Financial Data and Key Metrics Changes - The company's GMV for Q1 2025 was $34.2 billion, reflecting a 7% year-over-year increase [12] - Revenue for Q1 2025 was $82.4 million, also up 8% year-over-year [12] - Non-GAAP gross profit margin for Q1 2025 was approximately 50%, with a year-over-year decline attributed to ramping up new merchants in newer categories [16] - Positive adjusted EBITDA of $1.3 million was achieved in Q1 2025, marking the sixth consecutive quarter of positive adjusted EBITDA [18] - The company ended Q1 2025 with approximately $357 million in cash, deposits, and investments, carrying zero debt [18] Business Line Data and Key Metrics Changes - New product revenue growth was up approximately 190% year-over-year, indicating strong traction of the platform [8] - The two largest categories, Tickets and Travel and Fashion and Luxury, each grew in the mid-teens range year-over-year [12] - The money transfer and payments category achieved approximately 90% year-over-year growth in Q1 2025, driven by new merchant activity [13] - The home category contracted by 74% year-over-year, contributing to a 5% decline in the U.S. [14] Market Data and Key Metrics Changes - APAC grew approximately 70% and Outer Americas (Canada and Latin America) grew approximately 13% in Q1 2025, primarily due to new and upsell activity [15] - Eight of the top ten new logos won during Q1 2025 were headquartered outside the U.S., indicating a focus on international growth [11] Company Strategy and Development Direction - The company is focused on expanding its top-of-funnel efforts to generate more pipeline and converting that pipeline into new business [5] - There is a strategic investment in machine learning capabilities to enhance performance for merchants [9] - The company aims to maintain a non-GAAP gross profit margin between 52% to 53.5% for the full year [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of consumers despite macroeconomic uncertainties [10] - The company maintains its revenue guidance of $333 million to $346 million for 2025, reflecting a balanced view of risks and opportunities [20] - Management noted that the global go-to-market strategy is starting to pay off, with more opportunities diversified outside the U.S. [26] Other Important Information - The company repurchased 4.1 million shares for approximately $20.7 million in Q1 2025, reflecting a commitment to managing dilution [19] - The company expects approximately $30 million of positive free cash flow in 2025, with most cash flow generation anticipated in the second half of the year [19] Q&A Session Summary Question: Impact of product roadmap execution on growth confidence - Management highlighted strong pipeline growth and the effectiveness of their platform in driving new business opportunities [25] Question: Timeline for gross margin stabilization - Management encouraged looking at gross margins on an annual basis, with expectations for improvements as large client wins ramp up [29] Question: Update on mid-tier market strategy - Management indicated that while there is potential in the mid-tier market, current strength is still focused on enterprise-level clients [34] Question: Competitive landscape comparison with Stripe - Management emphasized the advantages of their data capabilities over gateway solutions like Stripe, which have more limited data access [40] Question: Industry growth rate compared to GMV growth - Management noted that their growth in certain categories, like travel, has outperformed broader industry metrics, indicating share gains [44] Question: Growth mix between new logos and existing base - Management indicated that new logo growth is slightly higher than expected, while dollar retention rates remain around 100% [62]

Financial Performance - Riskified's Q1 2025 revenue reached $82.4 million, an 8% year-over-year increase[51, 56] - The company achieved positive Adjusted EBITDA of $1.3 million in Q1 2025, marking the sixth consecutive quarter of positive Adjusted EBITDA[51, 58] - Riskified repurchased 4.1 million shares in Q1 2025 at a total cost of $20.7 million[59, 65] - The company maintains its 2025 revenue guidance between $333 million and $346 million, with an Adjusted EBITDA guidance between $18 million and $26 million[61] Business Growth & Diversification - Riskified's GMV for FY2024 was over $140 billion[16, 20] - Revenue from products outside of the core Chargeback Guarantee product increased by approximately 190% year-over-year[64] - The company is expanding into new verticals, including Money Transfer & Payments, which experienced over 90% year-over-year revenue growth in Q1 2025[63] - Riskified is diversifying geographically, with eight of the top ten new Chargeback Guarantee logos representing wins outside of the United States in Q1 2025[62] Platform & Technology - Riskified's platform has reviewed over 4 billion historical eCommerce transactions and includes over 950 million unique consumers in its network[40] - The company's non-GAAP operating expenses as a percentage of revenue decreased from 53% to 48% year-over-year, indicating improved expense management[57]

