Good morning, and thank you for joining Shopify's third quarter 2026 conference call. I'm Shane Kleinstein, Director of Investor Relations, and joining us today are Harley Finkelstein, Shopify's President, and Jeff Hoffmeister, our CFO. After their prepared remarks, we will open it up for your questions. Today's call will include certain forward-looking statements that are based on assumptions and therefore subject to risks and uncertainties that could cause actual results to differ materially from those projected. Under-reliance should not be placed on these forward-looking statements. We undertake no obligation to update or revise these statements except as required by law. You can read about these assumptions, risks, and uncertainties in our press release this morning, as well as in our filings with US and Canadian regulators. We will also speak to adjusted financial measures and other non-GAAP measures which are not a substitute for GAAP financial measures. Reconciliations between the two are provided in our press release. And finally, we're reporting US dollars, so all amounts discussed today are in US dollars unless otherwise noted. And with that, I'll turn the call over to Harley.

Good morning, everyone, and as always, thank you for joining this call. It has been an incredible quarter for commerce. The velocity of development we are seeing across the entire industry is nothing short of remarkable. From the adoption of personal agents to the start of delegated purchasing to new tools that help entrepreneurs turn any idea into a business overnight, we've seen an avalanche of new interfaces, but it's all powered by the same load-bearing commerce operating system, and that is Shopify. I'll get into the numbers shortly, but I want to take a moment at the top of the call to really land the significance of all of this and why it matters so much for merchants. Imagine for a moment that you are a retail business owner in 2026. Here are just a few things that might be on your mind today. How is your online store performing? Is ChatGPT surfacing your products correctly? How can you drive up conversion in your physical retail stores? Is it time to start thinking about expanding into new markets? Now don't get me wrong, these are all very good problems to have. This is truly the greatest time in history to be a founder. There is opportunity everywhere. And the more opportunity there is, the more complexity there is. And the more complexity there is, the more our value goes up. The value of one unified commerce operating system connected to every surface area that customers want to shop on and every tool that teams want to build with. That is the real story behind this moment. For Shopify, that is what matters most. As the world is finding its feet in this new era, there is simply no better place to be than where we are. And that is everywhere. Okay, let's talk about the numbers. Q3 was another signature Shopify quarter. GMV was up 29.5% to $119 billion. Revenue was up 32% to $3.7 billion, and our free cash flow margin was 22%. and we saw more of the biggest names in retail from Balmain to Mac to Clinique to Lululemon all go live on Shopify. So we delivered exactly what we said we would. Consistent, durable growth yet again. But the real story is hiding in between the numbers and it is this. Shopify is uncommonly good at operating in two realities at the same time. The agentic future we're building towards and that everyone on this call is excited about. And the current reality for most of our merchants today. And here's what that looks like in practice. Since our last earnings call, personal agents hit the mainstream. Muse, Instinct, Claude Duet, Grokbot all partnered with Shopify. So our merchants' checkouts are supported and buyers can use ShopPay as their wallet. and we're powering product discovery across all major AI channels from ChatGPT to Microsoft to Muse. These are the things that could drive real merchant success in the future. At the same time, we also rolled out an incredible range of new products and features across Shopify, growing our presence internationally, strengthening our offline business and making our online store builder even more powerful. Those are the things that drive merchant success today. And importantly, we balance both of these realities while running an exceptionally strong business. 32% revenue growth, 22% free cash flow margin at our scale. That is not common. And yet I get to repeat numbers like this every quarter. So I mentioned merchant success in the future and merchant success today. Let's start by talking about the future first, specifically agentic shopping. Now, while the volume is still small here, adoption is growing and the early signals show that this is the potential to become a very powerful surface area. Here's what we're seeing. AI traffic is up 2.6x year over year. Orders are growing even faster at 3.3x. AI channels are sending shoppers straight to product pages at 3x the rate of organic search and shoppers are converting 64% more often. So the numbers are certainly encouraging, but what's even more interesting is what products are being surfaced. And it's not the obvious categories. AI channels are surfacing highly specific products that fit specific customers with a specific need. Here is where Shopify catalog comes in. Catalog-powered searches are converting a 2x the rate of general AI search. That is because catalog is quite literally written for agents. It turns over a billion product pages into structured data set translating details like size, color, and material into numerical values that an agent can read and understand. and it is not just a linear product feed. It is live cross merchant map for what is available across all of Shopify with current pricing and inventory that helps AI channels make more accurate recommendations. And that makes it insanely powerful. And here's what is really exciting. AI is no longer just a discovery channel. As I mentioned earlier, Q3 was the first time we saw shoppers experimenting with delegated purchasing through personal agents who can also act on behalf of their users with their permission. In order to do that, they must earn their trust. Does it know what I like? Will it get my size right? Can I trust it with my personal information? From Muse, Instinct, Claude Duet, and Grokbutt, the answer is yes, thanks to Shop. Through your Shop account, the agent knows your preferences and shopping history. Through the Shop app, you can track all your orders placed by your agent listed right next to your other orders. And with Shop Pay as your wallet, your payment details are already saved, you stay in control of your purchases, and your agent never sees your card details. and with Claude Duet, Insync and Grotbot, that reach even extends beyond stores built on Shopify. Shoppers can now use ShopPay as their chosen wallet for any merchant, no extra setup required, it just works. For merchants, this means reach, a huge new pool of customers with zero lift for them. For buyers, this means trust, a familiar way to buy in an unfamiliar channel. And for developers and AI companies, this means access to world-class infrastructure. Now, all the tools they need to build a shopping experience, including catalog, checkout, and the shop network, are in one place. We call it shop.dev, one-stop, all-commerce complexity handled. Okay, switching gears, now let's talk about how we're helping merchants to build and operate more effectively with AI. As we predicted in previous quarters, commerce is fragmenting. AI is not just creating new ways for buyers to shop, it is also creating new ways for merchants to operate. and that is what Shopify was built for. We've always been an open ecosystem and that now extends to agentic tools. We have connectors with agents like Muse, ChatGBT, Claude, Google Gemini, giving merchants complete optionality over how and where they run their business. Now, this doesn't just give our current merchants optionality. It is also becoming an on-ramp for new merchants. Imagine an aspiring entrepreneur talking to ChatGPT or Claude or Muse about starting a retail business. The agents suggest they start building with Shopify, and then it helps them build their store inside the chat. And once they're ready to start selling, they sign up for a Shopify account. Agents can effectively become ambassadors for Shopify, connecting new entrepreneurs to the platform at precisely the right moment. Now of course, this is still a small source of new merchants today relative to our scale, but as more people use more tools to turn ideas into businesses, Shopify is part of that journey right from the start. Now talking about turning ideas into businesses, this quarter we launched the biggest update to our online store builder in our 20 year history. It's called Canvas. Canvas lets merchants build a fully bespoke online store simply by describing what they want to sidekick. No coding or design expertise required. Now the store you can picture is the store you can build. It's only been live for about a month, but here is what we are seeing. Merchants are launching stores that are more personalized and they're doing it 20% faster. Anecdotally, this has been one of the most exciting things for me to watch roll out in a while. I asked merchants to tag me on X with what they built using Canvas. And the quality and the sheer variety has been truly remarkable. From