Shopify Inc.

Good morning, and thank you for joining Shopify's first quarter 2025 conference call. I am Carrie Gillard, head of investor relations, and joining us today are Harley Finkelstein, Shopify's president, and Jeff Hoffmeister, our CFO. After their prepared remarks, we will open it up for your questions. We will make forward-looking statements on our call today that are based on assumptions and therefore subject to risks and uncertainties that could cause actual results to differ materially from those projected. Undue reliance should not be placed on these forward-looking statements. We undertake no obligation to update or revise these statements, except as required by law. You can read about these assumptions, risks, and uncertainties in our press release this morning, as well as in our filings with U.S. and Canadian regulators. We will also speak to adjusted financial measures, which are non-GAAP and not a substitute for GAAP financial measures. Reconciliations between the two are provided in our press release. And finally, we report in U.S. dollars, so all amounts discussed today are in U.S. dollars unless otherwise indicated. With that, I will turn the call over to Harley.

Thanks, Carrie, and thanks to everyone for being here today. Let's start with the obvious. Today's market is uncertain. As the platform that powers global commerce, we're of course monitoring for potential slowdowns. But our data through April shows little evidence of that. It's still early to assess the full impact of the current trade environment. However, Q1 saw our trend for consistent quarterly growth continue, and more on that in a minute. First, I want to say this. Shopify is built for agility, and in many ways, these days are just like any other. We're here to help merchants of all sizes absorb change rapidly and at scale. This strategy does not change as the landscape underneath us continues to shift. So as we sit here today, we cannot predict what administrations around the world will do. But what Shopify can do is continue to be the guardians of our merchants. We show up, we build, we ship, and we make commerce better for everyone, from entrepreneurs to the largest of enterprises. Now, it is not hyperbole to say that businesses do better on Shopify. It is a fact. Since 2015, growth rates for 38 out of 39 of our quarterly merchant cohorts have outperformed the overall e-commerce market. I wanna repeat that. 38 of 39 quarterly Shopify cohorts have outpaced the market when it comes to growth. Think about that in relation to small and medium-sized businesses that are the backbone of every economy. We help them scale as they leverage more of our products and services over time to drive consistent performance and growth. Simply put, businesses on Shopify are more resilient than businesses that are not on Shopify. That merchant resiliency combined with our operational excellence will continue to set us apart as we navigate market uncertainties ahead. I need to remind everyone of this. This is where Shopify's agility really comes into play. We've built a business model that allows us to adapt very quickly and pull the right levers to manage through challenges. Those levers mean we can prioritize tools and support needed for merchants to thrive in any environment. We power adaptation at lightning speed, whether that means seizing new opportunities for growth or responding to changes like we're seeing today. Again, those building on Shopify are better prepared than those who are not. And with that, the Q1 numbers speak for themselves, so I'll keep it brief. Coming off of a very strong 2024, in Q1 of 2025, revenue was up 27% and free cash flow margin hit 15%. We saw real strength in key growth areas with offline GMV increasing 23% and B2B GMV delivering another triple-digit quarter of growth up 109% from last year. International GMV grew 31% and cross-border held steady at 15% of GMV. And we saw continued growth across our merchants' GMV, from entrepreneur through enterprise, balanced across both existing and new merchants to deliver a seventh consecutive quarter of GMV growth above 20%. This is what we mean when we say our business model is built for this. Our formula for growth remains the same. Operational discipline plus a real commitment to innovation. Look at our free cash flow profitability. Look at our operational efficiencies. We can be both disciplined and innovative. This is the operating model you have come to expect from us and should continue to expect to see from us moving forward. Okay, now with that out of the way, let's dive into what we've built to help our merchants adapt. We've shipped a lot, and we've focused on areas that we can have a more immediate impact. Cross-border trade, making it easier to buy local, duties calculations, and shipping. It is incredible what our team has done in just a few short months, and this is just the beginning. Starting with cross-border trade, we've enhanced our managed markets products, giving US merchants more options with our merchant of record service for collecting and remitting