Shopify Inc. (SHOP) September 2026 Conference Transcript

Good afternoon, and welcome to the Shopify session at Goldman Sachs Technology and Communicopia. I'm Gabriella Borges. When I was debating with Shane from Shopify how we could amp this presentation up a little bit, we thought it would be really fun to have Archie Abrams, head of growth, join us from Shopify, and, of course, Jeff Hoffmeister, CFO. We really thought this would set us up for a little bit of leveling up in the Shopify discussion beyond all of the good stuff. That Jeff typically shares with us. And look, it's such a great time for it because the investor questions that we've been getting have gotten much more technical and specific on Shopify's notes over the last six months. I wanted to start this conversation with a little bit of a reflection on the culture that Toby has built at Shopify. There was a podcast that came out, I think it was a couple weeks ago now, where Sam Altman, And he opened up talking about Toby and how he's just such a great example of a founder CEO who actually rolls up his sleeves and gets into the technology. And I know from speaking to you guys for a number of years now that the first principle of thinking at Shopify is pretty unique. So tell us a little bit, maybe via an example from your day-to-day, where this plays out in practice and Shopify essentially thinks first principles about adopting AI.

Archie, you want to start? Thanks, Gabrielle, for having us and excited to be here. You know, working with Toby is amazing because he is so hands-on keyboard, right? He is in the technology himself doing it. And so just the other night, we were going back and forth very late into the evening on how different AI models are discovering Shopify merchants and Shopify itself, right, and really trying to kind of reverse engineer a lot of that discovery and what makes a merchant appear, what makes Shopify itself appear, and rethinking and using it as an opportunity to really rethink the information we're giving to merchants and how we're even structuring ourselves. So that depth and that level of understanding I think is really unique in how we build and what we're doing.

Jeff, an example from your day-to-day?

Well, I think one of the things that Archie alluded to, the one point I'd expand on is because Toby is so deep in the technology, he's exceptional at making sure we constantly are questioning how we've built a product. And maybe it was built on an architecture that even though it's only two or three years old, could be rebuilt in a way. and we see this a lot where he's like hey this is phenomenal but if we want to take this to the next level we need to do this so let's use this latest and greatest technology in order to enhance the product so that make sure the next two or three years it's even further along or the other thing which I see a lot is we'll be doing product reviews and a bunch of engineers will come in and say hey we did a bunch of work we got it down to you know 10 milliseconds or we did this or we did that and he'll be like well yeah it needs to be two like no no we just spent like two months trying to get this on the 10 million he's like no no it's got to be two like like the consumer experience demands this and so he's very good about taking that product knowledge thinking

about how we apply it and make sure we're delivering merchants what they need not what it is that we're kind of obsessed about building but what they're actually going to utilize Jeff there was a time I think it was around COVID actually when Shopify still used to give us merchant acquisition numbers every quarter and I remember investors used to ask us look at some point this merchant acquisition gravy train is going to slow down because the depth of TAM just isn't there. So Archie, I know your role focuses a lot on merchant acquisition strategy. Talk to us a little bit about what the strategy is. And Shopify has sustained these growth rates. It doesn't seem like merchant acquisition is slowing down. How are you able to generate this sort of infinite TAM?

Yeah, that's a great question. I think that the key to our strategy is kind of remain timeless over time, which is that we believe that the next large Shopify merchant is just getting started today. And so our job is always to meet entrepreneurs early in their journey, wherever they are, and lower the barriers for as many people to start. We know that many of those businesses, they might not actually succeed, and that's totally fine, because the businesses that do become brands like fakes, Alloyoga, and the like. And, of course, we grow right alongside them. And one thing that's really interesting about the merchant acquisition piece is one of our goals is always to build trust with entrepreneurs. As I mentioned, a lot of those businesses, they might turn, they might not be successful in their first attempt, but actually over 40% of businesses on Shopify are started by merchants with their second or third or fourth business coming back to start over. And if you look at one example of that, Ben Francis, the founder of Gymshark, actually started multiple businesses before he hit it big with the apparel brand Gymshark. And so that goes to us really lowering that barrier to make it really easy to start in our integrations with all of the agentic platforms so we're there, building trust along the way, and then helping more merchants come on, be successful, and over and over until they've hit that successful business.

