Global-E Online Ltd.

Greetings and welcome to the Globally first quarter 2023 earnings call. This call is being simultaneously webcast on the company's website in the investor section under news and events. For opening remarks and introductions, I'll now turn the call over to Erica Mannion at Sapphire Investor Relations. Please go ahead.

Thank you and good morning. With me today from Globally are Amir Shlockett, co-founder and chief executive officer of Ofer Karin, Chief Financial Officer, and Nir Devi, Co-Founder and President. Amir will begin with a review of the business results for the first quarter of 2023. Ofer will then review the financial results for the first quarter of 2023, followed by the company's outlook for the second quarter and full year of 2023. We will then open the call for questions. Certain statements we make today may constitute forward-looking statements and information within the meaning of Section 27 of the Securities Act of 1933, Section 21 of the Securities Exchange Act of 1934, and the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995 that relate to our current expectations and views of future events. These forward-looking statements are subject to risks and uncertainties and assumptions, some of which are beyond our control. In addition, These forward-looking statements reflect our current views with respect to future events and are not a guarantee of future performance. Actual outcomes may differ materially from the information contained in the forward-looking statements as a result of a number of factors, including those set forth in the section titled Risk Factors in our prospectus filed with the SEC on September 13, 2021, and other documents filed with or furnished to the SEC. These statements reflect management's current expectations regarding future events and operating performance and speak only as of the day of this call. You should not put undue reliance on any forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that future results, levels of activity, performance, and events and circumstances reflected in the forward-looking statements will be achieved or will occur. Except as required by applicable law, we make no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events. Please refer to our press release dated May 22, 2023 for additional information. In addition, certain metrics will be discussed today Excuse me. Certain metrics we will discuss today are non-GAAP metrics. The presentation of this financial information is not intended to be considered in isolation or as a substitute for or superior to the financial information prepared and presented in accordance with GAAP. We use these non-GAAP financial measures for financial and operating decision-making and as a means to evaluate period-to-period comparisons. We believe that these measures provide useful information about operating results, enhance the overall understanding of past financial performance and future prospects, and allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making. For more information on the non-GAAP financial measures, please see the reconciliation tables provided in our press release dated May 22, 2023. Throughout this call, we will provide a number of key performance indicators used by our management and often used by competitors in our industry. These and other key performance indicators are discussed in more detail in our press release dated May 22, 2023. I will now turn the call over to Amir, co-founder and CEO.

