Recently, Shopify (SHOP.US) held its FY25Q3 earnings call.
According to Zhitong Finance App, Shopify (SHOP.US) recently held its FY25Q3 earnings call. The company stated that it launched the AI assistant Sidekick two years ago, and this quarter alone, 750,000 stores used it for the first time, with 8 million conversations recorded in October.
Since January this year, traffic to AI-driven stores has grown approximately sevenfold, while orders attributed to AI searches have increased about elevenfold. The company’s pre-Black Friday/Cyber Monday consumer survey showed that around 64% of shoppers are likely to use AI during their purchasing process.
Senior management pointed out that 'customer acquisition' remains one of the biggest challenges for merchants. The company's strategy is to 'reinvest advertising revenue back into business growth' — ensuring continuous expansion of both ad inventory and overall business scale.
Currently, in this quarter, merchants’ budget commitments for Campaigns have grown ninefold year-over-year. Comparing Q3 2024 with Q3 2025, adoption rates for Campaigns by merchants have grown fourfold year-over-year.
At the division and product level, merchant solutions revenue grew by 38%, with strong GMV growth contributing to the majority of the increase. Shopify Payments penetration increased slightly this quarter, reaching 65%.
In terms of ShopPay’s performance, GMV processed by ShopPay reached nearly $29 billion in Q3, marking a 67% year-over-year increase.
When discussing the impact of tariffs, the company noted that the core measure of 'consumer confidence' lies in 'checkout conversion.' Data indicates that consumers on the Shopify platform continue to make purchases and repurchase consistently, with demand remaining resilient across channels and categories.
Q&A Session
Q: Your integration with OpenAI has been initiated. Please share preliminary observations from these transactions, the incremental contribution pace compared to other channels, and your expectations for scaling through the AI platform in the future.
A: Since January this year, store traffic driven by AI has increased approximately sevenfold, with orders attributed to AI searches growing around elevenfold. Our pre-Black Friday/Cyber Monday consumer survey indicates that about 64% of shoppers are likely to use AI during their purchasing process. We are laying the infrastructure for "agent-based e-commerce" and have partnered with leaders in this field to ensure Shopify merchants are better prepared and can benefit first. Our business model is highly aligned with merchant success; the more merchants sell, the more we share in incremental GMV and Payments revenue. Our collaboration with OpenAI on conversational commerce represents yet another new 'surface' for merchants to reach customers.
Q: In the context of "instant checkout," there will be many accelerated checkout solutions presented side by side in the market. How do you think these solutions should be prioritized? As a merchant platform, how do you ensure that Shop Pay gains an advantage in such scenarios?
A: The core lies in the value of Shopify and these partnerships. Whether it's OpenAI, Microsoft, or Perplexity, the fundamental reason we are their preferred partner is that these intelligent agent products need access to 'premium brands,' and premium brands are all on Shopify.
As for Shop Pay’s performance: In the third quarter, Shop Pay processed nearly $29 billion in GMV, representing a 67% year-over-year increase, with cumulative transaction volume exceeding $280 billion. As the top-ranked accelerated checkout tool on the Shopify platform, Shop Pay is gaining favor among 'consumers who have high brand recognition for their favorite brands'—and these brands happen to be on Shopify.
Q: How do you balance marketing efficiency and growth when considering market investment? And what are your views on next year's trends in investment and MRR?
A: This quarter marks the first time Standard plan MRR achieved a sequential increase (after several quarters of flat performance), with a sequential growth rate of 4%. This change is purely the result of 'trial policy adjustments'—the third quarter was the first time we could see a clear sequential comparison of trial policies. By the first quarter of this year, we had largely completed the transition 'from other trial policies to a three-month trial policy,' so the comparison between Q2 and Q1 was not entirely clear, whereas the comparison between Q3 and Q2 is fully comparable.
Q: Can you discuss how we should view market share in the enterprise segment as you expand into the enterprise market and replace some existing suppliers? How should we interpret take rates in this domain?
A: Enterprises are migrating to Shopify. Brands like e.l.f. Cosmetics and Estée Lauder have already joined, while Michael Kors, David’s Bridal, Goop, and Mejuri have gone fully live. Our go-to-market strategy in international markets such as Europe is more refined, and partner-led transactions are increasing.
Regarding take rates for enterprise users, we are still in the early stages of 'enterprise customer funnel conversion.' Many enterprise customers may initially only use our payment services, but over time, they gradually adopt more of our products, such as point-of-sale (POS), installment payments, and cross-border solutions. Therefore, although take rates may face some short-term pressure, this trend is a positive signal for our business in the long term—the more products enterprise customers adopt, the higher their long-term value. We are optimistic about this trend.