duties and taxes while managing other markets independently. This means if new duties are announced, most merchants can achieve compliance within hours. Next, let's talk about making it easier to buy locally. On the Shop app, we introduced a feature that allows buyers to filter products by country. This promotes local businesses and enhances the shopping experience that's generated hundreds of thousands of unique sessions since its rollout alone. Moving on to duties calculation. In February, we made our duties calculation available at checkout for all merchants and reduced its price to just 50 basis points. Moving on to duties calculation. In February, we made our duties calculation available at checkout for all merchants and reduced its price to just 0.5%, making one of the most affordable options in the market. By the end of March, the number of shops actively using this feature nearly doubled since January. And later this month, we'll introduce duty-inclusive pricing, allowing merchants to set international prices that include duties in the product price. This ensures transparent pricing from the start and helps customers avoid surprise fees at checkout. And just this past week, we launched TariffGuide.ai. This AI-driven tool provides duty rates based on just a product description and the country of origin. Sourcing the right products from the right country can mean the difference between a 0% and a 15% duty rate or higher. And TariffGuide.ai allows merchants to do this in minutes, not days. Finally, shipping and fulfillment. We are simplifying international shipping for merchants by enabling them to purchase prepaid shipping labels known as Delivered Duty Paid, or DDP, directly from our platform and expect to onboard several carriers soon. Additionally, we've expanded our network of 3PL providers through the Shopify Fulfillment Network app, enabling merchants to access more local warehouses for order fulfillment. Utilizing local warehouses speeds up fulfillment times, reduces shipping costs, and simplifies returns for buyers in those markets. What all this should tell you is that Shopify moves at a pace unlike anybody else, truly. Our reaction time to uncertainty is unmatched, with the best engineers on the planet ready to tackle whatever lies ahead. Our obsession with unlocking every opportunity and filling every important gap in the system to give our merchants the best chance of success is one of our superpowers. Shopify is a different company, moving rapidly towards what is next. We rolled out the shop app filter in less than a week, and the duties calculation and checkout update over a weekend, literally. The weekend after the tariff changes were announced, the team got to work, and by Sunday evening, we were testing it for production. This is who we are, a company that obsesses over our merchants by thriving on change and living at the cutting edge. This is why our merchants consistently outperform the market, and this is why they trust us. Now, before handing it over to Jeff, I want to touch on some other products that are foundational to our long-term success. Let's quickly take a closer look at how we're continuing to capitalize on these opportunities, starting with payments. Shopify Payments continues to be our largest product offering and a key driver. We made great progress in Q1, with Payments GMV penetration hitting 64%. We launched Shopify Payments in 16 new markets, Mexico, Lithuania, Poland, Norway, Latvia, Hungary, Estonia, Malta, Croatia, Greece, Slovenia, Cyprus, Bulgaria, Liechtenstein, Luxembourg, and Gibraltar. Now, I know that's a lot of names, but that's the point. At the end of 2024, and after a decade of offering payments, it was in 23 countries. With our Q1 expansion, we nearly doubled that, bringing the total to 39 countries now supported by Shopify payments. This is important because having a key product like payments available in more markets simplifies the onboarding process. It offers merchants a streamlined payment solution that reduces fees and enhances security. Plus, features like ShopPay improve conversion rates and provide greater convenience for buyers. Adding more products in more markets remains a key driver of our international growth. And with these country launches, even more merchants can process payments seamlessly in their home countries, which is crucial as tariffs and economic factors may complicate cross-border trade. But we did not stop there. We also launched multi-currency payouts in 20 countries across Europe, allowing merchants to receive payments in their preferred currencies, essential for operating globally and minimizing the impact of fluctuating exchange rates. Now, as we look at the success of Shopify payments, it is clear how foundational it is to our shop products, the buyer-facing side of Shopify that is all about making shopping simpler. One of the biggest advantages to our merchants is access to shop pay. And in Q1, shop pay GMV was up 57% from last year, processing over $22 billion in GMV. Within our core pillars of shop, the shop pay component