Earnings Call
Globus Maritime Ltd (GLBS)
Earnings Call Transcript - GLBS Q4 2021
Operator, Operator
Greetings and welcome to the Global-e Fourth Quarter and Year-end 2021 Earnings Call. This call is being simultaneously webcast on the company's website in the Investors section under News & Events. Please follow the operator instructions. As a reminder, this conference is being recorded. For opening remarks and introductions, I would now like to turn the conference over to Erica Mannion at Sapphire Investor Relations. Please go ahead.
Erica Mannion, Investor Relations
Thank you and good afternoon. 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 brief review of the business results for the fourth quarter and year ended December 31, 2021. Ofer will then review the financial results for the fourth quarter and year ended December 31, 2021, followed by the company's outlook for the first quarter and full year of 2022. 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 the current expectations and views of future events. These forward-looking statements are subject to risks, uncertainties and assumptions, some of which are beyond our control. In addition, these forward-looking statements reflect our current views with respect to future events and are not a guarantee of future performance. Actual outcomes may differ materially from the information contained in the forward-looking statements as a result of a number of factors, including those set forth in the section titled Risk Factors in our prospectus filed with the SEC on September 13, 2021, and other documents filed 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. 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 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 these statements are made or to reflect the occurrence of unanticipated events. Please refer to our press release dated February 16, 2022, for additional information. 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 financial information prepared and presented in accordance with GAAP. We use these non-GAAP financial measures for financial and operating decision making 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 the non-GAAP financial measures, please see the reconciliation tables provided in our press release dated February 16, 2022. 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 February 16, 2022. I will now turn the call over to Amir, Co-Founder and CEO.
Amir Schlachet, CEO
Thank you, Erica, and welcome, everyone. Today marks our third quarter as a public company and our first Q4 reported one. This is an exciting chance to reflect on what an unbelievable year we've had. We finished the year with the strongest quarter in the company's history, continuing our consistent trend of delivering growth and strong execution against our ambitious targets. During today's call, we will review our Q4 and full 2021 results, update you on the exciting developments going on in the business and provide guidance towards what we expect to see in 2022. Starting with Q4 results. I could not be prouder of the Global-e team for producing yet another record quarter despite the tough year-on-year comparison as we lapped last year's COVID-impacted holiday period. For the first time in our company's history, we surpassed $0.5 billion in quarterly GMV, with $505 million generated in the quarter. Together with our stronger execution in the previous three quarters, annual GMV summed up to $1.45 billion in 2021, delivering more than 87% growth versus 2020 GMV. Revenues followed a similar trend with $82.7 million of revenues in Q4 and $245.3 million for the full year, delivering roughly 80% year-on-year growth in 2021. Thanks to our growing economies of scale and our continued focus on operational excellence, we managed to continue improving our gross profitability margin, which in Q4 reached 39.5%. As a result of the top line growth, coupled with the scale average, we more than doubled our gross profit in 2021, reaching $91.4 million compared to $43.5 million last year, delivering 110% year-on-year gross profit expansion. We continue to reinvest across our business as we rapidly scale up. But as always, we do it in a thoughtful and highly efficient manner, maintaining our cash-generating model with an adjusted EBITDA margin of 14.3% for Q4 compared to 13.5% in Q4 of last year and 13.2% for the full year of 2021, up from 9.2% in 2020. We continue to witness an immense and growing market opportunity ahead of us across all regions and market segments we operate in. Interest in our services remains strong, if not stronger than ever. And we believe the effects of the COVID pandemic on merchants' priorities and decision-making processes are largely permanent. As we mentioned in the past, we do expect the gradual normalization of e-commerce growth rate to continue over the coming quarters as the impact of the pandemic wears off and shoppers around the world increase the percentage of their spending in physical stores. It is also worth mentioning that given our scale and the strategic relationships we have with a variety of logistics service providers, coupled with the fact that merchants tend to prioritize direct-to-consumer over other channels, to date, we have not witnessed any meaningful impact from supply chain challenges or merchant inventory shortages. Over the last quarter, we continued launching with many more incredible brands and expanded our relationships with prominent retail groups. During the fourth quarter, we launched with yet more brands from the LVMH Group. This time, Fenty Beauty and Fenty Skin, Rihanna's cosmetics brands. Yeezy-GAP, Kanye West's much-discussed fashion cooperation with GAP, also launched with us during Q4, as did the fast-growing sports clothing brand, NVGTN. We expanded our relationship with several of our merchants, serving more lanes for them. Among these, we can mention Cartier; Stussy; Suunto; the French brand, The Kooples; and the Spanish footwear brand, Camper, all of which added additional key lanes to be operated by Global-e. In addition, the German audio equipment brand, Sennheiser, added the U.S. one