Q4 2024 Global-E Online Ltd Earnings Call

Amir Schlachet

Thank you, Erica, and welcome, everyone, to our fourth quarter and full year 2024 earnings call. 2024 was yet another record breaking year for us here at Global-E, as we continue to diligently execute on our strategy and further solidify Global-E’s leadership position in the global e-commerce space.
2024 was brought to a great close by a fourth quarter, which was our strongest quarter ever, and came in well above our guidance on all metrics. We finished Q4 with a record $1.71 billion in GMV, up 44% year on year, and we’ve record revenues of $263 million, up 42% year-on-year, supported by the strong performance of our merchants over the holiday sales period, including the Black Friday and Cyber Monday weekend. The adjusted gross profit margin for Q4 was nearly 46%, up almost 330 basis points from the same quarter of last year.
Gross margin expansion, coupled with our continued focus on operational excellence and execution, enabled us to reach a key milestone in our journey in Q4. For the first time ever, our quarterly adjusted EBITDA margin crossed the 20% mark, which was the long-term profitability target we set for ourselves at the IPO, less than four years ago, lending at 21.7% or $57.1 million, reflecting more than 62% growth compared to the same quarter last year. Such increased profitability, coupled with the usual seasonality effect, yielded accelerated cash generation, with the business generating nearly $130 million in operational cash flows in Q4.
Not only that, but in Q4, we reached GAAP profitability for the first time since the IPO, another incredible milestone for us. We expect 2025 as a full year to exhibit, for the first time in our history as a public company, a strong GAAP profitability as well, on top of the continuation of our multiyear strong free cash flow generation.
As we report to you today the results for 2024, we are quickly approaching our fourth anniversary as a public company. As such, it is an opportunity to pause and reflect on our growth journey over the last few years. And what an incredible journey it has been.
GMV for the full year of 2024 came in at close to $4.86 billion, and revenues for the full year came in at almost $753 million. This is more than 6x the GMV and 5.5x the revenue we had in 2020, the last full year prior to our IPO just four years ago.
Our annual adjusted gross profit reached nearly $350 million in 2024, more than 8 times what we had in 2020, as our top line growth was coupled with a robust expansion of our adjusted gross profit margin, from just 32% at IPO, to 46.5% in 2024, an increase of 14.5 percentage points or more than 45% during this four-year period.
Moreover, adjusted EBITDA for 2024 was roughly $141 million, growing even faster at almost 11 times compared to 2020, and representing a staggering compounded annual growth rate of over 80%, driven primarily by our operational leverage and commitment to cost control, coupled with our track record of delivering fast and durable growth.
Accordingly, net operating cash flows grew to nearly $170 million for the year, yielding a cash and cash equivalents balance of nearly $0.5 billion at the end of 2024. As such, we believe that our consistent growth trajectory, together with our strong cash generation ability, will provide the necessary fuel to support our growth plans in the future as well, both organic and inorganic.
Looking back at the last four years, I feel enormous pride in what our global team of remarkably dedicated globally professional. Now more than 1,000 people strong around the globe has managed to accomplish, achieving and surpassing the key financial and strategic goals we have set for ourselves. We managed to beat our start of the year annual GMV guidance in every single year since going public. Despite occasional intra-year macro headwinds and challenges we had to push through, also setting a new record in GMV bookings each year, with 2024 being no exception to that.
But such growth did not come at the expense of profitability. As I already noted, our relentless focus on efficiencies and cost control enabled us to beat the aspirational long-term profitability target we set for ourselves at the time of the IPO. We crossed the 40% adjusted gross profit margin mark already several quarters ago. And now we crossed the 20% adjusted EBITDA margin milestone as well.
Beyond the massive growth in all our financial metrics, over the past four years, we also managed to achieve the ambitious strategic goals we set out to conquer when we IPO-ed. On the platform side, we continue to expand the suite of capabilities and solutions we offer to our merchants, added multiple capabilities across all areas of global e-commerce and sharpened our data capabilities and insights, all aimed at further growing our merchant business.
In parallel, we significantly expanded our total addressable market, or TAM, in recent years, by extending our global geographical footprint from just 9 outbound markets operated in 2020, to the 39 outbound markets we currently support, as well as by broadening our platform scope to enable more multi-local offerings to serve the needs of large global merchants as well as consumer electronic brands. We also launched our SMB and demand generation offerings based on the Flow and Borderfree acquisitions, respectively.
From a merchant perspective, post-IPO, we have made strategic investments in cultivating several new verticals, including sports clubs and consumer electronics, investments which have been paying off as we continue to onboard more and more such brands. As an example, the latest consumer electronics brand that recently went live on Global-e is Logitech, one of the world’s largest and most innovative providers of computer peripherals, input devices, gaming accessories, audio and video gear and smart home devices. We are grateful for the opportunity to support the amazing team at Logitech in their ever-growing focus on direct-to-consumer sales worldwide.
More broadly, as we prepare to enter our fifth year as a public company, we are in high gear with our engines firing on all cylinders as our global team pushes forward along all our strategic pillars.