continues to be a key product offering that is working to drive upmarket enterprise-level growth opportunities. Businesses like mattress company Purple, lifestyle brand Johnny Was, fashion icon Lily Pulitzer, and footwear giant Birkenstock are among the latest to integrate this solution into their sites. Just this week alone, we signed up to expand more tapestry brands on to utilize this component as well. Now they started with just coachoutlet.com, but because it worked so well, they are now rolling it out to online shops for Coach, Kate Spade, and for the Kate Spade Outlet. This is more than just a passing trend. It is becoming an increasingly compelling pathway for large merchants to come to Shopify. This is where our journey may start with these large brands, but we are confident as we demonstrate success, we will unlock more opportunities to add even more of our powerful tools and solutions over time, enhancing their growth and capabilities on our platform. Moving on to the other pillars within shop. The Shop app continued its momentum in Q1, hitting over 94% year-over-year growth in native GMV, an impressive acceleration from 84% growth last quarter, especially considering the seasonality of Q4. Shop pay installments launched in early access to Canada, marking another important milestone in our global expansion, with more countries on the horizon for later this year. Okay, let's talk quickly about AI. AI is at the core of how we operate and is transforming our work processes. For those who have not seen it, I encourage you to check out Toby's recent company-wide email on AI that has now been shared publicly. At Shopify, we take AI seriously. In fact, it's becoming second nature to how we work. By fostering a culture of reflexive AI usage, our teams default to using AI first, reflexive being the key term here. This also means that before requesting additional headcount or resources, teams are required to start with assessing how they can meet their goals using AI first. This approach is sparking some really fascinating explorations and discussions around the company, challenging the way we think, the way we operate, and pushing us to look ahead as we redefine our decision-making processes. In the past couple of weeks, we built a dozen MCP servers that make Shopify's work legible and accessible. And now anyone within Shopify can ask questions, find resources, and leverage those tools for greater efficiency. This reflexive use of AI goes well beyond internal improvement. It supercharges our team's capabilities and drives operational efficiencies, keeping us agile. And as we continue to innovate, AI will remain a cornerstone of how we deliver value across the board. On the merchant-facing side of AI, in Q1, key developments for Sidekiq included a complete re-architecture of the AI engine for deeper reasoning capabilities, enhancing processing of larger business data sets and accessibility in all supported languages, allowing every Shopify merchant to use Sidekiq in their preferred language. And these changes, well, they're working. In fact, our monthly average users of Sidekiq continue to climb, more than doubling since the start of 2025. Now this is still really early days, but the progress we are making is already yielding some really strong results for merchants, both large and small. Sidekiq is yet another reason that merchants on Shopify will have an unfair advantage for whatever lies ahead. Okay, switching gears a little, let's talk about the progress we are making in some of our key growth drivers, starting with international. We see the opportunity to capture market share in every European market, as well as in Asia and Latin America. In Q1, we saw Europe's GMV growth 36% year over year, which clearly shows that we are gaining traction and expanding our presence in this key region, led by the UK, Netherlands, and Germany. Now, I already mentioned some of the product features we are rolling out to merchants to navigate the current landscape, but we also continue to strengthen our foundation for international specific features with improvements to AI power translations and new privacy compliance functionality. Now, these enhancements to the product combined with our continued investments in marketing are helping to further grow our reach and market penetration in these really important countries. In our offline business, GMV was up 23% this quarter, thanks to the continued strong growth from our mid-market and multi-location merchants. We're also bringing on more established brands onto the platform, like FAO Schwartz, Just Cozy, and the iconic Japanese watch company, Grand Seiko. Now, while this flexibility is really important, our true value goes beyond simply enabling these offline features. It lies in building trust and partnerships through our merchants' unified commerce journey, online, offline, and everywhere in between. And a perfect example of this is our recent partnership with Allo, the athletic apparel brand that's absolutely crushing it. Now, they wanted to implement same-day delivery, so they