Thank you, Erica, and welcome, everyone. With the financial results of Q1, which we are releasing today, we are off to a great start for the year. with 55% year-over-year growth in GMV, which totaled $704 million. Revenues for the quarter were $117.6 million, growing by 54% compared to the same quarter last year. An adjusted gross profit margin was 41.4% for the quarter, up from 39.1% last year. Our adjusted EBITDA came in at $14.5 million, compared to only $3.3 million in Q1 of last year. These strong results, which came in above our guidance, manifest our continued strong execution across the business, our effectiveness in controlling costs, and the fact that macro conditions during the quarter were slightly more favorable than what was initially anticipated going into 2023. Later in this call, Ofo will review in greater detail our Q1 results, and he will provide you with our guidance for Q2, as well as our updated guidance for the full year of 2023, which we are raising today. But before we do that, I would like to share with you some of the exciting developments we have seen across the business during the past quarter. First and foremost, we continue to see great interest in our services coming from brands all around the globe, as more and more merchants turn to the direct-to-consumer channel as their key focus growth channel. To name just a few, in Q1, we saw renowned brands like Carbon38, Doen, Cyclebunny, Maui & Sons, Lulu's, Jigsaw, and Rebecca Minkoff go live, as well as the merchandise store of the Mercedes-AMG Petronas Formula 1 team. We continued our push into APAC, with brands such as Charles & Keith, Porcelain Skin & Bind by Donny going live in Singapore, Unreal 4 going live in Australia, Object IO going live in Japan, and more. In parallel, we launched our first Portuguese merchant called Isto, and continued to onboard celebrity brands and social first brands, such as Kylie Cosmetics by Kylie Jenner, or Maison Francaise Courgeant, part of the LVMH group, whose Baccarat Rouge perfume was the number one perfume shared by influencers on TikTok in 2022. During the quarter, we also continued our efforts to expand our business with existing merchants. Notable examples would be numerous expansions of our engagement within the LVMH group, with two additional brands, Repulsi and Pucci, joining the platform, Kenzo going live, and Bvlgari turning on an additional batch of close to 30 markets, which are now operated by Globally. Another notable example would be Disney Europe, which now utilizes Globally to support sales to the United Kingdom, one of its top global markets. Regarding our partnership with Shopify, On the direct integration side, we continue our work on adding new features to our native integration, as well as providing support for Shopify's new checkout extensibility. In parallel, we continue to migrate merchants from our legacy third-party integration into the new native one and add newly signed merchants directly onto the native plugin as we go. On the white label solution front, We continue to work in close collaboration with Shopify's teams towards the rollout of Shopify Markets Pro, a fully integrated merchant of record solution intended for merchants looking to scale to new markets quickly and easily. Markets Pro is currently in early access mode in the US, and we are seeing a high level of interest from merchants and encouraging initial results from those early access merchants that have been going live since September of last year. Along with Shopify, we believe MarketsPro remains on track to general availability in the US in the summer, to be followed by the UK later in the year. Finally, I would like to mention a different and exciting aspect of our activity, which is the potential of using AI to improve our service levels and potentially increase the efficiency of our operations. We have already been using machine learning and AI models for several years now. helping our teams to automate large-scale recurring tasks, such as the classification of large product catalogs for duties and taxes, for example. More recently, our internal AI task force has conducted several proof-of-concept exercises in various functions of the company, demonstrating some of their potential. We believe that the amazing advancements made in the field of AI lately, resulting in the proliferation of highly sophisticated yet easy-to-use large-scale models, should present over the coming quarters and years many opportunities to incorporate AI-powered tools and capabilities across different parts of the organization. These, in turn, could enable us to drive significant cost efficiencies over the coming years, while further improving the level of service and insights we can give to both merchants and end consumers. There are countless other exciting developments to share from all corners of the business, all contributing to our belief that we can continue to exhibit high growth rates as we capture more and more of the vast greenfield opportunity that lies ahead of us, and do it in a sustainable way, maintaining cost controls and besting cost efficiency. But in the interest of time, and in order to leave ample time for any questions you may have, I will now hand it over to offer our CFO to take us through the quarterly numbers in more depth, as well as present our updated guidance.

