vectors. All three, we have traction and momentum in, but all three, we are just getting started. We have so much room to go, and we're excited about the opportunity we have ahead of us. With that being said, let me just revisit these last three things. We've transformed our business. There's an inflection point. We still have a lot of work to do. There's a good, better, best version of everything that we've put in. But I think what you can see from the results is we're growing faster than ever before. The second is we're actually taking share, taking share from the competition, and not just in the entrepreneur space, not just in mid-market, but in large and enterprise. And last but not least, our commercial model is really grounded in operating and fiscal discipline. Jeff's gonna spend more time walking through that after the break. I thank you again for your time. The break, I'm not sure how long the break is, but next up will be Jeff Hoffmeister. 10 minutes. 10 minutes. We'll see you back in this room- Back in 10 minutes. ... in 10 minutes. Thanks, everyone Please return to your seats. We are about to start. Please welcome Jeff Hoffmeister, Shopify's CFO, to the stage. Jeff, take it away. Thanks, everyone. I appreciate your time. I'm gonna try and make up a little bit of time, as we definitely want to save some time for Q&A. For a lot of you, you know I've been at Shopify now roughly a year, a little bit over a year. Before that, I had an opportunity to work with Tobi, Harley, and team on the IPO, going back, as we mentioned, Tobi mentioned before, roughly eight and a half years ago. And it actually sparked for me the idea of doing a little bit of comparison of where we were at the time of IPO versus where we are now. I'm gonna start with that, and then we're gonna, we're gonna build from there. So... And I just need a clicker to work. Okay. All right, I'll ask the AV team, is it hopefully better now? 'Cause it's changing on the screen down here, but not. Thank you. All right, there we go. AV problems aside. So, Tobi talked a little bit about TAM. We are now roughly, and I'm gonna dig into these numbers a little bit, 18, in terms of TAM, 18x where we were at the time of IPO. We have roughly 5x the number of products. We have roughly five, in fact, more than five countries, 5x the number of countries that have payments. Our GMV is 50x what it was at the time of IPO. Our revenue is 50x at the time of IPO. And importantly, we've gone from double-digit negative free cash flow margins to double-digit positive free cash flow margins. At the time of IPO, as you thought about Shopify, you were largely thinking about us at the intersection of three things: small and medium merchants, online commerce, and North America. Now we are essentially everywhere commerce happens. This is irrespective of merchant size, irrespective of country, irrespective of online, offline, any channel. This is a theme which we're gonna run through my remarks here today. I guess I'll call this an investment thesis, if you will, in terms of how we think about Shopify from our vantage point, and this is first and foremost, that we are, and Tobi talked about this, we are an accelerant to the power of entrepreneurship and merchant success. This is critical in terms of our thinking. We've used the term merchant obsession a few times today. This is where we start all of our thinking around products and everything else we do. And we, because of this, are becoming the clear leader in online commerce for entrepreneurs and increasingly all commerce overall. And as also mentioned before, when you think about how our merchants are successful, that translates into direct success for us. So we want to help our merchants do better, and as a result, Shopify itself will do better. Let's talk a little bit about TAM. I'm gonna speed through this a little bit quicker, just given where we are from a timing perspective. The power of entrepreneurship. This is something, again, which is extremely important to us. We think entrepreneurs are becoming a more and more important part of society, and we are helping them be successful. We're helping them be successful because it's easier to start a business. We can help them accelerate faster. We can de-risk certain parts of their business. We can let them do exploration in terms of try a different channel, try a different product SKU, do all kinds of other things on the platform. We make it easier for them to be successful, and you can see this in the data in terms of my comment that merchants becoming a larger, more important part of society. 5 million business, this is just in the U.S., new business applications. It's a step function since what we've seen from COVID, and it's persisted now for 2 years. E-commerce is obviously the heart of what we have done historically. This looks at e-commerce penetration rates in various geographies. Glen talked about us being 6% of e-commerce in North America, I'm sorry, in Western Europe, in the key geographies. We are 10% of e-commerce in North America. We are 4% of e-commerce in the rest of the world, excluding North America and China. And so you can see in terms of the progress we're making, we feel really good about the runway, because we're 10% of North America. That's going to continue to grow, and all the other geographies will try and catch up with that, which itself is a moving target. So just in e-commerce, which again, is kind of the heart of what we've done historically, we have all kinds of runway. And one of the things that we've done in terms of expanding TAM is the products. As we introduce more products, we continue to expand the opportunity, but that's just one piece of it. Obviously, we get into new geographies. As we get into new merchant types, this continues to expand. Importantly, this is third-party data. One of the things that Tobi alluded to in the fireside chat as we think