There was a couple of secular shifts that happened probably around the time that Shopify was founded, where the startup costs to start and become a merchant went down. And I'm thinking of dynamics like dropshipping. I'm thinking of Facebook ads. What does that look like in 2026 with AI? Does the barrier to the average American starting a business, or actually global, has it gone down and in what ways?

Absolutely. So I think that, you know, one thing I look at is right now, if you look at, I'm going to focus a little bit on the U.S., but obviously our growth is very global, the 12% increase year over year in terms of new business starts in the U.S. But if you look at absolute numbers, it's still only 1% of the U.S. population that is starting a business. And I think our fundamental belief is that there are many, many more people who want to reach for independence, particularly with AI. And what AI allows one to do is if you think about starting a Shopify business, right, you had to be good at a multitude of skills, be really good at designing apparel, but then also be really good at marketing, also be good at website design, also be good at running your operations, also be good at analytics. With AI, you might only need one superpower, be an incredible product designer, but then leverage the sidekick or other AI tools to become an expert in marketing, Leverage Shopify's autopilot so we can help you run your marketing for you. Use Sidekick to run your reports and run your operations. So all of a sudden, the barriers for many people who want to reach for independence, they really only need one superpower. Use Sidekick and other AI tools can help them with those other skills that are not as come as naturally. And I think that's really the opportunity with AI and what we're seeing.

Yeah, I think if some of you haven't as investors just tried to build a store and use Sidekick, I think it would be really enlightening just for you to get a sense for the experience, the information, the content, all the information in there to just basically say, I have an idea or even help me generate an idea. And with this idea, get a website up and running. So even if it's something where you're just testing it out and trying to figure out, I want to just get a feel for how the technology works and really put it in action, I'd encourage you to do it because to Archie's point, it's pretty incredible what it enables.

Let me ask you a little bit about how agentic commerce is starting to impact the market. Let's start a little bit more macro. During COVID, people would track the e-commerce trend line, and it accelerated. I think it was three years' worth of acceleration in nine months. My question for you is, do you think the e-commerce penetration trend line is changing again?

