Good morning. Welcome to the Global E fourth quarter and full year 2025 earnings 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 Alan Katz, Global E's Head of Investor Relations. Please go ahead.

Thank you and good morning, everyone. With me on the call today are Amir Shlaquette, co-founder and chief executive officer, Ofra Koren, Chief Financial Officer, and Nir Debi, Co-Founder and President. The mirror will begin with a review of the business results for the fourth quarter and full year of 2025. Ofra will then review the financial results for the fourth quarter and full year in more detail, followed by the company's outlook for 2026. We will then open the call for questions. Before I read the forward-looking statements, I'll note that we have posted an Excel-based metrics file on our IR website. This provides historical data for both financial information and KPIs that may be helpful as investors are researching the company. Please feel free to let me know if you have any feedback on this document. Moving on, certain statements we make today may constitute forward-looking statements and information within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact, including, without limitation, statements regarding our future results of operations, a financial position, growth strategy and plans, and objectives of management for future operations, including onboarding new merchants, expanding our offerings, and introducing and integrating new solutions, are forward-looking statements. These forward-looking statements reflect our current views with respect to future events and are not a guarantee of future performance. Actual outcomes may differ materially from the information contained in the forward-looking statements as a result of a number of factors, including those set forth in the section titled Risk Factors in our annual report on Form 20F, filed with the SEC on March 27, 2025, and other documents subsequently filed with 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. Except as required by applicable law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events. Please refer to our press release issued today, February 18, 2026, 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 from, as a substitute for, or superior to the financial information prepared and presented in accordance with GAAP. We use these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. We believe that these measures provide useful information about operating results, enhance the overall understanding of past financial performance and future prospects, and allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making. For more information on these non-GAAP financial measures, please see the reconciliation tables provided in our press release issued today. Throughout this call, we will provide a number of key performance indicators used by our management and often used by competitors in our industry. These and other KPIs are discussed in more detail in our press release issued today. I will now turn the call over to Amir, our co-founder and CEO.

Amir, please go ahead.