about this is, this is just one person's definition of TAM. As we think about how we expand new markets, redefine new markets, create new markets, this is just one way to think about it. We see significant opportunity ahead. This looks at the countries where we have payments. Again, there's 23 countries where we have payments. And if you think about that as a served addressable market versus the 849, which, which Bobby had talked about, not quite 50%, 48% of those geographies are ones we tackle with countries where we have payments. and that, what I should have actually mentioned also in that prior slide, if you think about our revenues, vis-a-vis those numbers, we're roughly 1% of the TAM, 2% of the SAM. Here's another way of looking at it, because we're doing more and more offline, and you think about commerce more broadly, and you can think about our penetration, again, 2% in North America, 0.5% globally. So significant, significant opportunity just based on these definitions, and we actually think it's larger than this. Let's talk about our merchants' sales, our merchants' revenues, which obviously translates for us into our GMV, and talk a little bit about GMV, and then we'll talk to Shopify's revenues and margins later. This is when you look over the last four years, you can back into this math if you spend the effort on it. But if you look at the last four years and you think about how our merchants have done, vis-a-vis e-commerce overall, it's been in each of these four, 1.5-2.25 times what we've seen in the markets overall. So again, we are helping our merchants be much, much more successful than e-commerce. This is focused on e-commerce, and then go and look at all of retail. So all of retail has had a compound annual growth rate of 5% over each, over this last four-year period, and our merchants have been able to grow 40%. Again, we take a lot of pride in doing everything we can to help our merchants be more successful. And our cohorts are getting larger. I'm gonna talk a little bit about some cohort analysis on a GMV basis, and then I'll switch a little bit later to look at cohorts on a revenue basis. But again, going back to the time of IPO, Q1 2015, $136 million was the size of our cohort, our merchants' GMV cohort for that quarter, and compare that to the most recent one, you can see it's seven times the size, and that size has grown roughly 27% on an annual basis. Here's another one, again, based off GMV. This is something which I think we're pretty proud of. You take the cohort of when the merchants in that class joined, and you look at their growth rate from that quarter until now, and you compare those growth rates to e-commerce overall. And you can see the green dots, which are Shopify, you see the blue dots, which are all of e-commerce. Our merchants have outperformed the market 32 out of 33 times. The only quarter in which it didn't happen was the first quarter of the pandemic. Again, we really feel strongly about being able to help merchants outperform the market overall. Our merchants have, on average, performed 24% in the time from when they joined the platform to now, versus the market overall at 13%. I do want to call out a little bit, you see the right side of this page, there's a big divergence, which is something we love. One of the things which we think we do a really good job of is helping merchants ramp very quickly. So they take off. We do expect there'll be some reversion to what you see on the left side of the chart, but it, this is still after they've taken off, and they continue to grow, and so they continue to outperform. And this, obviously, when you add these all up in terms of matching that to our GMV, noting, of course, the Q4 seasonality. Making commerce borderless as possible is something which we are working very diligently to make happen. You can see a couple different elements here in terms of thinking about what percentage of our GMV is outside of North America, now 36%, 23 countries with payments, as I mentioned, and we have now more than 65 countries where the merchant in country, in aggregate, is doing more than $100 million in GMV. So, a lot of—Glen talked a lot about international. I'll talk later about some products in terms of some of their growth drivers being international. This is something where we're making a lot of progress and continuing to let merchants outside of our core markets continue to use the platform and do it very, very successfully. So now let me talk a, a little bit about Shopify in terms of taking some of the GMV perspectives, and now let's talk revenue and, and margin perspectives. This is for us, if you start in the top left, and you think about more merchant GMV, us helping our merchants be more successful, obviously brings us more merchants on platform, gives us more economies to scale, in turn, the ability to build more products, which, of course, starts this cycle all over again, which is something which we, we've done a really good job at to date. And as we think about, again, the concept of aligning ourselves with our merchants, helping our merchants be more successful, our solutions, and this is one product taxonomy, Kaz has shown a chart where it kind of show over time how our products have unveiled. This looks at the four key things that we try and do for our merchants: thrive at any stage, run and manage a business, sell wherever buyers are, and discover new customers. And again, the beauty of this is that it's all on one platform, so they are self-reinforcing in terms of making the platform, in total, much, much more powerful for merchants. So let's talk about how, again, like we talked about GMV cohorts before, now let's talk about revenue cohorts. If you look at our Q1 2015 cohort, and you see how that has progressed over time, that cohort has grown 3.6x its original size and has had a compound annual growth rate of 19%. And so a lot of