New Street Research - Shopify Inc. (SHOP) (SHOP) Shopify (SHOP, Neutral, $90 target) Expect FCF consensus to ease back to reality (aka guidance)

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New Street Research

Dan Salmon

EUR 8827.00 For Business Accounts Only

Shopify (SHOP, Neutral, $90 target) Expect FCF consensus to ease back to reality (aka guidance)

What’s New: In this first take we focus on:
1. 2QTD GMV trends solid. Key question: how much of it is being pulled forward?
2. 2Q gross margin guidance should bring FCF margin consensus back to reality
3. Enterprise pipeline continues to show strength

08/05/2025 1 EN

Underlying

Shopify Inc. (SHOP)

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New Street Research

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Analysts

Dan Salmon

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We raise our price target to $120 from $115 on slightly higher estimates following the 4Q beat. Investment Thesis: We remain Neutral rated and expect the shares to be range-bound in the near-term. We continue to expect shares to be driven largely by GMV growth relative to expectations in 2025. Positive catalysts could include increased Enterprise contribution in 2025, while downside catalysts could include any consumer-driven macro weakness in the SMB base.

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SHOP: Top Initiation Questions - FCF margin guidance, Enterprise GMV -> Revenue, Attach Rate upside

The most common questions we’ve received following our SHOP initiation have focused on the level of conservatism (or not) in management’s FCF margin guidance, how Enterprise GMV growth will translate to revenue growth, and potential upside for SHOP’s attach rate. Below we review our views on each of these subjects.

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What’s New: We felt the most important issues from today's results were: 1. Resetting the long-term cost structure after a 13% RIF and 20% fewer managers 2. No big surprises in payer/revenue trends: Tinder ALC weakening, as expected 3. Capital return above 100% of FCF target and we think possible for 2025 full year

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Jonathan Chaplin

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This note focuses on estimate changes. Earlier today, we provided a review of results and our thoughts following the earnings call. We kept broadband estimates unchanged but increased our EBITDA estimate. No change to thesis.

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Shopify (SHOP, Neutral, $90 target) Expect FCF consensus to ease back to reality (aka guidance)

Shopify (Neutral, raising target to $120 from $115) Slightly raising estimates on beat and guide, target follows

SHOP: Top Initiation Questions - FCF margin guidance, Enterprise GMV -> Revenue, Attach Rate upside

The Match Group (MTCH, Neutral, $31 target) A battle between short-term and long-term outlooks

ATUS Post-1Q25 Model Update

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