[Q1 2025 Financial Results Overview](index=1&type=section&id=Q1%202025%20Financial%20Results%20Overview) [Q1 2025 Business Highlights](index=1&type=section&id=Q1%202025%20Business%20Highlights) Riskified expanded market reach with new merchant wins, grew its multi-product platform, and continued its share repurchase program - Further vertical and geographic diversification was achieved, with **eight of the top ten new Chargeback Guarantee logos outside the United States**[3](index=3&type=chunk) - A new global digital wallet account was onboarded in the Money Transfer & Payments category, which experienced **over 90% year-over-year revenue growth**[3](index=3&type=chunk) - Revenue growth from products outside the core Chargeback Guarantee product **increased by approximately 190% year-over-year**[3](index=3&type=chunk) - An aggregate of **4.1 million shares were repurchased for $20.7 million** in Q1 2025[3](index=3&type=chunk) - Riskified was named the **Most Innovative Fraud Prevention Solution** at the Merchant Payments Ecosystem Awards 2025[3](index=3&type=chunk) [Q1 2025 Financial Summary & Highlights](index=2&type=section&id=Q1%202025%20Financial%20Summary%20%26%20Highlights) Riskified reported increased revenue and GMV in Q1 2025, with GAAP gross profit and Adjusted EBITDA decreasing, but maintained a strong cash position with zero debt Q1 2025 Financial Performance (YoY Comparison) | Metric | Q1 2025 | Q1 2024 | YoY Change | | :-------------------------------- | :-------- | :-------- | :--------- | | Gross Merchandise Volume ("GMV") (in billions) | $34.17 | $32.02 | +7% | | Revenue (in millions) | $82.39 | $76.41 | +8% | | GAAP Gross profit (in millions) | $40.45 | $42.12 | -4% | | GAAP Gross profit margin | 49% | 55% | -6 ppts | | Net profit (loss) (in millions) | $(13.89) | $(11.63) | -19% | | Net profit (loss) margin | (17)% | (15)% | -2 ppts | | Adjusted EBITDA (in millions) | $1.32 | $2.75 | -52% | | Adjusted EBITDA margin | 2% | 4% | -2 ppts | - Operating cash inflow of **$3.8 million** for Q1 2025 compared to **$10.7 million** in the prior year[8](index=8&type=chunk) - Free cash inflow of **$3.6 million** for Q1 2025 compared to **$10.5 million** in the prior year[8](index=8&type=chunk) - Ended March 31, 2025, with approximately **$357.1 million of cash, deposits, and investments** on the balance sheet and **zero debt**[8](index=8&type=chunk) [Financial Outlook](index=2&type=section&id=Financial%20Outlook) Riskified reaffirmed its full-year 2025 financial guidance, projecting revenue between $333 million and $346 million and Adjusted EBITDA between $18 million and $26 million Full-Year 2025 Guidance | Metric | Guidance Range | | :------------- | :------------- | | Revenue (in millions) | $333.00 - $346.00 | | Adjusted EBITDA (in millions) | $18.00 - $26.00 | - The company is unable to provide a reconciliation of forward-looking non-GAAP financial measures to net profit (loss), gross profit, and total operating expenses for the fiscal year ending December 31, 2025, due to the unpredictable nature of certain excluded items[11](index=11&type=chunk) [Conference Call and Webcast Details](index=4&type=section&id=Conference%20Call%20and%20Webcast%20Details) [Conference Call and Webcast Details](index=4&type=section&id=Conference%20Call%20and%20Webcast%20Details) Riskified hosted a conference call on May 14, 2025, to discuss its financial results, with a live webcast and replay available on its Investor Relations website - A conference call was hosted on May 14, 2025, at 8:30 a.m. Eastern Time[12](index=12&type=chunk) - A live webcast and replay of the call can be accessed from Riskified's Investor Relations website at ir.riskified.com[12](index=12&type=chunk) [Key Performance Indicators and Non-GAAP Measures](index=4&type=section&id=Key%20Performance%20Indicators%20and%20Non-GAAP%20Measures) [Definitions and Rationale](index=4&type=section&id=Definitions%20and%20Rationale) Riskified defines GMV as a key performance indicator and provides detailed definitions for non-GAAP measures, explaining adjustments for items like share-based compensation - Management and the Board of Directors use key performance indicators and non-GAAP measures as supplemental measures to compare operating performance consistently and remove the impact of items not directly reflecting core operations[13](index=13&type=chunk) - GMV is defined as the gross total dollar value of orders reviewed through the AI-powered ecommerce risk intelligence platform, serving as an indicator of merchant success and platform scale[16](index=16&type=chunk) - Non-GAAP measures are derived from GAAP