I'll start. I'm sure Archie will have plenty to add. Yes, but I also think it's early days. I think with all the product announcements, it's very easy to get focused on, hey, we think agentic commerce is such a huge percentage of commerce. We're really only depending on how each of a company, a vendor, or a software provider defines it. We're kind of six to nine months into seeing real traffic where someone goes to one of the LLMs, does some discovery, and then ends up on a merchant's website and then transacts. So with that caveat that we're still in the early days of this, we are seeing an inflection. And as you know, when you kind of normalize across geographies, is roughly 20% of commerce globally is done online. And I should know the exact rate of change. But in any given year, it feels like, and Gabriel, I'll give you a view on this, too. In the last few years, it's kind of a point or so of global e-commerce each year shifts from offline to online. We fully expect e-agentic commerce to inflect that. And that obviously will play into our strengths, into kind of what historically has been our traditional source of where we started with merchants and help them grow. I think the other thing that we're going to see just into the adjustment of the inflection of the growth rate is we're going to see more and more discovery happen earlier in the process, which is going to help merchants. And there's a couple of stats, one of which we alluded to in the last earnings call. But when you start with an LLM and you do your searching there, you're two and a half times more likely to end up right on the product page rather than starting somewhere in a general spot on the merchants website you're going straight to the product you want and then that leads to an uplift and conversion we've seen roughly an 80% uplift and conversion and so you're doing a lot more discovery searching figuring out exactly what you want before you even get to the merchants website but it also helps them the merchant could transact and convert much faster which is something that we've seen to be very very effective and we're also just in terms of how we're interacting with the with the merchants and all the LLMs. For us, we're the only one that has the admin that allows you to work with all the different AI and LLM platforms directly from one admin, one pane of glass, and lets you decide, hey, I want to sell on this channel or that channel, or turn this one on, turn this one off at any one given point in time. So it works really, really well. But importantly, the economics to us do not change. So whether you start on this LLM or that LLM, you're still a channel for the merchant, and you're still getting to the merchant's website. So once you're on the merchant websites, still going through shop pay you're still going through the process and kind of everything you're doing in terms of obviously exchanging money and getting your goods services whatever sent to you and it's there's been a lot of announcements around meta and muse which obviously is a huge partner of ours exact same way in terms of everything we've done in terms of how we work with open ai and everyone else your point on economics is an interesting one because i would imagine that whether it's meta or perhaps one of the frontier models or the llm engines they would also want a share in the economics so how how does that work how are you able to preserve your economics and then also make it worthwhile for them to be in this path of discovery well for the LLM they're obviously they're trying to do a couple things and there's the business models the size of the businesses differ a lot right so it's a little hard to make some generalizations across all them but for the most part they're engaging with the consumer in a way largely attached to what they're trying to do on an advertising side to final that consumer to a merchant and help them conduct a transaction but if you're a merchant the vast majority of the time you still want the transaction to happen on your website it may even be within one of the LMS it makes a reflection or mirror or it seems like you're actually still within the LM but you're really operating with the infrastructure of the merchant in a lot of cases because if you're a merchant you spend a lot of like countless hours dollars management bandwidth trying to make sure the pictures are the way you want the brand is the way you want the product descriptions are you want this is kind of the top level, and you click down to the second level, and you click down to the third level, all that information a merchant has spent a ton of time working on. So the LLMs are doing everything they can to engage with the consumers. And I give, I mean, one of the things is, you know, Gabriel, as we've talked about it, one of the changes that's happened is most of the LLM searches are generally, when you type in the query, it's generally like two dozen words or so. The old traditional search, you probably were typing in kind of five or eight words. So to all the LLMs' credit, they're generating more sophisticated questions, which allows them to give more sophisticated answers, and they're trying to compete. In addition to what they may be doing on advertising and other pieces, they're trying to compete on the quality of the referral. If you type in something very specific in terms of a product you may want, they want to get you to the right spot. And that's, I mean, I'm sure we'll talk about catalog at some point, but that's the beauty of catalog in terms of how we interface with the LLMs. But they're trying to build their brand with the consumer.

We get this question, and I think you've already alluded to the answer here, but just to crystallize it, every time a new agentic technology comes out that seems to have some way of replicating or disintermediating Shopify in the stack of merchant discovery through to conversion, we'll get questions about it. And I think that's probably a way to answer all of those questions in the same way, which gets to the heart of Shopify's notes. So how do you, when investors ask you about ABC products that seems like it might abstract part of Shopify, how do you respond to that in a more comprehensive way?

Yeah, actually, maybe Archie, I'm going to let you start on this too. But part of it is just kind of the, to your point, the comprehensive element of things we do. This is one of your near and dear points. I'll let you start and then I'll pile on.

I mean, and to Bill, I think the complexity and the fragmentation is actually amazing for Shopify and the value proposition we offer to merchants. Because if you're a merchant right now, think about if you're starting a business, you need to have a website, you need to sell on the agentic channels, you may also want to do physical retail. And so you want one place that can bring all of that together in a simple way. And that is what Shopify does. So from a merchant's perspective, actually, as the fragmentation gets even more over time, all roads lead back to Shopify. You want one place to manage your inventory. You want one checkout. You want all those pieces to flow back. And that, I think, is the ultimate moat for what we do in the merchant value.

Yeah. I mean, always keep in mind that Shopify is a place that does, depending on how you define the products, 12, 18, 20 things for the merchant. There are companies' angles that will do a piece of that. But to Archie's comment, we're helping them with the inventory. We're doing kind of getting them connected to shipping. We're calculating the taxes. We're doing the payments. We're doing the consumer context in terms of everything. We're running their website. We're using Sidekick to help them figure out which new product to do next or how to price or what to do in terms of this initiative. All that stuff. At the end of times, people are like, well, I want to do a little bit more of this piece or a little bit more of that piece, but no one's doing anything like we are in terms of the totality of all of it.

Let's talk about catalog. It's one of those innovations that is so simple and obvious and yet so sophisticated because the catalog, as I understand it, doesn't just describe, hey, it's a dark green dress. There is a level of how you can code that up that makes it incredibly useful to LLM discovery. Talk to us about how Catalog does that.