Thank you, Amir, and thanks again, everyone, for joining us this morning for our quarterly earnings call. We are pleased to begin 2023 with a very positive momentum. Q1 was another strong quarter of solid growth and healthy margins as we continue to execute well on all fronts. I'd like to point out again that in addition to our gap results, I'll also be discussing certain non-gap results. our GAAP financial results along with the reconciliation between GAAP and non-GAAP results can be found in our earnings release. As Amir mentioned, our rapid growth in GMV continued in Q1 as $704 million of GMV was generated on our platforms, an increase of 55% year over year. We continue to experience growth both from our existing merchants as they continue to develop their direct-to-consumer business and expand their activity with Global E, and from new merchants onboarding our platforms around the globe. In Q1, we generated total revenue of $117.6 million, up 54% year-over-year, with both revenue streams continuing to grow rapidly. Service fees revenues were $50.4 million, up 58% year-over-year, and fulfillment services revenue were up 52% to $67.3 million. We have continued to experience higher-paced growth in our U.S. outbound revenue as our strong momentum in the U.S. continues, driven also by the U.S. bias of the border-free portfolio. In Q1 2023, U.S. outbound revenue was up 100% year over year. Our penetration efforts to APAC and the Middle East remained on track and continuing to bear fruit. While the share of GMV coming out of these new outbound markets is still relatively low, transaction volumes have grown by almost 4x year over year. Non-GAAP gross profit, outpaced revenue growth, as we continue to leverage our scale. In Q1, non-GAAP gross profit was $48.7 million, up 63% year over year, representing a gross margin of 41.4% compared to 39.1% in the same period last year, driven by the higher share of service fees revenue and the ongoing efforts to improve efficiencies. GAAP gross profit was $45.9 million, representing a margin of 39%. Moving on to operational expenses, we continue to invest in the development and enhancement of our platform with a significant effort around the development of the Shopify Markets Pro white label solution towards general availability in the US, as Amir mentioned. R&D expense in Q1, excluding stock-based compensation, was $16.8 million, or 14.3% of revenue, compared to $12.5 million, or 16.4% in the same period last year. Total R&D spend in Q1 was $22.9 million. We also continue to invest in sales and marketing to expand our presence and to further build our pipeline. while continuing to be mindful of efficiencies. We have expanded our presence in Europe, including people on the ground in Italy and Scandinavia, and continue to enhance our presence in Australia and Japan. Sales and marketing expense, excluding Shopify-related amortization expenses, stock-based compensation, and acquisition-related intangibles amortization, was $10.5 million, or 8.9% of revenue, compared to $8.2 million or 10.7% of revenue in the same period last year. Shopify warrant-related amortization expense was $38.2 million. Total sales and marketing expenses for the quarter were $51.8 million. General and administrative expenses, excluding stock-based compensation, acquisition-related expenses, and acquisition-related contingent consideration, was $7.4 million, or 6.3% of revenue, compared to $6.2 million, or 8.1% of revenue in the same period last year. Total G&A spend in Q4 was $13.1 million. Adjusted EBITDA totaled $14.5 million, representing a 12.3% adjusted EBITDA margin. increasing from $3.3 million of 4.3% margin in the same period last year, which was negatively impacted from the flow consolidation. Net loss was $43.1 million compared to a net loss of $53.6 million in the year-ago period, driven mainly by the amortization expenses related to the Shopify warrants and to the transaction-related intangibles. Switching gears and turning to the balance sheet and cash flow statements, we ended Q1 2023 with $212 million in cash and cash equivalents, including short-term deposits and marketable securities. Cash flow used by operating expenses was $29.5 million compared to $5.3 million a year ago, driven by typical Q1 post-peak working capital dynamics and a $12.2 million payment of held-back acquisition-related proceeds. Moving on to our financial outlook and guidance for Q2 2023 and our updated 2023 full-year guidance, which reflects the resilience and the continued momentum of the business. For Q2 2023, we're expecting GMV to be in the range of $755 million to $785 million. At the midpoint of the range, this represents a growth rate of 44.2% versus Q2 of 2022. We expect Q2 revenue to be in the range of $125 to $130 million. At the midpoint of the range, this represents a growth rate of 46.1% versus Q2 of 2022. For adjusted EBITDA, we are expecting a profit in the range of $15 to $18 million. For the full year of 2023, we are raising our guidance and now expect GMV to be in the range of $3.4 to $3.55 billion, representing nearly 42% annual growth at the midpoint of the range. Revenue is expected to be in the range of $562 to $590 million, representing a growth rate of nearly 41% at the midpoint of the range. For adjusted EBITDA, we are expecting a profit of $70 to $77 million. In conclusion, we are focusing on disciplined execution to create value for the merchants and tap on the market opportunity in front of us. We strive to continue our growth journey while exerting ongoing efforts to improve efficiencies, enabling sustainable top-line growth and acceleration of cash generation. And with that, Amir Nir and I are happy to take any of your questions.

Thank you. At this time, we'll be conducting a question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. In the interest of time, we ask that you each keep to one question and one follow-up. Thank you. Our first question comes from the line of Will Nance with Goldman Sachs. Please proceed with your question.