2025 Earnings School 2025 was another record-breaking year for GlobalEast, in which we surpassed our guidance, both for the fourth quarter and on an annual level. across all parameters, from top-line revenue down to adjusted EBITDA. 2025 was a very successful first year of a multi-year strategic plan, which we laid in front of you at our Investor Day in March, as we continue to execute on our strategy and further solidify our leadership position in the global e-commerce enablement space. Sending results in 2025, coupled with the guidance we are providing today for 2026, from 27.8% in 2025 to close to 30% in 2026, in parallel to significant bottom-line margin expansion driving our adjusted EBITDA margin to 21.9%, are all a testament to the durability of our business model and to our confidence in our ability to uphold our long-term strategic goals. As we look beyond 2026 to the subsequent years of our multi-year strategic plan, given the enormous opportunity that lies ahead of us, with a massive dam that is still mostly greenfield, and the increase in demand for our services due to the growing complexity in the global tariff landscape, we believe that our business momentum, our market and product leadership position, and our various business development factors will enable us to continue and deliver against our multi-year financial targets in the years to come. In fact, given the strong ending to 2025 and the forward-looking outlook that we are laying out today, we believe we're slightly ahead of our multi-year plans with lots of room for growth. Our merchants had a very strong holiday sales period, including the Black Friday and Cyber Monday weekend, and we achieved our first ever billion-dollar GMB month in November of 2025. When I think about the fact that our total annual GMB for 2020, just five years ago, was $774 million, dollars, transacting over $1 billion in a significant achievement. It is a tribute to the tireless efforts and meticulous execution of all our amazing team members here at Globally. The full quarter, Q4 was our strongest quarter ever and came in well above our guidance ranges. We finished Q4 with a record $2.36 billion in GMV, with GMV growth accelerating to over 37% year-on-year to 28% year-on-year, totaling $337 million in the quarter. The profitability, our non-gap gross profit margin for Q4 was 46.8%, up 80 basis points from the same quarter of last year. And our Q4 adjusted EBITDA was $87.2 million, up 53% year-on-year for a 25.9% margin and almost 420 basis points increase compared to the same quarter last year. 2025 was first and foremost another year of fast. GMV for the year came in at approximately $6.57 billion, up 35%. We've revenues for the full year at $962 million, up 28%. And we've adjusted EBITDA at $198.5 million, representing a 41% growth rate and a 20.6% margin. Our strong profitability growth was driven by the strong top-line growth and operational leverage, partly as a result of AI deployment across different functions and processes within globally, cost control, and utilization of efficiencies of scale throughout the various 2025 was also our first full year of GAAP profitability, with a GAAP EPS of 39 cents. This is another incredible Remain Gap profitable in future years as well. We continue to be a highly cash-generative business. We are reinvesting this cash to drive growth both organically and through strategic acquisitions, as well as returning access cash to shareholders via our share buyback program, as part of which we have already completed $72 million in share repurchases within Q4 of 2025. Moving on, and before I go through our recent merchant launches, I would like to provide you with a few key updates regarding our business traction with the launch of Shopify Managed Markets version 2.0, the new iteration of our white-label self-service merchant of record solution on Shopify. With this exciting new build, Managed Markets is now fully integrated into Shopify payments, enabling much more harmonization between global and domestic financial and operational flows, along with faster payouts, enhanced control over global product availability and compliance, and is working as expected. And both us and Shopify are pleased with the progress to date, happy to say that we are working with Shopify to expand the offering to additional countries in the coming quarters. as well as on many exciting new features and enhancements. With the 2.0 build out there and starting to gain traction, we believe the trading volumes on this new and innovative offering will pick up throughout the year. On our Q3 call, I discussed our duty drawback offering, an important value-added service designed to enable merchants to potentially reclaim import duties on goods that are exported outside their home base, as well as reclaim certain tariffs paid on returned goods. Depending on the sales rapidly changing tariff environments in the U.S. and Europe, pricing and profitability advantages, we got the permit to offer import duty drawback to our U.S.-based merchants for goods that are exported out of the U.S. to international customers in optimizing their cost of trade in times of change. This attractive new offering is now made available for all eligible us we continue to make good progress also on our borderfree.com offering we saw further growth in shoppers signups as well as a significant increase to the share of merchant sales attributable to the borderfree.com channel which stands now at over six percent for merchants that are utilizing border lastly as discussed last quarter we continue to view ai as a meaningful lever for growth service level enhancements and efficiencies across our business There continues to be a lot of focus across the organization on identifying and deploying use cases for AI-driven platform enhancements, restructuring some of our services, and building additional ones to provide faster, better, and more efficient services. Given our unique merchant of record business model that combines trade compliance solutions and licenses, a unique data asset, robust global payments infrastructure, and post-purchase services, all at scale, we view AI as a very positive factor for our business and as a driver of durable value creation over time. We have a few examples on how we are already integrating AI into our operating model, how it's beginning to influence our sales and merchant acquisition efforts, and what we are seeing as a genetic commerce continues to emerge across the organization to drive efficiencies and optimize the impact of our resources. We're seeing faster turnaround times in R&D, with entire features, and in some cases even entire subsystems, already designed, developed, tested, and deployed through vibe coding, speeding up time to market for new features, and enhancing the efficiency of our R&D. These efficiencies are already evident in our numbers, as 2025 saw around 70 basis points of reduction in our R&D spend as a percentage of revenues. We plan to continue on this path and, as such, intend for all our massive growth and activity planned for 2026 to be carried out by the existing R&D team