Global-E Online Ltd (GLBE) 2021 Q3 法說會逐字稿

Greetings, and welcome to the Global-e Third Quarter 2021 Earnings Call. This call is being simultaneously webcast on the company's website in the Investors section under News and Events. For opening remarks and introductions, I'll now turn the call over to Erica Mannion at Sapphire Investor Relations. Please go ahead.

Thank you, and good morning. With me today from Global-e are Amir Schlachet, Co-Founder and Chief Executive Officer; Ofer Koren, Chief Financial Officer; and Nir Debbi, Co-Founder and President. Amir will begin with a brief review of the business results for the third quarter ended September 30, 2021. Ofer will review the financial results for the third quarter followed by the company's outlook for the fourth quarter and full year of 2021. We will then open the call for questions.

Certain statements we make may constitute forward-looking statements and information within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995 that relate to our current expectations and futures -- excuse me, and views of future events.

These forward-looking statements are subject to risks, uncertainties and assumptions, some of which are beyond our control. In addition, these forward-looking statements reflect our current views with respect to future events and are not a guarantee of future performance. Actual outcomes may differ materially from the information contained in the forward-looking statements as a result of a number of factors, including those set forth in the section titled Risk Factors in our prospectus filed with the SEC on September 13, 2021 and other documents filed with or furnished to the SEC.

These statements reflect management's current expectations regarding future events and operating performance and speak only as of the date of this call. You should not put undue reliance on any forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that future results, levels of activity, performance and events and circumstances reflected in the forward-looking statements will be achieved or will occur. Except as required by applicable law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise after the date on which the statements are made or to reflect the occurrence of unanticipated events.

Please refer to our press release dated November 9, 2021 for additional information. In addition, certain metrics will be discussed today -- excuse me, we will discuss today non-GAAP metrics. The presentation of this financial information is not intended to be considered in isolation or as a substitute for or superior to financial information prepared and presented in accordance with GAAP.

We use these non-GAAP financial measures for financial and operating decision-making and as a means to evaluate period-to-period comparisons. We believe that these measures provide useful information about operating results, enhance the overall understanding of past financial performance and future prospects and allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making.

For more information on the non-GAAP measures -- the non-GAAP financial measures, please see the reconciliation tables provided in our press release dated November 9, 2021. Throughout this call, we provide a number of key performance indicators used by our management and often used by competitors in our industry. These and other key performance indicators are discussed in more detail in our press release dated November 9, 2021.

I will now turn the call over to Amir, Co-Founder and CEO.

Thank you, Erica, and welcome, everyone. I hope everyone is keeping safe and healthy. Thank you all for joining us today for our quarterly earnings call, and let's jump straight into our third quarter results.

I'm proud to report that Q3 was another record quarter for us. Gross merchandise value, or GMV, grew to $352 million or 86% growth year-on-year. Revenues for the quarter were $59.1 million, representing 77% year-on-year growth. Our gross profit grew even faster by 127% year-on-year reaching $22.8 million. Our gross profitability margin further expanded in Q3 to 38.6%, up from 30.2% in Q3 of last year, thanks to our growing economies of scale and increased efficiencies. Adjusted EBITDA for the quarter totaled $7.7 million, almost tripling year-over-year, attributed primarily to our highly efficient operating model.

Before we dive further in, I would like to mention that from a broader market perspective, during Q3, we have started to see signs of the anticipated return to normality in e-commerce growth trends. We have seen key markets beginning to exhibit various levels of COVID relief in the form of reopening of physical retail, swinging the pendulum of consumer spend slightly back from the record levels of e-commerce market share we have witnessed throughout the height of the pandemic.

That being said, we expect e-commerce to continue gaining market share faster than during pre-pandemic times, as new consumer audiences as well as small to large brands alike are shifting more weight towards e-commerce. Within e-commerce, the D2C, or direct-to-consumer, cross-border e-commerce market opportunity is immense and continues to grow significantly faster than the overall e-commerce market. As such, during Q3, we continued to reinvest heavily into our business, and have made great progress across all our key strategic growth levers.