Hey, guys. Good morning. Yeah, I wanted to ask about what you're seeing in the APAC market. Have you seen any notable shifts in consumer spending? You know, we've seen a lot of talk around, you know, the shift away from goods and towards services. Just wondering if you're seeing any impact and maybe one for Ophir, if you could just remind us how large. you know, APAC consumer inbound revenues is as a percentage of total revenue. That'd be helpful. Thank you.

Yeah. Yeah, so we haven't seen any significant change in APAC consumption. APAC is a significant market for us, but not one of the largest. Europe and the U.S. are larger in share. And we haven't seen, it has been relatively stable, at least for us. We haven't seen any shift in consumer preferences from our side.

Got it. That's helpful. And if I could just follow up on, you mentioned that the macro ended up being a little bit better than what you'd expected at the beginning of the year. I know you talked about taking a conservative posture heading into the current environment on the last quarter's call. If you could maybe just remind us what you're building in for macro. Has anything changed in terms of what you're assuming for the rest of the year? And how are you thinking about the outperformance in the first quarter relative to the remainder of the year?

As you mentioned and as we highlighted, the macro environment in Q1 was a bit better than we expected coming into the year. We saw solid demand from consumers and that was translated into a nice growth of existing clients. However, the uncertainty still remains. Macro is still not very stable. There are some negative drivers, so we haven't changed our view towards the second or the next three quarters regarding the year. We still stayed with the same assumptions, and we remain fairly conservative due to that. Understood. I appreciate you taking my questions.

Thanks, Will.

Thank you. Our next question comes from the line of Cody Ikeda with Bank of America. Please proceed with your question.

Yeah, hey guys. Good morning and thanks for taking the questions. I wanted to ask you a question, maybe in the likes of new merchant growth versus GMV for merchant assumptions in the guidance. It sure sounds like you guys are adding new merchants at a very healthy clip. So maybe help us understand as you think about the guidance What are you guys baking in from a new merchant growth or GMV expansion per merchant for their guidance this year?

Hi, Kojic. It's Neil, Debbie. Thank you for the question. So basically, we are optimistic for the rest of the year as what we've seen year-to-date growth. We had a record year in signing new merchants into the platform, and we hope to maintain that going forward for the rest of the year. So all in all, a good trajectory. We haven't seen, I would say, any delays in merchants' decision-making due to macroeconomics. in order to decide to put the budgets and integrate globally into the solution. So far, the pipeline looks robust. And this we look forward to maintain for the rest of the year. And as well, we look forward for some contribution, mainly in Q4, coming out of MarketsPro once it goes into general availability.

Got it. That's super helpful. Amir, my follow-up here is on AI, and you mentioned it in your prepared remarks. I wanted to dig into that a little bit more, thinking about how you are thinking about the AI benefits for customers and maybe breaking it out into two buckets, maybe how customers might use it, using the AI to drive faster ROI, either from faster onboarding onto the globally platform or even expansion of some of those big brands that you have that, you know, that have many brands and many different geographies, you know, that's, that's number one, or is it more for driving enhanced monetization levers of the end market from the overall shopping experience? Thanks guys. Thanks for taking the questions.

Sure thing. Um, so first of all, you're under, there are two main buckets that, uh, at least for now we look at one is, uh, is kind of, uh, along the same lines that you've mentioned, which is, uh, and we're using these models to greatly enhance the level of insights that we can generate for our merchants based on our data, based on our accumulated proprietary data. This is obviously something, as you know, that we've been doing for a while now, but we believe there is great potential in using AI-based tools to dramatically enhance the quality, the granularity, and the time to market for us. and make it even more actionable for our merchants and therefore drive better performance overall for them on our platform. So that's definitely one big bucket. The other bucket I would say is more internal, which is kind of driving efficiencies all across different functions in the organization. enabling our teams to do much more accurately with the same level of resources and drive kind of the next wave, if you want, of efficiency on the back of our scale and our know-how. So these are, I would say, the The two main buckets, one is more outbound that kind of our merchants will enjoy directly. The other one is more internal where we as a company will enjoy internally. But that's currently the way we view the two main buckets that we'll pursue.

