Welcome to Global-e's Fourth Quarter and Full Year 2023 Earnings Announcement Conference Call. This call is being simultaneously webcast on the company's website in the Investors section under 'News and Events'. For opening remarks and introductions, I will now turn the call over to Erica Mannion at Sapphire Investor Relations. Please go ahead.

Thank you, and good morning. With me today from Global-e are Amir Schlachet, Co-Founder and Chief Executive Officer; Ofer Koren, Chief Financial Officer; and Nir Debbi, Co-Founder and President. Amir will begin with a review of the business results for the fourth quarter and full year of 2023. Ofer will then review the financial results for the fourth quarter and full year of 2023, followed by the company's outlook for the first quarter and full year of 2024. We will then open the call for questions. Certain statements we make today may constitute forward-looking statements and information within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995 that relate to our current expectations and views of future events. These forward-looking statements are subject to risks, uncertainties and assumptions, some of which are beyond our control. In addition, these forward-looking statements reflect our current views with respect to future events and are not a guarantee of future performance. Actual outcomes may differ materially from the information contained in the forward-looking statements as a result of a number of factors, including those set forth in the section titled 'Risk Factors' and our prospectus filed with the SEC on September 13, 2021, and other documents filed or furnished to the SEC. These statements reflect management's current expectations regarding future events and operating performance and speak only as of the date of this call. You should not put undue reliance on any forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that future results, levels of activity, performance and events and circumstances reflected in the forward-looking statements will be achieved or will occur. Except as required by applicable law, we make no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which these statements are made or to reflect the occurrence of unanticipated events. Please refer to our press release dated November 21, 2024, for additional information. In addition, certain metrics we will discuss today are non-GAAP metrics. The presentation of this financial information is not intended to be considered in isolation or as a substitute for or superior to the financial information prepared and presented in accordance with GAAP. We use these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. We believe that these measures provide useful information about operating results, enhance the overall understanding of past financial performance and future prospects, and allow for greater transparency with respect to key metrics used by management in its financial and operating decision-making. For more information on the non-GAAP financial measures, please see the reconciliation tables provided in our press release dated November 21, 2024. Throughout this call, we provide a number of key performance indicators used by our management and often used by competitors in our industry. These and other key performance indicators are discussed in more detail in our press release dated November 21, 2024. I will now turn the call over to Amir, Co-Founder and CEO.