without any meaningful increase in to speed up and automate daily tasks, as well as to organize, update, and deploy know-how and business information across different departments in the organization, like was never possible before, would be our internally developed and highly successful customer service chatbot. For more than two years now, this chatbot has been handling larger and larger portions of our incoming customer inquiries in near real time to the satisfaction of the end customers and without a need for human escalation in our newly launched full site localization offering. This in-house developed LLM-based value-added service allows merchants to easily and seamlessly translate the entire content of the website into different languages, including language and pricing embedded onto graphic content, while ensuring full coherency across the entire customer journey throughout the browsing, launching the first two merchants on this new service, and believe more will join in the coming quarter. we are increasingly deploying AI-based capabilities is around product classification and restrictions management. Our proprietary LLM-based tool can now classify large product catalogs, assigning the correct customs Aegis code to product faster with built-in iterative learning feedback loops, achieving constantly growing levels of accuracy. Such improved processes across R&D and G&A should help us to manage and optimize spend, which in turn would contribute to the adjusted EBITDA margin expansion we expect to see through 2028. We are also applying AI to significantly enhance our sales efforts, and I believe this is a particularly compelling use case. As a reminder, our consultative sales approach requires an understanding of merchant-specific value drivers, product nuances, and geographic priorities, among other things, in order to deliver the conversion improvements we are known for. Until recently, each prospect opportunity required expert research, qualification, and enrichment by our BDE team before any reach-out is made by a salesperson. Seeking to greatly expedite this process, during the fourth quarter, our internal innovations team developed and refined a proprietary agent built in-house from the grounds up. It uses AI and a broad set of support these efforts, such as site traffic, global e-commerce posture, and more. The system is able to identify these prospect merchants and qualify opportunities with immediate, high confidence value. With the system operating at scale, we are now able to fill the top of the sales funnel at a combination of speed and quality that was unimaginable prior to the AI revolution in the number of demos run per month, which is expected to rise even further after we feel the next evolution of the system, which the team is already working on. This next iteration will add an AI agent that will automate the initial reach-hour process with a highly tailored and customized approach. While still early, we're encouraged by the initial results and excited about the potential impact on our new merchant acquisition pipeline. Lastly, on AI, in terms of the e-commerce market dynamics, we are seeing a steep increase in traffic originating from AI-based chats, albeit from a low base. We expect to see AI-based chats continuing to grow over time as a discovery channel for our brands, and we are working through our various e-commerce platform integrations to provide seamless support for our merchants' global discovery efforts through this increasingly important channel. We also made sure that through our integrations to the different e-commerce platforms, we are geared to support agent e-commerce transactions utilizing our platform capabilities behind the scenes. and have already seen a small number of transactions done utilizing these capabilities for the newly released UCP created by our partners at Shopify together with Google. We view all these developments as additive to our opportunity set, supporting our merchants' trading through more D2C channels as merchants look to extend agentic workflows into cross-border commerce. The underlying complexity of their global transactions increases materially, making our Merchant of Records services. Besides these many exciting developments, in Q4, we also saw many new brands joining the platform and going live across all geographies. We launched with prominent brands such as Nadine Morabi, Laura Geller, PopSockets, and Parc. We launched all three iconic brands of the French SMCP group, Sandal, Maj, and Claudie Pielot, as well as other leading French brands such as Maison Alaya from the Richemongu, Satisfy Running and Jerome Dreyfus. We launched Stella McCartney and Amina Mouadi in Italy, FoodArt Dunhill and Graf in the UK, multiple Scandinavian brands such as Exocer from Denmark, Softgoat from Sweden and Fijians from Norway and also went live with Prusa, the largest maker of 3D printers in Europe which is based in the Czech Republic. APAC 2 we launched with many brands during the quarter, including Tutio, a seller of high-performance e-bikes out of Hong Kong, J&Co from Singapore, Verish and Sosa known from South Korea, and Portia and Vestrisi from Australia. We also went live with multiple Japanese brands, such as Rennie, Danton, and Sunryo, probably best known for, besides new merchant launches, Q4 also saw the expansion of our business with a number of brands, including Logitech, which became the first to launch on a new integration with the TikTok shop marketplace. Zimmerman, the iconic Australian high-end women's fashion brand, which now uses globally also into the EU and the US. And Karl Langerfeld, Pokemon, Tom Ford, Soar, and Marcane, all of which added support for additional lanes. The main topics which were and continue to be top of mind for all merchants is the issue of global tariffs and the challenges posed by them. In 2025, we have witnessed tremendous changes in the global tariff landscape, mainly driven by changes in the U.S. tariffs and in changes to personal pressure on trading volumes in the short term, especially with regards to trading into the U.S. As we anticipated, this had a positive effect on our pipeline and subsequently on our growth in the midterm, as reflected in our Q4 2025. growth figures into 2026. The tariff landscape is expected to remain dynamic, most notably with the EU de minimis removal and tariff changes. We believe our platform, especially with regards to its merchant of record trade compliance and optimization capabilities, is making our offering even more critical for merchants into the future. Through our detailed results and our financial outlook for 2026 in a moment. But before that, as we wrap up 2025, I do want to take a minute to acknowledge the tremendous performance from our team, despite the challenges and uncertainties in the global consumer markets that we all face throughout 2025. We believe this truly speaks to the resiliency of our model. Our performance over the past 12 months has proven, once again, that our business, we have a huge opportunity ahead of us. To take us through the quarterly numbers in more depth and lay out our Q1.