handmade pottery to pet treats to banned merch to vintage comic books. This is the Shopify that Toby and I imagined almost two decades ago. Anyone selling anything from anywhere gets their own beautiful, functional home on the internet. Now I want to talk a bit more about Sidekiq, which is still overwhelmingly the most widely used tool for our merchants to run their business. And usage continues to grow at an even faster clip in Q3. Daily active merchants are up 3.7x year over year, and daily sessions are up 4.2x. but there's an even more important story here than adoption and it is just how capable Sidekiq is becoming. In Q3, Sidekiq created around two thirds of all Shopify flows. Now remember, flows are those automations merchants use to take repetitive tasks off of their plates. and here's how that shows up in practice. I recently met a large furniture retailer who's built custom sidekick flows for everything from warehouse inventory snapshots to delivery fee analysis to regional pricing checks. This is what makes Sidekick so powerful. It can be completely tailored to power a merchant's particular business. And now these flows extend beyond the admin into supported apps that merchants use to run their business. Sidekick is the only AI tool that can connect to them without the merchant having to set up manual integrations. We want merchants getting the benefits of AI, not spending their time figuring out how to get those benefits. This is what makes Sidekick truly feel like an extension of their team. So there are obviously a lot of tools in the market, and there's a lot of noise about which ones will come up on top. But here's what really matters. Shopify's critical advantage is that we do not have to choose, because all of them connect back to our platform. And that is what makes our incredible growth durable in the long term. Now, I want to bring us right back to what merchants are focused on today. I recently hosted a forum for some of our largest and most active merchants alongside some of Shopify's leadership team. and guess what? The merchants did not spend much time talking about personal agents or even AI power discovery or even delegating purchasing. They talked about the fundamentals, trust, growth and simplicity. And we never lose sight of that. Let's first talk about how we're building trust. I mentioned earlier that ShopPay is bringing trust to an unfamiliar surface with agentic shopping. That trust is built on 20 years of commerce experience. and it is also why we continue to see incredible brands bringing shop pay into their ecosystem, including one of my favorite brands, as I mentioned earlier, Lululemon, who just selected shop pay for their North American online store. and as history has proven, once we have a toe in the door, the upside is clear. More broadly, in Q3, GMV accelerated with shop pay grew over 50% year over year. Both the number of buyers and the number of purchases per buyer keeps growing with shop pay and shop pay installments expanded beyond the US, Canada and the UK into Australia. Trust also comes from the work we do in enhancing fraud detection. It is not sexy, but it is the stuff that really matters to merchants. We draw on signals across millions of businesses to help merchants spot risks, and in Q3, we added tools to automatically cancel high-risk orders even before checkout and explain why an order looks suspicious, helping merchants protect their inventory and their revenue. and of course, trust comes from the connected shopping experience that shop has become known for. So whether you're shopping on a merchant's website, the shop app or the newly announced shop.com, your preferences, your payment and shipping information and even carts and viewed items all come together to make the shopping experience feel seamless and personalized. Now, speaking of shop, GMV and Q3 more than doubled year on year. This is shop's network effect at play. More shop buyers, more seamless shopping experiences, more benefits for merchants. And we continue to invest to make the experience even better. The second thing I mentioned that our merchants really care about is growth. These merchants are growing across channels, and as they grow, so do we. Let's start with our offline business. We hit a key milestone crossing $200 billion in lifetime offline GMV this quarter. In this past quarter alone, Canada Goose, The Body Shop, BevMo all launched retail locations powered by Shopify. Skims launched its first international flagship in London with us. And MAC Cosmetics launched 84 locations just 120 days after signing with us. That is remarkable speed. and in Q3 we made real progress on one of the oldest problems for physical retailers, not knowing their customers. We're changing that. Now when a customer taps their card in a Shopify powered store and opts in to receive a digital receipt, a customer profile is then created. So the merchant has a record of the shopper and their purchase history. They can get to know them, understand what they like, and they can even reach out to eligible customers to bring them back. And the payoff is real. In fact, a known in-store customer has a meaningfully higher lifetime value than an unknown one. This is Shopify turning point of sale from a sales channel into a growth engine. And that is a very powerful advantage for merchants. Now let's talk about growth internationally. Our goal there is simple, to make global and cross-border selling possible, simple, and localized. And the impact is clear. International GMV grew 32% in the quarter. and the work here continues. In Q3, we launched mobile first solutions like sign it with WhatsApp and WhatsApp marketing and messaging, which will be huge unlocks globally. We also launched a localized version of the shop app in Japan, which became the number one shopping app in the Japan app store the week after full rollout, which I think is really cool. and we launched new payment offerings globally that reflect important global nuances, like the rollout of OXO as another local payment method across Mexico, allowing shoppers to place an order online and pay for it in cash at an OXO convenience store. There'll be a lot more of this to come in 2027. The last point I'll make on growth is about discovery. As I talked about at the top of the call, shopping is spreading across more channels, more opportunity, more complexity, more ways for Shopify to help our merchants. Shopify Campaigns offers a risk-free way to reach customers across 10 channels, from Shop to Instagram to ChatGPT. That means full optionality for merchants. We're not biased towards any one particular channel, and they only pay when a sale happens. and the momentum there is really building. Year to date orders through shop campaigns more than doubled year over year accelerating in the third quarter. That means more merchants getting discovered without needing to become advertising experts. It also means more traffic coming to the shop app. Finally, I said our merchants really care about simplicity. And whether you're looking at the present reality of most merchants or the direction of travel we're heading in, in both cases, one thing becomes very clear. Our simple, connected, unified operating system is the moat. No one merchant can manage the increasing volume of surface areas to build and sell across, and nor should they. And that is true for merchants of all sizes, including larger merchants. These businesses want their online stores and their physical locations to work together. They want their teams spending more time improving the customer experience and less time maintaining the technology behind it. And as AI creates new ways to shop, they want a platform that keeps them ready for what comes next. and that is why we continue to see large merchants join and scale across the platform. Like Balmain, Givenchy, Jacquemus, Chaumet and Acne Studios. These iconic names in luxury retail that all chose Shopify and Q3. or Alison Olivia, who scaled from a single founder to a globally recognized fashion label and who just decided to fully re-platform onto Shopify after starting with Shop Pay and seeing it become their most used payment method. Or Omaha Steaks. I love this story. This is a 109-year-old company that was running on a custom stack built by their own CEO. They wanted a platform that can keep up with the pace of technology and allow them to focus on their business. So of course, Omaha Steaks is coming to us as well. Okay, I'll end on this note. There is a very special energy inside of Shopify right now. Toby talks about it openly. We're giving people the tools and the room to tinker, to try an idea, to turn it into something useful for merchants. AI is changing what our teams can build and how quickly they can get an idea into someone's hands. Small teams can try more things, learn from what works, and build again. that makes taste and judgment even more valuable. Seeing a problem we're solving, knowing what a great solution looks like, and then having the curiosity to go after it. And that mindset extends well beyond engineering. All across Shopify, our team is rethinking how they work and what they can accomplish with these amazing tools. Toby put it this way in a recent note. The early answer to how we make commerce common turned out to be simple. Just build great products for them. This is what we continue to do every damn day. And with that, I'll turn the call over to Jeff.