Yeah. So, I mean, I think one of the things that we've invested a lot in is our real deep understanding of every single product that is in, you know, the Shopify merchant has. And creating a taxonomy that is incredibly robust around not only it's, you know, the most basic facets, but also things like understanding the imagery and really understanding kind of the tone, what type of buyer this is going to appeal to. And then in the process of that, cleaning things up so that if there are multiple products listed from different merchants, we have that unique understanding of a per-product understanding versus kind of a scattering of these products are actually the same, but they appear in different listings. And so all of that plus the live inventory data, the live pricing data, those things are extremely unique when you're an LLM who's reaching for and helping a consumer actually find the right product versus using web search or something like that, which will have all sorts of issues, not real time, bad pricing data, no live inventory. And so all of those things are really compelling for the catalog, for both consumers and then also for merchants themselves.

The statistic that I really like from your earnings call was the one about conversion rates for the long tail. How do you think competition is changing in so much of Shopify's value pitch has been, value proposition has been empowering the rebels and helping the small guys compete with the power of an Amazon. How do you think share is shifting between the long tail of merchants versus the giants in the room, typically the marketplaces?

Yeah, I'll go back to one of the comments I made in terms of the LLMs being really thoughtful in terms of you're asking more sophisticated, nuanced questions and you're getting more sophisticated, nuanced answers back. And we're seeing that initially play out in a couple of spots, and we alluded to this to your point, Gabrielle, a little bit on the earnings call. There's two immediate spots, and there's a third one, which is rapidly developing. The two immediate spots are some of the, I don't know if I'd want to say niche-y products. We had Harley quoted a statistic regarding what percentage of the AI-driven traffic was outside of our top 100 categories. Now, obviously, we can define the top 100 categories a bunch of different ways, but the point is that the significant majority of the AI-driven, the AI-started searches, I should say LM-started searches, are in some of these products which are maybe less known. It's not the huge brands. It is maybe, for example, it's some product, some entrepreneur that started five or six years ago, The brand took off really well, had some phenomenal growth rates, and then just plateaued a little bit, had kind of found an initial niche. And then with LLM, you're getting more specific questions, and you're kind of seeing a lot of these brands that had done well, slowed a little bit, and a lot of them are taking off again, which has been amazing to see. The other category, the second category where we've seen a lot of initial impact from LLM are things which are very heavy in terms of product specifications. electronics or maybe there's a piece of furniture it needs to be a certain size or certain height or something that needs to be a certain weight or something about where obviously the LM is going to allow you to put in some very specific requirements that you want and then get more feedback from that and get a better result the third thing which we're really doing and we've talked about this a little bit when Archie was talking about catalog we're really trying to take some of the things that maybe did not have a lot of product heavy searches and now because of LLM you can take some of the things that merchants have in the inventory listing and with catalog present them in a way which is enhanced in terms of the product description and so maybe you're looking at all right so I want to look and buy this suit and is this suit a certain level of weight of fabric is it breathable is it appropriate for this type of event is it suitable for this and adding some things which historically you never would have considered within a description or a characterization of a product and now put that in there in a way where the LMS now for the first time allow you if you can ask the question which of course you can as you get in the habit of asking that question catalog will serve up a product which is even better suited to what you maybe would have planned and so maybe historically you would have bought from brand X but now the LLM will say well based on other things you bought in your style and types of things that I see you buying actually maybe there's a small manufacturer in Portugal or

wherever that that's the manufacturer you should be buying from and so as we can help merchants do better descriptions of their products fold that into the catalog it's really helping a lot merchants be discovered in that way it's just it's feeding more information and content into the system and letting that content then be accessed by the by the consumer the inverse of this question is how merchants discover shopify which archie i think is is at the heart of where you spend time jeff i remember there was a fair amount of change at shopify when google search engine went down as a percentage of your mixed top of funnel in 2023 time frame and the number of marketing channels that you all were able to use to land new merchants dramatically expanded as best we could tell from the outside. So Archie, tell us a little bit about how that strategy has changed, maybe bring us up to speed over the last year.