On the new GMV front, looking back at Q4 of 2024, we saw many new brands joining the platform and going live across all geographies. In the US, the successful shapewear brand Spanx went live, FD Thursday Boots, the upcoming jewelry brand [KAZAR] and the web store of famous luxury fashion designer, Tom Ford.
Europe saw many new brands go live as well, including Spanish brand Tous, Italian fashion brand Slowear, U.K. footwear brand Phoebe Philo, German brand, IvyOak, Swiss running gear brand, Compressport, famous Austrian lingerie brand Triumph, French brands, ZAPA and MOLLI, and the successful Finish pet brand HURTTA. So now all European dogs can enjoy their unique pet gear and clothing.
The APAC region saw its fair share of go-lives as well. In Japan, we went live with Komehyo, one of Japan’s largest retailers of secondhand goods, with Kyoto-based watch brand Kuoe, with novelty brand Taito, and with the Japanese tailored shirt brand, Kamakura shirt. We also went live with the renowned Korean cosmetics brand Depology, and with the Australian fashion brands Zoe Kratzmann and SECONDLEFT to name a few.
Besides adding new merchants, we also continue to expand the scope of our business with existing merchants and merchant groups. During Q4, we added Romania and Croatia to the list of markets we operate for Adidas, went live with a new outlet site for our long-standing merchant, John Smedley, and added Strellson, the third brand to go live with us out of the Swiss Holy Fashion Group.
As we strive to fulfill our mission of powering better global e-commerce, we continue to invest in adding new services and new functionality to support the diverse needs and aspirations of merchants of all sizes and across all geographies.
During Q4, our product and engineering teams concentrated on deploying several key new capabilities. Those included, among other things, a new revamped returns portal and returns process improvement, including new consolidated return options in [Kering] support for B2B imports for relevant merchants known as Re B2C, and enhanced live view as part of our merchant portal and several enhancements for our Borderfree.com demand generation platform.
As we remained a leader of global e-commerce as a service, we believe we are uniquely positioned to continue harnessing our unparalleled and fast-growing data assets, our accumulated know-how and our unique expertise, building and perfecting more and more services and capabilities for the benefit of new and existing merchants.
Our robust product development pipeline as well as our continued investment in R&D are aimed at achieving just that. That is true also with regards to Shopify-managed market, where we continue to work hand-in-hand with our partners at Shopify and invest in adding new features and functionalities to the managed markets offering, aimed at making it applicable to a wider range of merchants on the Shopify platform.
Another key area we continue to invest in is technological innovation, with emphasis on harnessing the power of artificial intelligence to improve both customer and merchant experience, as well as drive productivity and efficiency within our internal operations. One such innovation, which we have already discussed in the past, is our successful customer services chatbot.
Utilizing a specially trained version of the ChatGPT large language model, the chatbot is already handling a large percentage of customer ticket, almost half of which are solved by the bot in real time to the full satisfaction of the customer. And we are constantly broadening the scope of issues the bot can handle. For example, now when customers approach customer services wanting to return a product, instead of being redirected to a returns portal, they can finish the entire process right there vis-a-vis the bot, and get a return label, all the relevant documentation and clear instructions on how to proceed.
Another example of a proprietary tool we are starting to experiment with is automatic AI-assisted localization of merchant site, text and visual content, aimed at transforming the way merchants manage multilingual content on their site. Once operational, to this service, we plan to offer merchants instant, high-quality translation, tailored to the specific context of their brand with minimal efforts, while maintaining the merchant’s control over the final results through a resource management system, enabling edits and updates by human translators when needed.
We are also continuing to develop and deploy internal automated systems aimed at increasing operational efficiency. A recent example is an automated system developed by our innovation team designed to streamline the handling of payment dispute and potentially lower unforced chargebacks.
Other examples include AI-powered tools that could enable internal users and software developers to interact more easily with our data, our knowledge bases and our code-base using natural language, as well as AI-based tools like copilot and others that are designed to accelerate coding as well as testing and quality assurance.
In summary, we are extremely pleased with our achievements and results for the past few years since the IPO as well as with the results of 2024 in particular. We are even more excited about the many growth opportunities that lie ahead of us in 2025 and beyond across all our strategic pillars.
From a financial perspective, besides the continuation of our solid growth trajectory, 2025, our fifth year as a public company, is set to bring with it two significant milestones. First, as mentioned already, 2025 is expected to be Global-E’s first GAAP profitable year as a public company. We exhibited positive and improving adjusted EBITDA and free cash flow figures every single year, since we went public. But this year, we also expect to be GAAP profitable for the full year, and hit our 20% adjusted EBITDA long-term IPO targets for the full year, which are both very significant milestones for us.
The second important milestone for us is that in the back half of 2025, we are expected to cross, for the first time ever, an annual run rate of $1 billion in revenue, and likely finish 2025 just shy of the $1 billion mark for the full year. The journey from $0 to $1 billion in revenues over the past 12 years has been an amazing one, and we’re only getting started.
And with that, I will hand it over to Ofer to dive deeper into our quarterly and annual financial results as well as our outlook for Q1 and for the full year 2025.