Thanks, Harley. Q3 was another quarter of strong, consistent execution. Before turning to the results, I'm going to step back and provide some perspectives on our addressable market, as we've not discussed that in a while, and I believe that agentic commerce will expand our market. Commerce continues to grow globally, but in addition to that, there are two important things to keep in mind regarding Shopify's role in our future opportunity. First, we continue to power a larger share of commerce overall. and second, we are expanding commerce itself by helping more merchants survive and thrive, helping them discover new buyers and lowering barriers to entrepreneurship. To my first point, the quality and capabilities of our solutions help our merchants drive a disproportionate share of global commerce growth. Over the last three years, our U.S. merchants' online sales grew at a compound annual growth rate of 23%, compared to 8% for U.S. e-commerce overall. In Europe, we saw a similar pattern. Our merchants grew online GMB at a compound annual growth rate of 37%. Thank you for watching. To illustrate the platform scale today, in the third quarter alone, our merchants sold over $119 billion through Shopify, almost as much as they sold in all of 2020, the year everything went online due to COVID. An entire year of Shopify GMV has now become a single quarter and not even the holiday shopping quarter. and to my second point, measuring our opportunity against the market potential that exists today misses a critical component. Our products do more than help merchants compete for existing commerce. We help create new commerce. AI is an accelerant for our market, simultaneously making entrepreneurship easier to try but also raising the stakes for what success requires. In that context, Shopify is a merchant's not-so-secret weapon. We make the complex simple so that our merchants can focus on what matters, building strong businesses. We have always and will continue to change the economics of entrepreneurship. When your niche passion products can more easily find the customers they're meant for, you're more likely to build that business. Smaller niche markets are now not only addressable, they're not so small anymore. With Shopify Catalog and how it is optimized for LLMs, more long-tail merchants succeed by matching buyers' specific needs, however unique, with our merchants-tailored solutions. Extending the long tail of commerce is helping create new commerce. In Q3, three quarters of AI-referred sales yet again came from product categories outside our top 100. And as entrepreneurship has become more accessible, that access has manifested inside our platform. Since 2018, the number of first-time sellers on Shopify has increased seven times. Moreover, we help new entrepreneurs reach that milestone faster than ever before. Last year, compared to just three years ago, 43% more stores made their first sale within a single day of signing up. We're not just finding high intent entrepreneurs. We're bending the curve for how quickly they reach early success. AI and the AI products that we build are a rising tide lifting all boats. and we saw that wave coming a long time ago. It's why we started building catalog three years ago before agentic was ever in the lexicon of commerce to make our merchants product data reachable across all AI channels with high fidelity and high consistency. It's why we co-led the creation of the universal commerce protocol because we knew that in order for our merchants to take advantage of the opportunities inside agentic commerce, agentic commerce needed a shared language across the internet. It's also why we're actively driving other standards like the Personal Agent Protocol alongside other technology and retail partners, and why we have embedded Shopify into personal agents like Instinct, Muse, and more. We also recently released Shop.dev and the Shop MCP, giving developers one easy connection to add Shopify's AI tooling, sign-ins, and checkout into their apps or agents. We are embedding commerce across more channels and more surfaces. Our growing buyer network extends this leadership. With ShopPay, customers can explore new merchants through new channels while maintaining the safety of the wallet they already know and trust, and businesses of all sizes benefit from the complex commerce ecosystem Shopify has built at scale. You may have seen our latest additions theme was exponential. and many more. Now let's take a closer look at our third quarter results. Q3 GMB was $119 billion, up 30% in constant currency, our sixth consecutive quarter at these levels of growth. The trends across all vantage points are very consistent with recent quarters. Growth was broad-based across merchant sizes and geographies and remained evenly split among new and same-store sales. Starting with merchant size, the $2-25 million cohort contributed the most incremental GMV and is the largest slice. Growth in this band was mostly from existing shops growing into this size. The $25 million and greater band is the fastest growing, albeit off of a smaller base. North America continues to deliver strong growth at scale, with GMV growing 28% in constant currency for the third consecutive quarter. GMV in Europe grew 33% in constant currency, aided by our continued addition of local payment offerings across several markets. Similarly, we continue to build our presence in Asia and Latin America with more tailored local offerings like those Harley mentioned. We also launched local currency billing in 10 new countries over the past few months. Merchants in these markets can now pay for their Shopify subscription in their local currency, making it easier for merchants to get started on our platform. Finally, looking by channel, beyond just online. Offline GMP grew 30% year-over-year, consistent with last quarter's constant currency growth. Large, complex, multi-location merchants continue to be our fastest growing segment, with their total locations on Shopify up 52% year-over-year. Importantly, we are having greater success expanding our point of sale merchant base beyond just those merchants that started with us online and then adopted our