you ask questions of us a lot of times of how do you think about durability of growth? How is this gonna persist over time? This is just one cohort. We just started with, again, going back to the IPO analysis and how has this played out over time, and then compare that to all these. It would have been a little cumbersome to have a line for every single quarter since we've gone public. But look at this, and it just basically says, for all the Q1s, how have these cohorts played out over time? Now, I indexed this to 100. Importantly, the cohorts continue to get larger year after year after year. But if you look at this trend, they obviously continue to perform largely along the same trend line. This most recent cohort, Q1 2022, is, in fact, the one which is off to the fastest start when you look at the colors. And again, when you take all this in the aggregate and you look how these have trended over time, they continue to perform, they continue to do really well, which of course, adds up to the revenue growth, which you all know in terms of what we've publicly disclosed. Another analysis, which we thought would be helpful, is to take our products. I'm gonna break them into four buckets to give you a little bit of a sense for the size and the growth rate for certain categories of products that we haven't talked much about, up to date. Starting with subscriptions, and what you'll see here are these two columns. This is the growth rate over the last four years, the compound annual growth rate. Again, whenever we have a 2023 estimate number, it's based off the midpoint of guidance of what we gave at the last earnings call, and then percentage of revenue. Subscriptions here, including Standard, Plus, and our Retail plan, have grown 30% and they're roughly a quarter of revenues. Payments has grown 50% over the last four years on a compound annual growth rate basis, and is now 60% of revenues. Importantly here, though, what I am doing is I'm lumping together third-party transaction fees, processing fees, and a few things which over time I think will migrate into payments, so it's appropriate to look at these in one bucket. That obviously is, and Kaz talked about this, Glen talked about this, payments as a product continues to do exceptionally well, not only in terms of the penetration rate, which we expect to see going forward, but obviously at all the different things with Shop Pay, the product itself, that we're going to continue to just advance payments. Which is, then in comparison to what I've called now our scaled products. These are products that are doing, for each of them, over $50 million revenue. You can see in the aggregate, they have grown 66%. They are 10% of revenue, and the beauty of the success of payments and subscriptions is it makes it a hard bar to surpass, but they are obviously climbing as a percentage of revenue. When you look at each of these products, Glen talked a decent amount about Capital in terms of the renewal rate. We're doing some interesting things on the machine learning side in order to do even better targeting for SMBs that are not yet Capital users, which we think would be great adopters. As it, as it relates to Markets, we have some strong tailwinds as it relates to cross-border work, and a bunch of other things we're doing to help merchants target specific geographies, which they should be selling, where they're not currently doing. So we feel very good about the growth rate for our scale products. Of course, the last bucket is the emerging products. Almost all these are ones we've introduced in the last year or two, so it is very early days. Very early days. As I made an allusion to earlier, international is going to be a key piece for these, these products. 71% growth rate over the last four years. Again, some of the, some of these are just brand new. Most of these are brand new. It's still only 5% of revenue. Importantly, when you look at the scale products and the emerging products, so roughly 15% of revenue, they are going to become a larger and larger percentage of revenue over time. And that's obviously something we feel really good about. But also, as I mentioned before, payments and subscription continues to do really, really well. But remember, payments has been around for 10 years, and these products, especially in the emerging category, are relatively recent. So it's, it's a moving target. It's great that payments continues to do so well, but obviously as these new products continue to progress, and it's, it's going to balance out the revenue some. Offline. So Glen had mentioned that our offline business, which sometimes in the past we've talked about as a retail business, is roughly $450 million in revenue for this year. That includes three pieces. That includes the payments, which happen on the point-of-sale platform, it includes our retail plan, subscriptions, and it includes a little bit of hardware. That business, our offline business, is expected to grow roughly one and a half our other businesses this year. Kaz mentioned this, too, is that this is going to be a real growth driver for us going forward. There's a few reasons for that. One is just the technology. We've for a long time been the best online commerce platform. This is now the best offline commerce platform as well. We've really done a lot to increase the technology capabilities. And if you're a merchant, rather than being if you're a merchant that sells both offline and online, rather than being in the old construct where you had a tech stack online and a tech stack offline, there's very, very compelling value proposition to go to a merchant. So you can all have this in one platform, all the analytics, the dashboard, everything you need is in one technology, and we continue to make it better and better. And two earnings calls ago, I mentioned that we've got installments, capabilities moved. And again, this is one example