Riskified Ltd. · NYSE:RSKD
Riskified — Q1 2024 Earnings Presentation
35 slides from Riskified's earnings presentation, May 15, 2024
Slide 1: Investor Presentation
May 2024 Investor Presentation
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking st
Slide 3: Key Performance Indicators and Non-GAAP Measures
Key Performance Indicators and Non-GAAP Measures This presentation contains key performance indicators including GMV and Annual Dollar Retention Rate, as well as non-GAAP measures, including Adjusted EBITDA and Free Cash Flow. “Gross Merchandise Volume” or “GMV” is defined as the gross total dollar v
Slide 4: Agenda
01 Company Overview Agenda 02 Financial Summary 03 Appendix
Slide 5: Unleash your ecommerce growth
Unleash your ecommerce growth Leading ecommerce merchants trust Riskified to maximize revenue and profit with our AI-powered fraud management and risk intelligence platform.
Slide 6: Company Overview
01 Company Overview
Slide 7: Riskified is a leader in ecommerce risk intelligence
Riskified is a leader in ecommerce risk intelligence 2013 RSKD 33%+ Established more than a decade IPO in July 2021; only Over ⅓ of the team ago as a pioneer in AI-powered publicly held AI fraud and devoted to R&D.1 fraud management in ecommerce. risk intelligence company. $120bn 98%+ 50+ One of the
Slide 8: We operate in massive markets with strong tailwinds
We operate in massive markets with strong tailwinds Solving problems that touch ecommerce orders $5.8 trillion ~$8.0 trillion global Ecommerce global Ecommerce GMV in 20231 GMV in 20271 2023: $120B+2 1. Source: eMarketer (May 2024). 2. GMV reviewed by Riskified during the twelve months ending Decembe
Slide 9: Ecommerce Has Massive Friction Points
Ecommerce Has Massive Friction Points Friction & Lost Sales Customer Frustration Leads to Lost Merchant Fraud & Sales Chargebacks Abuse & Policy Enforcement Numerous, Complicated and Banking & Payments Expensive Pain Points Account Security
Slide 10: Riskified Value Proposition: Significant Sales Uplift and Attractive ROI
With Riskified Value Before Riskified Declined Fewer declined orders builds deeper customer Proposition: Riskified Orders loyalty and drives additional revenue for merchants Significant Declined Orders Prevented False Declines Sales Uplift and Attractive ROI Our solutions convert bank declines and false
Slide 11: Riskified helps leading enterprise merchants unleash their ecommerce growth
Riskified helps the world’s leading enterprise merchants unleash their ecommerce growth by outsmarting risk
Slide 12: What sets Riskified apart
What sets Riskified apart With accountability, create Human ingenuity, predictable profitability AI-powered scale Merchants can increase Partnered with Riskified’s approval rates by 4-8 points dedicated team of ecommerce with Riskified. Shifting risk analysts, data scientists, and chargeback liability c
Slide 13: Riskified's technology advantage
Riskified’s technology advantage Labelling Network Integration Performance Continuous Closed loop system Scaled merchant Deeply integrated management innovation with high quality network of delivery model Active monitoring, Proprietary AI data purity pre-eminent driving strong segmentation and capabi
Slide 14: Riskified's AI-powered fraud and risk intelligence platform
Riskified’s AI-powered fraud and risk intelligence platform Products Chargeback Guarantee Policy Protect Dispute Resolve Account Secure Prevent fraud, Stop policy abuse, Fight chargebacks, Block account lift revenue reward loyalty recover revenue takeovers, build trust Managed and self-optimizing Ris
Slide 15: Riskified vs competitors: select head-to-head results
Riskified vs competitors: select head-to-head results Gift card retailer Travel merchant Fashion Retailer Lower chargeback rates Lower chargeback rates Lower chargeback rates 1.3% 0.35% 0.44% Competitor A 2.60% Competitor A 0.44% Competitor A 0.89% Competitor B 3.10% Competitor B 1.01% Higher approva
Slide 16: Q1'24 Results and Financial Summary
02 Q1’24 Results and Financial Summary
Slide 17: Continued Execution in our Q1'24 Financial Performance
Continued Execution in our Q1’24 Financial Performance Second consecutive quarter of Additional $75 million Buyback Positive Adjusted EBITDA1 Authorization Achieved profitability on an Adjusted EBITDA1 basis and Board of Directors authorized up to $75 million dollars of positive Free Cash Flow2 of $1
Slide 18: Q1 2024 Business Highlights
Q1 2024 Business Highlights Expanded Leadership Positioning in Tickets and Live Event Sub-Vertical: Our top new logo win, and largest upsell during the first quarter were both in our Ticketing and Live Events sub-vertical. Each win involved taking volume from a competitor. Many of the top merchants i
Slide 19: Q1 2024 Business Highlights (continued)
Q1 2024 Business Highlights (continued) Share Repurchase Program Update: We repurchased 6.4 million ordinary shares for $30.3 million during the first quarter. In addition, our Board of Directors authorized the repurchase of an additional $75 million of the Company’s ordinary shares, subject to the c
Slide 20: 2024 Guidance Outlook
2024 Guidance Outlook Improved Adjusted EBITDA Guidance for 2024 Low Midpoint High Change Revenue $323M $329 $335M No Change to Midpoint Improvement of $1.5mm Adjusted EBITDA $12M $15M $18M to Midpoint YTD Non-GAAP Down ~3.5mm from Weighted Average 180.5M Prior Year Shares Outstanding
Slide 21: Q1 2024 Financial Highlights (GAAP)
Q1 2024 Financial Highlights (GAAP) GMV $32.0B Revenue $76.4M Gross Profit $42.1M Adjusted EBITDA(1) $2.8M (1) A reconciliation of Adjusted EBITDA to the most directly comparable GAAP financial measure, Net Profit (Loss), is provided in the Appendix.
