Shopify Inc. (NYSE:SHOP) Q2 2018 Earnings Conference Call - Final Transcript

Jul 31, 2018 • 08:30 am ET

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Shopify Inc. (NYSE:SHOP) Q2 2018 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

(Starts Abruptly) Matthew, and I will be your conference operator today. At this time, I'd like to welcome everyone to the Shopify Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks there will be a question-and-answer session. (Operator Instructions) Thank you.

Katie Keita, Head of HR, you may begin your conference.

Executive
Katie Keita

Thank you, operator, and good morning, everyone. We are glad you can join us for Shopify's second quarter 2018 conference call. We are joined this morning by Tobias Lutke, Shopify CEO; Harley Finkelstein, our COO; and Amy Shapero, our CFO.

(Forward-Looking Cautionary Statement)

Also our commentary today will include adjusted financial measures, which are non-GAAP measures. These should be considered as a supplement to, not a substitute for, GAAP financial measures. Reconciliations between the two can be found in our earnings press release, which is available on our website.

And finally, note that because we report in US dollars, all amounts discussed today are in US dollars unless otherwise indicated. With that, I turn the call over to Harley.

Executive
Harley Finkelstein

Thanks, Katie, and good morning, everyone. We delivered another quarter of strong results in Q2. In the quarter, we spent a valuable three days with partners at our Unite Conference. We announced dozens of new features and capabilities, and we added more merchants than ever to Shopify Plus. In other words, we spent Q2 doing all of the things that, when executed well, produce continued strong results in the future.

In fact, this month we hit a really special milestone. The one billionth order was placed on Shopify. What's remarkable about this is the pace at which we've achieved this milestone. It took us more than 10 years to get to half a billion orders, and just a fraction of that time to double it. This rapid growth is a testament to the strength of our platform, our Plus program, and our partner ecosystem.

Let's start with our platform. Several of the product announcements we made in the quarter are the result of work we started long ago, and we are looking forward to rolling them out to our merchants before the end of this year. A few of these key product announcements include multi-location, which enables merchants to track and update inventory across multiple locations; fraud protect for Shopify payments, which helps merchants sell with greater confidence; and the introduction of the tap and chip reader to transform in-store shopping experiences.

We have already launched several of these products that were announced at Unite, including buy-one-get-one capabilities and quantity discounts. We also launched Ping, our mobile app that consolidates merchants' business conversations with staff, customers, and even their AI employee that are known as Kit. Through Ping, merchants can now run their store and handle their marketing conversationally.

Finally, we launched dynamic checkout, which enables shoppers to quickly check out directly on a product page using their preferred payment method. This feature is expected to increase conversions by further reducing friction