Thank you. Thank you, Amir. Super helpful. Thanks so much.

Thanks, Cody.

Thank you. Our next question comes from the line of James Fawcett with Morgan Stanley. Please proceed with your question.

Yeah, good morning and thanks this morning, everybody. Wanted to touch on quickly the U.S. Obviously, you highlighted that it's growing very quickly and it certainly was bright spotted around 100% year-over-year growth. Can you help us disaggregate that growth generally on an organic basis versus what came from the border-free acquisition and provide some commentary with respect to how you are thinking about that region and what your assumptions are within your outlook.

Thanks, James, for that. Most of the growth is organic. Border-free has contributed, but the lion's share of the growth is organic and it driven by the ongoing strong momentum that we have in the U.S., some bias towards direct-to-consumer and sort of new-age brands, celebrity-endorsed and so on, which are growing faster than average. And also, I would say the stabilization of the environment in Europe, because the largest market for... US merchant is obviously Europe and that has contributed to a certain extent as well.

Got it, got it. And then I wanted to ask about the interaction with Shopify and just get a better sense of what controls the pace of penetration and onboarding with Shopify merchants. You know, how we think about it, it looks like a very sizable, outstanding GMB opportunity. Is that something where you can kind of push the accelerator or is it more of an organic cadence? And how should we think about that into 2023 or into the rest of 2023 and into 24?

Hi James, it's Neil. Um, so, so basically, uh, I would break it into two separate buckets. Uh, when you look at the globally, uh, I would say, and third-party solution provided in the Shopify native checkout, which is a regular solution, this will continue to grow and will continue to grow fast. We have been growing very nicely since we gained exclusivity on Shopify a year and a half ago, and it continues to grow nicely to date. In parallel to it, we expect to see acceleration on the Markets Pro, which is a Shopify-owned solution powered by Globally. And this will start to take effect as of Q4, as we expect, following the general availability in the US in the summertime. And we expect to see much more of the effect coming into 2024 on this solution. So the combination of both, we do expect to see and acceleration into 2024 in realizing potential on Shopify.

Got it, got it. Thank you. Thanks, Jason.

Thank you. Our next question comes from the line of Samad Asamana with Jefferies. Please proceed with your question.

Good morning. Thanks for taking my questions. Ofer, maybe a follow-up for you on the guidance. Just kind of reconciling the strong one cue and maybe what the revision implies for the rest of the year, any changes in what you're assuming for NRR for the rest of the year or what you're assuming in terms of the timing of go-lives or the ramp of partnerships? Just trying to understand maybe the moving parts within the guidance and what your updated assumptions are.

Thanks so much for that. Basically, we haven't changed our view. As I mentioned, due to the uncertainty, we remained a bit on the conservative side. We did see some positive signs in Q1. As we said, demand from consumers was relatively positive, or at least more positive than we initially expected. However, again, as there is still a lot of macro uncertainty, we remain a bit conservative. Regarding new merchants, we haven't seen any notable delays. Projects are running on time, general, some usual delay, some we are able to launch a bit earlier than expected. nothing notable on that. We remain optimistic regarding the remaining of the year, but again, in terms of putting in guidance due to the macro uncertainty, we prefer to be just a bit on the conservative side.

Great. And then maybe just a follow-up on the product side. I know we talked about some of maybe the kind of newer products you could roll out to get the service revenue take rate higher, including something like multi-local. Just maybe any updates there, Amir or Nir, on the quarter and how maybe progress there looks and how we should think about that maybe being a source of further monetization as the year progresses.