Thank you, Erica, and welcome everyone to our fourth quarter and full year 2023 earnings call. 2023 was a record-breaking year for us here at Global-e, and it was brought to a great close by fourth quarter, which was our strongest quarter ever, crossing for the first time a milestone of over $1 billion of GMV within a single quarter. We finished Q4 with a record $1.19 billion in GMV, up 42% year-on-year, and record revenues of over $185 million, up 33% year-on-year, supported by the strong performance of our merchants over the holiday sales period, including Black Friday and Cyber Monday. The adjusted gross profit margin for Q4 was 42.7%, up 140 basis points from the same quarter of last year, and our adjusted EBITDA margin was 19%, or $35.2 million, our highest ever in a single quarter, reflecting nearly 62% growth compared to the same quarter of last year. Such increased profitability yielded an accelerated cash generation, with the business generating $93.5 million in operational cash flows in Q4. Looking at the full year of 2023, GMV came in at close to $3.56 billion, an increase of over 45% year-on-year, and revenue for the full year came in at $570 million, an increase of over 39% year-on-year. Annual adjusted gross profit increased even faster, growing by almost 46% from 2022, reaching roughly $245 million, and representing an adjusted gross profit margin of 42.9% for the full year, an increase of nearly 190 basis points year-on-year. Finally, adjusted EBITDA for the full year was $92.7 million, up more than 90% compared to $48.7 million last year, representing our continued commitment to delivering durable yet profitable growth, thanks to the high efficiencies and tight cost controls. Last but not least, we finished the year with more than $300 million of cash and cash equivalents on our balance sheet, providing a solid foundation for the continuation of our fast and profitable growth trajectory, and for the realization of our strategic plans going forward. As we reflect on these strong annual financial results and the substantial growth we managed to generate, it is important to remember that these were achieved while we faced a challenging and at times volatile macroeconomic environment, further exacerbated by the challenges presented by the ongoing war in Ukraine, as well as the aftermath of the horrific Hamas terrorist attack on October 7. Our hearts go out to all those who were affected by these events, and we continue to provide all possible support to our team members and their families in both Israel and Ukraine. As such, we could not be more proud of our incredible team members across all our offices and locations worldwide for having navigated all these challenges so successfully, and we could not be more thankful to the thousands of merchants who entrust us with their business every hour of every day. Beyond the strong financial growth and figures, 2023 was also another pivotal year for us in terms of the substantial leaps we took forward along all our long-term strategic pillars, as we continue to enrich and develop our various offerings. First and foremost, we continue to onboard and add many new brands across the globe to the large portfolio of enterprise brands we work with, as global direct-to-consumer online trading continues to be a strategic priority for brands worldwide. We are not just the leader in global direct-to-consumer e-commerce. We're also the only true global player in the market. We already support 31 different outbound markets. And last year alone, we actively shipped packages to 224 distinct destination countries and territories around the world. We quite literally enable our merchants to sell to anyone in nearly every place on earth. As an example of this continued expansion, just this last quarter, we launched with Glossier, EleVen by Venus Williams and Perfect Moment in the U.S., with Phantom Wallet in Canada, with Whistles and the Harry Potter store by Warner Brothers in the U.K., with Mugler, a L’Oreal brand, Jean-Paul Gaultier and Ledger, a leading crypto wallet brand, in France, with Etoile and Modes in Italy, with LuaVis in the Netherlands, with Jetzt in Germany, with ideal in Belgium, with Zanerobe in Australia, with Salt Murphy and Avec Amour in Hong Kong, and with Retouch in Japan, just to name a few of the many brands that went live with us in the last quarter of 2023. During Q4, we also went live with Stellar Equipment out of Sweden, as well as with God Save Queens, our first Polish merchant, further extending our geographic outreach. Besides adding new merchants, we also continue to expand the scope of our business with existing merchants and merchant groups. Just this last quarter, adidas, Nobull, and the Kooples all extended the list of markets operated through globally. Triangle Swimwear went live with an additional brand called Casa Del Mar, and Kylie Jenner who went live with another one of her brands, the fashion brand KHY. From a product perspective, looking back at 2023, we introduced many new features and key developments into our enterprise platform. Those included improved support for preorders via tokenization, support for cryptocurrency payments via our new integration with crypto.com, support for orders which include items fulfilled from different countries as part of a single order, support for several new countries in our multi-local offering, integrations into new platforms such as Wix.com, and much more. Alongside these, we continue to work towards the launch of our enhanced demand generation offering based on the assets and capabilities we acquired as part of the border-free transaction, and we expect the first major parts of this exciting new offering to be released towards the second half of the year. Moreover, we have discussed in earlier quarters. During 2023, we also invested considerable resources in harnessing the new and transformative technology of generative AI to enhance the quality and efficiency of various aspects of our business. The most recent example of such a successful implementation comes in the form of our shopper facing customer services. After several months of beta testing and before the recent peak trading season, we introduced into production our new automated Customer Service Chatbot based on OpenAI's ChatGPT technology, which has been securely connected to our systems and databases, thereby enabling many of our shoppers to receive highly accurate answers to their support queries in real-time without a need for human intervention. We believe this is a manifestation of the tremendous business value such technologies can unlock over the next few years. Another area in which we have made great progress during 2023 was our strategic relationship with Shopify. The agreement for which was renewed for another year during Q4. On the enterprise side, we have almost finalized the migration of all our legacy in-store base onto the new native integration. In addition, our support for Shopify's new checkout extensibility feature has gone into general availability since January 2024, with a significant number of merchants already running on this new and improved checkout with globally cross-border capabilities seamlessly embedded within it. On the Shopify Markets Pro side, which went into general availability in the U.S. in September, we continue to see an encouraging adoption rate with more and more merchants every week effortlessly switching it on and going global. Between these positive early signs and the exciting roadmap of new features and capabilities we are working on together with Shopify, we believe that the innovative Shopify Markets Pro offering has the potential to grow significantly over the next few years. In summary, we are extremely pleased with our achievements and results for 2023. And we are equally excited about the many opportunities for growth that await us in 2024 onwards across all our strategic growth pillars. As Ofer will elaborate on when he presents our guidance for 2024, we expect our strong growth momentum to continue this year with around 32% of annual growth expected in both GMV and revenues. And with that, I will hand it over to Ofer to dive deeper into our quarterly and annual financial results as well as our outlook for Q1 and for the full year of 2024.

