Financial Data and Key Metrics Changes - The company's GMV for Q2 was $36.4 billion, with a first half GMV of $70.6 billion, reflecting a 45% year-over-year increase [15] - Q2 revenue reached a record $81.1 million, up 3% year-over-year, while first half revenue was $163.4 million, up 5% year-over-year [15] - Non-GAAP gross profit margin for 2025 was approximately 50%, down from 53% in the prior year [19] - Positive adjusted EBITDA of $2.1 million in Q2 and $3.5 million for the first half of 2025, marking the seventh consecutive quarter of positive adjusted EBITDA [21] Business Line Data and Key Metrics Changes - The two largest categories, tickets and travel, and fashion and luxury, grew 1510% year-over-year, driven by strong new business wins and upsell activity [15] - The home category saw a year-over-year decline of 74%, while the money transfer and payments category achieved approximately 90% year-over-year growth in Q2 [17] - Fashion and luxury category growth was partially offset by same-store sales pressure, particularly in high-end fashion and sneakers [16] Market Data and Key Metrics Changes - The United States market declined 11% year-over-year, primarily due to the contraction in the home category, while APAC grew approximately 40% year-over-year [18] - Other Americas (Canada and Latin America) grew approximately 16% year-over-year, and EMEA grew approximately 23% year-over-year, with strong performance in fashion and luxury, tickets and travel, and money transfer and payments [18] Company Strategy and Development Direction - The company aims to gain market share in existing categories and geographies while expanding into new verticals to diversify its merchant base [7] - A partnership with Human Security was announced to enhance fraud prevention capabilities in the evolving landscape of AI commerce [10] - The board authorized an additional $75 million share repurchase program, reflecting confidence in the company's long-term trajectory [13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the solid first half performance and the potential for improvement in the second half, supported by a robust new business pipeline [6] - The company anticipates delivering an annual non-GAAP gross profit margin of approximately 52% for 2025, with expectations for higher margins in the second half [20] - Management highlighted the increasing complexity of fraud and the need for advanced solutions, positioning the company as a leader in the market [89] Other Important Information - The company ended Q2 with $339 million in cash, deposits, and investments, maintaining a debt-free balance sheet [22] - Quarterly free cash flows were $5.3 million, up from $4.1 million in the prior year, with an expectation of approximately $30 million of positive free cash flow for 2025 [22] Q&A Session Summary Question: Expectations for the second half of the year and same-store sales in fashion and luxury - Management is optimistic about the sales pipeline and expects win rates to be similar to historical levels, but same-store sales in fashion and luxury may be flat or down [27][30] Question: Impact of AgenTek Commerce on pipeline conversations - The evolving space of AgenTek Commerce is generating new conversations and budget opportunities as merchants seek to address AI-related challenges [32][34] Question: Trends in performance by vertical and same-store sales commentary - Travel and payments performed well, while ticket sales showed some softness, particularly in June, with expectations for a challenging comparison to the previous year's strong performance [39][41] Question: Management of operating expenses - Operating expenses were managed well, with expectations for similar levels in the second half of the year [43][45] Question: Adoption trends for adaptive checkout and its impact on new logos - Adaptive checkout has seen double-digit percentage adoption, contributing positively to the overall value proposition [47][49] Question: Proportion of fraud from large coordinated attacks - There has been an increase in professional, coordinated fraud attacks, primarily through remote desktop hacking and data breaches [72] Question: Renewal rates and upsell strategies - The company achieved a 100% renewal success rate and continues to focus on creating unmatched value for merchants [80][81]