First, we continue to onboard more merchants onto our platform across all geographies we operate in, while expanding our work with existing merchants and brand groups. For example, our relationship with the LVMH luxury group continue to develop as during Q3, we launched with 2 more group houses, Givenchy and Sephora Asia, the latter contributing to our growing business in Asia Pacific.

Another example of a successful new merchant relationship is the fast-growing sports clothing brand, Alo Yoga, which is our latest large enterprise brand to go live on the Shopify platform, further exemplifying the value of our strategic partnership with Shopify. This quarter also saw several merchants expanding the scope of their partnership with us to additional lanes. Notable examples include the consumer electronics brand, Sennheiser, which added 15 additional markets; the luxury jewelry brand, Boucheron, part of the Kering luxury group that added the U.S. and Europe; as well as Spanish footwear brand, Camper, which added support for 15 new markets.

Second, our direct sales channels continue to be augmented by an ever-expanding list of strong channel partners. The latest partnership we announced is with the Australian Post group, yielding us access to their vast Australian client base and providing further support for our penetration into the APAC region.

Third, we continue to develop and enhance our multi-local support features and capabilities, launching with Jabra, our first global consumer electronics brand as well as with the football club Leeds United, representing the latest addition to our growing list of sports club merchant partners.

Another notable feature we deployed for our merchants at the beginning of Q3 was support for the new OSS and IOSS value-added tax regimes in Europe. With such support provided natively by the Global-e platform, the otherwise complicated transition from the old distance selling VAT regime to the new IOSS one was seamless and transparent for all our merchants.

Furthermore, due to the complexity, which is involved in supporting the new regime, some of our merchants, such as the sports club Arsenal, for example, which in the past operated in Europe by themselves, chose now to move the European markets to be operated by Global-e. Across all these channels, our pipeline remains stronger than ever.

Fourth, we continue to put significant effort and resources into our fast-growing strategic operation with Shopify. We are seeing great market traction with the Shopify merchant base as part of our partnership with enterprise merchants such as Netflix and Alo Yoga as well as with a growing number of smaller emerging brands. On the technical side, we recently completed the first phase of our new native integration into Shopify, with the first pilot merchants already live and selling through the new seamless plug-in.

Netflix, whom I've already mentioned, is actually one of the first enterprise merchants to be selling through the new native integration. Over the next quarters, we intend to continue working together with Shopify in order to roll out the additional phases of the new native integration, which is expected to lead to an even more seamless merchant go-live process.

Last but not least, in parallel to capturing our fast organic growth opportunities, consistent with our previously announced strategy, we intend to continue exploring synergetic M&A opportunities as nonorganic options to further enhance our platform's capability.

As you all know, our people have always been the key element of our success. As such, throughout Q3, we continue to recruit many more great and passionate individuals. They join our super talented and dedicated teams around the globe, helping us build sound foundations of our continued future growth. As part of these efforts, we also recently signed a long-term lease for a new R&D center and headquarters in Israel. We cannot wait to move to our new home in Q2 of next year once the renovation work is done.

We are still in the early innings of direct-to-consumer cross-border e-commerce. And within it, we believe that we are just taking off. We are a reputation-first company and merchants' recognition of the tremendous value we create for them and for the entire ecosystem continues to grow. Day-in and day-out, more and more merchants from around the world are coming on to our platform to grow their international business and serve their shoppers around the world. We believe that our leading end-to-end solution, coupled with our execution capabilities, position us for rapid growth and success well into the future.

And with that, I will hand it over to Ofer, our CFO, to go over our financial results in more depth as well as provide our outlook for the remainder of the year.

Thank you, Amir, and thanks again, everybody, for joining us today for our quarterly earnings call. We are pleased that our business has been tracking well, and our strong growth momentum continued throughout Q3. I'd like to point out again that in addition to our GAAP results, I'll also be discussing certain non-GAAP results. Our GAAP financial results along with the reconciliation between GAAP and non-GAAP results can be found in our earnings release.

As Amir mentioned, our rapid growth in GMV continued in Q3 as we generated $352 million of GMV, an increase of 86% year-over-year. We continue to tap into the massive opportunity of the direct-to-consumer cross-border e-commerce market, which is growing much faster than the overall e-commerce market, while the reopening of physical retail and the return of e-commerce growth rates to normality is evident.