Thank you, Amir, and thanks everyone for joining us today for our earnings call. As Amir stated, we are indeed very pleased with our Q4 and full year 2023 results. Q4 was a strong quarter of fast growth and robust cash generation as we continue to execute and push forward both top-line growth and scale efficiencies. I'd like to point out again that in addition to our GAAP results, I'll also be discussing certain non-GAAP results. Our GAAP financial results, along with the reconciliation between GAAP and non-GAAP results, can be found in our earnings release. As Amir mentioned at the beginning of this call, we have experienced rapid growth of GMV in Q4 as we generated $1.19 billion of GMV, an increase of 42% year-over-year. We benefit from the secular trend of growth in e-commerce which continues to take share from brick-and-mortar retail and from the increased focus of merchants on their direct to consumer channels. However, it is important to note that due to the continued recessionary concerns and the sensitive macroeconomic and geopolitical situation in many of the world's largest economies, in the short term there is still relatively high uncertainty regarding consumer demand which remains volatile. In Q4, we generated total revenues of $185.4 million, up 33% year-over-year. Service fee revenues were $89.9 million, up 43%, and fulfillment services revenue were up 24% to $95.5 million. The higher growth of service fee revenues compared to fulfillment services revenue was mainly driven by the higher share of our multi-local service with high performance of the largest multi-local merchants in Q4. Throughout 2023, our existing merchant base continued to stay and to grow with us as reflected in our annual NDR rate of 127% and GDR rate of over 97%. Note that our NDR in 2023 excludes border-free volumes as border-free merchants traded with us only for part of 2022. Moving down the P&L, growth in non-GAAP gross profit continues to outpace revenue growth. In Q4, non-GAAP gross profit was $79.1 million, up 37% year-over-year, representing a gross margin of 42.7% compared to 41.3% in the same period last year, driven by the higher share of service fee revenue. GAAP gross profit was $76.3 million, representing a margin of 41.2%. Moving on to operational expenses, we continue to invest in the development enhancement of our platform to further strengthen our offering. R&D expense in Q4, excluding stock-based compensation, was $18.2 million, or 9.8% of revenue, compared to $17.8 million, or 12.8% in the same period last year. Total R&D spend in Q4 was $25.2 million. We also continue to invest in sales and marketing to enhance our pipeline while maintaining efficiencies. Sales and marketing expense, excluding Shopify-related amortization expenses, stock-based compensation, and acquisition-related intangibles amortization, was $17.8 million, or 9.6% of revenue, compared to $9.9 million, or 7.1% of revenue in the same period last year. Shopify warrant-related amortization expense was $37.4 million. Total sales and marketing expenses for the quarter was $58.8 million. General and administrative expenses, excluding stock-based compensation, acquisition-related expenses, and acquisition-related contingent consideration, was $8.6 million, or 4.6% of revenue, compared to $8.9 million, or 6.4% of revenue in the same period last year. Total G&A spend in Q4 was $15.5 million. Adjusted EBITDA totaled $35.2 million, representing a 19% adjusted EBITDA margin, increasing from $21.8 million, or 15.6% margin, in the same period last year. Net loss was $22.1 million, compared to a net loss of $28.5 million in the year-ago period, driven mainly by the amortization expenses related to the Shopify warrants and to transaction-related intangibles. Switching gears and turning to the balance sheet and cash flow statements, we ended 2023 with $317 million in cash and cash equivalents, including short-term deposits and marketable securities. Cash generation has accelerated with operating cash flow in the quarter at $93.5 million, compared to an operating cash flow of $57.3 million a year ago, driven mainly by adjusted EBITDA growth and working capital dynamics. Moving to our financial outlook and guidance for 2024, despite the prevailing macro-related uncertainties, we expect 2024 to be another year of fast growth and improved adjusted EBITDA for Global-e. For Q1 2024, we're expecting GMV to be in the range of $875 million to $915 million. At the midpoint of the range, this represents a growth rate of 27% versus Q1 of 2023. We expect Q1 revenue to be in the range of $138.5 million to $145 million. At the midpoint of the range, this represents a growth rate of 21% versus Q1 of 2023. For adjusted EBITDA, we're expecting a profit in the range of $16 million to $20 million. For the full year of 2024, we anticipate GMV to be in the range of $4.59 billion to $4.83 billion representing over 32% annual growth at the midpoint of the range. Revenue is expected to be in the range of $731 million to $771 million representing a growth rate of nearly 32% at the midpoint of the range. As we expect, overall take rates to stabilize throughout the year. For adjusted EBITDA, we're expecting a profit of $121 million to $137 million, representing over 39% growth at the midpoint of the range, thanks to increased efficiencies and economies of scale. As reflected in the guidance, we expect our fast growth to continue in 2024, with around 32% top-line growth, alongside improved adjusted EBITDA margin. The slower top-line growth we expect in Q1 is a result of a number of factors. First, is the lower contribution from new merchants, as large merchants we have signed are expected to launch only in the second half of the year. Second, is the fact that we expect the trading that still exists on the legacy border-free platform to weigh on our growth in the first half of 2024, as a high share of its remaining GMVs generated by traditional retailers, especially department stores, which are facing challenges with many even experiencing declining sales trends. We believe we will see improvements once we migrate many of these merchants to the Global-e platform. Third, is the continued volatility in consumer demand in the short term, in light of weakness in some of the largest economies, as well as some softness we observed in trading volumes of consumers around the globe during February. We expect our overall growth to accelerate in the remainder of the year, driven by ramping Shopify Markets Pro planned launches of large merchants in the second half of the year, and a lower impact from border-free on a year-on-year comparison. In conclusion, we continue to enhance our capabilities to support merchants worldwide in their direct-to-consumer journey. The opportunity in front of us is immense and we are well-positioned to capture it. We believe this will enable us to combine durable top-line growth and cash generation in the coming years.