Yeah. I think the great thing about our merchant acquisition has always been a very diversified set of channels that we use to acquire merchants. And as I mentioned earlier, a lot of it has always gone back to How can we be helpful to merchants at the very top of their journey to becoming an entrepreneur? So historically, that may have been tools that we had, like a logo maker or a business name generator. And what we've done is we've taken a lot of those tools and actually made skills that are accessible by agents and connectors that enable folks in Lovable and ChachiPT and Claude and Manus and Replit and Grok to basically be able to discover Shopify right there. as well as really, you know, that going back to what Toby and I were going back and forth about at that late night, how do we understand what type of content is being served up and how do we continue to optimize our content and how people are talking about Shopify to make sure that we are showing up right at the start when somebody is searching for the best platform to start their business. And so what we see is we see just an enormous amount of visibility in the AI channels. And then a lot of that comes back in direct to Shopify or via some other channel as well. And so that's been kind of the core. It's getting into the agents, being helpful at the start of the journey, and playing that out.

I think it was Harley who was talking about how the initial meetings with larger enterprises also feel different because you can very quickly show them essentially what they're missing out on. Talk about that conversation further up to the larger enterprises, the Estee Lauder's of the world.

Yeah, I think a big piece of that is folks realizing some of the network power that we have, and specifically around payments and shop pay, kind of that accelerated checkout really opens up a lot of conversations. But more than that, I think I'd go back to a product that Estee Lauder or any of the large brands have, is that folks are always, let's say, running A-B tests to understand how they can convert or better price their products, et cetera. And not only do we build products that make that easier to run those types of experiments, but we also leverage a lot of the network intelligence that we have. So there's a product called SimGym. What does SimGym do? It allows you to create a bunch of variants. It could be landing pages, pricing for your product, product imagery, ads. And then we actually have agents come in and basically simulate which one of those variants is more likely to do well and then actually run the experiment and then actually launch the winning variant. So when you're an Estee Lauder or you're a large brand, you're getting both the benefits of all the complexity but also that we handle, but also that intelligence that we're able to offer that is very unique compared to anyone else.

One of the themes that we've been exploring is this idea that switching cost goes down. And I think as it's relevant to your business, it's the switching costs between some of the legacy platforms and migrating over to Shopify. Have you all observed that? Maybe give us a stat here. Perhaps the migration typically was a one-year undertaking. Have you noticed a change in pace of migration?

Yeah, I think we're seeing that, you know, with our help, some of the largest brands are able to get launched in weeks or even, you know, even shorter. because of what we're able to do both by just having the platform the way it is and it's easy to integrate, but then also whether that's agencies that we work with and really equipping them and the integrators to be able to leverage all of the agentic workflows to be able to help move those brands over. We've seen a real ability to get folks launched, you know, increase pretty substantially over the last year or so.

I'd say the other thing, too, just in terms of migration overall, Archie, you mentioned Syngin, that I think just in terms of having an agentic roadmap, a thoughtful roadmap of, you know, here's Sidekick, here's Cattle. I mean, we started building both of those three years ago. So here's products that are going to help you as you really think, even if you as a CTO of a large organization, say I have maybe a slightly different view or bearish view in terms of how quickly agentic commerce is going to take off or what percentage of this or that it's going to be, it is still hard for you as a CTO of a very large global brand retailer to say, I'm going to adopt the platform that doesn't really have a lot of AI capabilities. We are really the only ones that are presenting kind of not just an agentic plan, but a bunch of products in place with a bunch more coming just in terms of how we think about these capabilities and really making the decision where it's hard for them not to do. And I think effectively what we've done over the last couple of years is for the first time, given large brands, the opportunity where you have a third-party software which is going to outperform, which is going to help you be more successful than something that maybe you spent, depending on how big you are and how long you've been around, years, maybe a couple decades, in terms of building the infrastructure, building the team, and customizing all that stuff. And all that's wonderful. But with the capabilities of catalog and the capabilities of everything we're doing, you're just at a spot where you're almost at a competitive disadvantage if you're not adopting some of the things that we can do to help you propel your business.

Let me sneak in a couple of macro questions. Archie, I think this one is for you. How worried should we be or how worried should Shopify merchants be about SEO hitting an air pocket?