Total revenue for the 3 months ended September 30, 2021 were $59.1 million, up 77% year-over-year. Service fees revenues were $23 million, up 89%. Fulfillment services revenue were up 71% to $36.2 million. The higher growth in service fees revenues relative to fulfillment services revenue was driven mainly by the launch of our multi-local offering for which we typically do not provide fulfillment services as the model is largely based on local shipping. Another factor is a decrease in the customs clearance fees revenues alongside custom clearance costs as a result of the new OSS and IOSS rules related to cross-border e-commerce VAT in and into the EU, which came into force on July as we mentioned in our previous call.

While we generated considerable growth across the business, we've continued to experience higher paced growth in our U.S. outbound revenue, reflecting the strengthening reputation of Global-e in the U.S. market. U.S. outbound revenue was up 91% year-over-year. In addition, during the quarter, we were pleased to see continued significant contribution of GMV and revenue from some of the new logos we launched during the year.

Now let's review the income statement in more detail. Gross profit continues to grow significantly faster than our top line as we continue to improve gross margins, leveraging our scale and improving efficiencies. In Q3, gross profit was $22.8 million, up 127% year-over-year and representing a gross margin of 38.6% compared to 30.2% in the same period last year, also affected by the higher share of service fee revenue. We are very pleased with our margin expansion, and we continue to put efforts to support this trend.

Moving on to operational expenses. On the R&D front, we continue to invest in the development and enhancement of our platform to further expand our offering and lay the foundation for future growth. As Amir mentioned, during Q3, we continued the development of the new Shopify platform integration in collaboration with Shopify team. We have already launched the first pilot, including the onboarding of Netflix. R&D expense, excluding stock-based compensation, was $6.4 million or 10.8% of revenue compared to $3.6 million or 10.9% in the same period last year as we scale up our investment in R&D. Total R&D spend in Q3 was $8.3 million.

We continue to invest in sales and marketing to support our fast growth and capture the growing market opportunity, and we continue to see a very healthy and growing pipeline while still maintaining high efficiency levels. Sales and marketing expense, excluding the amortization expenses related to the Shopify warrant, was $5.4 million or 9.2% of revenue compared to $2.2 million or 6.5% of revenue in the same period last year. Shopify warrants-related amortization expense was $29.4 million. Including this expense, sales and marketing expenses for the quarter totaled $34.9 million.

General and administrative expense, excluding stock-based compensation, was $4.5 million or 7.5% of revenue compared to $1.7 million or 5% of revenue in the same period last year. This expense reflects the full quarter impact of additional expenses related to being a public company, including our D&O insurance policy costs and also onetime costs related to the follow-on secondary offering, which we executed during the quarter.

Total G&A spend in Q3 was $7.8 million. Adjusted EBITDA totaled $7.7 million, representing a 13.1% adjusted EBITDA margin, increasing from $2.7 million or 8.2% margin in the same period last year. Net loss was $28.5 million compared to a net income of $1.3 million (sic) [$1.2 million] in the year ago period, a direct outcome of the amortization expense related to the Shopify warrant. Net profit excluding the amortization expense related to the Shopify warrants was $0.9 million.

Switching gears and turning to the balance sheet and cash flow statement. We ended Q3 with $492 million in cash, cash equivalents, including short-term deposits and marketable securities, which reflects the high level of liquidity. Operating cash flow in the quarter was $5.5 million compared to a negative operating cash flow of $0.5 million a year ago due to the increase in adjusted EBITDA.

Moving to our financial outlook. We are raising our Q4 and full year guidance. Our guidance reflects the strong momentum of the business alongside the normalizing of e-commerce growth rates due to the reopening of physical stores.

For Q4, we're expecting GMV to be in the range of $465 million to $475 million. At the midpoint of this range, this represents a growth rate of 55% versus Q4 of 2020. We expect Q4 revenue to be in the range of $76.4 million to $78.4 million. This represents a growth rate of 45% at the midpoint of the range versus Q4 of 2020. For adjusted EBITDA, we expected a profit in the range of $7.3 million to $8.3 million.

