Core Insights - Facephi has secured a new banking client in Central America for its mule account detection and behavioral biometrics solutions, marking a significant expansion in its client base [1][9] - The financial institution has signed a 5-year contract to implement a next-generation fraud prevention system aimed at protecting the entire customer lifecycle from various threats [2] - Facephi's solution integrates multi-biometrics, behavioral signals, and advanced AI analytics into a comprehensive platform that enhances fraud detection and regulatory compliance [3] Company Overview - Facephi specializes in digital identity verification, fraud prevention, and regulatory compliance solutions, offering an AI/ML-powered platform for comprehensive digital protection [6] - The company has over a decade of experience in safeguarding digital identity and operates in more than 30 countries, reinforcing its global presence in regulated industries [5][7] - Facephi emphasizes security and data integrity, developing technologies that prevent identity theft while ensuring ethical management of personal data [6]

Core Insights - The company achieved its first-ever quarter of GAAP profitability in Q4 2025, driven by record revenues and a significant expansion in adjusted EBITDA margins to 18% [1] Financial Performance - The performance was bolstered by a data moat of over 1 billion unique customer interactions, providing a structural competitive advantage in identifying complex fraud patterns [1] - International markets outpaced domestic growth, with non-U.S. regions growing 22% year-over-year, led by strong performance in APAC and LATAM [1] - The Money Transfer and Payments vertical emerged as a primary growth engine, expanding 90% in 2025 due to refined models for high-frequency, high-risk transactions [1] Customer Retention and Strategy - Management attributed improved retention, with Net Dollar Retention (NDR) increasing to 105%, to a successful multi-product strategy, with a 50% increase in merchants using more than one product [1] - The strategic focus has shifted toward prioritizing gross profit dollar growth over top-line revenue to better reflect the value of high-margin non-guarantee products [1] Technological Advancements - Internal AI adoption acted as a force multiplier for engineering, doubling ticket completion rates and allowing for faster deployment of merchant-specific features [1]

Financial Data and Key Metrics Changes - The company reported a fourth quarter non-GAAP gross profit of $57.3 million, reflecting a year-over-year growth of 16% [5] - Adjusted EBITDA for the fourth quarter was $17.7 million, translating to a margin of 18%, which exceeded the full-year adjusted EBITDA of $17.2 million in 2024 [5][6] - Fourth quarter revenues reached nearly $100 million, marking a record since inception and contributing to the first-ever quarter of GAAP profitability [6] - Annual revenue for 2025 was $344.6 million, up 5% year-over-year, while fourth quarter billings grew 9% year-over-year to $103.3 million [24][25] - Full year gross profit was $180.3 million, representing a year-over-year growth of 4% [29] Business Line Data and Key Metrics Changes - The money transfer and payments category grew 75% year-over-year, driven by new business wins and upsell activity [25] - The fashion, cosmetics, and luxury vertical grew 8% year-over-year, primarily due to new business and upsell activity [25] - The travel subvertical showed strong performance, while the tickets and live events subvertical experienced a decline year-over-year [25] - The company achieved a year-over-year improvement in annual dollar retention (ADR) to approximately 100% and net dollar retention (NDR) to 105% [7] Market Data and Key Metrics Changes - Non-U.S. regions collectively grew 22% year-over-year, with APAC growing approximately 53% and other Americas (Canada and Latin America) growing approximately 13% [8][28] - Revenue derived from merchants headquartered outside of the U.S. increased to 46% in 2025, up from 39% in 2024 [28] Company Strategy and Development Direction - The company aims to deepen its geographic presence and grow faster in newer verticals while identifying additional verticals for market share gains [8] - There is a focus on driving gross profit growth rather than solely optimizing for revenue growth, with expectations of non-GAAP gross profit growth accelerating to double digits in 2026 [12][13] - The company plans to expand its offerings in response to the increasing complexity of fraud schemes and the evolving needs of merchants [10][11] Management's Comments on Operating Environment and Future Outlook - Management highlighted the increasing complexity of fraud schemes and the need for enhanced platform features to address these challenges [10][11] - The company anticipates generating approximately $40 million in free cash flow in 2026, reflecting a free cash flow yield of about 10% relative to its current enterprise value [22] - Management expressed confidence in the company's long-term trajectory and announced an additional $75 million share repurchase program [22][23] Other Important Information - The company ended 2025 with approximately $298 million in cash deposits and investments, maintaining a debt-free balance sheet [34] - Share-based compensation expense declined to $51.6 million from $57.8 million in the prior year, with expectations of continued decline in 2026 [37] Q&A Session Summary Question: Can you quantify any early GMV from agentic commerce scenarios? - Management indicated they are in discussions with over 50 publicly traded companies regarding their agentic commerce strategies, but specific GMV figures were not provided [42][44] Question: Do you see outsized growth continuing in money transfer and payments for 2026? - Management expects continued growth in the money transfer and payments category but anticipates it will normalize compared to the exceptional growth seen in 2025 [47][48] Question: How do you view the potential for rising adoption of agentic commerce impacting fraud levels? - Management noted that the complexity of agentic commerce could lead to increased fraud, particularly in newer channels, but this complexity also benefits the company as it positions them as a key partner for merchants [51][53] Question: Can you provide an update on integrating with the latest agentic protocols? - Management acknowledged the fragmented nature of current protocols but emphasized their commitment to supporting a wide range of protocols to enhance fraud detection capabilities [59][61] Question: What are the FX headwinds impacting margins? - Management quantified the FX headwind as approximately 400 basis points or $14 million to adjusted EBITDA, attributing it to the appreciation of the Israeli shekel against the U.S. dollar [63][64]