Thank you. Our first question comes from Brian Peterson from Raymond James. Please proceed.

Hi, guys. Thanks for taking my questions. Yes, Ofer. I understand that you already mentioned that December and November were pretty strong. You guys made it to the top in February. Would love to understand maybe how things progressed from December to January. Were there any regional trends that you've observed?

Yes. So Brian, thank you for the question. It's Ofer. I think that, as we mentioned, we have seen increased volatility in consumer demand in the past year and especially in the last few months. And as we already communicated in the previous quarter, we saw a drop in September and October, a relatively steep drop in same-store sales. And a very nice recovery towards the end of October with a very, very strong peak and excellent results around Black Friday and Cyber Monday weekend. Then during December, this continued with a lighter end to the year. And as I just mentioned, things continue to be volatile. And we do see a lot of shifts in consumer demand. And since the beginning of February, we have seen some softness in consumer sentiment again around the globe and weakness in some of the large economies. So, this has been with us only for the last two or three weeks, but still important to note.

A question. There are a lot of market pros and pros. Is there any way to get better insight into how to think about the contribution in 2024 or any perspective you guys can share there? Thank you.

It's a, Brian, it's a little choppy or your line is a little choppy. Could you repeat the contribution of what were you asking about exactly?

Yes, sorry. Hopefully this is better. No, the reference to Shopify's markets growth so far, is there any perspective that you can give in terms of expectations in 2024?