Ofer Koren

Thank you, Amir, and thanks to everyone for being with us today for our earnings call. As Amir mentioned, we are truly excited about our Q4 and full year results for 2024. 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.
Looking at the full year of 2024, it was another year of strong growth for us, with the business firing on all cylinders. GMV and revenue grew 37% and 32% year on year, respectively. Adjusted gross profit grew even faster at 43%, reflecting an adjusted gross margin of 46.4% for the year, up 350 basis points from 2023. Adjusted EBITDA grew a staggering 52% to slightly more than $140 million, reaching an adjusted EBITDA margin of 18.7% on an annual level. Furthermore, 2024 was another record year of free cash flow generation, which amounted to $167 million, reflecting a free cash flow margin of 22.2%.
Throughout 2024, our existing merchant base continue to stay and grow with us as reflected in our annual NDR rate of 119% and GDR rate of 93.5%. It is important to note that GDR and NDR were negatively impacted by the out of the ordinary bankruptcy of Ted Baker and by several Borderfree merchants that chose not to replatform to the Global-E platform. NDR and GDR, excluding the out-of-the-ordinary churn for 2024, is at close to 123% and 97%, respectively.
Zooming into Q4, the quarter exhibited strong rapid growth and robust cash generation as we continue to execute and tap into the global direct-to-consumer e-commerce opportunity. We have experienced accelerated growth of GMV in Q4 as we generated $1.71 billion of GMV, an increase of 44% year over year. The rapid growth was driven by strong consumer demand, which remains volatile, and significant contribution from new merchants such as Harrods and Victoria’s Secret that have onboarded successfully to our platform in recent months.
In Q4, we generated total revenue of $262.9 million, up 42% year over year. Service fee revenue were $117.3 million, up 30%, and fulfillment services revenue were up 53% to $145.6 million. The faster growth of fulfillment revenue compared to service fee revenue was mainly driven by the bankruptcy of Ted Baker, to which we provide the demand generation services with a high service fee take rate. Fulfillment services revenue growth was also positively impacted by the GMV mix.
Moving down the P&L. Growth in non-GAAP gross profit continued to outpace revenue growth. In Q4, non-GAAP gross profit was $120.9 million, up 53% year-over-year, representing a gross margin of 46% compared to 42.7% in the same period last year. The gross margin has slightly decreased compared to Q3, mainly due to the higher share of fulfillment revenue. GAAP gross profit was $118.7 million, representing a margin of 45.1%.
Moving on to operational expenses. We remain committed to investing in the growth and improvement of our platform to further enhance our offerings. R&D expense in Q4, excluding stock-based compensation, was $24.1 million or 9.2% of revenue compared to $18.2 million or 9.8% of revenue in the same period last year. Total R&D spend in Q4 was $28.3 million.
We also continue to invest in sales and marketing to solidify our pipeline, while maintaining efficiencies. Sales and marketing expense, excluding Shopify-related amortization expenses, stock-based compensation and acquisition-related intangible amortization was $29.8 million or 11.3% of revenue compared to $17.8 million or 9.6% of revenue in the same period last year. Shopify warrants related amortization expense was $37.4 million. Total sales and marketing expenses for the quarter were $70.9 million.
General and administrative expenses, excluding stock-based compensation and acquisition-related contingent consideration, was $10.7 million or 4.1% of the revenue compared to $8.6 million or 4.6% of revenue in the same period last year. Total G&A spend in Q4 was $14.3 million.
Adjusted EBITDA for the quarter totaled $57.1 million, representing a 21.7% adjusted EBITDA margin, increasing by 62% from $35.2 million or 19% margin in the same period last year. As Amir mentioned, this marks another key milestone in our journey as we have been able to hit our adjusted EBITDA long-term targets set prior to our IPO.