Financial Data and Key Metrics Changes - The company reported fourth quarter revenue of $99.3 million, a 6% year-over-year increase, and full year revenue of $344.6 million, up 5% year-over-year [21] - Fourth quarter non-GAAP gross profit reached $57.3 million, reflecting a 16% year-over-year growth, while full year gross profit was $180.3 million, a 4% increase [25][30] - Adjusted EBITDA for the fourth quarter was $70.7 million, the highest quarterly amount in history, translating to an 18% margin, with full year Adjusted EBITDA at $26.7 million, a 55% year-over-year increase [30][31] - The company achieved GAAP profitability in the fourth quarter with a net profit of $5.8 million, compared to a loss of $4.1 million in the prior year [30] Business Line Data and Key Metrics Changes - The money transfer and payments category grew 75% year-over-year, driven by new business wins and upsell activity [22] - The fashion, cosmetics, and luxury vertical grew 8% year-over-year, supported by new business and upsell activity [22] - The travel subvertical showed strong performance, contributing positively to revenue growth, while the tickets and live events subvertical experienced a decline [22] Market Data and Key Metrics Changes - Revenue from non-U.S. regions grew significantly, with APAC growing approximately 53% year-over-year and other Americas (Canada and Latin America) growing about 13% [24] - EMEA regions grew approximately 18% year-over-year, with strong performance in money transfer and payments, tickets and travel, and fashion and luxury verticals [24] - Revenue derived from merchants headquartered outside of the U.S. increased to 46% in 2025, up from 39% in 2024 [25] Company Strategy and Development Direction - The company aims to deepen its geographic presence and grow faster in newer verticals while identifying additional verticals for market share gains [7] - There is a focus on expanding localized products and features in high-growth regions, particularly APAC and LATAM [7] - The company plans to drive gross profit growth rather than primarily optimizing for revenue growth, with expectations of non-GAAP gross profit growth accelerating to double digits in 2026 [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's long-term trajectory, supported by strong free cash flow and a debt-free balance sheet [19] - The company anticipates generating approximately $40 million in free cash flow in 2026, reflecting a 20% increase [31] - Management highlighted the increasing complexity of fraud schemes and the need for robust fraud prevention solutions, positioning the company as a key partner for merchants [9][10] Other Important Information - The company repurchased approximately 22 million shares for a total price of $105.9 million in 2025, contributing to an 8% reduction in shares outstanding [31][32] - Share-based compensation expense declined to $51.6 million from $57.8 million in the prior year, with expectations for further declines in 2026 [33] Q&A Session Summary Question: Can you quantify any early GMV from agentic commerce scenarios? - The company is in discussions with over 50 publicly traded companies regarding their agentic commerce strategies, indicating promise in merchant-native AI agents [40][41] Question: Will the growth in money transfer and payments continue in 2026? - The company expects continued growth in the money transfer and payments category but anticipates a normalization of growth rates [44] Question: How does the adoption of agentic commerce impact fraud levels? - The company noted that the complexity of fraud is increasing, particularly in agentic channels, which may lead to higher fraud levels initially [51] Question: What is the status of integrating with new agentic protocols? - The company is actively supporting various protocols but anticipates a fragmented approach in the market [58] Question: How do Riskified's services compare to those from card networks? - The company believes its offerings are distinct and provide unique value that is not directly comparable to services from card networks [72]