Thank you, Amir, and thanks everyone for joining us today. As Amir just highlighted, we achieved another quarter of strong profitable growth globally and ended the year at or above the high end of our guidance across all key metrics. Our strong top-line and bottom-line performance drove record-free cash flows, and Q4 continued to perform well above the Rule of 40. We are reiterating the multi-year targets presented at our Investor Day early in 2025, and we believe our strong 2025 results, along with the 2026 guidance I will discuss shortly, clearly indicate that we are on track in executing our strategy and achieving our high growth and increased profitability multi-year targets. Before I go into the details of the quarter, I'd like to remind everyone 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 issue today. Looking at the full year of 2025, it was another year of strong growth by both new merchant launches and existing merchant relationships. GMV and revenue grew 35% and 28% year-on-year, respectively. Non-GAAP gross profit also grew at 28%, reflecting a non-GAAP gross margin of 46.3% for the year. Adjusted EBITDA grew by 41% to $198.5 million, reaching an adjusted EBITDA margin of 20.6% on an annual basis. Furthermore, 2025 was another record year of free cash flow generation, which amounted to $281 million, reflecting a free cash flow margin of 29%. Throughout 2025, merchants operating on our platforms continue to trust us and to grow with us, as reflected in the annual NDR rate of 122% and GDR rate of 96%. Drilling down into Q4, we delivered another quarter of rapid growth and robust cash generation. GMV growth accelerated during the quarter, reaching $2.36 billion of GMV, an increase of 38% year-over-year. This performance was driven by strong consumer demand, which together with some favorable FX tailwinds supported strong same-store sales performance, trading volumes of new merchants that launched during 2025. In Q4, we generated total revenue of $337 million, up 28% year-over-year. Service-free revenue was $160.9 million, up 37%, and fulfillment services revenue was up 21% to $175.7 million. Servicely take rate was 6.82%, just about flat compared with both last quarter and Q4 of 2020. Filment take rate was 7.44%, slightly lower than expected, driven by higher than expected. Moving down the P&L, Q4 non-GAAP gross profit was $157.5 million, up 30% year over year, representing a gross margin of 46.8% compared to 46% in the same period last year. Gap gross profit was $154.8 million, representing a margin of 46%. Moving on to operational expenses, in Q4, we continued to invest in the enhancement of our platform and in the expansion of our offerings and services, while focusing on driving efficiencies. R&D expense in Q4, excluding stock-based compensation, was $28.5 million, or 8.5% of revenue, compared to $24.1 million, or 9.2% of revenue in the same period last year. Total R&D spend in Q4 was $33.1 million. We also continue to invest in sales and marketing to support future growth. CES and marketing expense, excluding Shopify-related amortization expenses, stock-based compensation, and acquisition-related intangible amortization, was $31.7 million, or 9.4% of revenue, compared to $29.8 million, or 11.3% of revenue in the same period last year. Q4 sales and marketing expenses already reflect the updated 3P Shopify revenue share. Shopify warrant-related amortization expense was $8 million. This amortization expense should be fully gone from the P&L in January 2026. Total sales and marketing expenses for the quarter were $43.8 million. General and administrative expenses, excluding stock-based compensation and acquisition-related contingent consideration, was $10.8 million, or 3.2 percent of the revenue, compared to $10.7 million, or 4.1 percent of the revenue in the same period last year. Total G&A spend in Q4 was $14.7 million. dollars. Adjusted EBITDA for the quarter was $87.2 million, representing a 25.9% adjusted EBITDA margin, an increase of 53% from $51.7 million, or a 21.7% margin in the same period last year. As I will discuss in a few minutes, when we go through our 2026 guidance metrics, we are well positioned to see continued adjusted EBITDA margin expansion in 2026 in accordance with our long-term plan. As Amir noted, in 2025 we also turned GAAP profitable for the full year, driven by a rapid growth and a significant decrease in the Shopify warrant-related amortization expense. Net profit for the quarter was $62.5 million, compared to a net profit of $1.5 million last year, and GAAP EPS was $0.35. Starting this quarter, we are also presenting a new non-GAAP net profit metric, as can be found in our earnings release. Non-GAAP net profit for the quarter was $85.8 million, compared to $52.9 million in the same period last year. Non-GAAP net profit per share was $0.49 on a fully diluted basis, compared to $0.30 in the same period last year. Switching gears and turning to the balance sheet and cash flow statement, we ended 2025 with $623 million in cash and cash equivalent, including short-term deposits and marketable securities. Cash generation accelerated in Q4 with operating cash flow in the quarter at $216 million, compared to an operating cash flow of $129 million a year ago. 2025 was a very strong cash generation year with free cash flow of $280.7 million, increasing 68% from 2024. Operating cash flow for the full year was $283.8 million. It is important to note that our operating and free cash flows for the quarter and the year were impacted by one-time positive effects of certain favorable working capital dynamics related to a few sizable merchants. As a rule of thumb, we expect annual free cash flows to be driven by adjusted EBITDA and typically also by some additional contribution from year-end favorable working capital dynamics. As Amir mentioned, as of the end of Q4, we have repurchased 1.8 million shares for $72 million in the quarter and had $128 million of capacity remaining on our repurchase plan. We have continued to buy and make progress on our repurchase plan during Q1 of 2026. financial outlook and guidance for Q1 and the full year 2026 to be another year of very strong top and bottom line growth for globally. For Q1 2026, we are expecting GMV to be in the range of $1.705 billion to $1.745 billion. At a beginning point of the range, this represents a growth rate of 38.8% versus Q1 of 2025. We expect Q1 revenue to be in the range of $247 to $254 million, representing a growth rate of 32% versus Q1 of 2025. Lastly, for adjusted EBITDA, we are expecting a profit in the range of $46.5 to $49.5 million, or a 19.2% margin at the midpoint of the range. For the full year of 2026, we anticipate GMV to be in the range of 8.45 to 8.80, representing an annual growth rate of over 31% in the midpoint of GMV growth to remain strong throughout the year. We saw very strong same-store sales during recent month, including the first half of Q1. The same store says growth rates will moderate to a more normalized level for the remainder of 2026, closer to multi-year averages, in part driven by FX tailwind subsides. At these elevated levels, we would be well positioned to deliver results at or even above the top. We are expected to be in the range of $1.21 to $1.27 billion, dollars representing an acceleration of the growth rate to 29 percent at the midpoint of the range based on this outlook 2026 will be our first year achieving greater than one billion dollars in revenue this is an exciting benchmark for any company but we are especially excited that we are seeing a re-acceleration of growth while already expect adjusted EBITDA and adjusted EBITDA margins to expand, thanks to our increased efficiencies and operating leverage. For 2026 adjusted EBITDA, we are expecting to be in the range of $259 to $284 million, representing almost 37% growth at the midpoint and a 21.9% margin. The 2016 guidance reflects an acceleration in revenue as well as expansion of our adjusted dividend margin, which is expected to put us above the rule of 50. We're on our way to achieve the targets that we laid out at our investor day last March with our 2025 results and 2026 outlook putting us slightly ahead of our multi-year plan. We see strong same-store sales growth and merchant expansions, a healthy pipeline of new logos, and exciting new services that are generating interest across the e-commerce universe. We look forward to delivering another strong year in 2026. And with that, Amir, Nir, Alan, and I are happy to answer questions you may have. Operator?