Despite the impact of the Shopify warrant-related amortization expense, Q4 ’24 marks our first quarter of GAAP profitability as a public company, and net profit for the quarter was $1.5 million compared to a net loss of $22.1 million last year. Switching gears and turning to the balance sheet and cash flow statement. We ended 2024 with $474 million in cash and cash equivalents, including short-term deposits and marketable securities. Cash generation has accelerated, with operating cash flow in the quarter at $129.3 million compared to an operating cash flow of $93.5 million a year ago, driven mainly by adjusted EBITDA growth and working capital dynamics.
Moving to our financial outlook and guidance for 2025. Despite the prevailing macro-related uncertainties, we expect 2025 to be another year of fast growth and improved adjusted EBITDA for Global-E.
For Q1 2025, we are expecting GMV to be in the range of $1.21 billion to $1.25 billion. At the midpoint of the range, this represents a growth rate of 32% versus Q1 of [2024] We expect Q1 revenue to be in the range of $184.5 million to $191.5 million. At the midpoint of the range, this represents a growth rate of 29% versus Q1 of [2024] For adjusted EBITDA, we are expecting a profit in the range of $29.5 million to $33.5 million.
For the full year of 2025, we anticipate GMV to be in the range of $6.19 billion to $6.49 billion, representing over 31% of annual growth at the midpoint of the range. In other words, we expect GMV growth to remain strong, although growth rates are expected to be lower compared to H2 2024, driven mainly by normalizing consumer demand, which has been on the higher side in the last few months of 2024. Revenue for the year is expected to be at the range of $917 million to $967 million, representing a growth rate of 25% at the midpoint of the range. Revenue growth is expected to be somewhat lower compared to GMV growth as we expect the overall take rate to decline during 2025. The lower take rate expected is driven mainly by our estimates that large merchants will increasingly adopt more multi-local or [Re B2C] strategies as means to manage the risk of rise increased cross-border tariffs, which are being put in place by the US and some of its trading partners worldwide. Even with that, as Amir mentioned earlier, we believe we can potentially reach another significant milestone in 2025. As in the second half of the year, our revenue annual run rate is expected to cross the $1 billion mark for the first time.
We expect adjusted EBITDA to continue to perform well and adjusted EBITDA margins to expand, thanks to our increased efficiencies and economies of scale. For adjusted EBITDA, we are expecting a profit of $179 million to $199 million, representing over 34% growth at the midpoint of the range, allowing us to reach our long-term goal of 20% adjusted EBITDA margin in 2025. Moreover, 2025 is expected to be our first full year of GAAP profitability as a public company, as the Shopify warrants related amortization is expected to decrease significantly in Q2 of 2025 and to be gone in the beginning of 2026. In conclusion, we have reached and surpassed the long-term targets that we have set prior to our IPO in 2021, and we believe there is still a long runway in front of us. We believe now is the right time to share our thoughts about next phases of growth for Global-E, and we will share our strategy, business initiatives and financial targets for the future during our upcoming inaugural Investor Day on March 11 in New York City. Hope to see you there.
And with that, Amir, Nir and I are happy to take any of your questions. Operator?

Operator

(Operator Instructions) Andrew Bauch, Wells Fargo.

Andrew Bauch

Congratulations on a fantastic year. I’ll ask both of my questions upfront, I mean the first quarter guide, just unpacking that it implies a pretty meaningful deceleration from the momentum that you showed in the fourth quarter and despite the easier comp from first quarter ’24. So maybe if you could just kind of help us understand the conservatism that’s baked in there?
And then my follow-up would be, on the managed market solution, by our estimates, you delivered north of $250 of GMV in 2024, basically off of essentially 0 in 2023. So is it fair to assume that you can add a similar amount of GMV dollars in 2025 as you did in 2024?

