Riskified Ltd. · NYSE:RSKD
Riskified — Q3 2024 Earnings Presentation
35 slides from Riskified's earnings presentation, Nov 13, 2024
Slide 1: Investor Presentation
November 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. $135bn+ 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 ~$6 trillion ~$8.0 trillion global Ecommerce global Ecommerce LTM Q3 GMV in 20241 GMV in 20281 2024: $135B+2 1. Source: eMarketer (July 2024) 2. GMV reviewed by Riskified in the twelve months ended Septem
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: Q3'24 Results and Financial Summary
02 Q3’24 Results and Financial Summary
Slide 17: Continued Execution in our Q3'24 Financial Performance
Continued Execution in our Q3’24 Financial Performance Fourth consecutive quarter of Positive Continued Strong Buyback Activity Adjusted EBITDA1 Repurchased 8.6 million shares for $47 million during the third quarter. Board of Directors authorized up to $75 Achieved positive Adjusted EBITDA1 of ~$1
Slide 18: Q3 2024 Business Highlights
Q3 2024 Business Highlights Won Largest Policy Protect Deal in Company History: In the third quarter we successfully cross-sold our largest Policy Protect deal to date, with an Annual Contract Value of nearly $2 million. This large Fashion merchant is already active on the Riskified network using our
Slide 19: Q3 2024 Business Highlights (continued)
Q3 2024 Business Highlights (continued) Landed New Account in Money Transfer & Remittance Category: During the third quarter, we onboarded a multi-billion dollar global money transfer company with a worldwide network spanning more than 500,000 locations in over 190 countries and territories. We beli
Slide 20: 2024 Guidance Outlook
2024 Guidance Outlook Improved Revenue & Adjusted EBITDA Guidance for 2024 Low Midpoint High Revenue $322M $324.5M $327M Adjusted EBITDA $14M $17M $20M YTD Non-GAAP Weighted Average 179M Shares Outstanding
Slide 21: Q3 2024 Financial Highlights
Q3 2024 Financial Highlights GMV $34.7B Revenue $78.8M Gross Profit $39.0M Adjusted EBITDA1 $0.9M 1 Adjusted EBITDA is a non-GAAP metric. A reconciliation of Adjusted EBITDA to its most directly comparable GAAP financial measure, Net Profit (Loss), is provided in the Appendix.
Slide 22: Adjusted EBITDA Over Time
Adjusted EBITDA1 Over Time Fourth consecutive quarter of positive Adjusted EBITDA IPO $9.7M $8.4M $3.1M $2.8M $1.4M $2.3M $0.9M 1 Adjusted EBITDA is a non-GAAP metric. A reconciliation of Adjusted EBITDA to the most directly comparable GAAP financial measure, Net Profit (Loss), is provided in the Appe
Slide 23: Strong Balance Sheet and Cash Flow Model
Strong Balance Sheet and Cash Flow Model IPO ● Meaningfully improved $13.9M our Free Cash Flow $10.5M (“FCF”)1 since IPO $7.1M $3.7M $4.1M ● Improved 2024 outlook of approximately $35mm in positive FCF ● $390mm of cash, deposits and investments as of Sept. 30, 2024 ● Zero Debt 1. A reconciliation of
Slide 24: FY 2023 Financial Highlights
FY 2023 Financial Highlights GMV $123.1B Revenue $297.6M Gross Profit $152.5M Adjusted EBITDA1 $(8.5M) 1 Adjusted EBITDA is a non-GAAP metric. 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 Fo
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 General1 across industries and Fashion & Luxury Goods geographies, with double digit Geography growth across all ~60% geographies in 2023 B
Slide 26: Existing Customer Penetration
Existing Billings Growth by Cohort1 Customer Penetration We have increased billings from our mature cohorts2 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 year.
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: Q3 & YTD 2024 GAAP Financial Results
Q3 & YTD 2024 GAAP Financial Results $ in thousands Q3'23 Q3'24 9M'23 9M'24 Revenue 71,872 78,849 213,545 233,987 Cost of revenue 40,732 39,893 109,541 111,909 Gross profit 31,140 38,956 104,004 122,078 Operating expenses: Research and development 17,397 16,671 54,455 51,522 Sales and marketing 21,75
Slide 31: Reconciliation of GAAP Net Profit (Loss) to Adjusted EBITDA
Q3 & YTD 2024 Reconciliation of GAAP Net Profit (Loss) to Adjusted EBITDA $ in thousands Q3'23 Q3'24 9M'23 9M'24 GAAP Net profit (loss) (20,925) (9,699) (55,770) (30,838) Non GAAP expenses: Share-based compensation expense 15,330 13,905 47,485 44,462 Payroll taxes related to share-based compensation 1
Slide 32: Reconciliation of Operating Cash Flow to Free Cash Flow
Q3 & YTD 2024 Reconciliation of Net Cash Provided by (Used In) Operating Activities to Free Cash Flow $ in thousands Q3'23 Q3'24 9M'23 9M'24 Net cash provided by (used in) operating activities 4,493 14,012 (144) 29,005 Purchases of property and equipment (826) (105) (1,074) (507) Free Cash Flow 3,66
Slide 33: Reconciliation of GAAP Gross Profit to Non-GAAP Gross Profit
Q3 & YTD 2024 Reconciliation of GAAP Gross Profit to Non-GAAP Gross Profit $ in thousands Q3'23 Q3'24 9M'23 9M'24 GAAP Gross Profit 31,140 38,956 104,004 122,078 Non GAAP expenses: Share-based compensation expense 191 183 574 594 Payroll taxes related to share-based compensation 3 4 8 15 Depreciation a
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