Thank you. And ladies and gentlemen, we will now begin the question and answer session. To ask a question, you may press a star followed by the number one on your telephone keypad. To withdraw your question, you may press a star followed by the number two. And we kindly ask you to please limit yourself to one question and one follow-up. Your first question comes from the lineup, Will Nance with Goldman Sachs. Please go ahead.

Hey guys, good morning. Thank you for taking the question. Very nice results. I wanted to maybe ask about some of the outperformance that you guys saw in the fourth quarter. It sounded like on the prepared remarks, you know, there's an element of both stronger same-store sales as well as FX, and it sounds like that has continued into the first quarter. And, you know, I heard the assumption about assuming that the same-store sales component doesn't continue. Maybe could you drill down a bit and help kind of just delineate between sort of the FX-driven impacts versus same-store sales? You know, I think our understanding is that the FX-related impacts fall off starting in the second quarter. So, any color you can give on just helping getting apart those pieces. Thank you.

Good question. We have seen very strong mentioned also in the beginning of Q1, and as you mentioned, it's driven by multiple factors. Initially, we are very happy with the new merchants that have launched during 2025 and especially the second half of 2025. We have seen very strong results with some of the larger merchants, so I think they are satisfied, and we are very satisfied. On top of that, same-store sales, multi-year averages. This was partially driven by strong demand and also some of the large merchants that are doing very well on their business. But also from some, because last year, towards the end of 2024, the USD strengthened versus continued into Q1 and then started to decline, and it's pretty low right now. So we do see some FX tailwinds out of that. When we look at Q1 and the entire 2026, as I mentioned, we might see some.

That's great. And just maybe to focus on some of the other growth drivers of the business, you've given commentary in the past around pipelines. I was just wondering if you could talk through kind of any dependencies for the outlook over the course of the year in terms of customer implementations and then just any color on sort of large versus small merchants, geographies, and timing as we think about the cadence of the year. Thank you, and nice results again.

Well, thank you. It's Neil. The booking pipeline looks great. It looks stronger today than it did in the same period in 2020. The contribution of new in 2025 was already a record year in terms of contribution to the growth. We expect in absolute terms, we expect that to continue forward. Pipeline is beginning to see impact from the AI-led sales tool that Amir mentioned, driving significantly more to the top of our funnel, and we expect that to materialize. And we also see increased demand, as we expected and guided through in previous quarters, from the increased complexity driven by the global tariff changes throughout the 25 in the U.S. and now all of this that is upcoming in Europe.

Thanks, Shane.

And your next question comes from the line of Brian Peterson with Raymond James.

Congrats, gentlemen, and thanks for taking my question. And maybe for Amir Neer, you guys have a very strong value proposition, and you've been able to go to merchants, and they see an uplift in their cross-border GMB. I'm curious what you think could change about that in an AI world, and if that's something that you can enable with new merchants, how should we think about putting that functionality in the hands of your existing merchants, which is obviously a very large GMB base today?

I think that our, as you mentioned, our value proposition is indeed very complex. It is a combination of robust infrastructure, trade compliance infrastructure, payment infrastructure across more than 40 legal entities worldwide. This is coupled with a very unique data asset that globally has, that on the back of it, AI can actually accelerate as we can train him on unique data in order to optimize our merchant trading in data that is not available outside globally. Couple that with our capabilities into fulfillment and the scale that globally has that allows us to build a trading model that are more efficient in terms of duty drawbacks, in terms of local registration, etc., and the combination of it all, I think, will just benefit from AI. As a driver, I don't see AI being able to replace elements of it. So we feel very confident, and we already see a lot of this positive tailwind being built and being deployed, and we see the effect on our customers' trading.