So then basically we have seen progress. in multiple arenas. For example, we have seen a high adoption of our new capabilities around duty drawback in different parts of the world for European merchants, for U.S. merchants selling into Canada, et cetera. So we do see new capabilities that bring with them an add-on to the take rate. We do expect even in Q4, but much more into 2024, an additional contribution coming out of demand generation and our ability to drive traffic into sites that we are currently working on. So we do believe that there will be levers, I would say, to continue and see a gradual increase in the take-raise over time.

Great. Thanks again for taking my questions. Thanks a lot.

Thank you. Our next question comes from the line of Brian Peterson with Raymond James. Please proceed with your question.

Hi, thanks for taking the question. So just one for me. So it's interesting to see with customers like Disney Europe, like the expansion so early on, but also with LVMH, who's been a customer for a while. So I'd love to understand... kind of the land and expand dynamics as we've progressed through 2023? Are our customers looking to kind of go multi-region to start? Or, you know, how do we think about that land versus expand motion this year?

Thanks, guys. So I think we have started in that, especially with the larger merchants, where they scale up or that they have presence, physical presence around the world, either direct presence or franchisees, those brands would typically do opt over time to go into a more multi-local mode of work, and this we support, so we do see that over time. In some of the larger brands, you also see regional decision making, so once you land into a certain region, which is very successful, then over time, you will be able to win additional regions based on the success story and the drive from the region you already entered. Same goes for groups of brands, such as LVMH, where you have multiple success stories that just create a gravity center for others to follow because they do share best practices, they do give corporate advice, and on the back of it, we do see a significant growth within groups. In terms of lend and extend, we hope and we believe there is still a lot of runway as we continue to lend large merchants. Over time, we do see a trajectory of growing within the brand or within the group. So we do have a runway also going forward. So no change on that.

Thanks, Jeff.

Thank you. Our next question comes from the line of Josh Beck with Cuban Capital Markets. Please proceed with your question.

Thank you for taking the question. I wanted to ask a little bit about border-free. Obviously, it's becoming more integrated into the platform, and I imagine there's some opportunity, particularly on the fulfillment side. Maybe just where you are with respect to the phasing of synergies and kind of how we should be thinking about that as we progress through the year.

So in terms of... Hi, Josh, it's Neil. In terms of border-free, I think we see the realization of the goals that we aim for in the acquisition. The first one would be... related to the demand generation capability, the marketing assets, where we started to build on the infrastructure we acquired from Borderfree in order to launch a more sophisticated demand generation services for the entire globally group brand. We hope to roll it out, I would say, sometime between Q4 and Q1 next year. This is already a work in motion in order to utilize it as we expected. In terms of the logistics part, we have realized, I would say, the first synergy, which is actually utilizing the premium standard services of Pitney Bowes into Canada, giving access to our U.S.-based brands into a standard solution that has a great SLA and great reporting attached to it. And all in all, we did see also the ability to leverage the professional team as well as the services and some of the services we acquired from Borderfree in order to accelerate the development of Globally on roadmap. So we actually shifted significant amount of the team to support I would say, is a build towards the roadmap globally. So all in all, we do see progress in line with what we expected out of the acquisition, and we expect it to all materialize by the end of 2024.

Super helpful. And then maybe just a follow-up on MarketsPro. Obviously, this is a segment generally SMB-based, self-service that you've spent less time in historically, just looking at the company's history. So what are you really hoping to, I guess, learn during the early access or really refine? Is it really the onboarding components? Is it really the integration with the Shopify admin and really how merchants become aware of it? What are some of, I guess, the key objectives that you really need to overcome during this kind of early access part of the process so that you're really well positioned as you go into formal launch later in the year?

Sure. Basically, the early access allowed both us and Shopify to fine-tune, I would say, the model to make sure that we give as much as benefit as globally can give, but at a very light touch model. that's on one hand, and the other thing is that it allows us to fine-tune, as you mentioned, also the onboarding process to see that we don't have leakage or things that are, I would say, overcomplicated for an SMB, the onboarding steps towards being activated on MarketStro. So we do them both. We fine-tune what are the benefits and how do we give the most benefit as part of as part of working with this subset. And on the other hand, we fine-tune the onboarding process in order to get to general availability without most, I would say, the business benefit we can bring while making it as easy as possible to switch on.