of taking some technology that's online, making it available offline, make that even more compelling for us for, I'm sorry, for merchants to use our offline, our point-of-sale capabilities. The Intuit partnership was also particularly interesting for us, just in terms of getting a little bit more scale behind the business. The number one reason a lot of times when we're out there and talking to merchants is just lack of complete awareness around what we're doing on point of sale and how good it is. So Intuit has helped out. Bobby talked a little bit about what he's doing in terms of go-to-market and having a dedicated effort to move this forward. All reasons why we feel really good about this business. On larger and larger merchants, I'm looking here at Plus. I'm showing it as obviously over time, how Plus has progressed as a percentage of revenues. This is, for us, an indication of a couple things. One, we have a lot of standard merchants that will migrate up to Plus, either because as they get larger and the volumes dictate them moving up to Plus, and/or they just look at Plus and all the capabilities, things like B2B and Audiences, and say, "I want to move up." In addition to obviously just enterprises that are maybe coming for the first time and want to use Plus. As you know, this is Plus is one of three ways as a large merchant that you can come on platform, Commerce Components, and also our headless solutions, Hydrogen and Oxygen, the other way. So again, we feel very, very strong as you all think about, well, what are going to be some of the drivers of growth going forward? This is another key piece. Attach rate. So this gets a lot of attention, of course. The attach rate has grown consistently the last few years. This does include, I would note, in 2022, logistics, only because we didn't do all the pro forma of stripping out logistics. But when you do that, you still look at a growth rate, which on an annual basis is high teens each year. I've laid out three things here that I think will be continued tailwinds for logistics. Obviously, payments penetration will continue to do well for all the reasons we talked about, about the success of that product, that we expect to continue the cross-selling, especially for some of the higher attach rate products, and pricing and monetization. Obviously, we did the pricing change of standard this year. There will be some headwinds to it. Obviously, as we take on more merchants that are especially high volume, large enterprises, the ratio to GMV to revenue will not be necessarily the same as we've seen with other merchants. And international, only because of international, a lot of the countries, we just don't have the full suite of products, so it's a little bit harder to do the full cross-sell. You also will note the dip from 2019 to 2020. That obviously is a function of the pandemic and the super high ramp in GMV. So, that does call to attention. Obviously, there will be periods of time. We're focused on making our merchants successful. We're focused on driving GMV. We're focused on driving revenue as well, but there will be periods of times where you look at attach rate, and it's not the one-to-one correlation that you expect, but we will continue to drive this going forward, and we feel good about the future. I wanna talk about margins a little bit. I'm gonna talk about it now in a retrospective, and in a few slides, I'll talk about in a prospective. So again, based on the midpoint of guidance, 12% free cash flow margins for the year. How did we get here? Obviously, a key piece of that is what we talked about in May, about the new size and shape of Shopify, the work we did around logistics, the work we did around headcount. This is something that we spent a lot of time on, getting these free cash flow margins. It's a continuation of a lot of diligent work we've been doing behind the scenes for a long time. Obviously, this goes on to a lot of the things we talked about, too, and just operating expense discipline. On marketing, we've talked about being really disciplined on payback periods, especially on performance marketing. We've done some things on automation. We will continue, as we've talked about on earnings calls, leaning into, on the marketing side, growth opportunities. We've talked about offline, we've talked about Europe, a couple of earnings calls ago. We will continue to do that. There's also revenue scale here, but we've worked really hard to get to these margins, and we look at these margins and want to drive them higher, and we believe that we can do that. Let me give again and extend on that theme a few longer-term perspectives. Durable growth. We think about avenues for future growth along these five lines. I would, as you can see the bottom of the slide, add we historically have been very strong in this first column, our traditional merchant base, SMBs, D2C, North America, online. We've expanded recently the types and sizes and geographies of merchants which we access. We help our merchants grow, and we do this obviously by helping them get more buyers on their platform and to help them drive conversion. The fourth piece is we will do additional monetization ourselves. Bobby talked a lot about the cross-sell piece, as well as obviously upgrades, which I mentioned before, when you have people go from standard to Plus because of all the capabilities and the interesting things we can do with Plus, and continued innovation. Glen talked a lot about this in terms of Editions. We've got over the last 18 months, roughly, we do 100 new feature upgrades in each one of these Editions, and importantly, we build these into the platform. So if you're a new merchant coming onto the platform for the first time, you get the benefit of all this good stuff in the solution set, and it allows you to do all the elegance of the Shopify admin, which, which Glen did a demo of before. Tobi