offline solutions. In Q3, 55% of merchants that added our point of sale were new to Shopify, and of those already selling, half are selling only in-store. B2B GMV grew 74%. We consider B2B a significant opportunity to expand the verticals that Shopify addresses. Interestingly, B2B GMV is much more distributed by industry vertical than online, and the fastest growing verticals include home improvement and hardware, electronics, and business supplies for verticals such as retail stores, laboratories and medical, food service, and agriculture. These are categories that take us beyond our most prevalent online categories. Turning to revenue. Q3 revenue grew 32%, both reported and in constant currency, delivering on the expectations we laid out and accelerating on top of last year's strong 31% constant currency growth rate. Merchant Solutions revenue grew 35%, driven substantially by the strength in GMV and increased payments penetration. Our FX revenue contributed nicely this quarter again, commensurate with our increasing international scale, and has consistently been a source of growth within payments. Payments penetration surpassed 68%, up three points year-over-year, and ShopPay GMB grew 50% year-over-year. We also saw growth in the broader set of services merchants use on Shopify, most notably this quarter in advertising. Subscription solutions revenue grew 20%, led by standard plan subscriptions. Equivalent size increases in plus subscriptions and variable platform fees rounded out the growth in subscription solutions, with the variable platform fees growth balanced between more merchants exceeding their minimum volume thresholds and continued sales growth among merchants already above them. Q3 MRR grew 19% year-over-year. Plus MRR represented 34% of MRR, growing 18% year-over-year. As a reminder, MRR comparatively under-represents the impact we're seeing from larger GMB merchants. Turning to profitability. Gross profit grew 28%, in line with our guidance, and gross margins came in at 47.6%, consistent with the second quarter. Merchant Solutions gross profit grew 37%, with gross margins expanding year-over-year for the third consecutive quarter. Our year-over-year and sequential margin improvements were driven by margin expansion in Shopify payments from savings negotiated with partners across the full payments ecosystem. We also saw margin uplift from increased FX activity in our advertising products. Subscription Solutions' gross profit grew 16%. Gross margins were 79%. On a year-over-year basis, subscription solutions gross margins compressed primarily from incremental AI spend on Sidekiq, partially offset by efficiencies and support. On a sequential basis, our margins declined mainly due to higher hosting costs as we added capacity ahead of BFCM and some enhancements to our storefront resiliency and global surge capabilities. Although Sidekiq drove year-over-year pressure and margins, on a sequential basis, we've been able to offset that pressure with efficiencies we've built into how we deliver Sidekiq. We've made improvements in model selection, distillation and caching to support more usage at a lower cost. From Q2 to Q3, merchant conversations increased 14%, while cost per conversation declined 28%, and total sidekick costs fell 18%. But cost is only one part of the sidekick story. The more important measure is what merchants accomplish with it. That is our focus, but that of course also translates into our financials. Sidekick attracts more merchants to Shopify, which manifests in the financials and subscription solutions, and it propels more merchant success, which materializes in merchant solutions. Last quarter, we shared that using Sidekick's onboarding guide results in an 8% lift in merchants reaching five sales within 15 days. This quarter, we can demonstrate benefits beyond that. After their first sales, Sidekick offers merchants a dynamic conversion guide to prompt additional conversion tactics in those critical early months as a business is launching. Examples include help with answering customers' questions, reaching out to customers with abandoned carts, and more. This resulted in a 3% lift in merchants reaching their next five orders in 60 days after using the guide. Incrementally small, but off large cohorts. That benefit makes a difference and shows the value Sidekick can bring in targeted, proactive merchant communication. Our gross margins in the third quarter reflect our deliberate work. Thank you for joining us today. Thank you for joining us. Some of the reduced spend will effectively shift to Q4, but nothing has changed about our marketing approach. Our free cash flow was $816 million, a 22% margin. I should point out that approximately 150 basis points of the year over year improvement in free cash flow margins stems from the structural operating discipline and expense leverage that we've been delivering. The remainder of the improvement results from items that are more temporary. The marketing tests that we did this past quarter, the timing of certain tax receivables, and the accounting change to merchant cash advances, with each of these three being roughly equally sized. The point remains a very strong quarter of profitability. With that, let's move to our fourth quarter outlook. We expect Q4 revenue growth in the low 30s year over year. Our guidance reflects less than a point of FX headwind. Thank you for watching. Free cash flow performance in the fourth quarter primarily reflects a continuation of the trends we saw in Q3, but with higher taxes from the timing of payments in certain jurisdictions that get paid in the fourth quarter. We don't expect any meaningful impact from the accounting change in merchant cash advances in Q4. A few thoughts in closing. Our opportunity remains substantial. We are serving more merchants and building more of what they need to grow. We continue to drive a larger share of commerce. We continue to expand commerce itself. We continue delivering top-line results with proven consistency, consistency of GMV growth, consistency of revenue growth, and consistency in the breadth of strength across regions, merchant sizes, and channels. We'll see you next time.

