This meeting was hosted by senior executives of Shopify, reviewing the company's performance in the second quarter and emphasizing the risks and opportunities in the future outlook. Management discussed adjusted financial metrics and pointed out that these metrics should not replace GAAP standards. The meeting also mentioned the impact of exchange rates, with all amounts being in US dollars. There will be a Q&A session after the meeting.

Looking back over the past 18 months, Shopify has successfully expanded its offline and B2B businesses, achieving significant growth, with international GMV, especially in the European market, accelerating. This quarter, the company's revenue reached $2.7 billion, a year-on-year increase of 31%, with a free cash flow profit margin of 16%. Through continued investment and strategic execution, Shopify has attracted several globally renowned brands including Starbucks, Canada Goose, and Burton Snowboards, showcasing the platform's flexibility and innovative advantages.

Shopify has successfully predicted and led the new trend of e-commerce through its forward-looking technological layout, such as the early integration of social e-commerce on Instagram and YouTube, as well as the recent Roblox metaverse shopping platform. The company has launched Shopify Catalog, providing real-time data on millions of products worldwide, to facilitate seamless integration with AI platforms; the Universal Cart feature allows for unified management of shopping carts across stores, optimizing the shopping experience for consumers. Shopify is building the next generation of AI-driven e-commerce infrastructure to support seamless connection between brands and consumers.

Shopify has launched a new upgraded checkout suite that supports theme customization, simplifies payment, tax, and regulatory handling, and provides a seamless shopping experience. Meanwhile, Shopify's AI product Sidekick offers real-time data analysis to help merchants optimize inventory, reduce customer loss, enhance marketing effectiveness, allowing merchants to focus on strategic decision-making.

Shopify has launched an AI store builder that can create an online store in just seconds based on product descriptions, significantly reducing the barriers for merchants to enter the market. At the same time, the company has expanded its payment products to 16 new countries, introduced multi-entity support and USDC stablecoin options, simplifying the operations process for global merchants and enhancing the security and flexibility of cross-border transactions.

In the past 2.5 years, the number of Shop Pay users has doubled, with Q2 transaction volume increasing by 65% to $27 billion, becoming the fast, secure, seamless payment standard. The Shop App has grown by 140% annually, benefiting from high-impact shopping events and AI optimized searches. Shopify is deepening brand partnerships to drive direct-to-consumer shopping patterns. The advertising business is expanding through Shopify Campaigns, providing risk-free advertising solutions. Progress has also been made in the offline business point-to-point sales system.

Shopify's retail and international businesses both performed strongly in Q2, with the retail business helping merchants achieve online and offline integration through optimizing the POS system and launching new features, while the international business drove GMV growth in Europe and other regions by expanding product coverage and providing cross-border payment solutions, showcasing the effectiveness of the globalization strategy.

The conversation emphasized that Shopify has established partnerships with multiple high-end brands, including Starbucks, skincare brands under Unilever, high-end home appliance manufacturers, fitness nutrition brands, and leading global drilling service companies, showcasing its extensive influence across various industries. These partnerships not only demonstrate the scalability, speed, and flexibility of the Shopify platform but also highlight its adaptability in different markets and industries, laying a solid foundation for future business development. By continuously optimizing products and services, Shopify is committed to helping all types of merchants achieve growth while driving the long-term development of its own business.

The report emphasizes the significant growth in GMV and revenue in Q2, especially in the US market, where all major verticals and merchant groups saw growth. In the European region, especially in the European market, merchant GMV growth exceeded the overall average level of the e-commerce market, demonstrating the effectiveness of product expansion and localization strategies. The platform supports a wide range of merchants, with GMV accelerating for merchants of various sizes. In addition, the expansion of product lines, including offline and capital tax areas, is gradually becoming a growth point, showing great potential.

In the second quarter, Shopify's global gross merchandise volume (GMV) reached $88 billion, an increase of 31% year-over-year, driven mainly by strong performances in the North American and European markets. GMV in North America grew by 49% and in Europe by 42%, both on a constant currency basis. The growth in sales of new large retail businesses and existing merchants drove a 29% increase in offline transactions. Revenue exceeded expectations due to the growth in GMV and increased penetration of Shopify Payments. Despite lower payment penetration rates in the European market, it is expected that this impact will weaken in the future as payment services are rolled out in more countries. Subscription revenue growth was driven by an increase in high-tier plan subscriptions and platform fee increases, although the year-over-year growth rate slightly declined due to policy adjustments extending trial periods. Overall gross profit increased by 32%, despite a slight decrease in gross profit margin for subscription solutions, the overall gross profit margin remained at a high level. Operating expenses as a percentage of revenue decreased, indicating that the company has maintained operational efficiency while supporting revenue growth. The capital business continued to expand, including the launch of loan products in Germany and the Netherlands, providing merchants with more financing options.