Yes, so as we mentioned, we're very happy with the progress that we've made in Shopify markets pro both from a technical perspective, the developments we've deployed and that we're working on together with Shopify and also the rate of adoption. It is still in the early days, but we believe that over the next quarters and years, it can grow into a significant business.

Hey guys, appreciate you taking the questions. So just, I guess another question on, I think you mentioned volatile consumer trends over the past several months and maybe more recently in February. I guess, could you maybe talk about the approach that you took to guidance? I mean, obviously, the color on Q1 is very helpful. It sounds like there is a ramp baked into the guidance for the remainder of the year. Some of that Shopify, just kind of color on what you're assuming for the remainder of the year as it relates to the macro. And then, if we look back over the last couple of years, there's been several kind of exogenous events that have impacted the numbers and resulted in kind of less outperformance than maybe you guys would have hoped. Just wondering if you could contextualize this guidance in terms of just how much kind of macro weakness over the course of the year the guidance can absorb given, the continued levels of uncertainty.

Sure, Will. Thank you for the question. So since there is a high level of uncertainty, we have not assumed an improvement in macro conditions throughout the year. However, we also haven't looked at the lowest point. As I mentioned, we saw some weakness since the beginning of February. So we sort of look at the average since the beginning of the year, not taking into account the lowest point, but also not taking into account any improvement in macro conditions as, again, the level of uncertainty is still high and we have no control of that.

Got it. Makes sense. And then I think, you called out border-free. Just wondering if you could just maybe help us size in terms of, what's the contribution in numbers today and maybe roughly what are you kind of baking in for the remainder of the year for that business.

Yes. So in terms of volumes, today border-free, sorry, is approximately 5% of the volumes. It's sort of a high-level number. It is decreasing in share over time, one, because we are not onboarding any new merchants onto border-free. And two, as we mentioned, the type of merchants that we see on border-free, legacy, mainly U.S. legacy merchants, a lot of department stores, and since they are sort of facing their own challenges with their business model, it has an impact on their sales as well. So this is decreasing over time.

Got it. That's helpful. Sorry, just for the clarification on the expectations for the remainder of the year. Are you guys assuming that the same-store sales there remain negative for the remainder of the year?

Yes. Yes, we do. However, I think we do think that mainly in the second half, as we migrate those clients, we will see a one-off increase that will stay with us. But due to the higher conversion rates that we typically see on the Global-e platform. So we do foresee an improvement. However, it will be gradual as they would migrate one by one. And since those are large legacy merchants, it takes some time. So we do expect to see some improvement, but it will be gradual.

Hey, good morning, and thanks for taking my questions. Maybe first just for what's embedded in the guidance around the net dollar retention. 127 was a strong year for 2023. Just as I think about the low 30s growth guidance, what are you thinking net dollar retention will look like in 2024?

So we think that net dollar retention in 2024 will be slightly lower compared to 2023. As we mentioned, we do see sort of uncertainty around macro conditions. Consumer sentiment is very volatile. And on top of that, also Borderfree will come in and sort of weigh a bit on our NDR. So we do expect it to be slightly lower than what we have seen in 2023.

Understood. And then maybe just on Shopify Markets Pro, this might be more for Amir or Nir, but what are you seeing as far as in the initial customers that are using it? Now it's been, let's call it four or five months, maybe average annual GMV of the typical Shopify Market Pro merchant that you're seeing? And then related to Ofer, should we think about that being like a $200 or $300 million GMV contribution in 2024? Just anything that we can kind of peg against.

Hi, Samad. It's Nir. Thanks for the questions. We have seen initial positive signs for adoption post S&P general availability in the U.S. Coupled with continued development of the solution capabilities that is still ongoing, we expect the adoption rate to grow gradually throughout the year. At this stage, we don't guide specifically for Shopify Markets Pro. However, I don't think your numbers generally are far off.

Hey, thanks for taking the question. I just want to get a sense of your expectations for the gross margins as we progress through 2024. I mean, with the fulfillment dynamics in the fourth quarter. It seems reasonable that gross profit could outpace revenue. So any thoughts around that would be helpful.