For the full year of 2021, we are raising our guidance and anticipate GMV to be in the range of $1.41 billion to $1.42 billion, representing nearly 83% annual growth at the midpoint of the range. Revenue is expected to be in the range of $239 million to $241 million, representing a growth rate of 76% at the midpoint of the range. For adjusted EBITDA, we're expecting profit of $27.9 million to $28.9 million.

Our outlook for the full year of 2021 reflects additional investments in personnel-related costs, sales and marketing and product development as well as incremental general and administrative costs associated with being a public company.

In conclusion, we believe that there are tremendous opportunities for more high-pace growth well above the market average in the years to come. We are gearing ourselves up in order to be well positioned to capture all of these opportunities. Exciting times ahead.

And with that, Amir, Nir and I are happy to take any of your questions. Operator?

(Operator Instructions) The first question comes from James Faucette with Morgan Stanley.

I want to ask, first. On your demand and ability to fulfill, are you seeing any adverse impacts right now from the well-publicized supply chain constraints, et cetera, that seem to be in the market and impacting crude production globally? And if so, has that been -- how are you factoring that into your outlook and planning?

Thanks, James. Thanks for the question. This is Amir. Generally speaking, we ourselves don't think there any interruptions due to the challenges in the global logistics market for the reason that basically our entire volume of shipments goes via air, and we have very good and close relationships with our strategic logistics partner that partners in general that give us priority. Most of the challenges currently are -- in the world are in seafreight and not in air.

Having said that, we do see, from time to time, some challenges for merchants. Some of our merchants have some inventory issues from time to time, but nothing material and nothing that to date has made any disruption in our business or in our merchants' business.

Got it. And then you highlighted that you're in a -- that you're starting to see good movement with Shopify merchants and you're in the pilot phases. How are you thinking -- or better said, how should we be thinking about the ramp, the pace at which it will ramp? How big of a merchant base within the Shopify group are you currently engaged with and ultimately targeting? Just a bit more color on the ways to track and anticipate the evolution and ramp of that relationship.

James, thank you for the question. It's Nir. We do expect somewhat growth in the next quarters as we see demand and bookings of large Shopify merchants, such as Alo Yoga that just launched with us, or Netflix continue to build up. However, as we see strong bookings momentum also with large brands outside Shopify through our partnership with SFCC, BigCommerce and others, we do expect the growth of Shopify sharing mix to be gradual. But overall, we see our bookings, I would say, growing at a fast pace versus last year. With last year, we nearly -- sorry, we more than doubled our new GMV bookings versus 2019. We expect this trend to continue this year with bookings currently at a pace to more than double versus 2020 numbers.

The next question comes from Samad Samana with Jefferies.

Maybe a follow up to James' question around Shopify. The company rolled out Shopify Markets during the quarter, and we get a lot of questions about maybe what the difference is between what Shopify Markets is and what Global-e is offering? And we think we know the differences, but just could you help us maybe clarify how you think about Shopify Markets and how that impacts the relationship that Global-e has with Shopify?

Yes. Thank you for the question, Samad. It's Nir. Basically, as we see it and Shopify sees it as well, Shopify Markets is a complementary solution to what Global-e offers. Shopify Markets comes to cater for the smaller SMB brands that I would say is the vast majority in terms of number of Shopify clients. However, the vast majority of the potential GMV in cross-border trading is concentrated at the top 1%, 2% of Shopify merchants. And those do need, I would say, a more comprehensive solution, including the MOR solution that Global-e provides, including the high-touch, I would say, guidance into best practices, including customer services around the world in multiple languages that are not part of the current or future Shopify Markets offering, so with much more differentiation on high-touch services that are catered more for the larger brands.

Great. That's helpful. And then maybe if I think about the guidance, and I know you gave some color around it. But as we think about maybe some of the -- like if we could double-click on it, how are you thinking about -- have you factored in that maybe some of your clients may be impacted by supply chain issues? Or just are you factoring in that the world will be more open? Just maybe help us understand some of the factors that have been kind of accounted for in that initial outlook for the fourth quarter.

Thank you, Samad. Ofer, do you want to take that question?

Sure. So Samad, thank you for the question. I think that even though there was a lot of uncertainty during the year, when we initially planned 2021, we thought that there might be some COVID relief at some point in time, and we took that into account even in our original planning. So basically that was taken into account through Q3 and Q4. So it was already baked in our original guidance. And as we went through the year, we saw that we were sort of picking up momentum and growing fast, and we were able to update the guidance every quarter. And we are raising the guidance also towards Q4. We feel confident and I think all those factors are already baked in our guidance.