Amir Schlachet

Andrew, thanks. So I’ll start just in terms of the growth rates for the first quarter. So in general, for the first quarter — for 2025, in general, we are happy with what we are looking at, and we believe the GMV is going to continue to grow fast over 30% as is reflected in our guidance.
There is, I would say, a somewhat slower growth expected in revenues and the main reason for that is the — what we expect would be the effect of the tariffs that are being imposed by the US and by some of its trading partners as we believe it will drive more merchants to adopt either [Re B2C] or even multi-local strategy as a means to manage the risks of these growing tariffs, and that will inherently lower the take rates on that, and that’s what we baked into our guidance going forward.

Nir Debbi

As for your second question, Andrew, it’s Nir. We do expect managed markets to remain around the 5% of our overall GMV as we and Shopify are currently focused on enhancing the merchant’s experience and simplicity in order to support reaching, in the longer term, a larger addressable market. So we do expect that to grow this year at a pace, which is — which would keep it as it was last year a share of our activity. But going forward, I think in future years, with the build we are doing now, we do have high hopes for a significant contribution.

Ofer Koren

And just to add that in terms of the deceleration from Q4 to Q1, in the second half of ’23, as you know, we’ve onboarded many merchants, including some large ones. And those large ones have performed very well in Q4, and they are actually skewed more than others towards Q4. So that will have an impact on our following quarters. In addition to that, we saw very strong consumer demand in the last few months of ’24, and we assume a certain normalization going into 2025.

Operator

Samad Samana, Jefferies.

Samad Samana

Congrats on the strong close to 2024. Maybe just a follow-up on the take rate and the impact of tariffs. I guess, are you already seeing merchants come into you and say, that they’re rethinking to provide the fulfillment strategy, which impacts — which results in more multi-local or that they’re going to start making operational changes in advance of tariffs being applied? Or is this just you anticipating that? Maybe give us a little bit more clarity on the feedback that merchants have given you?
And then I have a follow-up.

Nir Debbi

Samad. Yes, we do see already, from existing merchants, a growing interest the changes that are upcoming trading into the US and the fear of, I would say, an ongoing tariff for. As part of it, we did see merchants reaching to us to ask our advice and guidance as to what would be a good solution for them that will not implicate them in high operational and CapEx. And actually, most of them are looking at either using our [Re B2C] option or are actually growing multi-local completely.
So this, by nature, will have effect down the year on the take rates as reflected in the guidance.
On the other hand, we do see greater interest from prospects that are not currently with Global-E, that are looking for solutions as well and understand that with a partner like Global-E, they can expedite and make much more efficient as they’ll set up towards the new changes and the ever-changing environment. It’s not only the changes themselves. It is the ability to adapt for frequent changes that the retailers and the brands are facing hard time to do within the internal tech stack.
So overall, I believe that into the long term, it might yield the complexity, might yield a positive effect for Global-E. As we’ve seen in the past, when Brexit occurred, so — it had a short term, I would say, impact on take rates, on consumptions. But over time, it created a lot of push to additional merchants to join the Global-E platform.

Samad Samana

Great. That’s helpful. And then maybe, just as I think about the progression of 2025, obviously, we have the 1Q guidance. But Ofer, can you help us understand what you’re assuming from an MRR perspective and if you think about maybe just any anticipated large merchant go-lives like you’ve experienced in the last couple of years that we should be aware of as we’re setting our models for the year?

Ofer Koren

Sure, Samad. So regarding — I’ll start from the end, the new merchants. We came in today. We had a very, very strong year in terms of sales in 2024, and we started the year with a very nice backlog of merchants that are expected to go live within 2025. None of them, no single merchant that is as large as we saw in the last few months of ’24.
But the aggregated number is very is very solid. So we expect those merchants to contribute gradually into the numbers of 2025.
Remind me, what was the first part of the question?

Samad Samana

Can you guys hear me? What are you assuming for net revenue retention in 2025?

Ofer Koren

Yes. Thank you for that. Sorry for not remembering that. So for net revenue retention, we expect similar numbers to what we have seen in ’24, maybe slightly lower. At the larger scale that we are at, it is becoming gradually more challenging to maintain the same numbers.
But we expect it to come close to what we have seen in 2024.