approached us with this idea, and we obviously were on board to make it happen. By integrating with partners like Uber and DoorDash, Allo can now offer quick same-day delivery options, allowing customers near their retail stores to receive their gear really, really fast. This is exactly how we support our merchants in staying ahead of the game and seizing every opportunity to grow. No matter what you want to do in your retail business, we default to yes on Shopify. Our efforts to move upmarket are paying off, fueled by strong growth from high volume brands like Viore, along with more recent additions like BarkBox, Brilliant Earth, and Toys R Us. This evolving landscape paired with our powerful go-to-market strategy creates a significant opportunity for us to attract even more brands to Shopify. Our platform is designed to handle changes like navigating tariffs quickly and efficiently, making us the go-to choice for merchants of all sizes facing today's challenges. Agility and ease of use are now prerequisites for any modern commerce team. And Shopify is positioned not just as a tool, but as a strategic advantage in an unpredictable market. And that is why more global brands are choosing us. They value our ability to move swiftly to deliver incredible value and to provide scalable infrastructure, especially right now. We are in constant conversations with leadership teams and CEOs who recognize the global economy is fluid and they're seeking solutions that enhance their agility. Across various industries, there's this renewed focus on cutting costs by eliminating inefficiencies and modernizing technology. And that is where Shopify really shines. Many legacy platforms are struggling. They're slow and restrictive, lacking consistent investment, unable to efficiently handle basic tasks like pricing updates or loyalty changes. And custom-built systems often prove just as brittle under pressure. As businesses face these challenges, Shopify is becoming the preferred choice for those looking to thrive at scale. The diversity of businesses we are signing, from computer and gaming giants to household appliance brands, sporting goods, and iconic fashion labels, demonstrates the strength and resilience of our merchant base and the power of our platform. Additionally, in Q1, one of the largest apparel and footwear conglomerates, VF Corp, signed up to bring eight of their well-known brands to Shopify, including Dickies, Ultra Running, Kipling, and Icebreaker. And two of their brands, Jansport and Eastpac, have already launched, and we cannot wait to bring the others onto our platform. And in the past two weeks alone, even after the tariff announcements, brands continue to sign. And one of those is Follett Higher Education Group, the multi-billion dollar company managing campus bookstores at over 1,000 colleges and universities across North America. And in Europe, we signed Caring Beauty, the beauty brand division of luxury fashion houses like Alexander McQueen, Balenciaga, and Creed. We are incredibly proud to support such a world-renowned group as they unify their customer experience across channels by leveraging Shopify's B2B, B2C, and point-of-sale solutions. Now, this broad spectrum of verticals not only strengthens our platform, but also reduces reliance on any single market, vertical, or customer, allowing us to navigate market fluctuations and seize multiple growth opportunities with confidence. We've also seen a really impressive lineup of brands launching incredible online businesses on Shopify so far this year, including Stationery Company from Barnes & Noble, Paper Source, Luxury Fashion Brand from LVMH, JW Anderson, Luggage and Travel Business, Away, wellness technology company, Therabody, auto supply store and manufacturer, Kent Automotive, and apparel and accessory retailer, Life is Good. So to close, Q1 was a testament to the sustainable business model we've built, a model that's founded on supporting our merchants. Their success drives our success. This is who we are, and this is why we exist. Shopify thrives on change. It's in our DNA, and it has positioned us uniquely to overcome obstacles and adapt to new climates. It is quite simple. Our success boils down to three key principles, and I can assure you that our priorities will remain just as clear in the future as they are right now. First, everything we do is merchant first. There are needs to drive every product enhancement and every decision we make. Second, we've demonstrated an incredible ability to pivot when merchants need us most, adapting swiftly to challenges. Our resilience in turn ensures our merchants remain resilient too. And third, our operating discipline provides the flexibility we need to deliver unmatched value while balancing profitability and long-term growth. This is a very durable business model, and it is also how the very best companies are built, by staying grounded in our purpose and committed to our mission. And we look forward to sharing our journey with you in the quarters to come. And with that, I'll turn the call over to Jeff.