Great. And maybe I'd like to squeeze in a third one. Just Amir, you had mentioned -- M&A came up on the last call. The company had brought it up. So I'm just curious if any update on the M&A front, especially with us being fairly close to year-end? Should we still have that in mind for 2021? Or should we now be starting to think about that more as a 2022 type of event?

Yes. Thanks, Samad. Indeed, we are -- we continue to explore potential M&A opportunities. We still -- we have some in the pipeline in various stages. We do still expect, I would say, at least 1 announcement potentially this side of Christmas. And yes, as we mentioned in the past as well, we do view nonorganic growth as a means to enhance our -- the capabilities of the platform and our reach. So we definitely expect to continue exploring these in 2022 as well.

The next question comes from Brent Bracelin with Piper Sandler.

One for Amir and a clarification for Ofer. Amir, it's exciting to hear the Netflix Merch Shop and Alo Yoga go live on Shopify's platform this quarter. I was hoping just to drill down a little bit and really looking for color on like the scope deployments. Are you lighting up a handful of geos similar to the traditional merchants? Are you lighting them up globally? How long did the onboarding process take in that kind of high-touch approach? Just any additional color as you think about kind of onboarding now new merchants via kind of that Shopify integration will be interesting.

Yes. Just -- Brent, just to make sure you're asking in terms of whether it's regional or global in terms of the market that we support for these brands or in terms of our ability to deploy the solution for brands around the world on Shopify? I just want to make sure that I'm answering the right question.

Yes. Just love to know onboarding, like how much challenging it was to onboard merchant, number one. And then number two, you've talked about Camper go into 15 new markets. You typically start with a retailer, a large retailer and a handful of markets and then spanned over time. Is that the same deployment method for these? Or do they light up all 200 markets as they launch?

Got you. Thank you for clarifying. So first, in terms of deployment, both these merchants deployed globally with us. So it wasn't a gradual or a subset launch. It really -- it's on a case-by-case basis with the larger merchants, these 2 specific ones, regard -- irrespective of the fact that they're on Shopify just as merchants decided to launch the entire world at the first go.

In terms of complexity in deployment, I would say they were fairly in line with our, call it, regular process. Netflix, as we mentioned on the call, went on the new integration. So as you can probably imagine, since this is the first deployment, there were some additional steps and checks, and it was slightly more complex from a project point of view. But all in all, I would say there is nothing out of the ordinary in terms of these merchant deployment.

Helpful color there. And just a clarification for Ofer. Gross profit, you talked about triple-digit growth here in Q3 outpacing revenue. What drove the gross margin expansion, particularly on the software services side? And how sustainable are those trends?

Thank you for that, Brent. Well, we -- as you know, we have a very clear trend of gross margin improvement over time, which on a macro level is a result of our focus on leveraging our growing scale and ongoing optimization. In this specific quarter, the main drivers behind the improvement were the higher share of service fees and also the increase in service fee take rate, the ongoing optimization of our payment, shipping and fraud management component and there was also a slightly favorable mix. And as we go forward, we think this is fairly sustainable, and we will continue to put a lot of efforts to leverage our scale and continue to support this general trend of improvement.

The next question comes from Pat Walravens with JMP Securities.

It's Joey Marincek, on for Pat. Congrats on the nice results here. So first, how do you think about the potential to expand into other verticals? And then second, can you just remind us of your GMV concentration from your top merchants? And then maybe how you see that changing over time?

Great. So I'll let Nir take the first question and Ofer, you can take the second one.

Yes. Thank you for the question. In terms of expanding our reach into new verticals, and I think that overall Q3, we managed to penetrate 2 new significant verticals. One of them is consumer electronics with the successful launch of Jabra across multiple geographies as well as the substantial increase in operations with Sennheiser, which is consumer electronics as well, so this is building our foothold into consumer electronics, where we haven't traded much or at all before.