Operator

James Faucette, Morgan Stanley.

James Faucette

Great. Wanted to just quickly touch on the — another element of the NRR, et cetera, that you mentioned as it relates to Borderfree merchants, who chose not to replatform with Global-e. Can you just give us a little insight as to what those discussions were like or why those decisions were made and how you feel about at least some of those customers becoming Global-E customers in the future?

Nir Debbi

It’s Nir. So basically, just to start with overall, most of the GMV out of the Borderfree platform either already migrated or churn. So we see less impact going forward than what we’ve seen on 2024 numbers.
But those merchants that were mentioned that did not migrate to Global-E, actually, the vast majority had other priorities and to invest in an integration with Global-E. The typical merchant is much more a traditional merchants from department stores and traditional retail in the US, they have their own priorities due to the current situation, and many of them decided not to, unfortunately, of those that did not decided not to invest in integration currently.
And with some of them, however, we are still in discussions. So I do assume there is an opportunity that over time, once the urgent priorities are done, we will see some of it actually coming back as a new merchant into the Global-e platform.
However, on those that actually migrated to Global-E, we are very happy with the results. We have seen a great traction. We’ve seen the sales going up. We’ve seen much better conversion out of their current traffic. So all in all, what we wanted to achieve with them, we did see it becoming a reality.
So we’re quite optimistic on the growth project with them. And as I said, going forward, the effect on it, on our NDR NRR impact is going to be much lower.

Operator

Chris Zhang, UBS.

Chris Zhang

Our first question is about your revamped Borderfree offering the demand-gen service. Can you maybe talk about your progress on that in terms of the merchants onboarded, the progress towards monetization and how much of the impact has been baked into your take rate for 2025?
And then my second question is about the free cash flow conversion in 2025 and especially the tax rate you’re going to pay in 2025?

Nir Debbi

Chris, thank you for your question. It’s Nir. So yes, we have launched Borderfree.com, which is our demand generation initiatives in, I would say, sometime in Q4. It wasn’t early October, it was late-October, but we launched it, and we are very happy with the initial traction we’ve seen so far, both with current merchant adoption out of the board — out of the Global-E platform as well as the shopper usage.
We do believe that it will be a strategic pillar in the coming years to drive more traffic to our merchants, growing their business with a significant and growing share of their demand coming from Global-E, as well as setting us another competitive edge to the market in order to bring in additional GMV to Global-E. So all in all, we’re very happy with the initial traction.
I will pass to Ofer for the second.

Ofer Koren

Chris, thank you for the question. Regarding free cash flow, as in previous years, we expect it to be slightly above our adjusted EBITDA. So that’s the short answer.

Operator

Brian Peterson, Raymond James.

Brian Peterson

Congrats on the strong close to 2024. So I’d love to hear what you guys have seen so far starting 2025. I know you mentioned the very strong demand through the holiday season. But anything you’d call out in terms of GMV trends as we start 2025? And any color by region?

Nir Debbi

Yes, Brian. It’s Nir. So we have seen after a very strong peak period and also before that — slightly before that, in the second part of Q3, where we’ve seen a strong consumer demand. We did see some normalization coming into ’25, and we expect to go into something that is much more closer to our normal trend of the multiyear trends that we’ve seen in consumer demand driving same-store sales.
Most countries behave the same. I think that we have seen some slight weakening in the UK, in the consumer demand into the UK. But outside of that, we are currently seeing back to normalization, slightly lower than what we’ve seen, but it is already embedded into our guidance.

Brian Peterson

Got it. And maybe just a follow-up as we’re thinking about take rates. I’m just curious, what are newer merchants to the platform thinking about multi-local? I know there’s some mix dynamics with enterprise. But I’d love to understand, as we think about the expectations for the 2025 guidance, what should we be assuming about take rates longer term as we think about the mix of multi-local versus non-multi-local.

Nir Debbi

So I will start, and I will pass it to Ofer. In terms of the new merchants, I think that the multi-local enabled Global-E to address a new TAM. It opened an addressable market that Global-E could not reach before. If you look just in January, and Amir mentioned it, late January, early February, we launched Logitech. Logitech is our strongest consumer electronics brand to date.
This was not in our time, if you just take it back two to three years ago where we didn’t have the capability to do multi-local. So yes, by nature, it’s in a lower take rate because multi-local, either you don’t have fulfillment take rate at all or that you have at a very low take rate versus cross-border. However, it does open a new addressable market for us.
In terms of how we see it playing over time, I would let Ofer give more clarity.