talked a little bit about what we're doing on AI. When we think about the application of AI in a commerce-focused way, we think we, by far, are the leaders in that. So if you look at any one of our products, you could look at Subscription Solutions, and you could say, "Well, how do I think about the durability of this in terms of the growth curve? How long is this gonna persist? How long is this growth going to be durable?" And you could say, "All right, so how do I think about this for Subscription Solutions?" But importantly, you shouldn't think about Subscription Solutions in isolation because then you say: "All right, well, but if I add to it payments and everything that's going on with payments, that obviously extends that growth curve. It extends the applicability, durability, attractiveness of that solution for a merchant." Then, of course, what you do is you add in those four categories I talked about before. You have subscriptions, you have payments, you have scale products, you have emerging products, and you have everything we're doing with future products and Shopify Magic. So in totality, you get a growth curve, which is much longer, much more durable, much more powerful than you would have with any one of these elements. The platform, as a platform together, is so much more helpful in bending the curve for our merchants. We try really hard to bend the innovation curve, to go back to what I said before. Let's help them be more successful, faster. Let's raise the ceiling in terms of how successful they can be. Let's de-risk certain elements of their platform. Let's help our merchants bend this curve. So when you look at all the cohort, the GMV cohort analysis I looked at before, there's this curve for all of e-commerce, and there's a different curve for merchants that are on the Shopify platform. Gross margin. The, I broke this into three buckets in terms of the things that will be headwinds and tailwinds for gross margin. Subscription solutions will be stable to accretive in terms of its impact on gross margins. Payments, that we talked about, will be stable to dilutive, and each one of these buckets and each one of these three strata, I talk a little bit about the puts and takes. In In the interest of time, now we're a little bit behind, I'm not gonna go into all of them. Obviously, the last one, merchant solutions, and I put this in the category of the scale and emerging products that I talked about before, as they continue to get to be a larger percentage of revenues, as they continue to grow, as we get higher merchant adoption, then that obviously will have an impact on margins. In total, this leads us to gross margins being stable to slightly dilutive. Obviously, I'm not gonna get into specific guidance, or long-term model right now as it relates to this piece, but you can. I wanted to give you a general sense of how we think about this. A few slides ago, I talked about free cash flow margin. Let me stay on the margin piece here. You compare to where we were Q3 of 2019 to this most recent quarter. We've taken operating expenses from 65% of revenues to 45% of revenues. Again, this is a multi-year effort of everything we've been trying to do to be very disciplined on the cost side. We are going to continue that discipline. I talked before about the things that got us here, including the new size and shape of Shopify, and let's now then look at some of the drivers of future operating leverage. We will continue to be disciplined on headcount. We spent a lot of time, we did a lot of analysis, we put a lot of thought into getting to the size and shape of Shopify. That is not something which we are just going to, quote, "simply undo." We will be very mindful of adding headcount in key geographies, but overall, we're gonna—well, geographies and areas of expertise, but we are not going to ramp this back up again. That's—we worked too hard to get to this point. On marketing, and I talked about this before in terms of some of the payback periods, like performance marketing in particular, we've been really disciplined on this. We look at payback periods. Kaz spends a lot of time on this. Kaz, Bobby, and I coordinated on just making sure as we think about payback periods for different geographies, different products, different categories, what should those be? How do we enforce those, and how do we make sure we're overall, from a marketing spend, we're leaning into growth, but we're being thoughtful? Of course, we expect to continue to grow our, our revenues and deliver those economies to scale and have the operating leverage driven by AI. We really strongly believe that off this operating expense base, we can continue to grow revenues, and we'll have a sublinear, sublinear relation between operating expenses versus revenues overall. And again, as we look at this and we think about margins ahead, we think we have a very powerful ability to continue the top-line growth rate and also continue to improve on margins. Let me go back to this, and again, I, I wanted to go through this quickly. At the time of IPO, we were the intersection of these three sections, and now we are any merchant type, almost any geography, and as we think about almost any channel. So let me leave you with five key takeaways. I won't read through all these. I'll let you do that, but this is how we think about the opportunity ahead. We think we have a company which is essentially operating on all cylinders, and with that, what I'm going to do is go to Q&A. Tobi, Harley, and I will come up on stage. You should have all been submitting your questions. If you want to submit additional ones, fire away, but I think we have a queue. Just a couple on this one. Okay. Got it. By the way, when we met Hoffmeister, he wasn't wearing cool sneakers. This is one year into Shopify. We love it. Yeah, love it. Yeah, take that, Morgan Stanley. Okay, we're going to get