Thanks, Aaron. Oh, for maybe one follow-up, I appreciate the guidance on GMV and revenue. I would love to understand any color you can share in terms of the take rates of the individual segments. Thanks, guys.

Service fee has been pretty stable for the last four or five quarters, and we expect it to remain stable in 2026. As a reminder for everybody, unlike service fee take rates, which are based on a percentile of GMV, is actually a derivative of the business model that is sort of a per-transaction basis. And as part of our business, multi-local is growing faster than our traditional cross-border model. And this has a mix of impact which results in certain decline in total fulfillment rate over time. specifically for 2026 revenue, then GMB growth. As I mentioned, we do not expect service fee take rate to change much. It might fluctuate a bit between quarters, and we expect...

Thanks, guys.

And your next question comes from the line of James Fossett with Morgan Stanley. Please go ahead.

Thank you very much. I want to follow up on the service fee take rate commentary. And you're clear that you expect that to be relatively stable through 26, the service fee component. Can you just talk about how much benefit you got from maybe Marks and Spencer coming back online versus value-added services? And I'm also curious, given that if we look at the spread between your expected GMB and revenue growth in 2026, it looks to be narrower than the medium-term framework you gave at the beginning of last year. Can you just talk about what's driving that to be a bit better maybe than you had thought a year ago?

The question is Neil. In terms of the service fee take rates, I do see it a few quarters to continue going. Marks & Spencer by itself did not have an effect on it. It's a matter of mix, and the mix in general didn't change much. and this allows the service fee takeaways to remain stable. I think that going forward, when you look into our expectation next year and the narrowing of the gap between the GMV and service fee, I think part of it is driven by our pipeline. We have good visibility into client launching in the coming quarters And we see that the mix that we see coming is going to be relatively in a mix that simulates what we have today, maybe slight more towards multilocal. And this is inclining into the slight broadening, slight gaps that is still remaining between our GMB growth and revenue growth. But all in all, we do believe that it's going to stabilize a bit the share of multi-local. And due to that, most of the gap is being narrowed. The other part, as you indicated, we do start to see some traction with value-added services that we deployed across BorderFree.com, on trade compliance. It started to yield some revenue. And the combination of both gives us, I would say, the ability to give a strong focus on the growth of revenue.

That's great. And then I wanted to follow up on managed markets. Exciting to hear the progress there. And I know you've spoken in the past about harmonizing domestic and international merchant experiences. But can you just tell us, Give us a little color. What has changed mechanically in this version versus the prior implementation, firstly? And secondly, how much should we think about is embedded into the outlook for 2026 from managed markets?

Hi, James. It's Amir. I'll start with the mechanics, and then I'll let off or give you some color about a few changes and upgrades in this new iteration of managed markets. But I would say overwhelmingly the biggest change that drives that harmonization that you mentioned is the fact that this new build actually integrates all the services, all the financial flows and the operational flows to go through Shopify payments versus the previous iteration, iteration, which kind of stood as merchants that go on to manage markets to basically keep on operating their store and selling just like they do in their home store, using the same processes, the same familiar ways of conducting their business without a need to the workings of a completely different. And there are many other changes in terms of their visibility and control over what can be sold where and so on. but I would say mechanically that's the biggest change and that was the big uplift on both sides, from our side and from Shopify's side, in order to enable this major upgrade.

In terms of contribution in 2026, we expect the managed market to see way a bit on growth in the first few months of the year as it hasn't been pushed in recent months. We do expect to see contribution above our average rate in the back half of the year. We were still a bit cautious when we were budgeting and remains to be seen what the actual results would be, but we are cautious.

Great, thanks.

And your next question comes from the line of Samad Samano with Jeffrey. Please go ahead.

Hi, good morning, and thanks for taking my questions. The first one, maybe, Amir, when you were talking about the agentic commerce components where you're starting to see some early transactions, I know you said it's still small, but can you help us think through what early observations you have there? Is there a certain type of product that's getting purchased through the agentic channel? Is it a certain average order value? Just something that we can think about what it might signal for down the road, especially as consumers get more comfortable. And I guess along that line, is there a certain geography where you're seeing it already deployed? And then I have a follow-up question.

Hi, Samad. It's Nir. We do believe that agentic AI or agentic commerce is a great opportunity for our merchants. Starting at the top of the funnel as a discovery channel, where we have already seen a significant increase in the share of traffic that gets to our platform and our brands from AI-chats. We expect to see it continue to grow over time as a discovery channel, although from a small base, but still have grown significantly. Also started in small numbers yet, agentic commerce transactions. We did make sure that through our integration to the different platforms, we will natively support it for cross-border transactions. As here is getting to agentic commerce, we have seen a small number of transactions to date.