So we are very, very pleased with our gross margin improvement over time as we surpassed our 40% target earlier than we expected. And moving forward, we expect relatively stable gross margins as we continue to prioritize growth over profitability. However, we do see operational leverage potential that will enable us to improve our adjusted EBITDA margins.

Got it. Thanks. And then just looking back at the fourth quarter, I mean, you had a really strong Black Friday, Cyber Monday press release of 53% versus the 44% for the full quarter. So maybe you could just give us a sense of what was about your platform that drove that outside strength and maybe a better sense of the shape of trends throughout the quarter so we can understand it.

Sure. So as you mentioned, we did experience a strong quarter generally and a very strong big trading season with the highest growth around Black Friday and Cyber Monday weekend. Some of it may be attributed to consumers' preference for discount shopping. So this may have had an impact. And I think that on top of that, there were very strong results for some of our large merchants, so that also contributed for them first, but for us, it's a derivative as well.

Hi. Thank you for taking the questions. One on the revenue guide. So, your revenue guide for Q1 implies a take rate decline. But then when we look at the full year guide for 2024 that kind of suggests that the take rate should improve in the back half. So how much of the improvement in the take rate are you baking in assumptions for growth from Shopify Markets Pro, which is probably at a higher take rate?

Thank you, Kunal, for the question. I think the answer, the main part of the answer lies actually in 2023 because we started 2023 with a much higher fulfillment take rate. The overall take rate in Q1 last year was 16.7%. And over the year, as the share of multi-local and mainly our large multi-local merchants grew, because we have launched a few and expanded our activities with others, we've seen a reduction in overall take rate, mainly just out of the fulfillment take rate. And basically, as we mentioned in the previous quarter, we expect that to balance next year. So we expect to see a much more balanced year. We expect it to stabilize at around the overall take rate, around 16%, as we do not expect the share of those merchants to grow significantly, because the merchants that we see currently in our pipeline, the large ones, are not multi-local merchants. So we expect to strike a balance.

Thank you. And then, you mentioned weakness in February. Can you talk about trends by maybe vertical and geography, like you did last time, in terms of what's luxury doing versus what's apparel doing? And then last time, you talked about weakness in Europe, inbound. So can you talk a bit about that, please?

Yes, thank you for your question. It's Nir. I would say that in February, we don't see a specific vertical that is down. However, on geographies, we do see slowdowns around different parts of the world. Our inbound into the U.S. has slowed down a bit. Same-store sales are not growing as fast as they did in January or the previous year. Same goes for the U.K., which officially went into recession just earlier this year. And we've seen some slowness in APAC. So it's kind of a global slowdown that we see. It's not specific to a certain territory or vertical.

Hi, everyone. Nice quarter. Thanks for taking my questions here. I just wanted to touch on the guidance for 2024 a little bit. I think, as you all noted, your service fee revenue has been growing meaningfully faster than the rest of the revenues. But it's been growing even faster recently than historical trends. Do you still see the breakdown in growth between the two revenue segments kind of having that growth difference there? Or as was just noted a moment ago with some of the larger merchants that you have in the pipelines, do you expect that to maybe moderate the growth rates more balanced between the two lines?

Sure. Thank you for the question. We do expect to see a more balanced growth in 2024. As I mentioned, 2023 was characterized by strong multi-local growth, which had an impact on the mix. We typically don't have any fulfillment revenue or very little fulfillment revenue and with multi-local, and we expect that 2024 to be much more balanced. As I mentioned, the larger merchants that we've seen that it's fine though we've seen the pipeline are not multi-local merchants and we also have fewer new initiatives around fulfillment services, so we do expect this year to be much more balanced in terms of revenue pillar growth.

Got it, that's helpful. Congratulations on expanding into 200 countries. That likely means you're currently only fulfilling in the end article, which might be a future goal. Considering the investments needed to enhance your distribution capabilities across the countries where you already operate, do you believe those investments are mostly complete at this point? Are any additional needs incremental based on volumes, or do you anticipate a significant increase in investments in the next couple of years to support market penetration?