E-commerce giants demonstrated strong merchant GMV performance in the second quarter, especially accelerating growth in the US market, while cross-border GMV maintained a stable proportion. Faced with global inflation, merchants have generally raised prices, but overall transaction volume has not been significantly affected. The company expects revenue to maintain high growth in the third quarter, primarily due to the continued expansion of merchant solutions. In addition, the company emphasized the importance of maintaining focus on free cash flow, ensuring positive free cash flow for multiple consecutive quarters even as marketing and research and development investments are increased, demonstrating long-term growth potential and financial stability.

The discussion in the dialogue focused on whether demand had increased due to tariffs, but no significant advance phenomenon was observed. Performance remains stable, with no noticeable changes in cross-border activities and buyer behavior. The business is performing strongly in Europe, North America, and across all product lines, and overall operational conditions are good.

Discussions were held on the strong growth of the international market, emphasizing the importance of product optimization and market expansion strategies. It was pointed out that despite performing well in English-speaking countries, there is still enormous potential in international markets, especially in Europe and the Asia-Pacific region. Mention was made of expanding payment, multi-currency support, and capital services, as well as measures to improve market adaptability through partnerships and localized teams. In the future, there will be a continued focus on deepening the layout of international markets and product innovation to achieve sustainable growth.

The conversation focused on Shopify's long-term growth algorithm, emphasizing the accelerated growth brought about by past investments, especially in acquiring international merchants and expanding into new areas. It discussed emerging growth points such as large enterprises, B2B, and peer-to-peer sales, as well as the contributions of product innovations such as tax management and market expansion to growth. Both parties agreed that Shopify is in an optimal state with continuous growth potential and will maintain its growth momentum through various efforts in the future.

The conversation focuses on how e-commerce platforms can optimize product search and classification by introducing innovative tools such as Universal Cart and Check-out Kit, using large-scale language models to enhance the shopping experience for consumers. These tools not only simplify multi-store shopping cart management, but also embed merchant settlement processes directly into the conversation, enhancing personalized services. For businesses, this means that products and brands can reach consumers more widely, and platforms, with their strong technical capabilities and abundant brand resources, are becoming favored partners for various AI companies. Currently, many companies, including Microsoft, have started using these tools, indicating their leading position in the market.

Discussed how Shopify is using product innovation to improve merchant performance, exploring modular services such as checkpoints or Shop Pay with independent pricing, and how to attract more merchants to use some or all of its services, emphasizing the positive correlation between merchant success and company revenue.

The conversation discussed exploring new e-commerce opportunities through collaboration with AI companies, including AI-driven shopping experiences. It emphasized Shopify's commitment to partnering with AI companies to ensure merchants are at the forefront in the field of AI e-commerce. It mentioned integration strategies with social platforms, video platforms, and music platforms, indicating a positive attitude towards emerging e-commerce channels.

Discussed how Shopify can attract large enterprise customers in industries such as mining, automotive, etc., and help these traditional industries transform through modern e-commerce technology. This not only expands Shopify's market scope, but also brings stability and stronger market competitiveness.

Discussed the growth of performance marketing investment, emphasizing the importance of model optimization and market strategy adjustments. It pointed out that the growth of GMV and merchant base confirmed the marketing effectiveness, while mentioning the wide support strategy across markets, products, and geographical regions, as well as confidence in continuous improvement of the marketing model.

The conversation discussed the key factors for success in the enterprise market, including product value, cost-effectiveness, and continuous innovation. It was particularly mentioned that Shopify attracts large retailers by providing future-oriented solutions, and the role of system integrators in driving business growth. In addition, the increased conversion of Shopify Pay and its excellent platform ecosystem are also important reasons for attracting brands. Adjusting channel strategies and collaborating with system integrators are seen as key drivers for market expansion.

Discussed the application trends of AI assistance in the field of e-commerce, as well as the limiting factors in current business applications. Emphasized the importance of being prepared for AI trends to ensure that Shopify and its merchants are in a favorable position. Mentioned the accelerated development of product innovation and partnerships, showcasing an optimistic attitude towards the future and a determination to continue investing.