of its largest destination markets to be operated by Global-e, continuing our growth in the exciting new vertical of consumer electronics. Besides our strong momentum in the markets we already operate in, namely North America, the U.K. and Continental Europe, we also continue pursuing our geographical expansion efforts. We expanded our team on the ground in Tokyo; established a partnership agreement with the Japanese global digital transformation leader, Trans Cosmos; and now also have our first team member on the ground in Melbourne, Australia, with the first reputable Aussie merchant already signed. On the strategic partnerships front, our joint efforts together with Shopify to deliver the new native integration remain on track. We recently met additional important milestones in the technical development roadmap and are gearing up for the general availability of the new integration once we complete the pilot phase. All the while, we continue to onboard new Shopify-based merchants of various sizes on the existing third-party integration. As a matter of fact, some of the new brand launches I mentioned earlier, such as Fenty Beauty, Yeezy-GAP and NVGTN are all Shopify-based, as is the remarkable direct-to-consumer health care apparel and lifestyle brand, FIGS, which is the latest Shopify-based enterprise merchant to launch with us just a couple of weeks ago. I'm also happy to let the fans of the U.K.-based Formula One racing team, McLaren, know that you can now order your favorite merchandise, regardless of where you are in the world, as McLaren recently implemented Global-e's offering on their headless Shopify-based online store. Finally, I would like to give you the latest update on the strategic acquisition of Flow Commerce we signed in Q4. We closed the transaction early in Q1 this year, welcomed the team into the Global-e family and immediately went full steam ahead with integrating Flow's team and capabilities into Global-e. The motivation for the acquisition was our strategic wish to better support emerging brands as well as provide our solutions to channels in white-label form. Based on Flow's technology, we recently established a new Channels and Emerging Brands division. The division's first priority is to complete and launch the first channel partnership agreement, which is already signed with Shopify and on which work is well underway by the former Flow tech and product organization, augmented now by personnel and know-how from Global-e's teams. In addition to pursuing various other white-label channel opportunities, the new division is now in the midst of formulating its new go-to-market strategy and productizing additional aspects of our branded offering, taking into account Global-e's know-how, scale and expertise in order to ensure we deliver the best experience for the world's emerging brands. We expect this strategic work to continue over the next couple of quarters as we gear up to launch this new offering towards the end of the year. In parallel to our strong push into the channels and emerging brand space on the back of our Flow Commerce acquisition, looking ahead to 2022, we first and foremost plan to continue leveraging our clear market-leading position to continue our accelerated growth across North America, the U.K. and Continental Europe, in all of which the market is still very much greenfield. As in the past, this will include signing up new merchants, expanding our relationships within brand groups and operating additional lanes for existing merchants, leveraging both our ultra-efficient direct sales channels and our growing list of strategic partnerships with the likes of DHL, Shopify, Klarna, Facebook and others. In addition, we plan to continue investing into building our offering and presence in the APAC region, both directly and through local strategic partners such as the Australia Post Group. While we expect our existing markets to continue exhibiting fast growth well into the future, given the large untapped potential in the region, we do expect APAC to start gaining a meaningful part in our activity mix in the coming years. On the product side, over the last quarters, we welcomed many new members to our expanding global R&D team as we continue to reinvest into product innovation and the building of new capabilities as future growth levers. Over the course of the coming year, we plan to continue adding more localization capabilities to the platform with emphasis on further developing the granularity of our multi-local support features. Furthermore, we expect some of the value-added services we are piloting with, such as demand generation, for example, to move towards full-scale deployment throughout the few next quarters, providing merchants of all sizes with yet another layer of differentiated services and support for the growth of their cross-border business. During 2022, we also plan to begin a few additional pilots of our new managed services offering towards a full launch next year. 2022 started well both in terms of activity and in terms of new business coming in. We are optimistic regarding what this coming year has in stock for cross-border D2C in general and for us in particular. As Ofer will describe in more details in just a few minutes' time, we are guiding for strong GMV and revenue growth of 70% in 2022 at the midpoint of the range, representing our strong market leadership position and the vast and long runway that lies ahead of us. With the conclusion of our first decade of operations already in sight next year, we believe we are literally just at the beginning of this exciting journey as we continue our relentless focus on flawless execution, operational excellence and above all, on delivering exceptional, consistent and long-term value to all our loyal merchants. The future looks bright with tremendous opportunities for long-term growth ahead of us, and we very much plan to continue seizing them effectively and efficiently as we have done to date. And with that, I will hand it over to Ofer, our CFO, to go over our financial results in more depth as well as provide more details regarding our outlook for 2022.
