Riskified Ltd. · NYSE:RSKD
Riskified — Q2 2024 Earnings Presentation
35 slides from Riskified's earnings presentation, Aug 14, 2024
Slide 1: Investor Presentation
August 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. $130bn+ 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 Q2 GMV in 20241 GMV in 20281 2024: $130B+2 1. Source: eMarketer (July 2024) 2. GMV reviewed by Riskified in the twelve months ended June 3
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: Q2'24 Results and Financial Summary
02 Q2’24 Results and Financial Summary
Slide 17: Continued Execution in our Q2'24 Financial Performance
Continued Execution in our Q2’24 Financial Performance Third consecutive quarter of Positive Continued Strong Buyback Activity Adjusted EBITDA1 Repurchased 6.8 million shares for $39 million during the second quarter. As of August 5th, we have approximately Achieved positive Adjusted EBITDA1 of ~$2
Slide 18: Q2 2024 Business Highlights
Q2 2024 Business Highlights Expanded Leadership Positioning in Tickets and Live Event Sub-Vertical: Similar to the first quarter, one of our top new logos won during the second quarter was in our Ticketing and Live Events sub-vertical. We launched our relationship with this merchant by capturing all
Slide 19: Q2 2024 Business Highlights (continued)
Q2 2024 Business Highlights (continued) Named to CNBC's 2024 List of the World's Top Fintech Companies: We were recently named to CNBC's Top Fintech Companies List. This recognition highlights our market-leading position in the ecommerce fraud and risk intelligence sector and underscores Riskified's
Slide 20: 2024 Guidance Outlook
2024 Guidance Outlook Improved Adjusted EBITDA Guidance for 2024 Low Midpoint High Revenue $320M $322.5M $325M Adjusted EBITDA $13M $16M $19M YTD Non-GAAP Weighted Average 182M Shares Outstanding
Slide 21: Q2 2024 Financial Highlights
Q2 2024 Financial Highlights GMV $35.0B Revenue $78.7M Gross Profit $41.0M Adjusted EBITDA1 $2.3M 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 Third consecutive quarter of positive Adjusted EBITDA IPO 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 Appendix.
Slide 23: Strong Balance Sheet and Cash Flow Model
Strong Balance Sheet and Cash Flow Model IPO $10.5M ● Meaningfully improved $7.1M our Free Cash Flow $4.1M (“FCF”)1 since IPO $3.7M ● Strong 2024 outlook of approximately $30mm in positive FCF ● $422mm of cash, deposits and investments at June 30 ● Zero Debt 1. A reconciliation of Free Cash Flow to
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: Q2 & 1H 2024 GAAP Financial Results
Q2 & 1H 2024 GAAP Financial Results $ in thousands Q2'23 Q2'24 H1'23 H1'24 Revenue 72,766 78,730 141,673 155,138 Cost of revenue 35,743 37,728 68,809 72,016 Gross profit 37,023 41,002 72,864 83,122 Operating expenses: Research and development 18,264 17,079 37,058 34,851 Sales and marketing 23,216 22,
Slide 31: Reconciliation of GAAP Net Profit (Loss) to Adjusted EBITDA
Q2 & 1H 2024 Reconciliation of GAAP Net Profit (Loss) to Adjusted EBITDA $ in thousands Q2'23 Q2'24 H1'23 H1'24 GAAP Net profit (loss) (16,894) (9,509) (34,845) (21,139) Non GAAP expenses: Share-based compensation expense 15,799 15,035 32,155 30,557 Payroll taxes related to share-based compensation 12
Slide 32: Reconciliation of Operating Cash Flow to Free Cash Flow
Q2 & 1H 2024 Reconciliation of Net Cash Provided by (Used In) Operating Activities to Free Cash Flow $ in thousands Q2'23 Q2'24 H1'23 H1'24 Net cash provided by (used in) operating activities (4,866) 4,332 (4,637) 14,993 Purchases of property and equipment (61) (224) (248) (402) Capitalized software
Slide 33: Reconciliation of GAAP Gross Profit to Non-GAAP Gross Profit
Q2 & 1H 2024 Reconciliation of GAAP Gross Profit to Non-GAAP Gross Profit $ in thousands Q2'23 Q2'24 H1'23 H1'24 GAAP Gross Profit 37,023 41,002 72,864 83,122 Non GAAP expenses: Share-based compensation expense 188 200 383 411 Payroll taxes related to share-based compensation 3 6 5 11 Depreciation and
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