balances by adjusting for items such as depreciation and amortization, share-based compensation expense, payroll taxes related to share-based compensation, legal-related and other expenses, and restructuring costs[17](index=17&type=chunk)[19](index=19&type=chunk)[20](index=20&type=chunk) - Free Cash Flow is defined as net cash provided by (used in) operating activities, less cash purchases of property and equipment[19](index=19&type=chunk) [Limitations of Non-GAAP Measures](index=4&type=section&id=Limitations%20of%20Non-GAAP%20Measures) The company acknowledges that non-GAAP measures have limitations as analytical tools, not reflecting cash expenditures or working capital needs, and should not replace GAAP results - Non-GAAP measures do not reflect cash expenditures, future capital expenditure requirements, contractual commitments, changes in working capital needs, or tax expenses[14](index=14&type=chunk) - Free Cash Flow is limited because it does not represent the residual cash flow available for discretionary expenditures and is not necessarily a measure of the ability to fund cash needs[14](index=14&type=chunk) - Non-GAAP measures are not necessarily comparable to similarly titled captions of other companies due to different calculation methods and should not be considered in isolation or as an alternative to GAAP information[15](index=15&type=chunk) [Forward-Looking Statements](index=5&type=section&id=Forward-Looking%20Statements) [Nature of Statements and Safe Harbor](index=5&type=section&id=Nature%20of%20Statements%20and%20Safe%20Harbor) The press release contains forward-looking statements intended to be covered by the safe harbor provisions, reflecting current views but not guaranteeing future performance - Forward-looking statements are intended to be covered by the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995[24](index=24&type=chunk) - Statements regarding revenue and adjusted EBITDA guidance for fiscal year 2025, anticipated non-GAAP gross profit margin, future growth potential, and benefits of the share repurchase program are examples of forward-looking statements[24](index=24&type=chunk) - These statements reflect current views with respect to future events and are not a guarantee of future performance[24](index=24&type=chunk) [Risk Factors](index=5&type=section&id=Risk%20Factors) A wide range of factors could impact Riskified's actual outcomes, including managing growth, changes in payment methods, macroeconomic conditions, and operational risks - Actual outcomes may differ materially due to factors such as the ability to manage growth effectively, continued use of credit cards and other payment methods, and the ability to attract and retain new merchants[25](index=25&type=chunk) - Other risk factors include the impact of macroeconomic and geopolitical conditions, competition, the ability to continue improving machine learning models, fluctuations in CTB Ratio and gross profit margin, and the ability to protect merchant and consumer information[26](index=26&type=chunk) - Risks also involve the ability to retain executive officers and key personnel, exposure to litigation claims, fluctuations in currency exchange rates, reliance on third-party cloud providers, and compliance with data protection and privacy laws[26](index=26&type=chunk) [About Riskified](index=6&type=section&id=About%20Riskified) [About Riskified](index=6&type=section&id=About%20Riskified) Riskified is a leader in ecommerce fraud and risk intelligence, empowering businesses with an AI-powered platform to prevent chargebacks, fight fraud, and improve customer retention - Riskified empowers businesses to unleash ecommerce growth by outsmarting risk, providing guaranteed protection against chargebacks and fighting fraud and policy abuse[27](index=27&type=chunk) - The company's AI-powered fraud and risk intelligence platform analyzes individual interactions to provide real-time decisions and robust identity-based insights[27](index=27&type=chunk) - Riskified was named to **CNBC's World's Top Fintech Companies in 2024**[27](index=27&type=chunk) [Consolidated Financial Statements (Unaudited)](index=7&type=section&id=Consolidated%20Financial%20Statements) [Consolidated Balance Sheets](index=7&type=section&id=Consolidated%20Balance%20Sheets) As of March 31, 2025, Riskified reported total assets of $459.8 million, a decrease from $495.9 million, primarily due to reduced cash and cash equivalents Consolidated Balance Sheet Highlights | Metric | As of March 31, 2025 | As of December 31, 2024 | | :-------------------------------- | :------------------- | :---------------------- | | Cash and cash equivalents (in millions) | $286.86 | $371.06 | | Total current assets (in millions) | $399.51 | $433.70 | | Total assets (in millions) | $459.76 | $495.86 | | Total current liabilities (in millions) | $57.42 | $70.54 | | Total liabilities (in