Ofer Koren, CFO
Thank you, Amir, and thank you all for joining us today for our quarterly earnings call. We are pleased to conclude 2021 with another strong quarter of rapid growth as we continue to perform well across the board. I want to highlight again that in addition to our GAAP results, I will also discuss some non-GAAP results. You can find our GAAP financial results and the reconciliation between GAAP and non-GAAP results in our earnings release. As Amir noted, our growth in GMV accelerated in Q4, totaling $505 million, which is a 66% increase year-over-year. Although the overall e-commerce market is normalizing, we are still benefiting from the expanding direct-to-consumer cross-border e-commerce market opportunity. In Q4, our total revenues reached $82.7 million, up 54% year-over-year. Service fees revenues increased to $35.5 million, up 73%, while fulfillment services revenues grew to $47.2 million, representing a 43% increase. The more substantial growth in service fees revenues compared to fulfillment services revenues was due to the ongoing expansion of our multi-local offering and the composition of merchant volumes on our platform in Q4. Throughout 2021, our existing merchants continued to stay and grow with us, evidenced by our annual net dollar retention rate of 152% and gross dollar retention rate of over 98%. Simultaneously, we saw significant contributions in GMV and revenue from the new merchants that joined us in 2021. We also experienced accelerated growth in our U.S. outbound revenue, reflecting strong momentum in the U.S. In 2021, U.S. outbound revenue increased by 108% year-over-year. As Amir mentioned, our gross profit continued to surpass top line growth as we improved gross margins, leveraging our scale and enhancing efficiencies. In Q4, gross profit was $32.7 million, an 82% increase year-over-year, resulting in a gross margin of 39.5%, up from 33.5% in the same period last year, influenced by the higher proportion of service fees revenue. We remain focused on leveraging our scale to enhance efficiencies. Regarding operational expenses, we are committed to investing in the development and enhancement of our platform to fortify our current offerings and support new initiatives. R&D expenditures in Q4, excluding stock-based compensation, totaled $8.4 million, or 10.2% of revenue, compared to $4.6 million, or 8.7%, in the same period last year. Our total R&D spending in Q4 was $10.3 million. We continue to invest in sales and marketing and are building a robust and growing pipeline while maintaining high levels of efficiency. Sales and marketing expenses, excluding amortization related to the Shopify warrants and stock-based compensation, were $6.7 million, or 8.1% of revenue, compared to $3.6 million, or 6.8% of revenue in the same period last year. Amortization expenses related to Shopify warrants totaled $29.4 million. Including these, total sales and marketing expenses for the quarter amounted to $36.7 million. General and administrative expenses, excluding stock-based compensation and one-off Flow transaction-related expenses, were $5.8 million, or 7% of revenue, compared to $2.6 million, or 4.8%, in the same period last year. This reflects the additional costs associated with being a public company, including our directors' and officers' insurance policy costs. Total general and administrative spending in Q4 reached $7.8 million. Adjusted EBITDA amounted to $11.8 million, representing a 14.3% adjusted EBITDA margin, an increase from $7.2 million or 13.4% margin in the same period last year. We recorded a net loss of $22.5 million compared to a net income of $4.3 million in the previous year, primarily due to the amortization expenses linked to the Shopify warrants. Excluding these amortization expenses, our net profit was $6.9 million. Regarding our balance sheet and cash flow statement, we ended 2022 with $509 million in cash and cash equivalents, including short-term deposits and marketable securities, prior to completing the Flow transaction. We continue to generate cash, achieving operating cash flow of $24 million in the quarter, compared to $33 million a year ago. Now, let's discuss our financial outlook and guidance for 2022. The guidance we provide