SHOP | Shopify’s Growth Story Faces Its First Real TestShopify, Inc. Class ATSX_DLY:SHOPmoonyptoShopify’s Q3 revenue grew 32% Y/Y to $3.7 billion, roughly in line with expectations, while adjusted EPS came in at $0.49, beating estimates by $0.03. Despite the solid numbers, shares initially plunged as investors reacted to Shopify missing its usual revenue beat Gross Merchandise Volume (GMV) increased 29% Y/Y to $119.1 billion, slightly below the $120 billion consensus and down from 32% growth in Q2 International GMV grew 32%, offline GMV climbed 30%, and B2B GMV surged 74%, showing Shopify’s growing presence beyond traditional online retail Merchant Solutions revenue rose 35% to $2.91 billion, supported by Shopify Payments penetration reaching more than 68% of GMV, up 3 percentage points Y/Y. Shop Pay GMV also increased 50%. Meanwhile, Subscription Solutions revenue grew 20% to $836 million, missing expectations. Monthly recurring revenue climbed 19% to $230 million, reflecting continued growth in Shopify’s merchant base AI is becoming another potential growth channel.. Traffic from AI platforms increased 2.6x Y/Y, while orders grew 3.3x. Shoppers arriving through AI channels converted 64% more frequently than those coming from traditional search. Shopify Catalog-powered searches also converted at twice the rate of general AI searches. Management acknowledged that AI-driven commerce remains relatively small, but the early results are worth watching Free cash flow jumped 61% to $816 million, pushing the margin to 22%, compared with 18% a year ago. However, CFO Jeff Hoffmeister explained that only around 1.5 percentage points of the improvement came from structural operating leverage. The remainder was driven by temporary factors, including lower marketing expenses, tax timing, and an accounting change related to merchant cash advances Looking ahead, Shopify expects Q4 revenue growth in the low 30% range, potentially marking its seventh consecutive quarter above 30%. Gross profit is expected to grow in the high 20s%, while free cash flow margin should decline to around 19%, in line with Q4 2025 Shopify continues to deliver impressive growth and cash generation, while AI could open another major distribution channel However, GMV growth is gradually slowing, and with shares trading at roughly 65x forward earnings, the market leaves very little room for disappointment. The business is performing well, but expectations remain extremely high.