millions) | $100.44 | $113.56 | | Total shareholders' equity (in millions) | $359.33 | $382.30 | [Consolidated Statements of Operations](index=8&type=section&id=Consolidated%20Statements%20of%20Operations) For Q1 2025, Riskified reported revenue of $82.4 million, an 8% increase year-over-year, but gross profit decreased and net loss widened to $(13.9) million Consolidated Statements of Operations Highlights | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------------------------------------------------------------------------------ | :-------------------------------- | :-------------------------------- | | Revenue (in millions) | $82.39 | $76.41 | | Cost of revenue (in millions) | $41.93 | $34.29 | | Gross profit (in millions) | $40.45 | $42.12 | | Total operating expenses (in millions) | $57.51 | $58.03 | | Operating profit (loss) (in millions) | $(17.06) | $(15.91) | | Net profit (loss) (in millions) | $(13.89) | $(11.63) | | Net profit (loss) per share attributable to Class A and B ordinary shareholders, basic and diluted | $(0.09) | $(0.07) | [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Riskified experienced decreased net cash from operating activities in Q1 2025 to $3.8 million, with significant cash outflow from investing activities, leading to an overall cash decrease Consolidated Statements of Cash Flows Highlights | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------------------------ | :-------------------------------- | :-------------------------------- | | Net cash provided by (used in) operating activities (in millions) | $3.84 | $10.66 | | Net cash provided by (used in) investing activities (in millions) | $(65.85) | $(0.18) | | Net cash provided by (used in) financing activities (in millions) | $(22.31) | $(29.40) | | Net increase (decrease) in cash and cash equivalents (in millions) | $(84.20) | $(19.30) | | Cash and cash equivalents—end of period (in millions) | $286.86 | $421.53 | - Purchases of investments totaled **$78.16 million** in Q1 2025, contributing to the significant cash outflow from investing activities[34](index=34&type=chunk) - Purchases of treasury shares amounted to **$20.69 million** in Q1 2025[34](index=34&type=chunk) [Reconciliation of GAAP to Non-GAAP Measures](index=10&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Measures) [Adjusted EBITDA and Gross Profit Reconciliation](index=10&type=section&id=Adjusted%20EBITDA%20and%20Gross%20Profit%20Reconciliation) For Q1 2025, Adjusted EBITDA was $1.3 million (2% margin), down from $2.8 million, and Non-GAAP gross profit was $41.1 million (50% margin), a slight decrease Adjusted EBITDA Reconciliation | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Net profit (loss) (in millions) | $(13.89) | $(11.63) | | Total Adjustments (in millions) | $15.20 | $14.38 | | **Adjusted EBITDA** (in millions) | **$1.32** | **$2.75** | | Adjusted EBITDA Margin | 2% | 4% | Non-GAAP Gross Profit Reconciliation | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | GAAP gross profit (in millions) | $40.45 | $42.12 | | Total Adjustments (in millions) | $0.66 | $0.78 | | **Non-GAAP gross profit** (in millions) | **$41.11** | **$42.90** | | Non-GAAP gross profit margin | 50% | 56% | [Operating Expenses and Free Cash Flow Reconciliation](index=11&type=section&id=Operating%20Expenses%20and%20Free%20Cash%20Flow%20Reconciliation) Non-GAAP operating expenses for Q1 2025 showed slight changes, with Free Cash Flow at $3.6 million, a decrease from $10.5 million in Q1 2024 Non-GAAP Operating Expenses Reconciliation | Expense Category | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Non-GAAP research and development (in millions) | $13.75 | $13.41 | | Non-GAAP sales and marketing (in millions) | $16.76 | $17.39 | | Non-GAAP general and administrative (in millions) | $9.29 | $9.36 | Free Cash Flow Reconciliation | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------------------ | :-------------------------------- | :-------------------------------- | | Net cash provided by (used in) operating activities (in millions) | $3.84 | $10.66 | | Purchases of property and equipment (in millions) | $(0.21) | $(0.18) | | **Free Cash Flow** (in millions) | **$3.64** | **$10.48** | [Net Profit (Loss) and EPS Reconciliation](index=12&type=section&id=Net%20Profit%20(Loss)%20and%20EPS%20Reconciliation) For Q1 2025, non-GAAP net profit was $4.5 million, down from $7.0 million, and non-GAAP diluted net profit per share was $0.03, compared to $0.04 in the prior year Non-GAAP Net Profit (Loss) Reconciliation | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Net profit (loss) (in millions) | $(13.89) | $(11.63) | | Total Adjustments (in millions) | $18.38 | $18.66 | | **Non-GAAP net profit (loss)** (in millions) | **$4.49** | **$7.03** | Non-GAAP Net Profit (Loss) per Share | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------------------------------------------------------------------------------ | :-------------------------------- | :-------------------------------- | | Non-GAAP net profit (loss) per share attributable to Class A and B ordinary shareholders, basic and diluted | $0.03 | $0.04 | | Weighted-average shares used in computing non-GAAP net profit (loss) per share, diluted | 167,823,008 | 182,510,110 |