started with Q&A. Please submit online. We're just going to kind of run through as many as we can in the little bit of time we have left here. So the first question comes in from Colin Sebastian, says: "Shopify has done an amazing job showing the scalability of Ruby. As we think about how you continue to scale up R&D and tap newer areas around GenAI, are you confident that the existing tech stack and underlying technology can handle this growth, or will there be more significant retooling of technology required? That's for Jeff? Yeah. I'm very confident in the technological foundation of a company, and it is set up to be flexible for us to do everything we think is plausibly needed on top. And we have the technical expertise and willingness to invest in infrastructure to make up the difference wherever it might be needed. But like, I think I made this point earlier. Like, I find the analogy to chess to be quite good about how to develop a game. Like, I know when I was a kid, people taught, like, at least in Germany, you studied opening books, which is actually sort of analogous to how most people learn about business as well, and sort of memorize them. Instead now, these days, I think what kids are being taught in the space is like to develop the board in such a way that you have strategic influence over every other important parts, and learn to recognize tactics, which then allow you to go ahead. Shopify has been exceptionally good, I think, at the positional game, infrastructure as part of the strategic technical positioning on the board, gaining influence, tactics, like AI, what we wait for, this is what we build the capacity for. Okay, awesome. Next question comes from Mark Zgutowicz. Talk a little bit about Shop App. So the Shop App user base and its incremental monetization that is driving to merchants, what more can we do in the near term to drive additional monetization of these users? Yeah, I'll start there. So first of all, I mean, the Shop App, remember, there's two sides to it, right? First, you have the merchant side of it. One of the things that we are seeing, actually, one of the merchants, Tobi and I met with yesterday, started talking about that one of their new main core channels for growth is actually the Shop App, but not just because they're finding new customers there that otherwise would not have known about the particular brand, but also the quality of those customers have a higher AOV and a higher return rate. So from a quality perspective, one of the things that, you know, you've heard us talk about sort of the surfaces of commerce being everywhere. I think we see Shop App being one of those new surfaces that is an own surface, meaning, you know, you have to be on Shopify to use it, but those customers belong to the merchants, which is really exciting. On the consumer side, as early as this morning, one of you in the room mentioned that you did your holiday shopping off the Shop App. I think one of the things we can do is, and you're seeing a lot of progress here, whether it's Shop AI, which some of you have played with already, which is our AI-powered shopping assistant, or even in terms of how we do things like merchandising and categories and promotions. You're seeing now some of your favorite brands do drops directly in the Shop App. You're seeing brands are using Shop App to do things like promotions, Shop Campaigns, Shop Cash. So I think on both sides of the Shop, Shop App, yeah, model, you are seeing a lot of value there. It's still, I mean, I know you've heard this a couple of times today, but it's still quite early for, for Shop App. I I mean, we've been working on this now for a couple of years. Every single quarter, you're seeing it get better and better. But the reason we like it so much is because it's one way for us to help our merchants find more customers, and we like the idea that consumers are finding new brands that they're going to be loyal to for the long run on the Shop App, too. Right. Okay. Next question comes from Sitikantha Panigrahi: As merchants sell on Shopify and other marketplaces like Amazon, and marketplaces help bring traffic for merchants, how do you plan to help merchants bring traffic to their Shopify stores? Hey, look, if we want to qualify to be the retail operating system, so you qualify the first time, then you have to re-qualify every subsequent year to be their, the heart of their business. In order to do that, it has to be that wherever they're going to sell, find consumers, engage with those consumers, we have to enable. You know, one of the mental models we've often used is the idea of a browser with lots of tabs. And by removing or condensing and collapsing those tabs into Shopify, where they're able to run the entirety of their business and sell across every single channel, is really, really important. Obviously, we're doing things that are going to help- that are helping merchants find new consumers and new customers for their products. 1, of course, we talked about the Shop app, but also things like Audiences, whereby we actually, over time, can help them make better decisions, can better target, customers, increase their ROAS, which is becoming obviously increasingly competitive. So I don't think we'll ever be in a position where we're just going to give customers to the merchant. That's not the point, right? We're not giving people fish, we're teaching them how to fish. But in terms of making sure that every single surface area on the internet and offline, is integrated into Shopify so they can sell across the surface wherever consumers might be spending their time, is very, very important to us. It's the reason why you see us do things even with Buy with Prime, for example. We want to re-qualify every year to be the center of their business, and to do that, you have to integrate every single surface area. There's a lot of intrinsic motivation for merchants