reflects the strength and continued momentum of our business. For Q1 2022, we expect GMV to range from $446 million to $456 million. At the midpoint, this indicates a growth rate of 69% compared to Q2 of 2021. We anticipate Q1 revenues to fall between $74.5 million and $76.5 million. At the midpoint, this implies a growth rate of 64% compared to Q1 of 2021. We expect adjusted EBITDA to be a profit ranging from $0.7 million to $1.7 million. For the full year of 2022, we forecast GMV between $2.45 billion and $2.5 billion, representing nearly 70% annual growth at the midpoint. Revenue is expected to be between $411 million and $421 million, reflecting a growth rate of 70% at the midpoint. Adjusted EBITDA is projected to yield a profit of $38 million to $42 million. Our 2022 outlook considers the implications of the Flow acquisition, which is still expected to generate negative adjusted EBITDA in 2022, alongside additional investments in personnel costs, sales and marketing, and product development. In conclusion, we believe that the opportunities before us remain vast, and we are well-positioned to capture them. We will continue our focus on driving significant top-line growth while leveraging economies of scale and ensuring cash generation. We are preparing ourselves to create value for our merchants and to enhance our business momentum. Amir, Nir, and I are now ready to address any questions you may have.
Operator, Operator
Our first question comes from Will Nance with Goldman Sachs.
William Nance, Analyst
Congrats on a nice quarter. I was hoping I could ask a question about how you're thinking about the opportunity with Shopify over the longer term. I'm wondering how you're viewing what's the lowest-hanging fruit once the full integration gets off the ground and the partnership really starts ramping. When we look at Shopify volumes today, there's a significant amount of cross-border volume on their platform already. So, when you consider that opportunity, are you more excited to penetrate the existing cross-border activity that's already on the platform? Or is it the merchants with no cross-border footprint that you are excited to enable for the first time? I'm sure the answer is both, but I'm curious how you think about the opportunity for both.
Nir Debbi, President
Thank you for the question. We're very excited looking forward to the general availability of our native integration for the enterprise product on the Shopify platform. For this product, we are aiming and focusing our efforts on merchants that currently have cross-border activities, most of them being larger merchants already trading well and trading cross-border as part of it. Looking further into the future, as part of our enhanced partnership with Shopify, related to the Flow acquisition, we do expect to support many more smaller merchants, many of whom would be new to cross-border activities.
William Nance, Analyst
Got it. That's helpful. Appreciate it. And just maybe one on margins. I wanted to ask about the fulfillment side of the business. I guess the implied take rate on fulfillment came down again, and I assume that's largely a function of the multi-local offering that you discussed, I think, this quarter and last quarter. A lot of the outperformance this quarter came from the services side of the business. So I was wondering if you could talk about expectations for fulfillment revenue growth relative to services revenue growth, and how to think about gross margins as we progress through the year.
Ofer Koren, CFO
Yes. As you said, the service fee take rate has increased to over 7%, while the decrease in overall take rate was the result of the decrease in the fulfillment take rate. One of the main drivers for that is the expansion of our multi-local offering for which we typically do not provide fulfillment services as the model is largely based on local shipping. However, the mix in Q4 also affected the take rate as it was biased towards higher average order value merchants. We expect going forward for the multi-local offering to continue to expand. However, we don't expect the same mix effect in the coming quarters. I think that is reflected in our guidance, which reflects an overall take rate of approximately 16.7%.