Group 1 - The article focuses on Riskified Ltd. (NYSE: RSKD), a small-cap tech company based in New York City, which has not been analyzed since early 2023 [1] - The Busted IPO Forum, led by Bret Jensen, targets stocks that have been public for 18 months to 6 years and are significantly below their offering price [1] Group 2 - The article does not provide specific financial metrics or performance data for Riskified Ltd. [1]

Currency and Financial Risks - The company is exposed to fluctuations in currency exchange rates, particularly with a portion of revenue denominated in Euros, which could negatively affect revenues if foreign currencies weaken against the U.S. dollar[116]. - The company may require additional capital in the future, and its ability to obtain financing will depend on various factors, including operating performance and capital market conditions[117]. - The company’s financial position could be negatively impacted if it issues significant credits or refunds to merchants due to performance malfunctions in its platform[127]. - Changes in tax laws and regulations could adversely affect the company's operations and financial condition, potentially leading to increased costs and liabilities[199]. - The company is subject to routine tax audits, which may result in additional tax, interest, or penalties being imposed[200]. - The application of indirect taxes to online transactions is complex and evolving, with potential liabilities exceeding current estimates[201]. - The company may face substantial tax liabilities if required to collect sales or other taxes in jurisdictions where it has not historically done so[201]. Technology and Operational Risks - The company relies on third-party Public Cloud Providers for its cloud-based SaaS products, and any disruption in their operations could adversely affect the company's business and financial condition[119]. - The company faces risks related to interruptions or performance problems with its technology and infrastructure, which could undermine merchant confidence and negatively impact revenues[127]. - The company’s proprietary machine learning models depend on data from merchants and third parties, and any loss of access to this data could adversely affect its ability to evaluate transactions and detect fraud[128]. - The company faces risks related to the accuracy and availability of third-party data used for training machine learning models, which could adversely affect product offerings and merchant relationships[131]. - The company relies on third-party data sources for fraud detection may lead to inaccuracies, affecting its ability to make informed decisions[130]. - The company may incur significant costs for using alternative equipment or services in response to disruptions affecting its Public Cloud Providers[120]. Intellectual Property and Compliance Risks - The company has not registered any copyrights and primarily relies on trade secret protection, which may limit remedies for unauthorized use of its software[122]. - The company’s ability to protect its intellectual property rights is uncertain, particularly in foreign jurisdictions, which may expose it to unauthorized use of its technology[121]. - There is a risk of being sued for alleged infringement of intellectual property rights, which could lead to substantial damages or redesigning of products[179]. - The company does not currently have a patent portfolio, which may hinder its ability to defend against patent infringement claims[179]. - Compliance with evolving privacy laws and regulations may result in significant liabilities and operational costs, impacting revenues and financial condition[132]. Regulatory and Legal Risks - The California Consumer Privacy Act (CCPA) imposes civil penalties for violations, and failure to comply could lead to legal actions against the company[137]. - The General Data Protection Regulation (GDPR) imposes strict obligations on data processing, with potential fines for non-compliance that could significantly impact financial condition[140]. - The company anticipates increased operational costs due to compliance with the Digital Markets Act (DMA) and Digital Services Act (DSA) which require modifications to practices and policies[148]. - The evolving regulatory landscape in the European Economic Area and the UK may lead to increased operational costs and risks associated with data transfers and processing[139]. - The company is subject to complex and rapidly changing U.S. state laws regarding