But what we made sure is that our infrastructure and our integration and our ecosystem... that I think these are still where we're seeing much more experimentation now from early adopter brands. And so I think it's a little bit certain that it's more widely adopted, and then we'll probably see some emerging themes. But anyhow, as Nir said, we are anyhow there to support all of them on their global transactions. We'll probably see the market shape over the next few quarters and years.

The Excel file with the metrics was very helpful, so thank you to the team for putting that together. I saw the net dollar retention actually accelerated from 24 to 25, went to 122%. I was wondering a couple of things. Could you, one, help us understand, was that a function of lapping the Ted Baker comp, or is that an organic acceleration in NRR, and if so, maybe what drove that, and how or are you thinking about what's embedded in the 26 guidance from an NRR perspective? Thank you again for taking my questions.

Hey, Samad. It's Ofer. Thank you for the question. We had a very solid and healthy year in terms of net dollar retention and gross dollar retention. Actually, we've been able to improve our GDR from the previous year. As you mentioned, we lost Ed Baker in the previous year. And above that, we've seen healthy trading with some of our leading merchants. So all in all, it was a good year in terms of net dollar retention. We expect 2026 to be a continuation of 2025. So we don't expect any material changes. and, again, it might be impacted over the year from changes in same-store sales.

Your next question comes from the line of Chris Zhang with UBS. Go ahead.

Hi, thanks for taking my question. The first question is on your investment priorities for 2026. Can you share with us or any new areas you're looking at that you didn't perhaps had enough of investment dollars before that you wanted to highlight?

Well, I think there are multiple things that we are prioritizing into 2026. I think first to mention is our trade compliance infrastructure. We see more and more countries around the world take action, increasing their tariffs, removing their de minimis exemptions, which actually makes the cost of trade a huge benefit for us to continue and invest in reducing those costs for our clients with advanced trading models, with goods that are exported for the import duties, to do duty drawback in different countries for goods that are returned from final shopper. investment and focus is going into reducing the cost for trade, given the circumstances, as well as increased retention with our brands. The second is, of course, AI. We spoke quite a lot about it, but we see a continuous investment in AI for activities, from better utilization of our data asset in order to better optimize our clients' trading and drive a faster same-store sales into our own pipeline top-of-funnel demand generation and from there even down to an outreach agent and the outreaches in order to be able to do it at scale and going into optimizing different elements around the company from value-added services such as translation services down to allowing chats to our client on examining their data and their comparable data from globally to allow them to take a better decision and all the way into optimizing R&D spend, marketing spend and other places that AI can drive. So that would be the second alley where we're going to focus quite dramatically. And also we are planning to continue and invest heavily in optimizing our fulfillment networks in order to offer best-in-class services to our clients with different price points, more efficient than we have even today in order to allow them again to trade with a cost-effective structure given the changes in the global landscape.

Awesome. Thanks for all the color. Just a follow-up. I wanted to hear any update on one metric you shared at the investor day, which was the multi-local GMV. I understand it was a one-off disclosure and made back in March of last year and that was expected to be $900 million in 2025. But can you talk directionally to how the year trended versus that initial expectation and what you're seeing that going to 2026? Again, this is on the multi-local GMB.

Yes, so 2025 traded pretty close to our initial expectations with regards to multi-local, and we are at approximately 15% of GMB. Looking into 2026, we expect Multilocal to continue to grow, but we don't think it will outgrow the entire business by a lot, so that's what we see for now. We are very happy, and we think that this provides us a competitive advantage, and it's a great offering.

Perfect. Congratulations results. Thank you.

And your next question comes from the line of Koji Ikeda with Bank of America. Please go ahead.

Yeah. Hey, guys. Good morning. Just one question from me here. I wanted to ask on GAAP EPS earnings. And so congratulations on being GAAP EPS profitable for the full year. And so how should we be thinking about GAAP EPS growth from here on out, especially with factors like efficiency gains that you're seeing with AI and the R&D organization? Thank you.

About that stability in the coming period, we have provided also a non-GAAP net income and EPS number, which is a very important metric in our view. Generally speaking, when you look at that non-gap net income, there isn't a significant gap between adjusted divider and this metric. And we expect divider, there could be some gaps, but directionally, this.

Thank you. And your next question comes from the line of Billy Fitzsimmons with Piper Zendler. Please go ahead.

Hey, guys. Thanks for taking my question. As I think about the prepared remarks and the focus on leaning into AI tools internally and automated workflows, if we look in that adjusted EBITDA guidance midpoint for 2026, can you maybe break down the expected margin expansion from simply structural scale in the business versus some of those AI driven efficiencies that were outlined? And then secondly, any additional anecdotes or examples you could share in some of the specific ways you've increased R&D velocity with AI recently? Thank you.