Operator, Operator
We have the next question from the line of James Faucette with Morgan Stanley.
James Faucette, Analyst
I wanted to talk about acquisitions. Within acquisitions, how much are you contemplating Flow will contribute this year? How should we think about its impact on the overall P&L, including profitability? As part of that, what are you looking at for incremental acquisitions? Are there opportunities? And then I have a follow-up.
Ofer Koren, CFO
I will start regarding the guidance and the financials. Flow is integrated into our guidance, and they do represent over 5% of the top line. However, they are weighing on our adjusted EBITDA, mainly in the next two to three quarters as Flow's adjusted EBITDA is not positive yet. We expect that to improve over time as we leverage our scale and efficiencies, but basically, that's the impact on the next few quarters. Regarding the higher-level question, I will pass it to Nir.
Nir Debbi, President
Thank you, James. Looking into the future, we expect that in the next quarter, we will be focused on integrating Flow as part of the Global-e offering, building the bridge of Flow into the emerging brands' native support of Shopify as well as enhancing their capabilities towards better support for SMBs. We have high expectations for the acquisition, but it will take us a few months to align it in terms of R&D investment needed to get the platform geared for high-base growth.
James Faucette, Analyst
Great. And then separately, you announced either on the call or at least incremental brands from LVMH and Sennheiser taking over their operations in the U.S. When you think about the growth algorithm for this year and into next year, how should we weight between new geographies, new brands, and incremental services and capabilities that you're looking to roll out?
Nir Debbi, President
As you've seen from the numbers that Ofer spoke about, we've seen in 2021 more than 150% net dollar retention, which means our merchants actually stay with us and grow with us. We expect it to continue going into 2022. A considerable component of our growth would come from existing merchants continuing to grow with us. Some of it is organic growth, and some of it is opening more lanes. The majority of the growth in terms of new GMV is expected to come from signing new merchants. We have a very robust pipeline, which continues to develop across our operations in the U.S., Continental Europe, and the U.K., now also building up nicely in Asia Pacific. We expect a lot of new bookings to drive growth.
Amir Schlachet, CEO
James, I would just add that we see much of the opportunity in those markets that Nir mentioned, the U.S., Continental Europe, and the U.K., to still be very much greenfield. Although we are investing efforts into growing in the APAC region, we expect the majority of the activity over the coming years to still come from our existing territories as they continue to grow very fast.
Operator, Operator
We have the next question from the line of Samad Samana with Jefferies.
Samad Samana, Analyst
Great to see the strong finish to 2021. I wanted to ask the Flow question slightly differently. I guess, I know you guys gave a specific revenue level when you announced the acquisition, so I was hoping for a more specific amount that you're assuming for 2022. And could you tell us if Flow was growing at the same rate, better or slower than Global-e on a stand-alone basis?
Nir Debbi, President
Going into 2022, as we advised in the acquisition, we expect Flow to contribute to the growth in line with the Global-e internal growth. I think with the focus and building on the R&D, the internal growth of Flow should be a bit lower than Global-e itself but not materially different. We expect that to accelerate as a division once everything is deployed later this year, especially looking into 2023 onwards.
Samad Samana, Analyst
Great. And then maybe, Ofer, just we're about halfway through the calendar quarter. And I appreciate that the company gives guidance. Could you help us understand what you're seeing in terms of GMV seasonality for brands that have been with you for a while? Are we seeing kind of normal seasonal GMV trends for established merchants? Just any color you can give halfway through the first quarter from a seasonality perspective.
Ofer Koren, CFO
In terms of seasonality, we're seeing a standard quarter if you compare it to the previous two or three quarters. However, there is some normalization in the overall growth of e-commerce, and that is also evident. We generated very high growth rates, but the overall market is normalizing as physical stores are reopening, and there is a return to the traditional balance.
Operator, Operator
We have the next question from the line of Brian Peterson with Raymond James.