Thanks, Jeff. We'll now take your questions before turning the call back to Harley for some final words. Please use the raise hand feature in Zoom to ask your question. If you're dialing in by phone, you'll need to press star nine to join the queue and star six to unmute yourself. Please limit yourself to one question so we can get to as many questions as possible. Our first question will come from Samad Samana from Jefferies. Samad, your line is open.

Hi, good morning, and thanks for taking my question. Congrats on another strong quarter from the team. I wanted to see, Harley, if we could dig into the relationship with Meta and Muse. It's been a key investor focus. How is shop working with Meta on development? How does it impact the payment economics? depending on whether they use Shop Pay or Meta Pay or another option. And any early signals on what merchants are seeing from this channel in terms of conversion? We think it's a big focus and it'd be very helpful. Thank you for taking my question.

Yeah, so thanks for the question. Specifically on personal agents, I mean, as I mentioned in my remarks, certainly the last quarter, you've seen a lot of them, whether it's Muse or Instinct or CloudDuet. And I think one of the things we're most excited about is that this feels like a brand new channel for merchants. It feels like a new place where they can actually find new customers. And the fact that ShopPay is integrated as a wallet means that the agent knows your size, knows your style, knows your shopping history, and then all orders get tracked by the shop app as well. So I would say it's still quite early. Momentum is certainly strong. The quality of traffic is really, really quite high. And that we think is really, really important. But, you know, The agent is really just this new front door here. We are everything beyond that. So every new interface needs this commerce infrastructure running underneath it. And that's what we're doing. And I think the value is an enormous complexity of commerce. So the millions of lines of code that give the platform its power allows these agents to provide the best experience to the new consumer. And I think that'll only continue as well. In terms of just agentic in general, not just the agents, I think what you're seeing is that, you know, every week or two, you're seeing a new agent or a new personal agent show up. And hopefully you're noticing that Shopify is the commerce infrastructure behind all of them. We're partnering with all of them. Volume again is small, but traffic, you know, we saw in the last quarter was 2.6X year on year. Orders were up 3.3X. And then Shopify catalog is powering discovery in almost every single major AI channel. The other thing that's really cool is conversion from catalog is actually 2X the rate of general AI search, sort of, you know, what people call scraping. Maybe the last point I'll sort of end on here is that we are seeing that these AI channels are really rewarding specificity, which is really, really important for the long tail of commerce, which is most of our merchant base. So as we said, 74% of AI attributed purchases in Q3 were from outside our top 100 categories. So we're really seeing that these more nuanced niche products are getting found, and we have a ton of those on Shopify. So the way that we see it is Q3 saw personal agents hit the mainstream, and all the major ones are partnered with Shopify. Our merchant checkouts are supported, and the fact that buyers can use a very familiar paying opportunity with ShopPay as their wallet on an uncommon surface or a new surface, we think is going to be a huge advantage to both merchants and consumers.

Our next question will be from Andrew Boone at Citizens. Andrew, your line is open.

Thanks, Harley. I wanted to stay on the agentic topic. As I think about the potential, and you talked about the potential of agents at large, of moving towards what is a headless version of commerce, can you talk about how that changes maybe the mode of Shopify? What happens to shop pair, the infrastructure, and how you guys prioritize the roadmap? Thanks so much.

Thanks for the question on that. Let me be really clear about that, because I think one thing that maybe is getting missed here is that With this entrance of sort of these personal agents and the beginning of delegated purchasing, this is where agents don't just recommend products, but they're also buying on behalf of some of the users. And again, I said this in the last answer, but this is really the newest front door into commerce. This is very new behavior. Volume is, of course, small, but it's growing. But in the new world of personal agents, shop is not just a wallet. It is your complete buyer profile. So when you connect Shop2Muse or Instink or Clawduet or Grokbot, the agent gets three things. First of all, it gets your entire shopping history across any Shopify merchant so it can deliver these incredibly personalized recommendations. Second, with ShopPay, it gets saved payment details so you can pay the way you want with confidence the agent doesn't get that information. And then the connection to the Shop app means even afterwards, you're able to track everything you purchased. So the fact that we have 400 million shoppers already trusting Shop and Shop Pay, now that trust goes with them into every single agent. We think that's really, really important. So we actually think in a world of agents, in a world of agentic shopping, These tools, specifically the Shop tool and the toolkit that comes with Shop, Shop Pay, the Shop app, even UCP, so your checkout is exactly what you want it to be, what it is on your website, we think these become even more important. The one thing I wanna zoom up just for a sec, because I suspect I'm gonna get a lot of great questions about agentic on this call, The way we think about this is that agentic ultimately is this incredible new opportunity for merchants. It is a new surface area that otherwise does not exist. As Jeff mentioned earlier, this is, we think, going to be an incremental increase to commerce. He mentioned on the call, on his remarks, but since the start of 2025, we've seen an average, we've captured nearly half of all incremental e-com in the U.S., despite only being 14%. Part of what you're seeing is a strategy to make sure that wherever consumers are purchasing, whether online or offline, on agents, on social, Shopify helps merchants connect to it. So with more opportunity comes more complexity. And actually that is where Shopify's value goes up. By simplifying more complexity where there's more front doors, that allows us to play a larger role in the lives of the merchants that use Shopify. So we think actually with more of these channels and more of these front doors, we will actually play a larger role in the lives of the merchants that use Shopify.