Slide 22: Adjusted EBITDA Over Time
Adjusted EBITDA1 Over Time Second consecutive quarter of positive Adjusted EBITDA IPO $9.7M $8.4M $3.1M $2.8M $1.4M 1. A reconciliation of Adjusted EBITDA to the most directly comparable GAAP financial measure, Net Profit (Loss), is provided in the Appendix.
Slide 23: Strong Balance Sheet and Cash Flow Model
Strong Balance Sheet and Cash Flow Model IPO $10.5M ● Meaningfully $7.1M improved our FCF1 since IPO $3.7M ● Strong 2024 outlook of approximately $30mm in + FCF ● $455mm of cash, deposits and investments ● Zero Debt 1. A reconciliation of Free Cash Flow to the most directly comparable GAAP financial
Slide 24: FY 2023 Financial Highlights (GAAP)
FY 2023 Financial Highlights (GAAP) GMV $123.1B Revenue $297.6M Gross Profit $152.5M Adjusted EBITDA(1) $(8.5M) (1) A reconciliation of Adjusted EBITDA to it most directly comparable GAAP financial measure, Net Profit (Loss), can be found in our Q4 2023 Earnings Release on Form 6-K, filed with the SEC o
Slide 25: Industry and Geo Billings Trends
Industry Industry and Geo Billings Trends Payments, Money Transfer & Crypto Billings Tickets & Travel Over time, we have Electronics Home continued to diversify General across industries and Fashion & Luxury Goods geographies, with double digit Geography growth across all ~60% geographies in 2023 Bi
Slide 26: Existing Customer Penetration
Existing Billings Growth by Cohort(1) Customer Penetration We have increased billings from our mature cohorts(2 by ~270%.(3) We believe our more recent cohorts represent a similar expansion opportunity. 1. Each “cohort” includes all of the accounts that onboarded to the Riskified platform in a given
Slide 27: CTB Cohorts Over Time
CTB Cohorts CTB Ratio by Cohort(1) 2023 Cohort Over Time Starting Point While CTB ratios fluctuate 2022 from period to period as Cohort a result of various factors, 2018 including changes in Cohort 2021 Cohort industry mix within cohorts, over the long-term we have been 2013-2017 2020 able to consist
Slide 28: Share Based Compensation (SBC) & Dilution
Share Based Compensation (SBC) & Dilution Commitment to Manage SBC & Dilution to Lower Levels SBC as a % of Revenue SBC Trajectory Dilution Dilution Outlook ● 2023 SBC as a percentage ● SBC as a percentage ● In 2023, equity awards ● We anticipate dilution will of revenue decreased by of revenue is e
Slide 29: Appendix
03 Appendix
Slide 30: Q1 2024 Reconciliation of GAAP Net Profit (Loss) to Adjusted EBITDA
Q1 2024 Reconciliation of GAAP Net Profit (Loss) to Adjusted EBITDA $ in thousands Q1'23 Q1'24 GAAP Net profit (loss) (17,951) (11,630) Non GAAP expenses: Share-based compensation expense 16,356 15,522 Payroll taxes related to share-based compensation 148 201 Depreciation and amortization 1,283 1,265
Slide 31: Q1 2024 GAAP Financial Results
Q1 2024 GAAP Financial Results $ in thousands Q1'23 Q1'24 Revenue 68,907 76,408 Cost of revenue 33,066 34,288 Gross profit 35,841 42,120 Operating expenses: Research and development 18,794 17,772 Sales and marketing 22,123 23,214 General and administrative 17,913 17,047 Total operating expenses 58,83
Slide 32: Q1 2024 Reconciliation of Operating Cash Flow to Free Cash Flow
Q1 2024 Reconciliation of Net Cash Provided by (Used In) Operating Activities to Free Cash Flow $ in thousands Q1'23 Q1'24 Net cash provided by (used in) operating activities 229 10,661 Purchases of property and equipment (187) (178) Free Cash Flow 42 10,483
Slide 33: Q1 2024 Reconciliation of GAAP Gross Profit to Non-GAAP Gross Profit
Q1 2024 Reconciliation of GAAP Gross Profit to Non-GAAP Gross Profit $ in thousands Q1'23 Q1'24 GAAP Gross Profit 35,841 42,120 Non GAAP expenses: Share-based compensation expense 195 211 Payroll taxes related to share-based compensation 2 5 Depreciation and amortization 438 427 Restructuring costs - 1
Slide 34: Chargeback Guarantee Revenue Model
Chargeback Guarantee Revenue Model Riskified’s GMV Total eCommerce volume submitted to Riskified for review Flow Varies by merchant based on a variety of inputs, including Approval Rate (%) Transforming GMV Take the industry of the merchant, the risk level of the end market, the percentage of GMV we r
Slide 35: Thank you for your time!
Thank you for your time! Investor Relations: Corporate Communications: Chett Mandel, Cristina Dinozo, Head of Investor Relations Senior Director of Communications ir@riskified.com press@riskified.com