Brian Peterson, Analyst
I'll echo my congrats on the strong close to 2021. I wanted to hit on some of the sales investments. It looks like sales and marketing doubled year-over-year in 2021. I know that's going to be an incremental investment area going forward. Help us understand where those two or three incremental investments are going, and how productive are they today in terms of driving new merchant growth? Or will that be more felt in 2022 and 2023?
Nir Debbi, President
Yes, we did invest quite a lot in sales and marketing compared to what we did the previous year. However, we are still below the 10% mark in terms of spend on sales and marketing out of revenues. The growth that we've seen has gone towards two main focuses. One is establishing a spearhead into new territories, where we have people on the ground in Tokyo, Japan, building the pipeline and our relationship with the strategic partner, Trans Cosmos, and also investing already in Australia. In parallel, we've seen the market opportunity and the ability to capture higher growth, as we've seen in the States, which is growing more than 100% for us. We are therefore doubling our teams to enjoy the momentum. Our intention is to continue investing in that going forward but at a pace that will not be dramatically different in terms of the spend on sales and marketing out of revenues.
Brian Peterson, Analyst
If I think about the investments that you're making in Australia or Japan, how do we think about the ramp? I know it's early days, so maybe this is an unfair question. But when might we see those markets make material revenue contributions?
Nir Debbi, President
We expect to see significant GMV ramp-up in Asia Pacific as of 2023. However, we do anticipate seeing GMV this year. We have our first team member in Melbourne, and we already have the first reputable brand out of Australia signed and expect it to contribute by late Q2. We expect more to come within that year and launch within that year. Most of the effect would come only in 2023 because they will launch later in the year, but we see that our bookings went considerably up through 2021 versus 2020. This is part of the push and momentum we have into 2022 planning and results.
Amir Schlachet, CEO
We are entering these markets strong, with not just our teams on the ground but also with a couple of strategic partnerships that we have already signed and are operating. We expect that to also be a force multiplier in our ability to ramp up quickly in these regions.
Operator, Operator
We have the next question from the line of Koji Ikeda with Bank of America.
Koji Ikeda, Analyst
I had a question on guidance. Over the past few days, we've heard from other e-commerce companies where the outlook was a little less certain. Here you are with confidence giving '22 guidance, with a nice number of 70%. I wanted to dig into a little bit on what you're seeing and hearing from your customers that is giving you all this confidence to guide for '22.
Nir Debbi, President
We have seen with our clients a priority in investment in direct-to-consumer cross-border. We see multiple clients opening more lanes and investing more in penetration into new geographies, which is expected to continue into 2023. 2021 was a record year for us in finding new business and new logos, and a lot of this effect will contribute in 2022. We see many effects of COVID that are here to stay. The desire for brands to go direct to consumer was accelerated through the pandemic, and this trend is continuing. We see positive signals in our pipeline, which gives us a lot of confidence building our planning into 2022 and onwards.
Koji Ikeda, Analyst
I wanted to ask you a question on net revenue retention. 152% here in the fourth quarter and for the full year for '21. That's really off the back of a very strong pandemic at 172%. Could you provide some commentary on how we should think about net revenue retention driven by customer cohorts pre-2020 versus customers that were brought onto the platform more recently in 2021 and late 2020?
Nir Debbi, President
In general, we see that the newer cohorts performing a bit stronger compared to the previous cohorts. However, when you take a broader view, we do not expect the pandemic figures to be the stable figures for the future. We believe that looking at our pre-COVID averages, we will be able to achieve strong retention rates moving forward.
Operator, Operator
We have the next question from the line of Brent Bracelin with Piper Sandler.
Brent Bracelin, Analyst
I wanted to go back to the optimism around GMV growth here. You're guiding to $1 billion of incremental GMV. Even if I assume 5% of that is tied to Flow, it looks like organic GMV growth could be well north of 60% again. As we think about the levers to growth, how much of this is simply the luxury channel you're addressing that is really strong versus the new logos driving the optimism? Can you double-click a little bit more into the reasons for the optimism here and whether there's a significant contribution expected from Shopify?