Thanks, Harley. Another very strong quarter for us. Q1 marks our... eighth straight quarter of delivering pro forma revenue growth of 25% or greater, seventh consecutive quarter of GMV growth rate exceeding 20%, and seventh consecutive quarter of double digit free cash flow margins. Before I dive into the Q1 results, I want to build on Harley's comments regarding our key principles and link them to the growth framework that I laid out at our investor day and the strong GMV results that we've been posting. At that time, we talked about growing our merchant base, expanding the breadth of merchants we serve, and helping our merchants grow by giving them the tools they need to connect with and convert more buyers and run and grow their businesses, all of which are underpinned by continuous innovation. Our consistent GMB performance demonstrates that we are delivering on all of these vectors. If you recall from our investor day, I highlighted that we have seen our U.S. e-commerce GMB grow approximately two times overall U.S. e-commerce quarter in, quarter out. That trend has continued and strengthened, in fact, exceeding 2x each of the past five quarters. Another demonstration of our success is that every quarterly cohort other than one over the past 10 years has outpaced U.S. e-commerce since joining Shopify. Within Europe, we are outperforming the market by an even wider margin at even higher multiples of e-commerce growth. We've seen robust, greater than 30% GMV growth now for eight consecutive quarters, with that strength being broad-based across countries and merchant sizes. We are executing exceptionally well, and our Q1 results reflect that. With that backdrop, let's discuss Q1 results, then some perspectives on tariffs, and finally, our Q2 outlook. All growth rates mentioned are year over year, unless specifically stated otherwise. GMV in Q1 was 74.8 billion, up 23%. This strong Q1 GMV was driven by same-store sales growth of our existing merchants, growth in our merchant base globally, Continued strength in Europe, which grew 36% from both strong same-store sales growth and new merchant acquisition, with same-store sales growth being a larger contributor this quarter. And finally, offline growth of 23%, driven primarily by larger retailers joining the platform. As we build a wider array of commerce solutions, our platform has become more attractive to merchants across various industries. Apparel and accessories remains our largest category and that continues to perform well, but we are also experiencing strong growth in health and beauty, home and garden, and food and beverage. Additionally, smaller yet rapidly growing categories like animals and pet supplies and arts and entertainment showed particularly strong growth rates in Q1. Revenue for the first quarter was up 27%, looking at the two components of revenue. Q1 merchant solutions revenue increased 29%, driven by the same factors as Q4, including continued strength in GMV and increased penetration of Shopify payments, which reached 64% for the quarter. Several factors powered the quarter's higher GPV penetration, including the strong performance of those merchants utilizing Shopify payments, an increasing percentage of which are Shopify Plus, more merchants across the globe adopting payments, and expansion of payments both into more countries and through the partnerships with PayPal and Klarna. These items were partially offset by the continued strength of our business in Europe, which was a larger percentage of GMV, but where we have a lower GPV penetration than North America, which had become less of a headwind to payments penetration going forward, given the launch of payments in more countries in Europe. Subscription solutions revenue grew 21%, with the three largest drivers being an increase in the number of merchants on our platform, and to a lesser degree, the benefit from the plus pricing change and higher variable platform fees. As a reminder, the changes to plus pricing took effect in February last year for new merchants and a few months later for existing merchants. Given that the significant majority of the existing plus merchants chose to lock in three-year contracts at their existing rates, something that highlights the exceptional value we offer and the trust our merchants have in us, the majority of the benefit in Q1 came from new plus merchants. QN 2025, therefore, benefited from two months of year-over-year comparability tailwinds. As I mentioned on our last call, we expect our subscription solutions growth to normalize to a rate lower than merchant solutions in 2025, given the benefits from the plus pricing changes tapering off and the lengthening of the paid trials. Q1 MRR was up 21% year over year with continued growth in each of standard, plus, and offline, with all three categories seeing an increase in the number of merchants. Plus plans represented 34% of MRR for the quarter. As I mentioned during our last call, in Q4 of last year, we started shifting to a three-month paid trial in certain markets, moving away from our predominantly one-month trials. The adjustment in trial lengths