Q: I have a question about Shopify Inc. The US has recently ended the de minimus exemption for tariffs. Will this not impact many of Shop's customers? Their initial emphasis was on small customers, who will be the worst hit by this change.
5i Research Answer:
SHOP disclosed earlier this year that ~66% of revenues came from the United States. We would likely expect that any cost increases from tariffs or regulations to get passed through to subscribers rather than SHOP absorbing the incremental cost. We'd expect SHOP could be negatively impacted near-term on the perceptual headwind, although we think few merchants would leave the platform even if pricing increased. It certainly did not impact Q2 in a material way.