to want to bring people to their online stores because just, like, margin profile is better. And a lot of LTV is driven by mailing lists, which will point people at their online stores and by retargeting and activities like this, where the online stores are always at the end of these activities. All right, I want to shift a little. I guess one question in terms of payments penetration. You know, you talked about it being able to go higher. This one's from Daniel Chan: What do you think the upper bound of payments penetration is? I'll start. Yeah, we haven't given a specific upper bound on it. In fact, almost all the speakers today talked about all the opportunity we see ahead with payments. And part of it just continuing to make the product better, continuing to do more in terms of geographies, what we're doing on Shop Pay. So, we believe that we have a lot of runway left on penetration, and that's just a percentage. It relates to revenue overall coming from payments, especially as we do more with offline. I talked about the $450 million, which we had given. That includes the offline payments. It's a phenomenal growth engine for us. It will continue to be. We talked about other products that we hope to, over time, become a larger percentage of revenues as they just eclipse the payments growth rate. But, we still feel very, very good about where our payments is going. Yeah, remember also, as we tie more of these incredible new solutions to Shopify Payments, things like Shopify Capital, things like Audiences, Shop Pay, you know, Shopify Payments on its own is an incredible product with incredible pricing that is highly competitive across the entire payments market. When you start layering on all these other things, you get, but it requires you to be on Shopify Payments. It's this natural incentivization to actually adopt or shift to it. You don't want to lose out on this amazing piece of functionality because you're not using Shopify Payments. So I think geographically speaking, is one component to it, but the other one is, the more products and features we add that are linked to Shopify Payments, the more we increase our penetration. Yeah, I mean, I think one of the craziest stats we shared today is like when checkouts that have a purple button convert 5% better no matter what you use. Even if you don't use it. Yes. Like, so it's, there's really good reasons for wanting to be on Shopify Payments. And in a similar vein, this one comes from Colin. Around payments specifically and kind of how you think about build versus partner, right? We talked a little bit about this earlier, but obviously, we have a great partner in payments. But how do you think about build versus partner going forward in terms of the products that we may make next? Yeah, I can start. It's I don't think this is an area which lends itself to a principle that you then, like, doggedly follow. I think this is a, you know, take it one decision at a time. I think every decision will be every time we look at these opportunities, we will find we will look at the mission of the businesses and see, like, how much the Venn diagrams overlap over, like, what our main quests are. Like, if it's main quests aligned, then it's probably buy- a better buy. If it's fellow travelers on, you know, each focuses on its own sort of layer or area within, and then we can combine and solve problems better together, then I think we are doing partnerships very well. I think, you know, it's hard to say exactly what the sort of totally clean single-sentence description of this will be. I think it is, it's just kind of every situation is slightly differently, and we fall on sound decision-making principles to make the best choices. There's no ambition to want to own every bit of pieces. Like in the retail stack, I think it's much too large a space for doing this. Yeah, I mean, if you think about some of the major products that have deep embedded partnership, for example, you know, Markets Pro, for example, we were able to get to market much faster with an incredible product with our partner Global-e. Obviously, Stripe on payments. With buy now, pay later, Shop Pay Installments, we were able to get to market faster with Affirm. We've done this really well with a couple key, you know, to Tobi's point, a couple of key partners who we've deeply embedded, but whose main quest is, is that particular thing. Now, also remember, from a merchant perspective, merchants are using Shop Pay Installments, they're using Markets Pro, they're using Shopify Payments. We do reserve the right to have flexibility and optionality on our side, but it allows us to do the go-to-market, to get there faster with a great product and not waste time. ... Yeah, like, when you sign up for Shopify store and you use Shopify, and its default is not set correctly, like, as in to whatever it should be, like, whatever makes it the simplest, we consider this a bug, and we want to be able to set defaults well. And, so, like, this is where these deeper partnerships we are forging with some of the companies really help us because it allows us to, you know, chop our payments amongst the 700 whatever payment gateways we are supporting. You know, we just have a higher quality, deeper relationship with the company behind it, and so we are looking for similar implementations in these spaces. Okay, great. The next one comes from Anurag Rana. What did you learn from taking price on Standard this year? Does it increase or decrease your appetite to do the same outside of Standard? I mean, you know, I think that was the first time we increased pricing since I got to Shopify, like, 14 years ago. Went from $29-$39. It was a 33% increase. We didn't see much, much pushback from our merchants. I mean, Shopify generally, whether it's the enterprise or Basic or point-of-sale, is kind of the best deal in the industry. I mean, when you think about a