will make the quarter-over-quarter and year-over-year MRR comparisons tougher for you to assess from the outside, and these comparability issues will persist throughout 2025. But it is important to point out that we continue to see the benefits of moving to the longer trial period. Some comparability issues aside, the trend is a good thing. Our testing has indicated that giving merchants a little more time to experiment with our platform increases the likelihood that they are setting themselves up for greater GMV success over the longer term. This point became clear through the testing that we did regarding how quickly merchants from various trial lengths achieve certain GMV milestones. As a reminder, paid trials are just one of our merchant acquisition tools. Gross profit was up 22%. Gross profit for subscription solutions grew 19%, slightly less than the 21% revenue growth for subscription solutions. The lower rate was driven primarily by higher cloud and infrastructure hosting costs needed to support higher volumes and geographic expansion. Although we are investing more in AI, it is not a significant factor in this increase. Over the past five years, the gross margin for subscription solutions has centered around 80%, plus or minus a couple hundred basis points in any given quarter, and we do not anticipate that trend changing in the near term. Gross profit for merchant solutions grew 24%, with gross margin coming in at 38.6% compared to 40.1% in Q1 of 2024. The decrease was primarily driven by the same factors that we saw in Q4, including lower non-cash revenues from certain partnerships, which carry a high gross margin, and the impact from the expanded partnership with PayPal. Partially offsetting these headwinds was strong growth in our FX and tax products. This brings our overall Q1 gross margin to 49.5% compared to 51.4% in the prior year. Operating expenses were $966 million for the quarter, our 41% of revenue, in line with our guidance. This 41% compares to 47% in Q1 2024 and 60% in Q1 2023. We continue to make significant strides in building a lean, flexible, highly efficient team. Our continued discipline on headcount across all three of R&D, sales and marketing, and G&A continues to yield strong operating leverage, all while helping us move even faster on product development aided by our increasing use of AI. In marketing, we continue to lean in on our returns-based approach, executing the plan and leveraging the signals and data insights we have to quickly flex up and down our investments based on specific return metrics and payback periods. This strategy has not changed, and we believe it is continuing to serve us well. Our platform has all the capabilities to grow with and accelerate merchant success. Marketing helps us get those merchants on our platform, allowing us to then grow with them for years to come. Transaction loans and losses, the smallest of the operating expense categories on our income statement, was 3% of revenues, consistent with Q1 of last year. This stability is largely due to higher volumes in our growing capital business. We continue to grow our capital business and have recently introduced several product innovations that give merchants more choice for how they manage their loans and how they choose among various loan options. Operating income for the quarter was $203 million or 9% of revenue compared to 5% in Q1 of last year. Stock-based compensation for Q1 was $123 million and capital expenditures were $4 million for the quarter. Q1 free cash flow was $363 million, or 15% of revenue, in line with our outlook. The strength of our business enables us to achieve these attractive free cash flow margins while still, importantly, investing in the future. To be clear, while we will continue to drive efficiency, we are ultimately still a growth company. We will continue to prioritize investing in key areas like our core platform, international, B2B, enterprise, and offline, as opposed to driving for higher free cash flow margins in the near term. It's simply the right thing to do with the immense opportunities we see ahead. but delivers a profitability level that we are proud of and believe we can maintain without compromising future growth. A quick comment regarding a small but important acquisition that we closed in Q1. In March, we closed the acquisition of Vantage Discovery, which helps accelerate the development of AI-powered multi-vector search across our search APIs, shop, and storefront search offerings. This acquisition is one piece of a broader strategy to ensure that our merchants are able to continue meeting buyers regardless of where they're shopping or discovering great products. Given the dynamic macro and trade environment, I'd like to share some observations about our merchants and our business before we turn to our Q2 financial outlook. Starting with cross-border. Cross-border GMV made up 15% of total GMV in Q1, consistent with previous quarters. Approximately half of that involves U.S. trade, balanced between inbound and outbound, while the rest is largely interregional within Europe. Cross-border levels have