Great. Our next question will come from Mike Morton from Moffett Nathanson. Mike, your line's open.

Good morning. Thanks for the question. Maybe just a little bit of follow-up, Jeff, on the sidekick costs. You talk about doing a good job getting some leverage there on your token expenses. It's something that comes up a fair amount in the investor base. So just Would love to maybe have some kind of guidance, not like the financial way, but just you've talked in the past about subscription solution trend line 80% gross margins. It's kind of two quarters in a row. It's been below that and trending down. When you look forward and you think about your ability to serve merchants with Sidekick, but also get leverage on the token expenses, has your philosophy on that 80% gross margin trend line changed at all?

No, I guess, Mike, from my vantage point, and I said this a little bit in my prepared remarks, I would go back to a couple of things. Number one, on subscription solutions, I talked about what we saw in sidekick costs as well as also about being a blend of some of the other things we're doing from a hosting perspective. and so I feel really good in terms of what we're doing on subscription solutions and again I gave some detail in terms of some of the impact we're seeing on Sidekiq. I really think we're doing some interesting things and I reflect back to my comments in terms of essentially what we're doing in cost per additional inquiry versus usage and we're really trying to drive usage on Sidekiq because we see significant benefit not only and this is Sidekiq may be one of these a few products not the only product but it's just from a pure accounting perspective obviously the costs sit within subscription solutions but the impact is really felt on both sides of our business both the merchant solutions as well as on subscription solutions so and I try to do some of this in my remarks earlier in the call to just speak to kind of the benefit we're seeing and how that value is going to accrue more and more over time in terms of in terms of the success of the business. You also saw from the outlook I gave when you look at the gross margin implications for Q4 of this year and you think about what that trend looks like both on a quarter over quarter basis as well as a year over year basis, we feel really good about what we're doing here on the core elements of the business. some of what we're seeing in Q4 is going to be and again I also alluded to this earlier as well some of what we're going to see in Q4 is some infrastructure spend which really speaks to us making sure in this super important quarter the Q4 quarter where obviously the big holiday shopping season that we have extreme resiliency we're ready to do everything our merchants need so some of that's factored into the margins as well but again I think we feel really good about where we're heading on all this.

Our next question comes from Mark Mahaney at Evercore ISI. Mark, your line's open.

Okay. You may have just answered the question I wanted to ask, which is your guidance implies this.

Mark, you might be lost. I think your line just cut out. Mark, if you come back in the queue, we'll get you back in. Mark, you should be able to.

Yeah, I'm back. Can you hear me now? Yes. Yes. Sorry about that. Hey, just a little bit more on the free cash flow margin for Q4. You typically have free cash flow margins up sequentially. And maybe you just answered it with the last question about a little bit of extra infrastructure spending Q4. And I know you had some small one time items in a free cash flow margin in Q3. But just any more clarification on why you wouldn't have your normal sequentially up free cash flow margin in Q4. Thank you.

Yeah, I think there's a couple of things, Mark. I alluded to this in my comments earlier that there is some marketing spend that has shifted effectively from Q3 to Q4 in terms of some of the testing we did. But more importantly, when you look what we're doing on the performance marketing side, the returns have been very, very good. there are some opportunities just going into holiday shopping season what we've already seen in terms of putting some marketing dollars to work in a highly effective way and that's Shopify we're going to lean into opportunities like that and I think that's exactly what you would want us to do and even with that opportunity on the marketing side and some of the things I alluded to on the infrastructure side we're still getting to these to these margins so again there's a little bit of timing differential between the two but between some of the investments on the infrastructure side and some of the investments on the marketing side, we're still delivering these margins. And when you look what that implies for where we will end for the full year, again, I think from a overall expense perspective, from a profitability perspective, nothing's fundamentally changed. I feel very good about where we are with this business right now.

Great. Our next question is coming from Ken Gurelski from Wells Fargo. Ken, your line's open.

Thank you. If I could ask just two quick, please. First is just on the industry side, there's a fair amount of debate between horizontal kind of general purpose agents and vertical agents. With the full acknowledgement that shop remains largely agnostic here, You have a unique vantage point and would appreciate your perspective, maybe Harley, on that one. And very quickly, just one more on the subscription solutions revenue. Could you talk a little bit about kind of the disconnect between subscriptions revenues decelerating while GMB remains so robust? Could you talk about the outlook as you think 4Q into next year for that lineup? Thank you.

