Riskified .(US:RSKD)2025-11-12 14:32Financial 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 totaled $108.4 billion, up 7% year-over-year [12] - Q3 revenue reached a record $81.9 million, a 4% increase year-over-year, with year-to-date revenue of $245.3 million, up 5% year-over-year [13] - Non-GAAP gross profit for Q3 was $41.5 million, a 5% year-over-year increase, translating to a gross profit margin of approximately 51%, up 1% from the previous year [16] - Adjusted EBITDA for Q3 was $5.6 million, representing a margin of approximately 7%, with expectations for a margin of approximately 15% in Q4 [18][21] Business Line Data and Key Metrics Changes - The money transfer and payments category grew approximately 100% year-over-year in Q3, driven by new business activity [14] - The tickets and travel category grew 6% in Q3, while the fashion and luxury category saw a 13% increase [13][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, primarily due to the contraction in the home category [15] - APAC region grew approximately 55% year-over-year, while other Americas (Canada and Latin America) grew approximately 18% year-over-year [15][16] - EMEA region grew approximately 19% year-over-year, with strong performance in fashion and luxury, tickets and travel, and money transfer and payments [16] Company Strategy and Development Direction - The company is focused on enhancing machine learning capabilities and has shifted approximately 70% of its models to autonomous training, which is expected to improve scalability and performance [6][7] - The company is investing in new product developments, including Adaptive Checkout, which has shown significant improvements in conversion rates for merchants [9] - The strategy includes targeting specific verticals and geographic regions for expansion, with a focus on mid-market opportunities [26] 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 [10][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 [21] - Management highlighted the importance of navigating complexities introduced by agentic commerce and the potential for increased demand for their services [60] Other Important Information - The company ended Q3 with $325 million in cash and investments, maintaining zero debt and achieving quarterly free cash flows of $13.4 million [19] - Share repurchase activity included 5.2 million shares for approximately $25.3 million in Q3, with a total of 14.2 million shares repurchased for approximately $69.2 million in the first nine months [20] Q&A Session Summary Question: Momentum as the year ends - Management expects strong performance from both upselling existing merchants and acquiring new clients [24] Question: Emerging verticals for 2026 - The company is focused on specific large verticals and geographic regions for expansion, considering both product fit and distribution strategies [26] Question: Revenue contribution from non-Chargeback Guarantee products - Non-Chargeback Guarantee products have shown strong growth, over 100%, contributing positively to long-term contracts and new business [28] Question: Long-term margin profile - The long-term margin profile varies based on product mix, with a focus on increasing gross profit dollars [30] Question: Gross margin trajectory into next year - Recent model improvements are expected to improve performance, but there may be headwinds from new categories and regions [34] Question: One-time expense impacts in Q3 - Positive impacts were related to payroll adjustments and reserve duties, with expectations for operating expenses around $39 million in Q4 [36] Question: Growing stablecoin adoption - The company sees stablecoins and crypto introducing complexity for merchants, which could drive demand for their services [39] Question: Agentic commerce opportunities and threats - Agentic commerce could increase demand for services due to complexity, but there is a risk if transactions move away from traditional e-commerce [60]