Shopify Q3 Earnings Plays Both the New Hits and the Old Standards
If there are faults in Shopify's plans and execution, it's hard to find them by looking at the scoreboard. Shopify continues to execute the best merchant acquisition engine in all of commerce, all without a CRO and a CMO.
This Rick Watson guy clearly is clueless about Shopify needing a CMO or that merchants are not replatforming and this bit about gnawing off arms. Unsubscribe and unfollow that mofo.
With that said, let's get to the deets.
On Agentic:
* AI-driven traffic to Shopify stores up 7x in 2025. Orders attributed to AI searches up 11x.
* Shopify survey: 64% of shoppers likely to use AI as part of their BFCM buying.
* Shopify wants its merchants to succeed no matter what agentic experience wins and what their model is.
* If AI is fueled by data, then Shopify has a clear advantage. We power millions of merchants and billions of transactions.
* Has an internal "voice of customer" tool called Scout. Any PM, designer, engineer or anyone can ask a question and get grounded answers in seconds.
The new hits:
* Shop Pay in Q3 processed $29 billion in GMV, up 67% year-on-year. It’s now processed over $280 billion.
* Shopify Payments penetration hit 65%.
* International GMV grew 41%; Europe’s revenue share reached 21% of our revenue in Q3.
* Estee Lauder signed. This is a big one they have been waiting on anxiously to come in.
* B2B: Following 2 years of consistent growth over 100%, we nearly doubled B2B GMV again in Q3, up 98% year-over-year.
* Offline GMV in Q3 was up 31%
* Shop Campaigns 8x bigger budget commitments y/y
The old standards:
* Q3 delivered 32% GMV growth, 32% revenue growth and an 18% free cash flow margin.
* Revenue increased 32%
* Merchant Solutions revenue rose 38% (GMV growth)
* Subscription Solutions revenue grew 15%. Q3 MRR increased 10%, with Plus plans representing 35% of MRR.
* Gross profit grew 24%, with gross margin at 48.9%
Tariffs:
* Not even a blip. Are there even still tariffs? The difference between a global logistics business like UPS and a payments-oriented business like Shopify in this climate is ridiculous.
Outlook:
* Q4 revenue growth to be in the mid to high 20s y/y
* FCF margin slightly above Q3
Concerns?
* I do not remember hearing before that Standard plans were flat to 4% growth only.
* Shop App not a mention. Harley talked a long time, maybe he ran out of things.
The Future:
* Harley teases more Ads product releases in the next Editions (usually January). Maybe the analysts will finally have their high-margin advertising wishes come true?