Summary of Riskified (RSKD) FY Conference June 04, 2025 Company Overview - **Company Name**: Riskified - **Founded**: 2013 - **Public Listing**: 2021 - **Core Business**: Provides fraud management solutions for e-commerce, focusing on chargeback guarantee products and expanding into new areas [2][6] Industry Insights - **E-commerce Market Size**: The total addressable market (TAM) for e-commerce is approximately $6 trillion, with Riskified managing over $140 billion in gross merchandise volume (GMV) [17][40] - **Fraud Management Challenge**: E-commerce merchants face significant costs due to chargebacks, averaging around 25 basis points (bps) of revenue, which can be substantial [9][11] Core Product Offerings - **Chargeback Guarantee**: Riskified offers a chargeback guarantee that reduces the cost structure for merchants from an average of 30 bps to 20-25 bps, while also guaranteeing transaction approval rates [14][40] - **Adaptive Checkout**: A product that enhances bank payment authorization rates by sending enriched data to issuing banks, improving overall transaction success [19] - **Policy Protect**: The fastest-growing product with 90% year-over-year growth, aimed at identifying and blocking fraudulent refund requests [20][21][26] - **Chargeback Management Software**: A tool for managing chargebacks, allowing fraud teams to handle disputes efficiently [27] Financial Performance - **Cost Structure**: The cost of chargebacks is the largest component affecting gross margins, which hover around 50% [44] - **Operational Efficiency**: The company has focused on reducing operational expenses (OpEx) while improving profitability, with a flat OpEx forecast for the current year [41] - **Cash Flow**: Strong cash flow generation, with guidance over $30 million for the year [44] Growth Opportunities - **Market Expansion**: Riskified is targeting geographic expansion in regions like APAC and LATAM, with a focus on diversifying into non-discretionary categories [42][49] - **Upselling Potential**: There is significant white space for upselling within existing clients, with 80% of the top 30 clients having at least one upsell [49] - **New Product Development**: Continuous innovation in machine learning and data analytics to enhance product offerings and improve fraud detection capabilities [35][39] Key Metrics and Results - **ROI for Merchants**: On average, top clients experience a 30% reduction in costs and a high single-digit increase in approval rates [17][40] - **Data Capture Advantage**: Riskified's ability to capture extensive data per transaction allows for more accurate fraud detection and tailored solutions for enterprise clients [33] Conclusion Riskified is positioned as a leading player in the e-commerce fraud management space, leveraging machine learning and extensive data capture to provide value to merchants while addressing the significant challenges posed by fraud and chargebacks. The company is focused on expanding its product offerings and geographic reach, aiming for sustained growth and improved profitability in the coming years.

Summary of Riskified Conference Call Company Overview - **Company**: Riskified - **Industry**: E-commerce fraud prevention and management - **Core Offering**: AI solutions for managing online payments fraud, policy abuse, chargeback management, and account security [4][5] Core Value Proposition - **Merchant Challenges**: Merchants face liability for fraudulent transactions, requiring robust systems to differentiate between legitimate and fraudulent transactions [5] - **Fraud Types**: Includes chargebacks from "liar buyer friendly fraud," where customers falsely claim fraud to return items [6][7] - **Impact on Business**: Riskified's solutions have led to a cost reduction of over 30% and an average increase in approval rates of about 8% for top customers [9][10] Market Strategy - **Target Market**: Focus on enterprise clients, particularly those with revenues from $50 million to over $1 billion, with a growing presence in Latin America and Asia-Pacific [12] - **Sales Approach**: Direct sales targeting large enterprises, with plans to expand into mid-market and SMB segments [12] Industry Dynamics - **Fraud Evolution**: Increased sophistication in fraud tactics, including the use of AI by fraudsters, necessitating advanced solutions [14][21] - **Market Opportunity**: The growth of e-commerce (projected at $6.5 trillion) presents a significant opportunity for fraud, driving demand for Riskified's services [18][19] Financial Performance - **Net Dollar Retention**: Declined to 96% in 2024, attributed to large merchant churn and macroeconomic factors affecting discretionary spending [31][32] - **Growth in Non-Discretionary Categories**: Shift towards non-discretionary spending categories like food delivery and groceries has diversified the revenue base [30] Competitive Landscape - **Competitors**: Traditional legacy players and newer fintech solutions, with Riskified positioned as a more advanced, AI-driven alternative [35][36] - **Data Advantage**: Riskified captures extensive data across the transaction lifecycle, enhancing modeling performance compared to competitors [37][38] Product Development - **New Products**: Introduction of adaptive checkout, policy protect, and dispute resolve tools aimed at improving merchant conversion rates and managing fraud [55][61] - **Chargeback Guarantee**: Offers merchants a guaranteed approval rate and cost of fraud, enhancing value and accountability [49][50] Customer Engagement - **Cross-Selling Opportunities**: Increased focus on cross-selling additional products to existing clients, with significant growth in new product revenue [44][46] - **Customer Experience**: Emphasis on improving customer experience through faster refunds for loyal customers and managing abusive refund requests [62][63] Macro Environment - **Economic Resilience**: Despite uncertainties, consumer spending has remained resilient, with minimal impact from tariffs on overall business [27][28] - **Future Outlook**: Anticipated recovery in discretionary spending and continued growth in non-discretionary categories expected to stabilize net dollar retention [34] Conclusion - Riskified is well-positioned in the e-commerce fraud prevention market, leveraging advanced AI technology to address evolving fraud challenges while expanding its product offerings and market reach. The company is focused on enhancing customer experience and driving growth through strategic diversification and innovation.

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]