Financial Data and Key Metrics Changes - The company reported a GMV of $34.2 billion for Q1 2025, reflecting a 7% year-over-year increase [13] - Revenue for the first quarter was $82.4 million, also up 8% year-over-year [13] - The 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 [17] - Positive adjusted EBITDA of $1.3 million was achieved in Q1, marking the sixth consecutive quarter of positive adjusted EBITDA [19] - The company ended the quarter with approximately $357 million in cash, deposits, and investments, carrying zero debt [19][20] Business Line Data and Key Metrics Changes - The two largest categories, Tickets and Travel and Fashion and Luxury, each grew in the mid-teens range year-over-year, driven by strong new business wins and upsell activity [13] - The money transfer and payments category saw approximately 90% year-over-year growth, primarily driven by new merchant activity [14] - The home category contracted by 74%, contributing to a 5% year-over-year decline in the U.S. market [15] - Growth accelerated across all regions outside the U.S., with APAC growing approximately 70% and Outer Americas growing approximately 13% [16] Market Data and Key Metrics Changes - Eight of the top ten new logos won during Q1 were headquartered outside the U.S., indicating a continued expansion of the company's geographic footprint [12] - The company noted that the overall consumer remained resilient, with April trends stable compared to March [11] Company Strategy and Development Direction - The company is focused on expanding its top-of-funnel efforts to generate more pipeline, converting that pipeline into new business, and retaining and growing with merchants once onboarded [7] - The strategic investment in machine learning capabilities is aimed at enhancing performance for merchants and addressing evolving fraud challenges [10] - The company aims to maintain a non-GAAP gross profit margin between 52% to 53.5% for the full year [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong start to 2025 and the opportunities surrounding the pipeline and anticipated new business activity [21] - The company is maintaining its revenue guidance of between $333 million and $346 million and adjusted EBITDA guidance of between $18 million and $26 million for the year [22] - Management acknowledged the uncertainty around potential impacts of tariffs on merchants and overall spending activity [21] Other Important Information - The company repurchased 4.1 million shares for approximately $20.7 million during the first quarter, contributing to a decrease in share count [20] - The company continues to expect approximately $30 million of positive free cash flow in 2025, with the majority expected in the second half of the year [20] Q&A Session Summary Question: Impact of product roadmap execution on growth confidence - Management expressed satisfaction with the strong start to the year, attributing pipeline growth to the platform's value proposition and increased touchpoints within organizations [26][27] Question: Timeline for gross margin stabilization - Management encouraged looking at gross margins on an annual basis, reiterating expectations set in the previous call [30] Question: Update on mid-tier market strategy - Management indicated that while there is potential in the mid-tier market, the current strength of the pipeline remains focused on enterprise-level clients [35] Question: Long-term potential of the money transfer and payments category - Management highlighted the broad range of use cases in the money transfer category and the opportunity to expand market share [37] Question: Comparison with competitors, specifically Stripe - Management noted that Riskify's data capabilities are significantly greater than those of gateway solutions like Stripe, allowing for more effective fraud prevention [41][43] Question: Industry growth rates compared to company performance - Management acknowledged that their categories do not always align with external e-commerce growth metrics, with some categories performing better than industry averages [45][46] 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 close to 100% [63][64]

Financial Data and Key Metrics Changes - The company's GMV for Q1 was $34.2 billion, reflecting a 7% year-over-year increase [13] - Revenue for Q1 was $82.4 million, also up 8% year-over-year [13] - Non-GAAP gross profit margin for Q1 was approximately 50%, with a year-over-year decline attributed to ramping up new merchants [17] - Positive adjusted EBITDA of $1.3 million was achieved in Q1, marking the sixth consecutive quarter of positive adjusted EBITDA [19] - The company ended Q1 with approximately $357 million in cash, deposits, and investments, carrying zero debt [19][20] Business Line Data and Key Metrics Changes - The two largest categories, Tickets and Travel and Fashion and Luxury, each grew in the mid-teens range year-over-year [13] - The money transfer and payments category achieved approximately 90% year-over-year growth in Q1, driven by new merchant activity [14] - The home category contracted by 74%, contributing to a 5% year-over-year decline in the U.S. [15] - Growth in APAC was approximately 70%, while Outer Americas grew approximately 13% [16] Market Data and Key Metrics Changes - Eight of the top ten new logos won during Q1 were headquartered outside the U.S., indicating a focus on international growth [12] - The company has seen strong performance in the travel category, contrasting with broader industry trends [46] Company Strategy and Development Direction - The company is focused on expanding its product portfolio and enhancing its AI decisioning engine to address a wider range of use cases [9] - The strategy includes diversifying across verticals and geographies to enhance resilience against economic uncertainty [11] - The company aims to maintain a revenue guidance of $333 million to $346 million for the year, reflecting a balanced view of risks and opportunities [22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of consumers despite market uncertainties [11] - The company is strategically investing in machine learning capabilities to support merchants in addressing evolving fraud challenges [10] - The outlook remains cautious due to potential impacts of tariffs on merchants and overall spending activity [21] Other Important Information - The company repurchased 4.1 million shares for approximately $20.7 million in Q1, reflecting a commitment to managing dilution [20] - The company expects to generate approximately $30 million in positive free cash flow in 2025, with most cash flow generation anticipated in the second half of the year [20] Q&A Session Summary Question: Impact of product roadmap execution on growth confidence - Management highlighted strong pipeline growth and the effectiveness of their global go-to-market strategy as key factors for confidence in future growth [26][27] Question: Timeline for gross margin stabilization - Management encouraged looking at gross margins on an annual basis, noting that large client wins in Q1 impacted year-over-year comparisons [30] Question: Update on mid-tier market strategy - Management indicated that while there is potential in the mid-tier market, current strength remains in enterprise-level opportunities [35] Question: Long-term potential of the money transfer and payments category - Management sees a broad opportunity set in money transfer, with various use cases and payment methods contributing to growth [37] Question: Comparison with competitors like Stripe - Management emphasized the advantages of their data capabilities over gateway solutions, allowing for more effective fraud prevention [41][43] Question: Industry growth rate relative to company performance - Management noted that their growth in certain categories, like travel, has outperformed broader industry trends, indicating potential share gains [46][48]

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]