Well, Antarctica does not have any citizens in it, so probably not going to ship there anytime soon, but who knows maybe. But to your question, in terms of the outbound, in terms of the inbound markets, those don't require any specific investments from us. It's the outbound markets that sometimes require some investment in them, but I would say it's by now with as we mentioned thirty-one different outbound markets. The marginal investment that is required from us for opening an additional market is already quite low. We are well-trained and well-seasoned in doing it and it just as a reminder in any case we're not talking about any capital investments. This is very capital-light and it mostly has to do with sometimes we need a local entity; it requires some local contracts, but it's not a lot more than that. So we don't expect any massive investments in terms of the additional outbound markets that will be opening in the future.

Hey guys, thanks for taking the questions. I wanted to ask a question on the first quarter GMV, just digging into that a little bit more. Considering it's a much heavier sequential growth step down assumption this year versus last year, looks like it's about down 25% versus down 21% when first guiding the 1Q 2023. So can you dig into a little bit about what's causing that higher level of GMV's step down. Is that all uncertainty with the macro and the consumer? Are there any customers that you now have that have outsized 4Q holiday seasonality that is driving this outlook? I mean, any sort of color that would be fine.

Sure, thank you for the question. Well I'll start from the top for the full year of 2024, we expect to see continued momentum of high growth of over 30% for both GMV and revenue, and that’ll be supported by our strong pipeline of large merchants that are expected to launch in the back half of the year as well as the ramp-up of Shopify Markets Pro over the course of the year. Specifically for Q1, indeed the growth we expect is lower and that is, there are a few drivers behind that. The first one is less contribution from new merchants as the large merchants signed or the ones that are towards the end of the pipeline are expected to launch later in the year, mainly in the second half of the year. So we see, we are expecting and planning very nice launches, but the large ones in the second half of the year. As we mentioned we see some adverse effect from some border-free legacy retail clients mainly the department stores and we expect this to gradually improve once we complete the migration of these clients to the Global-e platform. And three, as we mentioned, we continue to see high volatility in consumer sentiment, as we've seen between Q2 and Q3 last year and then Q3 and Q4. And now again in February, as we mentioned, we saw a decline in consumer demand. So this will impact Q1 as well. So those are the main drivers.

Good morning. Great to see a strong close to the year. Amir, 97% gross retention model here suggests the product remains sticky, low churn. I get you can't control consumer spending. That clearly is impacting the growth outlook this year. What are the growth levers that are in your control that you can kind of lean more into this year outside of the macro?

Hi, Brent. So absolutely, as you mentioned, the dynamics remain very positive. Although, as we mentioned, it is expected to be another year of high uncertainty and high volatility from a macro perspective. But we continue to push across all the fields from growth in the existing territories where we already operate to opening additional markets and additional territories. Of course, Shopify Markets Pro, which we have mentioned a few times already on the call, is also expected to ramp up along the year and contribute further to our growth. And we are also working on value-added services, specifically demand generation. That's going to kick in, as we mentioned, towards the back end of the year. It's probably not going to be accretive day one, but over the longer period, we expect that to have an additional contribution for accelerating our growth.

Hi, thanks for the question. I want to ask just in terms of customer acquisition and that kind of thing, I'm wondering how trends have been evolving with respect to your inbound interest in conversion for new merchant ads outside of Shopify. Just trying to get a sense for how we should be thinking about the percentage of new ads that are shop-related versus those that aren't in the profile of the merchant partners.

Hi, James. It's Nir. Thanks for the question. We have seen record bookings in 2023, and we are excited about the strength of the pipeline that is going to support our growth throughout 2024 and into 2025. Within it, we have a couple of very large merchants that are expected to launch in the back half of the year. Both of them are non-Shopify, and we expect the weight of those larger merchants, I would say, to balance out the rapid growth we expect to see in Shopify Markets Pro. Overall, when we look at 2024, we expect the mix of merchants to remain quite balanced with what we've seen in 2023.

Excuse me. Thank you. Just a question on luxury specifically. Just given the habitual interest in discounts that you mentioned, I'm curious how luxury performed in the fourth quarter relative to the prior year and how that transitioned into Q1, just given that I think that vertical is roughly 25% of your GMV. I think that vertical is roughly 25% of your GMV. And then I had a quick follow-up.