And maybe I'll take the first question. Look, I mean, I think you sort of answered the question yourself, which is our job is to be channel agnostic. In fact, you know, I mentioned this in my early remarks, but, you know, while we're all talking and excited about Agentica and what's to come, it's still, you know, there's so much white space here. At the same time, our merchants are still selling online, they're selling offline. Our job is not necessarily to predict exactly what channel will be the next big channel. Our responsibility to the merchant of Shopify is to make sure they're everywhere. So obviously, when there are some very large new agents that come out from some of the largest companies, we want to make sure we're front and center. That's the Muse and Instinct and Claude Duet style. But beyond that, I mean, we're also building WebMCP, which enables agentic checkout. Any agent can complete a checkout with any store. We also built shop.dev, which are these and shop.md, in fact. These are specifically for developers, one file that can turn any surface area into a commerce experience. Shop.md on the shopper side is one prompt that turns your agent into your personal shopper. So you're seeing us ensure that whatever comes out, if there's commerce integration or there's a commerce component that Shopify is either directly integrated at day one, or we're creating these you know these tooling like shop.dev and shop.md so that any third-party developer who wants to bring commerce into their application whether it's a vertical agent or it's a horizontal agent is able to do so very easily the idea really here is is to be too good to ignore whether it's UCP or it's catalog or it's the shop app or shop pay make it so that any type of agentic tooling that wants to incorporate commerce comes to Shopify first and foremost

Yeah, and I would just add to your question on the subscription solutions piece versus GMB. Obviously, most of the GMB gets manifested in the payments revenue, which ends up on the merchant solution side. As I alluded to in my comments earlier, this is, we don't try and from a pure accounting perspective manage to one piece of the business versus the other. The subscription solutions generally captures, again, the merchants which are being added to the platform as well as variable platform fees and then everything from payments, tax, shipping, capital, etc., all that ends up in merchant solutions. So you see this in the MRR growth. I mentioned in my comments and you see in the press release that MRR was up 19% year over year. We talked a little bit about the marketing element of this too. So from a merchant ads perspective, we feel really good about what we're seeing there. when you look at the revenue growth in terms of what we delivered in Q3 it being 32% the guidance we talked about low 30s this would be that would mark the seventh consecutive quarter of revenue in the low 30s we feel really good about where we are and then the only other thing I would add is you know for some of as we get some of the larger merchants want to just do more GMV there's even a larger disproportionate share of Our next question will come from Jim Callahan from Piper Sandler. Jim, your line's open.

Hi, thanks for taking the question. I'm just kind of curious on the marketing tests, understand some of this will reverse in 4Q, but curious what the conclusion of the test was, and maybe could this have had any top line impact in the quarter? Thank you.

No, no top line impact. This was testing in some channels and some geographies. And I would just say what we're always trying to do, Jim, is just get smarter and hone even further the accuracy of our analysis. And it gives us a lot of confidence in the returns we're seeing. No change in marketing philosophy. and so on and so forth.

That our model has this breadth of growth levers. It is not a single bet on one growth curve. We have sort of this portfolio of core commerce and payments, international, agentic enterprise. And in any given quarter, some will be stronger than the others. But the durability, I think, of the story is the compounding strength across that set. You know, international GMV was up 32%. B2B saw 74% growth. Offline GMV was up 30%. We crossed the $200 billion mark for offline GMV. and then you have enterprise as well. So what we try to think about is sort of this portfolio of bets and making sure that whatever is to come, we're front and center, but also making sure that we're able to, I mean, Shopify ultimately is a growth company and we want to stay focused on driving merchants growth in turn that fuels our growth, but there's never necessarily one particular place we put our eggs in because we have this portfolio of opportunities. And I think that actually talks to the durability of this business model.

Our next question is from Shweta Kajuria with Wolf Research. Your line's open.

Thank you for taking my question. Could I please follow up on agentic commerce? So when we think about the economics and how economics will evolve, where will the How will it work in your view? Will the merchants be paying a certain take rate or will you be sharing the economics with these agents? How does this evolve in the near term and maybe mid to long term? And then how do the agents choose shop pay? If I as a consumer have set up shop pay and other forms of payment, how do these agents default to shop pay as the option? Thank you.

Maybe I'll take the second part of the question and then Jeff can do the first part of monetization. That's the best part of ShopPay because we have 400 million consumers that are using it constantly across all their favorite brands. We want to make sure that when the consumer is using any agent that they want and ShopPay is available, that's the one they select. Ultimately, this is about ensuring that consumers have an amazing experience, that they have that they're able to get the right credit card information, the right sizing, the right merchandising of the product they want and able to purchase it. Part of the reason why we're beginning to talk more about Shop as the suite of products with Shop Pay, with your preferences, with your order tracking is that ultimately we think that when consumers are given a number of different options, they're going to pick the option that is best for them, that results with the best experience, high security, it is fast, but it also knows the details of their purchase history. And that's what they get with Shop Pay. So This is about merit, and we believe that we can compete on merit to get more consumers to use it.

Yeah, and to Harley's point on that very point he just made, what we're trying to do is make sure, of course, more and more merchants use Shopify as their core platform. If you start, to your question, Shweta, if you start, for example, on Muse, and if you as a consumer then do a search which leads to a merchant which is using Shopify, then the economics are exactly the same. Essentially, this is another form of discovery. They're sending you to the merchant's website and everything else that you would have done and any other form of discovery ends up to the same economics back to Shopify. And then to Harley's point, what we're trying to make sure we do is get shop pay out there more and more in terms of a wallet perspective and continue to expand the economics on that front as well.

Our next question is from Paul Treber with RBC Capital Markets. Your line's open.

Good morning. Thanks for taking the question. during the quarter bought shop.com for about $100 million. It's a fairly sizable amount. How do you think about shop.com coexisting with merchant websites and other channels? And then the second question is, why now, particularly in light of The rise of AI agents, you know, what's the importance of having a centralized location?

Yeah. Look, in the physical retail world, location, location, location matters. We think the same thing applies on internet as well. And we think shop.com is an incredible prime address for us. Thank you for joining us. and we think this is a really convenient, very easy entry point for shoppers to discover incredible brands and products. The transition required no action from merchants and shopper traffic to shop is growing even faster on the web than in the app. So this was us moving basically the shop. We were at shop.app previously, we're moving to shop.com. We think this is one of the most important locations on the internet and that really matters to us. But I think you can sort of glean from this what our ambition is with shop.