This also supports our new, I would say, business models/vertical, which is a multi-local approach. So both Jabra and, as Amir mentioned earlier, Leeds United are example of merchants that are moving into our multi-local approach where we support a domestic interaction with consumers worldwide. So it's not only a cross-border model where you ship for a single territory into multiple countries, it's actually deployment in multiple countries around the world and transacting locally with the clients. So we see quite a lot of expansion there.

And we do expect additional, very large brands to join us over this model in the coming quarters. So quite a lot of expansion in those 2 verticals in parallel to the continuous growth in our current main verticals around fashion, apparel, cosmetics, jewelry and others.

Referring to the second question, we have a relatively fragmented merchant base. Our largest merchant share is decreasing over time. Although this merchant is growing very nicely, but the entire company is growing faster. So the largest merchant is less than 10% of GMV. And then the top 10, including the largest merchants, are less -- are around, I would say, 30% of GMV. But I can give you some color on that. Some of those top 10 are actually new merchants, just onboarded and came into this list. So it's -- I would say it's a dynamic structure. But all in all, it is relatively fragmented.

The next question comes from Josh Beck with KeyBanc.

I wanted to ask an industry question. You talked a bit about the reopening and certainly the impact on e-commerce. At the same time, it seems like there are a lot of folks that are going back to work, and they're going back to dining and there's a bit of apparel supercycle I think that's also taking place. Some of the companies have certainly called out strength in that vertical. So I'm just kind of curious how you would maybe balance those 2 factors and how they could interplay as we go into next year.

Yes. Thanks, Josh. Sure. So I would say, you are right, we agree with this observation. On the one hand, there is physical reopening; on the other hand, there are other factors that are contributing to the continued growth in e-commerce spend -- spend in general and e-commerce spending in particular. And I would say all in all, the trends that we are seeing in the numbers and in our interactions with our clients are pretty much in line with the numbers that we baked into our guidance. So we're going to -- you should take our kind of guidance as our view on how the market will continue to evolve.

Okay. Very helpful. And I wanted to ask a take rate question. I realize this is not how you manage the business. It's much more of an output, but I'm getting a lots of questions on it. So when we do look at the fulfillment take rate, obviously, it was down, I think, sequentially and year-over-year. And it seems like there's a tax regime change from VAT to this one-stop shopping and certainly, it seems to be a bit more simplified, a bit more streamlined. Obviously, not material to the gross profit take rate because that went up.

But yes, should we think about this as more of a effectively like baseline in 3Q '21 that incorporates that? And as we move forward, and again, I know it's not the most important metric, but it's going to be more influenced by things like mix and other factors? So I just want to kind of clarify the change in the quarter and what we should be mindful of in the future as well.

Sure. Thanks, Josh. Ofer, do you want to give Josh some color around our take rate dynamics?

Sure. So yes, as you said, take rate has decreased this quarter when -- where actually service fee take rate has slightly increased to over 6.5%. While as you mentioned, the decrease in overall take rate was a result of the expected decrease in fulfillment take rate. There are 2 main drivers for that. The first one is the fact you just mentioned, the OSS and IOSS implementation in Europe. And yes, that's onetime -- I would say, a onetime step down. We don't expect to see additional influence from this change.

The second driver is the fact that we have launched our multi-local offering, which for us is a very exciting opportunity, which we discussed in the previous quarter. For the multi-local offering, we typically do not provide fulfillment services as the model is largely based on local shipping. So basically, those 2 factors are -- have influenced our take rate, but at the same time also contributed to our higher gross margin in this quarter. One of them is sort of a one-off step down, and the other will still accompany us in future quarters.

The next question comes from Scott Berg with Needham.

Congrats on a strong quarter. I guess I wanted to start off on kind of comparing maybe the most recent quarter with the time frame from a year ago. As you look at new customers that you sold in the quarter, is the -- I don't know, is the onus or pressure on them to be able to more quickly or accurately fulfill global e-commerce sales as strong as what it was maybe a year ago kind of during the earlier phases of the pandemic? Or is there -- is maybe their priority maybe not as strong on the global e-commerce maybe requirements?

