SHOP: 2Q:26 EPS Preview: AI Costs Seeking AI Revenue as Offset

Research evidence excerpt

SHOP: 2Q:26 EPS Preview: AI Costs Seeking AI Revenue as Offset

g variable component of the product costs Prior NC 582.0 E 688.0 E 966.0 E2,759.0 E

(AI) with an offsetting variable revenue mechanic. Estimate AI headwind to Standard / 2027E 814.3 E1,001.1 E1,241.4 E1,914.8 E4,971.6 E

Shop Plus subscription solutions gross margins accelerating to -70bps / -130bps / Prior 956.0 E1,089.0 E1,340.0 E1,954.0 E5,339.0 E

-180bps in '26 / '27 / '28 from -10 bps in '25. Believe usage caps are misaligned with Source: Company Data, Wells Fargo Securities estimates, and Factset.

customers that are ramping usage of AI-powered products Sidekick and Catalog. Instead, NA = Not Available, NC = No Change, NE = No Estimate

must find a customer-aligned way to drive variable revenue structure.

Ken Gawrelski

Equity Analyst | Wells Fargo Securities, LLC

Reducing agentic commerce (AC) ramp assumptions as AC adoption sluggish; AC- Ken.Gawrelski@wellsfargo.com | 617-210-3707

enabled GMV now projected 3.2% of total merchant GMV in '27 (vs. 4.1% prior), driving Barath Rao, CFA

'27 rev/FCF -0.9%/-6.2% vs. prior. AC adoption remains modest given lack of strong Associate Equity Analyst | Wells Fargo Securities, LLC

use case to date, w/ SHOP LLM-directed traffic only +10bp to 28bps of web traffic Jan- Barath.Rao@wellsfargo.com | 212-214-8814

Jun '26. However, expect future adoption to scale w/ SHOP well positioned to capture Zachary Morrissey

economics, where we forecast AC-enabled rev starting 1Q27 w/ assumed 6.5% take rate. Associate Equity Analyst | Wells Fargo Securities, LLC

Zachary.Morrissey@wellsfargo.com | 212-214-5344

Estimates, rating and price target. '26 / '27 GMV estimates remain largely unchanged. George Rusnak

Raise '26 total rev 0.9% but reduce '27 rev 0.9%.