Agentic Commerce Winner with New Near-Term Tailwinds -- Upgrade to Buy

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Agentic Commerce Winner with New Near-Term Tailwinds -- Upgrade to Buy

B, POS, and Shopify Components are more in-focus; 4) the changes force

partners to stay focused on new logo acquisition and cross-selling rather than sitting on an annuity- Exhibit 1 - Uplift to 2027 Subscription, Total

like revenue stream and 5) the long-term unit economics from partner-driven deals will improve as Rev from Non-Plus SKU Price Increase

2027 Forecast Base Model 25%SKU Non-PlusIncrease 30%SKU Non-PlusIncrease 35%SKU Non-PlusIncreasethe commission stream is capped (See Exhibit 4). While any change brings risk, we see this as a

Software Rev - Plus $1,068,702 $1,068,702 $1,068,702 $1,068,702long-term positive for both growth and margins. CoreCoreCoreSoftware $2,872,983 $3,324,053 $3,414,267 $3,504,481 Software Rev - Non-Plus $1,804,281 $2,255,351 $2,345,565 $2,435,779

Apps, Themes, Domain, and

Platform Fee Revenue $700,172 $700,172 $700,172 $700,172

Solutions Rev $13,993,106 $13,993,106 $13,993,106 $13,993,106Is a Price Increase Around the Corner? SHOP last raised prices on non-Plus SKUs in 2023 (33-34%) SubscriptionMerchantTotal RevenueRev $3,573,154 $4,024,224 $4,114,438 $4,204,652 $17,566,261 $18,017,331 $18,107,545

and on Plus plans in 2024 (25%). Since then, the company has rolled out a slew of features, most Uplift to Subscription Rev 12.6% 15.1% $18,197,75917.7%

notably Sidekick, an AI assistant. SHOP has absorbed the costs related to Sidekick utilization. With .Source:Uplift to TotalCompanyRev Data, Jefferies 2.6% 3.1% 3.6%

more merchants using the tool and realizing value, SHOP is now positioned to raise prices. While

mgmt has discussed the possibility without committing to a specific timeline or structure (platform- Exhibit 2 - Partner Earnout Changes Reduce

Payouts Over the LT