Scott, thank you for the question. It's Nir. Basically, we haven't seen a change in the sentiment of our merchants toward cross-border. I think that even on some aspects or some merchants, it's the other way around where we see more, I would say, momentum towards e-commerce as a secular trend of the growth of e-commerce expected to continue. We've seen it with the rollout of multiple new markets. With existing, you've seen it in our land and expand number that is actually driving a substantial part of our growth. So we do see merchants continue to explore avenues to continue and expand in e-commerce, especially global e-commerce.

So we haven't seen I would say, concentration back to my bias toward my home country or back to physical. So still, as we see it, and we are quite optimistic about the long-term trend, as we see super Tier 1 brands opting towards our model and towards the e-commerce cross-border, we do see this trend continue over time, maybe with some normalization that, as Ofer explained, is already baked into our numbers.

Very good. Helpful. And then I wanted to ask a question on your -- in your press release, you talked about some strength in U.S. outbound sales there. But how does the playbook work in selling to merchants in the U.S.? Is it very comparable and similar to as you sell some of the more established markets in maybe EMEA? Or is the playbook maybe focused a little differently as you engage with U.S. merchants?

Thank you for the question. It's Nir again. Basically, the playbook itself or the approach to the client for, I would say, guiding them through the solution until we sign the rollout is the same across our different territories. There are some flavors to it, as a European merchant has different key geographies they want to focus on, they have more focus on VAT related issue in the home market, et cetera, which we don't see for U.S. brands, but these are flavors on the same process.

In terms of the pipeline itself, in the U.S., we see a bit more, I would say, mix towards Shopify Merchants as Shopify has a stronger position in the U.S. versus more traditional market where we see other platforms in more significant share of the mix.

(Operator Instructions) The next question comes from Brian Peterson with Raymond James.

Congrats on the really strong results, and it's great to hear that you guys are winning seemingly every team in the Premier League that's near and dear to my heart. But -- so first question I just wanted to ask kind of on the land size with customers. So obviously, cross-border is very, very thematic. And it sounds like you're landing at larger levels than you were a few years ago. I'm curious how many geos on average does a new merchant take maybe versus a year or 2 ago? And what is the reasonable expectation for that metric going forward?

Yes. I think the answer to the question would depend based on the merchant size, to start with. Any merchant that we define as less than a very large enterprise would usually roll out in all international markets at get-go. So outside his home market or maybe 2 home markets, if they're already established in 2, as they will roll out all of the international activities as a get-go.

With the large, I would say, more traditional brands, as the likes of the Hugo Bosses, the Versaces of the world, you would see a more, I would say, phased approach as they do have traditional distribution agreements around the world. So basically, we see more phased rollout in countries where they can actually go into e-commerce direct and then they roll out another batch. And over time, when they have the ability and can actually deploy more markets, we see additional expansion.

But in, I would say, pure players and all the clients that are not really, I would say, large traditional ones, we would see all markets at once. Usually, on average, we see merchants trading across 160 and 170 active markets.

Got it. That's great color on that. Maybe a higher-level question broadly. You mentioned returning to normal. I think we're all trying to figure out what that is here. But you guys are launching with new merchants, you're expanding with those merchants, there's geo expansion. And obviously, cross-border, I think, is growing faster than overall e-commerce. So if we try to unpack that a little bit, what is the same-store GMV from brands and regions that have been on the platform for more than a year? Any sense for how to unpack that?

Yes. It's true that everybody is trying to understand what normalization actually means and yet I think we all feel that. I would say, generally speaking, that the -- if you look at the e-commerce equivalent of store -- in-store growth from our merchants, it remains strong. We obviously don't -- we don't disclose the exact numbers, but I would say it's a strong double-digit growth for our merchant base year-on-year even through this gradual normalization.

This concludes our question-and-answer session. I would like to turn the conference back over to Amir Schlachet for any closing remarks.

Thanks a lot. Thank you all for your questions. And on behalf of Ofer, Nir, myself and the entire Global-e team, I would like to thank you all for joining today and for your continued interest in Global-e. I would also like to take this opportunity and thank our growing list of merchants around the globe for their ongoing trust and partnership. Finally, I would like to thank our super dedicated and passionate team of employees around the globe, who strive tirelessly every day to fulfill our vision and make the future of global e-commerce truly border-agnostic.

Good bye, all. Take care. And we very much look forward to speaking with you again on our future earnings call.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.