In terms of luxury, it hasn't been a great year for luxury. However, there was an improvement towards the last few months of the year. So it has improved compared to Q3, which was the lowest point for luxury. And I think it's hovering around the same level since. So it's better than it was in the lowest point. It's not doing great, but pretty stable for now.

Oh, great. Thank you. Amir, so are you still excited about DemandGen over the sort of mid-to-longer term? And what's the dream there?

Yes. So I'm absolutely excited. I think it's going to be a very unique offering. And it's going to take time to build it. But we strongly believe in the potential to both benefit our existing merchants and also to serve as another great benefit for new merchants that are coming on board and therefore help to accelerate our sales pipeline even further. So definitely as excited, if not more than before. In terms of the dream, it's basically to be able to offer a platform, a unique platform for demand generation, which is unlike any other offering that these merchants can have from digital agencies or other outside providers, but something that is fully aligned with their growth interests and fully integrated with the Global-e offering and with each part of it strengthening the other. We think it's something that can be a game changer for some of these brands.

Hey, guys, and thanks for taking my question. I was just wondering if you could talk about if there's any differences in the size of merchants coming onto the platform. There's obviously Shopify Markets Pro coming in. And obviously, you guys mentioned this last quarter too, but we also saw Wix announce the partnership. So just wondering if you're expecting maybe some of the smaller merchants to come onto the platform versus previous years. Thanks.

Yes. So I think that, as you mentioned, on the one hand, we continue our growth with our enterprise clients and we continue to onboard them as we did in previous years. In parallel to it, we have seen a great adoption of Shopify Markets Pro with thousands of merchants launching on the platform. However, it's a significantly smaller size than our average enterprise clients. We've seen initial traction launching Wix merchants on the platform as well, with an average size also smaller than our regular enterprise. However, both from Wix and from Shopify, we expect to see large numbers of clients that would actually give another edge to our growth with a different profile of merchants between those smaller merchants and our enterprise platform clients.

Yes. Hi. Thanks, everybody, for taking my question. Much has been asked and answered here, but maybe I'll just dig in a little bit on the cost of revenue quickly. It came in a little bit higher than expected. I was just curious if you could remind us the more volatile components of the cost of revenue. I imagine the payment side is a little bit more predictable, but are there instances where you'll have certain fulfillment costs agreed with a merchant and then underlying spot prices will increase and that'll squeeze that margin a little bit here and there? If you could just remind us what you guys are looking at with respect to things like container prices, oil prices, etcetera, that may drive the more volatile components there. Thanks so much.

Yes, sure. Thank you for the question. We don't have, well, most of our cost of goods sold are obviously variable, but at the same time, the margin or the cost margin is pretty stable. We don't have a lot of volatility. The main volatility is derived from merchant mix. For example, in Q4, as we mentioned, we had a relatively high share of a few large merchants, and those typically have pricing that reflect their size. This is just an example, but this is a mixed impact that may have a certain impact on gross margins. But generally speaking, our pricing with the carriers are relatively stable. They do change from time to time, but typically we can pass through the cost and it's not volatile over the year. It changes once in a long while, in a relatively long while.

Hey, good afternoon, guys. Thanks for taking the question. Just wanted to ask one clarifying question. You talked about Shopify Markets Pro contribution earlier in the call. Is that included in your guidance?

Yes, it is. It's part of the business and it is included in the guidance.

This concludes our question and answer session. I would like to turn the floor back over to Amir Schlachet for closing comments.

As we conclude another successful year here at Global-e, I would like to thank all of you for joining us today, for your interest and for your questions, and for your ongoing support on our exciting journey to transform the world of global direct-to-consumer e-commerce. We're incredibly eager and excited as we continue on our path to take advantage of the countless opportunities that lie ahead of us, and we invite you to continue taking an active part in this quest together with us. As such, we very much look forward to seeing all of you again on our future earnings calls. Until then, goodbye and take care.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.