privacy and data security, which could lead to costly compliance efforts[136]. - The introduction of new regulations in China, such as the Regulations on Network Data Security Management, expands obligations for data processors and may require significant adjustments to operations[157]. - The regulatory framework for artificial intelligence (AI) and machine learning (ML) is rapidly evolving, with significant new laws enacted in California, Colorado, and Utah, impacting compliance and operational costs[161]. - The EU AI Act, effective from August 2024, will impose obligations including transparency and risk assessments, with fines for non-compliance reaching up to 7% of worldwide annual turnover[161]. - China has implemented strict regulations governing generative AI and algorithmic technologies, requiring service providers to file algorithms and complete security assessments[161]. Market and Competitive Risks - The market for AI and ML technologies remains unproven, and the company faces challenges in developing and commercializing these technologies effectively[165]. - The company relies on third-party AI technologies, and any changes in availability or pricing could adversely affect its solutions and customer appeal[166]. - The use of open-source software poses risks, including potential litigation and requirements to disclose proprietary code, which could impact revenue generation[171]. - Maintaining and enhancing the company's brand is critical for growth, requiring substantial investments in marketing and product quality[173]. - The company may pursue acquisitions or strategic investments to expand capabilities, but such efforts could face integration challenges and divert management attention[176]. - The company faces challenges in identifying desirable acquisition targets and may incur significant costs if regulatory approvals are not obtained for acquisitions[177]. Governance and Shareholder Risks - The dual class share structure concentrates voting power with management, limiting shareholder influence over important transactions[213]. - The company's Class A ordinary shares have experienced significant price volatility, influenced by various market factors and operational performance[210]. - Future issuances of Class A ordinary shares or convertible securities may result in substantial dilution to existing stockholders[226]. - The dual class share structure allows existing shareholders to significantly influence shareholder approval matters, even with less than a majority of shares[232]. - The company believes it was not classified as a Passive Foreign Investment Company (PFIC) for the year ending December 31, 2024, but this status is subject to annual determination and could change[246]. - Rights and responsibilities of shareholders are governed by Israeli law, differing from U.S. corporations[261]. - Shareholders must act in good faith and refrain from abusing their power within the company[261]. - Controlling shareholders have a duty of fairness toward the company, though the substance of this duty is not defined[262]. Economic and Geopolitical Risks - The ongoing military conflict in Israel has led to a deterioration of certain economic indicators, including a downgrade in Israel's credit rating by agencies such as Moody's, S&P Global, and Fitch[253]. - The company’s commercial insurance does not cover losses from war and terrorism, which could materially affect its business if damages occur[255]. - The ongoing war has resulted in several hundred thousand Israeli military reservists being drafted, potentially disrupting the company's operations due to employee absences[254]. - The company faces risks related to geopolitical instability in Israel, which may adversely affect its revenues and financial condition[249]. - The global perception of Israel may lead to increased sanctions and negative measures against Israeli companies, potentially impacting business operations[257]. - Enforcement of U.S. judgments against the company and its non-U.S. officers may be difficult in Israel[259]. - Israeli courts may refuse to hear claims based on alleged violations of U.S. securities laws[259]. Internal Control and Reporting Risks - The company must maintain effective internal controls over financial reporting to avoid material weaknesses that could affect investor confidence[188]. - Any failure to comply with financial reporting regulations could result in investigations by the SEC and negatively impact the trading price of the company's shares[191]. - The company continues to incur increased costs due to operating as a public entity, particularly after no longer qualifying as an "emerging growth company," leading to significant legal and accounting expenses[236]. - The company is subject to various compliance costs and challenges due to regulations imposed on public companies, which may evolve over time[237].