Makes sense. Thanks, Nir.

Thank you. Our next question comes from the line of Brent Braceland with Piper Sandler. Please proceed with your question.

Morning, guys. This is Hannah Rudolph on for Brent this morning. Thanks for taking my question. Just one for me. We've heard from other companies that there has been some softening from the luxury consumer. It sounds like you've seen better than expected demand there, but just wondering if you could talk about specifically what you've seen in the luxury goods category, especially among your existing customers and existing brands.

Basically, what we have seen in the luxury is, I would say, quite stability. We don't see, to be honest, a reduction in luxury. It stays, for us, in terms of the same store sales, it looks quite stable. We have seen growth with winning additional luxury brands and gaining more markets from current luxury brands. clients of us. However, we have seen more accelerated growth for mass market retailers this year, but I don't think that luxury slows down. It's just for us, it didn't grow as fast as we have seen with mass market retailers.

Great. Thank you.

Thank you. Ladies and gentlemen, as a reminder, if you'd like to join the question queue, please press star 1 on your telephone keypad. Our next question comes from the line of Matt Coed with Autonomous Research. Please proceed with your question.

Hey, guys. Good morning. Thanks for taking the question. So another one on Shopify Markets Pro from me. Shopify mentioned on their earnings call that 100,000 of their merchants currently use either Shopify Markets or Shopify Markets Pro today. So I was hoping you could just remind us of the additional value-added services that MarketsPro provides to a merchant. And then bigger picture, if you could give some thoughts on, say, how many of those 100,000 merchants you believe could ultimately benefit from MarketsPro over time. Thanks.

Thank you for the question. It's Neil. Shopify Markets Pro actually adds on top of Shopify Markets the ability to enjoy a full suite of services of merchant on record, which actually takes all the heavy lifting of in-country registrations for duty and tax, filing, and whatever is required from the merchant and moves it into Shopify and globally making it, I would say, virtually seamless for the merchant. So it's much more comprehensive than just having a suite of services taken, but actually the merchant needs to manage a lot of components by himself. In terms of the growth of MarketsPro, as Shopify mentioned and we mentioned earlier, it's still in the early days, it's still early access in the US. We do expect that post general availability in summertime, And for U.S. merchants, we will see a quick acceleration. And over time, looking at 2024 and 2025, we do expect it to reach significant numbers.

Super helpful. Thank you. And then just as a follow-up, just more broadly, aside from Shopify, I was hoping you guys could touch on your biggest investment priorities here and then how we should think about the pace of headcount and OPEX growth, how that should track throughout the year.

Yeah, sure. This is Amir. So, we continue to invest, let's say, heavily into growth, various growth trajectories. One is geographical expansion, as Ofer mentioned. In the call, we are opening more geographies in terms of outbound markets, so expanding our ability to support merchants from additional countries. And we are also investing in further developing our offerings around multi-local and additional services, as was mentioned earlier in the call. In addition, we are investing and will continue to invest in areas such as data, both in general and, as mentioned, also AI-driven in order to further enhance the value and the insights that we can bring to both our existing merchant base and enable them to further extract potential from their cross-border business and, of course, to support the addition of new brands onto the platform. So definitely lots to do and lots to invest in all around the platform, all contributing to our growth trajectory.

Super helpful. Thanks, guys.

Thank you. Ladies and gentlemen, that concludes our question and answer session. I'll turn the floor back to Mr. Schlockett for any final comments.

Thank you, everyone, for joining us today, and we very much look forward to seeing you again on our future earning schools. Before we adjourn, I would just like to take this opportunity to say once again a big thank you to all our wonderful team members throughout the world whose hard work and total dedication to the success of our merchants remains a true driving force behind our continued growth and success. So until next time, goodbye to you all and take care.

Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.