Our next question is from Colin Sebastian with Baird. Your line's open.

Thanks, good morning, and I appreciate the questions. I guess, Harley, what's helping Shopify win more of these point-of-sale merchants that didn't start with you online? And I guess, is that changing your approach to acquiring those? And then maybe a follow-up on all the questions around variable economics with the GenTech. I guess, as Sidekick takes on more merchant workflows and the product catalog is growing, is now really critical for powering Agentic. Are you thinking about translating that value into higher monetization or is it more about expanding Shopify's share of overall retail?

Thank you. I mean, on the point of sale and the retail side, this certainly was an incredible quarter for Offline. I mean, I mentioned that, you know, lifetime POS GMB crossed $300 billion in Q3. GMB was up 30%. We had Canada Goose, who, you know, brought on dozens of locations. BevMo brought over 150 locations. The Body Shop, MAC Cosmetics added 83 locations in under 90 days. So what we're seeing is that offline is not a separate business. It is the same platform, the same catalog, the same buyer relationships. It's just extended into the physical world. And I think we're seeing more businesses with very established brick and mortar businesses of their own coming to Shopify for this unified commerce capability. It's great when we get a point of sale only merchant to come on first and foremost and expand. But also what is happening is the fact that, you know, New features. We just announced something recently at our auditions, but Point of Sale now automatically recognizes customers at checkout by using Shopify Payment Network in the actual physical store. That's something that never happened before. So this brings sort of this digital style customer context to physical retail, which frankly has never been the case. And I think ultimately, whether it's expanding customer recognition in Point of Sale or it's expanding locations, we are now becoming... One of the default places that mall and retail goes, not just for online, but also for offline as well. I think generally around enterprise, just because a lot of these very large sale installations are coming from enterprise. Enterprise is getting some incredible momentum here. We're able to not only get some of the The up-and-comers that are expanding, sort of the homegrown success stories are staying with us. But the fact that we're bringing the Lululemons of the world, for example, or Burton or Balmain or Canada Goose, who all went live in Q3. I mean, the pace of that, again, it takes longer to bring an enterprise merchant to migrate on. But we've really figured out how to get them on as quickly as possible, given the context and all their integrations. So I think both point of sale and enterprise is going really, really well. And yeah. Yeah. What is the second part of your question? I think I missed that.

I think you got it, Harley. I think you got it.

Okay.

We're now going to go to Brian Smilick at J.P. Morgan for our final question. Brian, your line's open.

Great, thanks for taking the question. I'm just curious on Sidekiq, very good to see you continue to gain efficacy. Can you just talk about the product roadmap into 27 across analytics, cogeneration, and Canvas more broadly? And then Jeff, just more near term, can you just elaborate on where you're going to allocate the incremental infrastructure spend into Black Friday, Cyber Monday? Will that be more across Sidekiq or just broader platform volume? Thank you.

Yeah, it is amazing. I mean, for new merchants, Sidekick is helping get the first sale much faster to grow. In Q3, we saw a 3% lift in the number of merchants reaching five orders within 60 days after using the guide. That's on a very, very large base. So it is becoming, obviously, incredibly powerful for new merchants, but also for complex tasks. inside the flow of running a business, whether it's these third-party apps that are now able to integrate merchants on average, use eight apps, help them run their day-to-day business, that all integrates into Sidekick. Beyond that, you're seeing these incredible examples of power users who are pushing into this advanced design, doing SEO, product creation. And so I think generally, you're just going to see Sidekick continue to provide more value over time, both for new merchants, but I mean, two-thirds of all Shopify flows were created by Sidekick in this past quarter. So the pattern should be very clear. More merchants are using it, and each merchant is finding more ways to use it. And over time, that value will only compound. Again, it's powered by 20 years of commerce experience. So there's that intelligence, and it also knows the full context of everything about your particular store.

Yeah, and Brian, to your question about source of the spend, some of it is sidekick. There's also some interesting things we're doing on search capabilities. We've had search capabilities for merchants for a while. We're continuing to enhance that, make that even stronger. And storefront resiliency, again, as I alluded to, as you go into the big holiday shopping season, we want to make sure we are extremely ready to let merchants do everything they can in terms of sell as much as possible. And so there's some things on the storefront infrastructure that we're doing. Great.

Thank you.

Thank you so much for joining us.

Retail is obviously changing completely. New channels seem to keep emerging. Old channels are becoming big again. And I think I can appreciate from the outside it may be hard to sort of keep pace of this. But through it all, I hope it is very clear that Shopify is unequivocally at the epicenter of all of this. We deeply believe this is one of the most exciting times in retail and commerce in a very long time. And as you see new companies or new technologies or even new models launch, where commerce is involved, Shopify will be integrated. and that is not by accident. We work really, really hard to be the de facto partner for commerce on the internet, whether that means partnering or building ourselves or collaboration. And so for those listening, if you're a shareholder, this is what you should want from us to be the company, not just betting on commerce, but also helping to architect Thank you so much for joining us. are coming to Shopify. There is no floor, no ceiling. And the products we're building is not just to help them right now, but also to future-proof them long into the future. Many of you have been betting on Shopify for almost 12 years now since the IPO. And I think in that time, I believe we've earned the right to be considered a highly trusted public company because we do what we say we're going to do. And we do that reliably. I think we do that durably. And we will absolutely keep doing that. So thanks for joining us on this call. And we will talk to you all next quarter.

Great. Thanks, Harley. Thanks, Jeff. This wraps our third quarter of 2026 conference call. Thanks everyone for joining and we look forward to speaking to you all soon. Have a great day.