Riskified .(US:RSKD)2025-11-12 14:30Financial Data and Key Metrics Changes - The company's GMV for Q3 was $37.8 billion, reflecting a 9% year-over-year increase, while the first nine months GMV was $108.4 billion, up 7% year-over-year [12] - Record Q3 revenue reached $81.9 million, a 4% increase year-over-year, with year-to-date revenue of $245.3 million, up 5% year-over-year [12] - Non-GAAP gross profit for Q3 was $41.5 million, a 5% year-over-year increase, translating to a non-GAAP gross profit margin of approximately 51%, an improvement of 1% from the prior year [16] - Adjusted EBITDA for Q3 was $5.6 million, representing a margin of approximately 7%, with expectations for a significant increase to around 15% in Q4 [18][20] Business Line Data and Key Metrics Changes - The tickets and travel category grew 6% in Q3, driven by new business wins, while the fashion and luxury category saw a 13% increase [12][13] - The money transfer and payments category achieved approximately 100% year-over-year growth in Q3, primarily driven by new business activity [14] - The home category contracted by approximately 70% year-over-year, but growth is expected to return in Q4 [15] Market Data and Key Metrics Changes - In the U.S., revenue declined 12% year-over-year, mainly due to the contraction in the home category, while APAC grew approximately 55% year-over-year [15] - Other Americas (Canada and Latin America) grew approximately 18% year-over-year, with EMEA growing approximately 19% year-over-year, supported by strong performance in key verticals [15][16] Company Strategy and Development Direction - The company is focused on enhancing machine learning capabilities, with 70% of models shifted to autonomous training, which is expected to improve scalability and performance [6][10] - The company is positioning itself to navigate the rise of agentic commerce through strategic partnerships and innovative technology [10] - The company plans to continue investing in product development while managing expenses effectively to maintain operating leverage [45][47] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for a healthy holiday season, supported by resilient consumer spending and strong performance in key categories [11] - The company raised the bottom end of its revenue guidance for the second consecutive quarter, now anticipating revenue between $338 million and $346 million for the full year [20] - Management highlighted the importance of adapting to new complexities introduced by agentic commerce, which could drive demand for their services [58] Other Important Information - The company ended Q3 with $325 million in cash and investments, maintaining a zero-debt position [19] - The company repurchased 5.2 million shares for approximately $25.3 million in Q3, continuing its commitment to managing dilution [19] Q&A Session Summary Question: How does the company view growth outlook related to existing merchants versus new business? - Management expects strong performance on both upsell and new client acquisition fronts, consistent with prior years [23] Question: Are there emerging verticals to watch for 2026? - The company is focused on specific large verticals and geographic regions for expansion, considering both product fit and distribution strategies [25] Question: What is the revenue contribution from non-Chargeback Guarantee products for 2025? - Non-Chargeback Guarantee products have shown strong growth, over 100%, aiding in securing longer-term contracts and winning new business [27] Question: How does the company view the long-term margin profile with machine learning investments? - The long-term margin profile varies based on product mix, with a focus on increasing gross profit dollars [29] Question: What are the expectations for gross margins into next year? - Management anticipates improved performance from model enhancements, but also acknowledges potential headwinds from new categories [33] Question: How does the company view the impact of stablecoin adoption on fraud management? - The company sees stablecoins introducing complexity for merchants, which could drive demand for their services [39] Question: What are the opportunities and threats related to agentic commerce? - Agentic commerce presents opportunities due to increased complexity for merchants, but could also pose threats if transactions shift away from traditional e-commerce [58]