Shopify (SHOP.US) recently held its FY25Q3 earnings call, highlighting significant growth driven by AI adoption and merchant engagement. Key takeaways include:
- **AI Adoption**: Since launching its AI assistant Sidekick two years ago, 750,000 stores used it for the first time this quarter, with October alone seeing 8 million conversations. AI-driven store traffic rose ~7x YoY, while AI-search-attributed orders jumped ~11x. A pre-Black Friday/Cyber Monday survey revealed ~64% of shoppers may use AI during purchases.
- **Campaign Growth**: Merchant budget commitments for Shopify Campaigns grew 9x YoY, with adoption rates up 4x compared to Q3 2024. The company reinvests ad revenue into scaling inventory and business growth, addressing "customer acquisition" as a top merchant challenge.
- **Financial Performance**: - Merchant Solutions revenue rose 38%, fueled by strong GMV growth. - Shopify Payments penetration reached 65%, while ShopPay processed ~$29B GMV (+67% YoY), totaling over $280B lifetime transactions.
- **Enterprise Expansion**: Brands like e.l.f. Cosmetics, Estée Lauder, and Michael Kors migrated to Shopify. The company noted early-stage "enterprise funnel conversion," with clients gradually adopting POS, installments, and cross-border solutions.
- **Consumer Resilience**: Despite macroeconomic pressures, checkout conversion rates remained stable, with Q3 GMV hitting $92B. European growth was particularly robust.
- **Partnerships**: Collaborations with OpenAI and others aim to position Shopify as the go-to platform for "conversational commerce," leveraging its merchant base of premium brands.
- **Ad Strategy**: Shopify Campaigns introduced AI-powered ranking optimization and gross sales metrics, driving ad performance. Long-term, the company aims to capture a share of merchants’ ~20% GMV ad spend while prioritizing data-driven scalability.
Shopify emphasized balancing growth investments with profitability, citing Q3’s 4% QoQ rise in Standard plan MRR (the first increase after flat quarters) due to trial policy adjustments. The company will detail ad initiatives at its upcoming Shopify Edition event.