I think that for our merchants, I think what we see is traditional search continues to grow and continues to be strong. But the nature of that SEO, it tends to be different. It tends to be lower in the funnel, more navigational. So things like in the past, you might have had queries like black pants, and now you have Viore pants instead. And so the top-of-funnel discovery is happening on social platforms, obviously still, as well as in Agentic, where folks are actually researching the best pants to buy, as Jeff said, really able to get that customized thing. But then when they actually want to go discover the brands, they typically use those navigational queries to actually have that rich experience of being on the merchant's website. And all of this, I think, will help independent brands because those queries around black pants, those are very hard and very, very competitive queries, whereas in Agentic, those independent brands are more discovered, and on social is where with our merchants and their ability to create amazing kind of content and the like are able to really succeed. So I look at the change in SEO is very beneficial to a lot of our merchants as the new discovery channels grow.

And, Jeff, the other macro question for you is health of the consumer. I use your data point all the time on the average Shopify merchant makes, on average, more than $100,000. So with that backdrop, any comments you're willing to share on health of the consumer?

Yeah, we try and put a lot of reliance on our own proprietary data. But I would also say that we're not seeing anything that vastly differs from what you see in the morning, whether you're kind of reading this blog or watching CNBC or kind of wherever you're getting from the Goldman Trading Desk in terms of you're getting views on the economy in terms of how things are doing. You see it in the numbers we've posted for several quarters right now. The business continues to perform very well, and I'm always talking about kind of strength across geographies and merchant sizes and industries and verticals and all that. So, like, it remains strong in our minds. So there's, especially the last couple days, of course, we kind of seems like we kind of ebb and flow in terms of what's going on with oil prices and kind of consumer spend and all that but and of course gabrielle i got to stick to what i said at the last earnings call but that being said like it remains consistent in terms of the strength that we're seeing so um you all will have your own views on consumer spend it seems strong to us right now i think it's worth spending a little bit more time on sidekick because of the amount of proprietary data that Shopify is able to leverage in Sidekick.

Tell us a little bit more about the AI engine that's running behind that. How much is third-party? How much is Shopify proprietary? What are the types of data that you can really put to work in something like Sidekick?

Yeah, I mean, I think that, you know, it goes back to one of the investments, you know, Toby made right at the age of kind of the start of AI a few years ago, which is really building kind of a venting in the admin that was, you know, incredibly powerful. So tracking absolutely every interaction that a merchant has and a buyer has on merchant sites and other services, which really laid the foundation for us to be able to do all sorts of next best action predictions. And I think where you see Sidekick going is leveraging that deep understanding of an entrepreneurial journey all the way from starting to scaling and making Sidekick not only good at when a merchant is doing a task, like designing a website and doing analytics, but starting to become more proactive with things like Sidekick Pulse, which is your proactive recommendations of, hey, you might be not understanding that you could create a collection and offer a discount, and that will increase your GMV. So it all starts with really that very early investment and that kind of very prescient investment Toby made and we made in really understanding all of the actions. And when we have that and we understand that both the merchants and how buyers are interacting across all of our storefronts, agentic channels, in person, it allows for something very, very powerful not only as a tool but also as a proactive assistant to help merchants run their business. It is very unique.

And, Jeff, this reminds me of when I used to ask you about audiences monetization every other quarter. There are these products within Shopify that are monetized indirectly.