Financial Data and Key Metrics Changes - The company achieved fourth quarter revenue of $93.5 million and full-year revenue of $327.5 million, representing year-over-year growth of 11% and 10% respectively [44][9] - The annual gross merchandise volume (GMV) grew by 15% to $141.2 billion for the full year 2024 [45][9] - Adjusted EBITDA for the year was positive $17.2 million, reflecting a year-over-year increase of over 300% [58][9] - The gross profit margin for the full year was 53%, up from 52% in 2023 [53][9] Business Line Data and Key Metrics Changes - The Ticket & Travel category was the largest contributor to year-over-year revenue growth, achieving over $111 million in revenue, which represented approximately one-third of the overall portfolio [49][9] - The Food category saw a 40% year-over-year growth, while the Money Transfer & Payments category grew by 66% [49][9] - The Fashion & Luxury category grew by low single digits in the fourth quarter and for the full year, representing approximately one-third of the portfolio [47][9] Market Data and Key Metrics Changes - The United States, the largest region, grew by 9%, while EMEA grew by 4% [51][9] - The Americas and APAC regions grew approximately 10% and 33% respectively, driven by new and upsell activity [51][9] Company Strategy and Development Direction - The company aims to expand its multi-product platform to diversify its revenue base and has successfully added several key merchants to products outside of its core chargeback guarantee [14][9] - A key focus for 2025 is to enhance top-of-funnel efforts to drive more pipeline and increase opportunities [15][9] - The company is investing in AI capabilities to improve performance and accuracy across its platforms [29][9] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about improved performance in annual dollar retention (ADR) and net dollar retention (NDR) rates in 2025, despite challenges faced in 2024 [21][9] - The company is implementing a merchant retention strategy aimed at returning ADR to historical levels [18][9] - Management anticipates revenue for 2025 to be between $333 million and $346 million, driven primarily by new business activity [65][9] Other Important Information - The company ended 2024 with approximately $376 million in cash and deposits and zero debt [59][9] - The company repurchased approximately $27 million shares for a total price of $141 million during 2024 [60][9] - Share-based compensation expense as a percentage of revenue decreased by approximately 300 basis points from 2023 levels [62][9] Q&A Session Summary Question: What are the strategies to maximize top of the funnel activity? - Management highlighted three strategies: expanding platform capabilities through increased R&D, geographical expansion, and a more thoughtful approach to mid-tier market areas [75][76][77] Question: What is the exposure to larger-than-average renewals in 2025? - Management expressed high confidence in multiyear renewals, with over 70% of the book of business already renewed [79][80] Question: Can you provide context around the success of standalone non-chargeback products? - Management indicated significant growth potential, projecting revenue from these products to increase from $4.5 million in 2024 to low double-digit millions [86][9] Question: What are the dynamics affecting net dollar retention (NDR)? - Management noted that NDR decreased due to churn events and a focus on new logo generation rather than upsells, but expressed optimism for improvement in 2025 [92][96] Question: How does the company view alternative payment methods? - Management stated that there is ongoing demand from merchants for fraud identification in alternative payment methods, indicating a growing opportunity in this area [98][9]

Financial Data and Key Metrics Changes - The company achieved fourth-quarter revenue of $93.5 million and full-year revenue of $327.5 million, representing year-over-year increases of 11% and 10% respectively [44][9] - Gross profit margin for the full year was 53%, up from 52% in 2023, with expectations for 2025 to be between 52% and 53.5% [53][54] - Adjusted EBITDA for the year was positive $17.2 million, a year-over-year increase of over 300%, with the fourth quarter achieving the highest quarterly adjusted EBITDA of $11.2 million [58][44] Business Line Data and Key Metrics Changes - The company grew its GMV by 15% for the full year, reaching $141.2 billion, with significant contributions from the Tickets & Travel vertical, which generated over $111 million in revenue [9][49] - The Food category saw a 40% year-over-year growth, while the Money Transfer & Payments category grew by 66% [49] - The Fashion & Luxury category grew by low single digits, representing approximately one-third of the portfolio, with early signs of stabilization in high-end fashion [46][47] Market Data and Key Metrics Changes - The United States, the largest region, grew by 9%, while EMEA grew by 4%, with the Americas and APAC regions growing approximately 10% and 33% respectively [51] - The company reported growth across all geographies year-over-year, indicating continued market share gains outside the United States [50] Company