price-to-value ratio, it's so far on the side of value. We like that. We like it to be more valuable, and, and we want it to be almost too good to ignore from a pricing perspective. But it did obviously provide us with the proof point that there are other areas that we can increase the price, where the ratio remains on the side of value, where we're still very competitive, but we're able to increase, you know, the, the, the monthly fee. I would say, in particular with enterprise, I mean, you saw Bobby so eloquently present this, I think. We're, we're taking real market share from, from all the major players, and one of the reasons that they're coming to us, of course, is because our product is really great. But another reason they're coming to us is because of TCO, total cost of ownership. And at some point, it becomes a bad idea or a bad decision inside these very large brands to not use Shopify, not just for basic, but across all those different plans. We want to maintain the situation where like, to Harley's point, Shopify, especially in the early days, the, you know, people who are experimenting are very price sensitive, remains being one of the best possible deals, you will ever find. Our the shape of the way we are running trials now has changed significantly. This created capacity for us to change a little bit about the pricing. I wouldn't expect that in core to recur. We've built up a lot of goodwill to make that, this change. We got very, very little pushback because everyone realized this has, like, been a excellent deal to begin with, and it's still an excellent deal, and the particular way we implemented it with keeping your costs static at the annual price was also deeply appreciated, and that's the Shopify core. It's like we will probably experiment more on the upmarket side because there's just, like, more experimentation potential there. And so I think that's the way to think about it. Okay. Next one comes from Andrew Boone. Just Jeff talking about capital allocation strategy going forward and how this changes as profitability potentially ramps into the future. Yeah, we have roughly $5 billion in cash, as you know, right now, with the convert, which is a little bit under $1 billion. We're roughly $4 billion in cash that we have on the balance sheet right now. We do expect to continue to grow free cash flow, as I mentioned in my remarks. We also recognize that the environment that we're in, the macroeconomic environment that we're in, is we do want to have a little bit of cushion. So we do want to continue. We're a growth company. We want to continue to lean into investments, whether it's investments on AI, whether it's investment just in general on product development, whether it's investments on anything, or marketing, anything that will help us continue to grow, that's where we will focus. So, I don't see us doing a dividend anytime soon, to be frank about it, but from our vantage point right now, we're just going to continue to use that cash to continue to grow the business. This is probably going to be the last question, but we'll see if we can squeeze one more in. It's from Alex Sacerdote, Whale Rock: In large enterprises, these accounts can be very apprehensive about switching or ripping out existing solutions. Do you see that changing, or will this be pretty gradual with enterprises taking components over time, or are the large accounts already ripping and replacing? It's a great question. I mean, that is the case. The sunk cost fallacy has legitimated these large enterprises. Not just that, I mean, a migration is not an easy thing, and most merchants and brands know that. The thing that I think has changed is that in this sort of, I don't know, whatever macroclimate you want to call this, there is a lot of focus on total cost of ownership and a lot of focus on future-proof. So what CTOs are being asked for is: Why are we spending so much? Why do we have 200 engineers? That's sort of in the homegrown situation. Or, why can't we cross-sell on Instagram or TikTok? That feels like table stakes in 2023. In both cases, on the total cost of ownership side and also on the future-proofing side, I mean, you know, Bobby and I met a very, very large brand recently, and at the end of the conversation, I basically said, "I think this is the last time you're ever gonna have to migrate when you come to Shopify." That's what a lot of these companies are looking to do right now. They're looking to modernize their stack. They don't want to keep migrating every five years, but they also don't want to be locked into a platform where they feel like the thing has not moved in the case of, you know, Demandware, a decade. So, I think it is getting easier for us. But the other thing that is happening, and this is where, you know, the Gartner stuff may, on its own, seem not that big of a deal, but when you start aggregating the Gartner stuff and the SI relationships and the new types of products we're doing for enterprise and the total cost of ownership and the future-proofing and making all of these things available, you get to a point where it, again, you really have to think as to why you're not coming to Shopify Enterprise. One other thing I just want to say, Alex, to you on the enterprise side is, remember, if you just go back two years ago or so, there was one on-ramp, or I guess two on-ramps into enterprise. One was upgrades, and the other one was Shopify Plus. What we now have is, we have a bunch of new on-ramps into enterprise. For example, CCS is an opportunity for us to have conversations with merchants and brands who may not be otherwise ready to come full-on to Shopify, but maybe they start with checkout, maybe they start with inventory, they start with analytics, and eventually, they decide to move over entirely. Things like, headless and Hydrogen is one other on-ramp. So all these different on-ramps that didn't exist-