Riskified .(RSKD)2024-08-14 17:35Financial Data and Key Metrics Changes - Revenue for Q2 2024 was 35 billion, up 13% year-over-year [13][21] - Non-GAAP gross profit margin was 53%, up from 52% in the same quarter last year, with a first-half gross profit margin of approximately 54%, the highest since the IPO [16][12] - Adjusted EBITDA was positive at 4.6 million in Q2 2023, marking the eighth consecutive quarter of year-over-year improvements [19] Business Line Data and Key Metrics Changes - The home category grew by 21% year-over-year, while the general vertical, including food and retail, grew by 7% [13][14] - Payments and money transfer category saw over 40% growth, driven by new business activity [13] - Fashion and luxury category grew by 5%, with expectations of continued same-store sales pressures in the second half of the year [14] Market Data and Key Metrics Changes - The United States, the largest region, grew by 11% in Q2, while APAC grew approximately 35% [15] - EMEA is expected to be relatively flat for the year due to a high concentration of merchants in fashion and travel, which are experiencing softness [15][62] Company Strategy and Development Direction - The company is focused on building a market-leading platform to solve real problems for merchants and expand its total addressable market (TAM) [8][12] - There is an emphasis on cross-selling multiple products to existing clients, with a strong pipeline of merchant activity anticipated for the second half of the year [6][31] - The company aims to enhance its technology and expand its market share while managing operational expenses effectively [7][12] Management's Comments on Operating Environment and Future Outlook - Management anticipates softer trends in the third and fourth quarters due to macroeconomic headwinds affecting consumer spending, particularly in high-end fashion and travel [6][21] - Despite challenges, management remains optimistic about new business activity in the second half of the year, which is expected to partially offset macro headwinds [6][21] - The company is updating its 2024 revenue guidance to between 325 million, reflecting anticipated headwinds [21][22] Other Important Information - The company ended Q2 2024 with approximately 39 million [20] - The company expects to generate approximately $30 million in positive free cash flow for 2024 [20] Q&A Session Summary Question: Impact of CrowdStrike outage on Q3 expectations - Management confirmed no impact on Riskified or its merchants related to the CrowdStrike issue [24] Question: Update on platform penetration rates - Management indicated ongoing improvements in gross profit margins and a strong pipeline for new products [26] Question: Net dollar retention expectations - Management expects net dollar retention to be slightly below 100% due to macro factors, with a slight uptick in loss volume anticipated [28][29] Question: Sales strategy evolution for platform offerings - Management highlighted a focus on new logos and the ability to sell multiple products to clients, enhancing win rates [31] Question: Growth expectations for 2025 - Management stated it is too early to model 2025 but noted acceleration in growth due to new business activity [34] Question: Margin targets for 2026 - Management remains confident in achieving the 15% to 20% EBITDA margin target for 2026 [36] Question: Enhancements in go-to-market strategy - Management emphasized the importance of product differentiation and a strong sales force in driving new business success [40] Question: Implementation pipeline for the back half of the year - Management confirmed a robust pipeline expected to go live by year-end, despite some seasonal considerations [54] Question: Comparisons to last year and easier growth rates - Management acknowledged easier comparisons in the back half of the year, particularly in high fashion and home categories [55]