Ofer Koren

I think that over time, we should see a multi-local — beyond what Amir has just mentioned regarding 2025, growing gradually in share. And this is one because as Nir just mentioned, there is an opportunity there, and we are pursuing that opportunity for consumer electronics and other merchants that have local inventory as well.
And on top of that, we see over time, a gradual shift with very large merchants, and it makes sense for them to open another inventory center, let’s say, if the US merchants in Europe or the other way around, if it’s European merchants in the US. So we see that also over time. So we do expect a gradual increase in multi-local over time.

Operator

(Operator Instructions) Brent Bracelin, Piper Sandler.

Brent Bracelin

Amir, Nir, I appreciate the early feedback on tariffs, a lot of questions that we have there. It sounds like that’s adding a new layer of complexity and while it might impact volumes, could also drive more merchants your way. My question is related. It’s on the potential suspension of the de minimis exception rule here in the US for duty-free goods under $800, how would the suspension of that rule impact the business?
It is — would that add another layer of complexity and potentially impact volumes, but drive more merchants to the platform? Walk through specifically what you’re seeing merchants discuss with you around the de minimis expansion rule.

Nir Debbi

Brent, it’s Nir. So indeed, we do expect the suspension of the de minimis to have an effect, both on the consumer demand with affected HS code that would see an increase that can be not a 10% that were actually levied on the product, but can be anything between 25% to 35% because there are ongoing duties that today don’t kick in because they are — the order is below the de minimis of the $800. So this chain would have an effect that not only is the 10% would kick in, but the entire 30% on average might kick in, making the order from foreign fees into the US for those specific agents more expensive.
This is what the merchants are facing. That’s why a Re B2C model, where the merchant would actually import it on a wholesale basis to avoid paying high tariffs on duties on the retail value, but do it on the wholesale and then sell it domestically, we will see it coming more, as well as an increase in demand for solutions to duty reclaim because if duties are kicking in now in the US and 15% on average of goods are actually going back into the origin country, the duty reclaim would become much more critical because it can save 2% or 3% on the trading cost.
So we do see a lot of interest coming around it for merchants in order to gear themselves to have an optimized, I would say, cost structure and profitability, while not bumping up prices to their US consumer, at least not at tens of percent. So we do believe this will create a lot of interest in our services as Global-E is geared to give a comprehensive suite of services from duty reclaim for the returns into supporting [Re B2C] that for merchants to do by itself is super complex to do, if at all.
So we do believe that there will be uncertainty. It might affect short-term consumption. But overall, in the longer term, we do expect it will behave the same as we’ve seen in Brexit, where overall, it created much more demand to our services.

Amir Schlachet

And I would just add to that, Brent, what — as Nir alluded to earlier, it’s not just the magnitude, the impact of either the tariffs or the change in de minimis, it’s also the velocity in which these changes are coming. And we’ve seen that over the last few weeks. And it’s probably not going to end there. There are going to be retaliatory actions back and forth. So it’s not just the tariffs themselves, it’s the ability to handle and keep on training in a streamlined way in the face of all these rapid changes in the market.
And that’s — as we said, that’s part of the value that Global-E brings to the merchant.

Operator

Koji Ikeda, Bank of America.

Koji Ikeda

I wanted to ask another question on take rates. And so — when I look at the original 2024 guide, right at the midpoint, I think the take rate assumption there was for 16% for 2024, but the year ended up a little bit below that at 15.5%. And so when I look at the 2025 guide, right smack at the midpoint, that’s 14.9%. And I do appreciate the multi-local and the tariff dynamic there. But I wanted to really understand how conservative the take rate assumptions are this year versus last year?
And what are some of the factors, maybe outside of multi-local and tariffs, that could drive a higher or lower overall take rate versus the guide?

Ofer Koren

Sure, Koji, it’s Ofer. I think that looking at — as we always do when we got into this year, we learned from past experience, we obviously looked at last year’s guidance versus actual execution as an input for the 2025 budget and guidance. And I would say that the 2025 guidance is thoughtful. And it’s based on our best estimation at this point in time.
As we mentioned, we expect take rates to decrease mainly on the back of higher multi-local share that is pushed by the tariffs and considerations of merchants. And we hope that we will hit the number in order to — what can drive this upwards is faster penetration of value-added services, this could definitely support take rates. And what could impact it negatively is if we see a higher share of multi-local compared to what we expect to see.