Q: Please discuss the status of consumers across different regions and the impact following changes in tariffs.
A: For us, the core measure of 'consumer confidence' is 'conversion at checkout' — and the data shows that consumers on the Shopify platform continue to make purchases and repurchase, with demand remaining resilient across channels and categories. Of course, I can only comment based on Shopify's platform data, but whether measured by GMV or other metrics, the defining characteristic of today’s consumers is that they are 'more selective' — tending to buy from brands they love, many of which happen to be on Shopify. Our Q4 guidance also reflects this trend.
Regionally, growth momentum in Europe has been particularly notable (as I mentioned in my remarks), and this trend is expected to persist. Ultimately, if we use 'checkout conversion' as the benchmark for consumer behavior, the $92 billion GMV this quarter speaks for itself.
A: Compared to the previous two quarters, there hasn't been much change; since the U.S. tariff adjustments in April, we have observed a slight pullback in merchant price increases. Regarding factors like the de minimis threshold for small parcels, things have remained relatively stable from our perspective; the merchant base remains strong and adaptive, and we are actively supporting cross-border activities.
Q: Could you elaborate on Shopify's marketing campaigns? How do merchants participate in these campaigns, and how does the economic model work? What revenue opportunities do you anticipate this initiative could bring over the next few years?
A: First and foremost, 'customer acquisition' remains one of the biggest challenges for merchants — an area where we have invested substantial resources. Currently, we are addressing this issue through two main approaches: one is the Shopify Campaigns tool you mentioned, and the other is 'product discovery and marketing enablement' (where the Shop app plays a significant role in driving traffic and increasing customer lifetime value for merchants; Shopify Collective is also active in this space).
Specifically, regarding Shopify Campaigns, our core objective is to 'run commerce-native performance ads on high-intent platforms.' Our strategy has always been to 'reinvest the revenue generated from advertising back into business growth' — ensuring that both ad inventory scale and business scale continue to expand.
The results so far have been highly encouraging: this quarter, merchants’ budget commitments for Campaigns grew ninefold year-over-year; comparing Q3 2024 to Q3 2025, merchant adoption of Campaigns increased fourfold year-over-year.
At the product level, we are continuously optimizing: for example, we introduced the 'Gross Sales' metric — which serves as the default 'high-coverage goal' in Campaigns; we have also just launched an 'AI-driven ranking optimization' feature, with early data indicating it significantly improves ad performance.
Q: You mentioned last quarter that more advertising opportunities would emerge; if merchants typically spend around 20% of their GMV on advertising, what portion do you aim to capture long-term? Additionally, regarding ChatGPT, could there potentially be revenue-sharing opportunities in the future (e.g., sponsored/promoted listings)?
A: I am unable to disclose specific economic terms of partnerships. However, what is clear is that our profit model is always tied to 'merchant success' — the higher the merchant sales, the greater Shopify’s revenue (whether through GMV commissions or Shopify Payments). This logic applies to all new channels, and any additional economic terms of partnerships are not disclosed publicly.
Regarding advertising business strategy: "Customer acquisition" remains one of the biggest pain points for merchants, and we believe we have the ability to do better — we possess massive data and scale, giving us a unique advantage. Our goal is to "achieve larger-scale growth in the advertising space," specifically through a process of "test, measure, and reinvest," ultimately delivering better long-term outcomes for merchants.
The advertising business is still in its early stages. For those interested in our advertising initiatives, we recommend keeping an eye on our next Shopify Edition conference — where we will provide a detailed update on related progress. Additionally, from our current efforts (such as the Campaigns tool, the Shop app, and Collective's product discovery and marketing enablement), you can already see our strategic approach in the advertising domain.
We are consistently delivering on our commitments quarter after quarter — last year, we built intelligent agent tools, which are now integrated with all key partners; two years ago, we launched the AI assistant Sidekick (well ahead of industry trends), and this quarter alone, 750,000 stores used it for the first time, generating 8 million conversations in October; nearly five years ago, we created an onboarding pathway for enterprise clients, and today brands like Estee Lauder, David's Bridal, Aldo, and Michael Kors have chosen us.
We are not merely "speculating about the future of commerce"; we are "actively building it." At Shopify, what makes me most proud is that we simultaneously balance three key objectives: aggressively investing to seize opportunities, maintaining profitability to demonstrate control, and achieving sustainable performance quarter after quarter. This represents a form of "compound execution" — very few companies at our scale can achieve all three simultaneously, but we are doing just that.