remained consistent throughout April and May to date. Turning to de minimis. The recent expiration of the de minimis exemption for goods from China is not expected to have a meaningful impact on Shopify in the near term, as only 1% of our overall GMV is related to imports from China that were subject to the exemption. That said, this expired less than a week ago, and we will continue to monitor its impact on our business. The quality and diversity of our merchant base and the buyers they serve are also two key things to keep in mind and which help ensure resilience in the face of potential economic shifts. We support millions of businesses across various industries and verticals, addressing every corner of commerce. This diverse merchant base gives us a solid foundation to navigate changing market conditions, providing unique stability to our business. Certain sectors or segments will require more time to address their supply chains in this environment, but many others, also represented on Shopify, can move more quickly, mitigating some of the impact to Shopify from these disruptions. Merchants' pivots in response to trade concerns are wide-ranging, including decisions on inventory strategies, pricing changes, and sourcing selections. Consider pricing as one example. While some merchants have raised prices, we haven't seen broad-based price increases yet. However, there remains a mix of strategies at play to navigate tariffs beyond just pricing. Merchants are considering when to change sourcing countries, when to buy inventory, or even adjusting product mix in their catalogs. From an end buyer perspective, in 2024, we had over 875 million unique online shoppers, spanning a broad range of income levels and brand loyalties. While all merchants proudly serve consumers across all income brackets, their buyer base skews towards higher income consumers, with more than half of their buyers in the U.S. having incomes exceeding $100,000. We believe this helps insulate our merchants from some of the potential swings in pricing or other market factors as higher income consumers tend to be less price sensitive. We acknowledge the uncertainty ahead and are actively monitoring our data to help us support our merchants and adapt to whatever changes may arise. Keeping all this in mind, let's now turn to Outlook. Our GMV data shows continued strength through April and early May, reinforcing our confidence and outperforming the market. Our expectations for the second quarter of 2025 factor in the strength of our Q1 and what we are seeing quarter to date for Q2. First on revenue. We expect Q2 revenue growth in the mid-20s year over year, driven by many of the same factors that supported our strong revenue growth in Q1. This outlook takes into consideration our best estimates of our performance in the context of today's trade and macroeconomic environment, with potential headwinds largely offset by FX tailwinds. We expect Q2 gross profit dollars to grow in the high teens, driven by a mixed shift with more contribution expected from merchant solutions, primarily from payments, followed by subscription solutions. The ongoing strength of our lower margin payment product and the accounting impact from PayPal combined with the impact from changes to the paid trial lengths are key factors in this growth. These dynamics in terms of gross profit dollar mix shifts are likely to persist, resulting in gross profit dollar growth at a rate lower than revenue growth. We anticipate that our Q2 operating expenses will be 39% to 40% of revenues, which represents a 200 to 300 basis points improvement over Q2 last year, when excluding the reversal of the $55 million legal accrual from the prior year. The factors contributing to our expense leverage in Q1 are expected to persist into Q2 as we stay vigilant on headcount, reflectively use AI to multiply our effectiveness, and concurrently invest in high return areas like marketing. On a dollar basis, operating expenses are increasing both year over year and quarter over quarter, primarily driven by expectations around higher marketing spend that I just discussed. Moving to stock-based compensation, Q2 SBC is expected to be $120 million. Finally, on free cash flow. For Q2, we expect our free cash flow margin to be in the mid-teens, similar to Q1 of 2025, as we continue to focus on driving growth, not optimizing for near-term margin. We believe that the free cashflow margin profile that we have achieved over the past several quarters strikes the right balance between profitability and investments in building the best products for our merchants today and into the future. Simply too many compelling growth opportunities ahead. To close, we are delivering growth across multiple products, multiple geographies, and multiple merchant sizes and types, all while being disciplined on expenses, but thoughtfully investing for Shopify's continued growth. The more the environment changes, the clearer it becomes to businesses of all sizes that they need a platform that can adapt, scale, and pivot. Shopify is that platform. And with that, I'll turn the call back over to Carrie.