Operator

Patrick Walravens, JMP.

Patrick Walravens

Great. I wanted to go back to Ted Baker. So after — in August of last year, you guys guided down, I think it was like by about $10 million because of the bankruptcy at Ted Baker. And at the time here in the US, when you went to the website, it was offline, but now it’s back, I guess, under ULAC. Do you get that business back?

Nir Debbi

So the business that actually went bankrupt was actually resolved. So there is a new partner managing it. We are, as we do with other prospects now, work in order to be connected, but it’s a completely different tech stack. It’s a completely different owner. It’s like selling to a new client.
Again, it’s part of our little pipeline. And hopefully, we would be able to — be able to work with them.

Operator

Mark Zgutowicz, The Benchmark Company.

Mark Zgutowicz

Congrats on the GAAP profitability milestone. Just two quick ones for me Ofer on the ’25 guidance, just curious what the services take rate assumption is? And then as it relates to Shopify-managed markets, I was hoping you could confirm the mix there in your ’24 GMV?

Ofer Koren

So regarding the take rate, we expect service fee take rates to be slightly lower compared to ’24. As we mentioned, there is a Ted Baker impact, and we did serve Ted Baker for, I think almost eight months in ’24.
Regarding fulfillment, as we already discussed more than once on this call, we expect it to be lower due to higher multi-local share. So that’s in terms of the take rate.
In terms of Shopify managed market, as we called out during the year, the actual result is budgeted by us. So we hit the budget. And as we mentioned a few times, it was around 5% of our volume.

Operator

Rob Wildhack, Autonomous Research.

Robert Wildhack

One more on managed markets, and I appreciate all the color there. I think in the past, you hinted that volume has been in line with expectations, but you’ve added more merchants than expected. So that kind of points to fewer large merchants onboarding there. I’m curious, why do you think that is? And then what specifically features or functionality do you think you need to add to make the product more applicable to those large merchants?

Nir Debbi

It’s Nir. So I think you’re correctly on your assumption. Yes, we did hit our budget. It is skewed towards slightly lower size of merchants versus what we budgeted for. However, it did give, so far, a solution for thousands of merchants that adopted it and are trading and happy on the platform.
We do believe, and we work with Shopify in order to build, I would say, additional tools, as I mentioned earlier, and capabilities to make it more simple and streamlined with other Shopify processes and activities. And we believe it will also give a greater set of capabilities that will allow to go further upstream in terms of also the size of the clients. It will mature over time in the coming quarters, but we have high expectations over the coming years for managed market.

Operator

Matt O’Neill, FT Partners.

Matthew O’Neill

I thought maybe I could ask a little bit about the Logitech win. That seems to be a nice diversification and indicative of the electronics channel taking off. Am I reading into that correctly? And how do you guys think about that? I know there’s maybe a little bit more scrutiny on electronics going cross-border than typical apparel and luxury items.
And so is that type of product movement improved?

Nir Debbi

Yes. So you’re spot on that consumer electronics is indeed more complex than apparel and cosmetics to move cross-border. That is almost by nature why consumer electronics brands that we bring on are multi-local. The latest addition, we spoke about Logitech is a good example. It’s completely multi-local.
However, it’s a new total addressable market for Global-E. We do believe that we can win ground within the consumer electronics segment, and we think that Logitech was our first real size case studies.
However, we had those before, with Jabra, with Suunto and many others. They joined Global-E already and are enjoying our multi-local offerings for the last few quarters, and we see the acceleration now and hopefully, we can keep them coming.

Operator

That concludes our question-and-answer session. I will now hand the call back to Amir for the closing remarks.

Amir Schlachet

Thank you for that. And as we concluded another very strong year at Global-E, I would just like to thank you all for joining us today and for your ongoing support as we continue on our journey to fulfill our mission to enable great, better global direct-to-consumer e-commerce for brands worldwide. We are incredibly eager and excited as we continue to take advantage of the countless opportunities that lie ahead of us, and we will be honored to have you join us.
As such, we very much look forward to seeing you in New York next month for our Investor Day as well as on our future earnings calls. Until then, goodbye and take care.

Operator

Thank you. Ladies and gentlemen, the conference has now ended. Thank you all for joining. You may all disconnect your lines.