Nir Debbi, President
Our optimism is based on the robust pipeline of new logos we see, which brings with it large brands wanting to do cross-border and also use our multi-local offering across multiple geographies. In parallel, we have a great pipeline of land and expand. We have ongoing discussions with large brands already operating on our platform, looking to expand their operations with us. And the organic growth of our existing clients remains strong. Combining these three levers brings us to the point where we believe 60% organic growth is reasonable for 2022.
Amir Schlachet, CEO
To add to that, we focus on keeping the gross dollar retention high. Coupling the growth from existing and new cohorts with churn rates remaining consistently below 2% over quite a few years helps maintain happy merchants who continue to see good results with us and stay for the long term.
Brent Bracelin, Analyst
And for Ofer, with the new mechanics in play regarding the take rate, Shopify, Flow, should we assume these newer partnerships will be at slightly lower take rates, the same take rate, or higher take rates? Just trying to grasp the take rate assumptions as we ramp up these partnerships.
Ofer Koren, CFO
Looking at the bottom line, we expect a solid take rate around 16.7%. We don't expect the mix to change significantly. The Shopify business we already had before the Flow acquisition tends to align closely with our overall average take rate. Excluding multi-local, we don't expect any substantial impact on the take rate in 2022. Once the Flow offering develops and starts gaining traction, that will impact the take rate, but it will take a few quarters until we see that effect.
Operator, Operator
We have the next question from the line of Scott Berg with Needham.
John Godin, Analyst
This is John Godin on for Scott Berg. First, just on the Flow platform, could you frame up the opportunity over the next couple of years between expanding Flow's reach more internationally compared to the increased go-to-market capabilities and accelerating penetration that this can drive in the U.S.?
Nir Debbi, President
We expect that Flow would first deepen our partnership with Shopify, allowing us access to additional elements of the Shopify-native cross-border solution. This will enable us to attract more smaller emerging brands that we are not focusing on with our current solution. Furthermore, this will help us accelerate the solution for smaller merchants with quicker deployment times and a more productized approach than the current Global-e enterprise platform. Overall, we expect to increase our footprint into additional verticals, primarily starting from the U.S.
John Godin, Analyst
Could you highlight any demand trends you're seeing in Europe? Are you observing a migration of companies previously not operating in Europe now starting to leverage the platform due to VAT changes?
Nir Debbi, President
We continue to see increased demand for our services. The complexity of trading cross-border continues to increase, especially with changes such as the IOSS regulations. There were over 30 changes in regulation for cross-border trade in the last 12 months across different markets. This convinces merchants that the time taken to adjust and the investment and know-how needed does not make sense doing it in-house, hence, we're seeing more interest coming our way. Specifically in Europe, we see more interest from cross-border retailers looking into leveraging Global-e to avoid registration requirements and access additional capabilities related to international duty drawbacks.
Operator, Operator
We take the last question from the line of Josh Beck with KeyBanc.
Josh Beck, Analyst
Could you provide some insight into how widely adopted the multi-local product is today and how to frame up its growth trajectory over a multiyear time frame?
Nir Debbi, President
The product is already well developed and allows us to support large brands like Jabra and Sennheiser, enabling us to capture a significant portion of their business. We continue to rollout additional legal entities and operational setups in different markets. We are launching our first merchant out of the GCC region working out of the UAE, as well as supporting operations for Mainland Dubai. We have teams on the ground in Singapore and other locations, so we will continue deploying.
Operator, Operator
Ladies and gentlemen, we have reached the end of the question-and-answer session. I would now like to turn the call back to Amir Schlachet for closing remarks.
Amir Schlachet, CEO
Thank you. On behalf of Ofer, Nir and myself and the entire Global-e team, I would like to thank you all for joining today and for your continued support and interest in Global-e. As the year 2021 comes to its conclusion, I would also like to take this opportunity to thank our merchants all around the globe for entrusting us with their business. None of this would have been possible without the unbelievable professional abilities and dedication of our teams around the world who put their heart and minds day in and day out to ensure that we deliver the best of Global-e. Kudos to all of you. Goodbye all, keep safe, and we very much look forward to seeing you again on our future earnings calls.
Operator, Operator
Thank you very much. This concludes today's conference. You may now disconnect your lines at this time. Thank you for your participation.