I think audiences is a great example psychic to some effect tell us more about the monetization strategy and the second derivative impact that these types of products have on GMV integrate well I'll start with sidekick I'm gonna second half of your question for us because psych and we've given some statistics and that we will continue to give more in terms of the impact that we see sidekick is having on on merchants and their success and really what we've seen over the last, as I mentioned before, we started working on this over three years ago. It's been out for over two years. It's really about nine months or so ago where we really started to see diversity and explosion in the usage of Sidekick. And it went from being something which we were seeing largely in terms of kind of mid-sized merchants were asking for the most part go-to-market questions was really kind of the initial foothold that Sidekick has. And it's really exploded in terms of merchants of all sizes and all geographies are asking all types of questions. And so you can imagine that the questions being posed as sidekick by a 10-person entrepreneur team versus, you know, one of the, like, Land's End or some of the biggest companies out there in terms of how they're thinking about things. There are different types of questions, but what we're finding is that it's really helping people think about how they can accelerate their business, and so obviously what that translates, the merchant is, the can of the goose is selling more things, and obviously that's generally going to translate back into payments revenue or FX revenue or tax revenue and all these things. So Sidekick is there because it goes back, and you mentioned this before, in terms of the first principles of Shopify and kind of how we're very mission-focused on a lot of things and helping the merchant be successful, us trying to be a tail end to the merchant in terms of what they're trying to do. That is what Sidekick does. The benefit, one of the benefits coming out of that, of course, is they're more successful than the success of our business is tied to their success. So, and you see that in Sidekick.

The question we sometimes get when products like Sidekick are really successful is how do you think about the token impact on gross margin?

Yep. Well, it goes a little bit back to kind of what I just alluded to. That is, if Sidekick, and we've given some statistics, we'll give more. If Sidekick continues to drive success, then that translates into gross profit dollars. And so there will be a, it may show up in different spots, as you know, if it's shown up in payments, if it's shown up in tax, if it's shown up in FX, cross-border, some of that will be shown up in our, for those of you that know our financial statements really well, some of that shows up in the merchant solution side of the business rather than the subscription solution side of the business, but it still goes down to gross profit dollars. And as you know, as we talked about in the last earnings call, for our gross margins on subscription solutions, it's been a balance as some of the LLM costs continue to rise with sidekick usage. And to be clear, we want to encourage and we are actively encouraging sidekick uses. We want merchants to use it. We want them to use it as much as they can. The challenge for us, of course, is make sure some of those additional LLM costs and all the things that we've talked about in terms of how we manage those costs, how we also in areas of support and other things extract costs there and just kind of on the net make sure that we're driving gross profit growth through kind of balancing those costs and driving kind of more success elsewhere.

We're seeing a lot of really great work from the distillation efforts, particularly with some of the new open source models. We're getting a lot of leverage with very little or no quality tradeoff, but able to leverage them very effectively to keep those costs at very good rates.

And we're doing a lot of caching, too, of questions. You can imagine a lot of times merchants will be asking sidekicks similar questions, and so we can be anticipatory in terms of the question they're asking. And it's not, we don't have to use the latest frontier models and everything because the value, one of the key values of Shopify is 20 years of transaction data, consumer transaction data, not just kind of I sent you to a website, but you went to this website, you put this in the cart, you took this out of the cart, you added two things that you transacted, you shipped, you did all this stuff. All that information is itself the source, and then we can run models off of it, but I don't need to have the latest and greatest model to do that.

We covered a lot in 35 minutes and how the world is changing. If there are one or two themes that you want to leave this audience with that may be underappreciated in how the world is changing, I would love to end there. Archie, please.

Yeah, I think that one of the things that I'm really excited about is the, you know, I think there's two really great trends for Shopify. One is entrepreneurship becomes much more accessible, which will mean a lot more interesting, unique brands and products in the world. That, combined with the ability to actually find those products and kind of expanding the shelf space, the range of products that can even be discovered, I think will only increase with LLMs and with Agentec. So I think those two things of more entrepreneurs creating more interesting products, more brands, able to find those 1,000 true fans, will become much more possible, which will lead to both more merchants, more growth there, but also just more buyers choosing and shopping across independent brands over the next period of time.

And the only other thing I'd say on agentic commerce, as we look at what is possible in the years to come, we are very excited about the fact, and there's kind of news about all the different LLMs, and we alluded to it, is whether you get to the merchant's website, which Shopify is running, whether you get to that website by coming through Muse or coming through OpenAI or going straight to the merchant's website or you did a Google search or whatever it is, all those are channels that lead back to the merchant and the broad suite of things that we do to help that merchant be successful. So these are just since commerce began, it's essentially a question of how do I get more buyers to show up for me and however they get to me, I welcome them and then we help them transact and that's something that we're working really hard to do.

Hey, it's really good stuff. Please join me in thanking Jeff and Archie for their time. Thank you for being here.

Thank you, Kevin.