Hi, Mark. It's Neil. I think that dividing the expansion in our EBITDA margins into 2026 and onwards, we do expect it to continue as we guided in our multi-year plan. and some of it by far we can contribute to ai i think that when you look into our r&d and our ability to continue and develop multiple new services support the growth of the business and as amir indicated virtually almost not recruiting any new headcount into our r&d is driven by AI efficiencies. We see it in the ability of writing code, deploying code, writing stories in product down to QA, et cetera. We see a lot of leverage around that. So there, I would say, a significant portion is AI-based. We do see advantages and support also for the growth in our sales and marketing. So, yes, it will not replace an enterprise consultative sales manager speaking to an enterprise brand. However, lead generation, we are increasing dramatically the input and output without actually increasing ad count because most of the work will be done by our prospecting tool and AI outreach tool. So, and if we take it through the different arenas of what globally handles, from handling fraud to classification of products to restriction management, trade compliance, and down into even our finance group and making sure that each and every order reconciles correctly, we do see a lot of leverage coming from AI. Not all of it, of course, would be realized in 2026, so we do have a lot that is in our order to be built this year. Out of what we put on paper for 2026, a significant chunk is AI-based.

Samir, just to mutually exclusive, there's actually a lot of dependencies between them because there are a lot of things that AI can do, but the ability to really extract tangible real value is dependent on data. Data is what fuels AI and definitely the very broad continues to grow quickly over time as we scale up the business. That's the AI models to generate that.

And your next question comes from the line of Patrick Walravens with Citizens. Please go ahead.

Oh, great. Thank you. And congratulations, you guys. Amir, can we dig deeper on the point that you were just starting to make, which is, you know, across the industry, people are worried about AI disruption. And what is it? What are the moats that protect your business from being disrupted, disrupted by, you know, some other use of AI? I mean, you just touched on data. What else?

Hi, Pat. It's Neil. Thank you for the question. So So there are four things that will continue to differentiate us and would make it virtually impossible for any model to replace what global is actually doing. The first and foremost is scale. Then it's the expertise and know-how. Then it's a trade compliance. And then it's our overall infrastructure across legal entities in more than 40 jurisdictions coupled with infrastructure on payments. All embedded into one. So if we speak just to the first thing about our scale, this allows us to access actually tier one pricing and working with the best partners and getting the best service from those partners, a cost fulfillment, and it gives us a huge pricing mode that is coming from a true differentiated cost structure. that even if you develop a beautiful tool, you will not have access to it. Not to some of the partners for sure, and definitely not to the price. The second we spoke about is expertise and the data asset. I think that in order to enjoy the benefits of AI, it needs to be trained on relevant data for what you're trying to do. And if what you're seeking is optimization of your trading, per market across 200 markets worldwide according to your specific dynamics. To train a tool, you need to have the data, and this is unique data that globally has and it scales that no one else has access. The third is our infrastructure and our MOR model. This is a heavy lifting model with a significant level of built-in compliance and risk requirements across dozens of legal entities around the world, allowing us to do business in more than those 200 markets worldwide efficiently, securing and managing licenses from various governments and regulators, providing after-sales capabilities in which we need to work with multiple parties, establishing a solution across trade compliance and logistics. And continue to that into our payments infrastructure with multiple PSPs working with us, investing class rates, with a sophisticated system allowing us to do reroutes, domestic acquiring, et cetera, across multiple destinations. All of it is business logic, capabilities, set of agreements, know-how expertise that an AI does not have the ability to do.

That's fantastic. Thank you, Nir.

Thank you. And your next question comes from the line of Scott Berg with Needham. Please go ahead.

Super nice quarter here. I guess just one question for me, and it's on the duty clawback that Amir noted was released here in the quarter. I guess what are you hearing on initial feedback from U.S.-based customers on that solution? I'm in the belief that there's almost no reason why most of them don't adopt this at a relatively quick nature, at least. And then how do we think about the impact in fiscal 26 guidance, if any?

We do hear about the capability. We need to obtain the license, as we indicated, late 2025, deploy the solution into a PLC mode early this year, and now we are releasing it to all our clients. Initial feedbacks are great. It has tremendous effect on the cost of trading for our U.S. client base. We expect high level of adoptions once we are geared with a streamlined process that we can extend the offering simply to all our clients. For now, in the first batch that we outreached, the adoption is very high. We did embed it into guidance on a certain level. We did some, but we did make it into our guidance as we do see it contributing to our revenue within 2026, for sure.

Super helpful.

Thank you. And ladies and gentlemen, this concludes our question and answer session. I'll hand it back to Alan Katz for closing remarks.

Thank you, everyone, for joining the call today. We look forward to speaking with many of you during the quarter and providing our next update on our Q1 call in May. Hope everyone had a great day.

Thank you. And ladies and gentlemen, this now concludes today's conference call. Thank you all for joining. You may now disconnect.