Strategy and Development Direction - The company aims to expand its multi-product platform to diversify revenue streams and enhance market share, with a focus on increasing top-of-funnel opportunities [14][15] - A key strategy for 2025 includes shifting many merchants to multiyear contracts to increase committed revenue, with over 70% of the 2025 book of business already committed [19][20] - The company is investing in AI capabilities to improve product performance and customer service, aiming for adjusted EBITDA margins between 15% to 20% by the end of 2026 [29][40] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about improved net dollar retention in 2025, driven by stabilization in challenged verticals and ongoing retention initiatives [21][66] - The company anticipates revenue for 2025 to be between $333 million and $346 million, with growth primarily driven by new business activity [65] - Management highlighted the importance of monitoring the performance of merchants and consumer spending in the broader e-commerce landscape [67] Other Important Information - The company ended 2024 with approximately $376 million in cash and deposits, carrying zero debt, and generated nearly $40 million in positive free cash flow [59][60] - The company repurchased over $140 million of its stock during 2024, reflecting a commitment to driving shareholder value [41][60] Q&A Session Summary Question: What are the strategies to maximize top-of-funnel activity? - Management highlighted three strategies: expanding platform capabilities through R&D, geographical expansion, and focusing on mid-tier market approaches [75][76][77] Question: What is the exposure to larger-than-average renewals in 2025? - Management expressed high confidence in multiyear renewals, with 70% of the book of business already renewed and only 10% of renewals requiring discounts [79][80] Question: Can you provide context around standalone non-chargeback deals like PolicyProtect? - Management indicated significant growth potential, projecting revenue from these products to increase from $4.5 million in 2024 to low double-digit millions [86] Question: What are the dynamics affecting net dollar retention (NDR)? - Management noted that NDR decreased to 96% due to churn events and a focus on new logo generation over upsells, but expressed optimism for improvement in 2025 [92][94][96] Question: How does the company view alternative payment methods? - Management acknowledged ongoing fraud challenges in alternative payment methods and emphasized the company's capability to identify fraud in these areas [98][100] Question: What insights were gained from the review of pricing strategies? - Management noted that accuracy and strategic product growth are key factors in maintaining high win rates against competitors [108][110]

Group 1: Earnings Performance - Riskified reported quarterly earnings of $0.06 per share, missing the Zacks Consensus Estimate of $0.08 per share, and down from $0.07 per share a year ago, representing an earnings surprise of -25% [1] - The company posted revenues of $93.53 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 3.71%, compared to year-ago revenues of $84.07 million [2] - Over the last four quarters, Riskified has surpassed consensus EPS estimates three times and topped consensus revenue estimates four times [2] Group 2: Stock Performance and Outlook - Riskified shares have increased by approximately 7% since the beginning of the year, while the S&P 500 has declined by -1.8% [3] - The company's future stock performance will largely depend on management's commentary during the earnings call and the earnings outlook [4][6] - The current consensus EPS estimate for the upcoming quarter is $0.04 on revenues of $77.29 million, and for the current fiscal year, it is $0.22 on revenues of $336.61 million [7] Group 3: Industry Context - The Internet - Software industry, to which Riskified belongs, is currently ranked in the bottom 48% of over 250 Zacks industries, indicating potential challenges [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact investor decisions [5]

Exhibit 99.1 Riskified Exceeds High End of FY'24 Revenue Guidance and Achieves Full Year of Positive Adjusted EBITDA Provides Initial 2025 Outlook NEW YORK, March 5, 2025 - Riskified Ltd. (NYSE: RSKD) (the "Company"), a leader in ecommerce fraud and risk intelligence, today announced financial results for the three and twelve months ended December 31, 2024. The Company will host an investor call to discuss these results today at 8:30 a.m. Eastern Time. "We began 2024 with a clear focus on advancing our AI p ...

Group 1 - The previous investment thought on Riskified (NYSE: RSKD) was a buy rating due to the potential for long-term growth given the large addressable market [1] - The focus is on long-term investments while incorporating short-term shorts to uncover alpha opportunities [1] - The investment approach revolves around bottom-up analysis, examining the fundamental strengths and weaknesses of individual companies [1] Group 2 - The investment duration is medium to long-term, aiming to identify companies with solid fundamentals, sustainable competitive advantages, and growth potential [1]