Riskified Ltd. · NYSE:RSKD
Riskified — Q4 2023 Earnings Presentation
33 slides from Riskified's earnings presentation, Mar 5, 2024
Slide 1: Investor Presentation
March 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: Company Overview / Financial Summary
01 Company Overview 02 Financial Summary
Slide 5: Company Overview
01 Company Overview
Slide 6: Unleash ecommerce growth
Unleash ecommerce growth Leading ecommerce merchants trust Riskified to maximize revenue and profit with our AI-powered fraud management and risk intelligence platform.
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 ~$8.0 trillion global markets with strong Ecommerce GMV in 20271 tailwinds Solving problems that touch ecommerce orders $5.8 trillion global Ecommerce GMV in 20231 2023: $120B+2 1 Source: eMarketer (January 2024). 2 GMV reviewed by Riskified during the twelve months ending Decem
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 Banking & and Expensive Pain Payments Points Account Security
Slide 10: Riskified Value Proposition: Significant Sales Uplift and Attractive ROI
Riskified Value With Riskified Fewer declined orders builds Proposition: Before Riskified Declined Orders deeper customer loyalty and drives additional revenue for Significant Declined Prevented merchants False Declines Orders Sales Uplift and Attractive Our solutions convert bank declines and false dec
Slide 11: Riskified helps leading enterprise merchants unleash ecommerce growth
Riskified helps the world’s leading enterprise merchants unleash their ecommerce growth by outsmarting risk
Slide 12: What sets Riskified apart
With accountability, create Human ingenuity, predictable profitability AI-powered scale Merchants can increase Partnered with Riskified’s dedicated approval rates by 4-8 points team of ecommerce risk analysts, data scientists, and researchers, What sets with Riskified. Shifting chargeback liability can
Slide 13: Riskified's technology advantage
Riskified’s technology advantage Labelling – Closed loop system with high quality data purity Network – Scaled merchant network of pre-eminent eCommerce brands Integration – Deeply integrated delivery model driving strong retention Performance management – Active monitoring, segmentation and optimiza
Slide 14: Riskified's AI-powered fraud and risk intelligence platform
Riskified’s AI-powered fraud and risk intelligence platform Chargeback Guarantee Policy Protect Dispute Resolve Account Secure PRODUCTS Prevent fraud, Stop policy abuse, Fight chargebacks, Block account lift revenue reward loyalty recover revenue takeovers, build trust RISK Managed and self-optimizin
Slide 15: Q4 & FY'23 Results and Financial Summary
02 Q4 & FY’23 Results and Financial Summary
Slide 16: Continued Execution in our Q4'23 Financial Performance
Continued Execution in our Q4’23 Financial Performance Positive Adjusted Strong Buyback EBITDA in Q4’23 Activity Achieved profitability on an Adjusted EBITDA1 basis Since the implementation of our $75 million share in Q4’23 and positive annual Free Cash Flow; repurchase program in November 2023, we h
Slide 17: FY & Q4 2023 Business Highlights
FY & Q4 2023 Business Highlights Further Diversification with the Addition of New Merchants: We continued to have success landing new merchants on the platform, which in turn deepened our vertical and geographic reach. Our top 10 new logos added during the fourth quarter of 2023 represented five differ
Slide 18: FY & Q4 2023 Business Highlights (continued)
FY & Q4 2023 Business Highlights (continued) Strong Cash Flow Model: We continued to maintain a healthy cash flow model and generated positive free cash flow of $5.9 million for 2023. We believe we are well positioned to continue generating strong cash flow in 2024. We are confident in our ability to ma
Slide 19: Initial 2024 Guidance
Initial 2024 Guidance Revenue $323M - $335M $329M to Midpoint Adjusted EBITDA $10M - $17M ~$13.5M to Midpoint YTD Non-GAAP Weighted Down ~1mm from Average Shares 183 Million Prior Year Outstanding
Slide 20: Share Based Compensation (SBC) & Dilution
Share Based Compensation (SBC) & Dilution Commitment to Manage SBC & Dilution to Lower Levels SBC as a % of SBC Trajectory Dilution Dilution Outlook Revenue ● 2023 SBC as a percentage ● SBC as a percentage of ● In 2023, equity awards ● We anticipate dilution will of revenue decreased by revenue is e
Slide 21: Q4 2023 Financial Highlights
Q4 2023 Financial Highlights GMV $35.2B Revenue $84.1M Gross Profit $48.5M Adjusted EBITDA(1) $9.7M (1) A reconciliation of Adjusted EBITDA to the most directly comparable GAAP financial measure, Net Profit (Loss), is provided in the Appendix.
Slide 22: FY 2023 Financial Highlights
FY 2023 Financial Highlights 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 on March
Slide 23: Industry and Geo Billings Trends
Industry and Geo Billings Trends Over time, we have continued to diversify across industries and geographies, with double digit growth across all geographies in 2023 ~60% 1 (1) General Category includes General Retailers & Food Categories
Slide 24: Adjusted EBITDA Over Time
Adjusted EBITDA Over Time Q4’23 first positive Adjusted EBITDA quarter since IPO and highest since Q4 2020 IPO $9.7M $8.4M $3.1M $1.4M
Slide 25: Strong Balance Sheet and Cash Flow Model
Strong Balance Positive Free Cash Flow Generation in 2023 QUARTERLY FREE CASH FLOW Sheet and Cash ~$6mm in 2023 Flow Model IPO ● Meaningfully $7.1M improved our FCF $3.7M since IPO ● Strong 2024 outlook of approximately $30mm in + FCF ● $475 million of cash, deposits and investments ● Zero Debt
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) Over Time While CTB ratios fluctuate from period to period as a result of 2023 Cohort various factors, 2022 Starting Point Cohort including changes in 2018 industry mix within Cohort 2021 Cohort cohorts, over the long-term we have been 2013-2017 able to consistently
Slide 28: Appendix
Appendix
Slide 29: Q4 and FY 2023 Reconciliation of GAAP Net Profit (Loss) to Adjusted EBITDA
Q4 and FY 2023 Reconciliation of GAAP Net Profit (Loss) to Adjusted EBITDA $ in thousands Q4'22 Q4'23 FY'22 FY'23 GAAP Net profit (loss) (12,052) (3,265) (104,705) (59,035) Non GAAP expenses: Share-based compensation expense 15,233 14,925 67,467 62,410 Payroll taxes related to share-based compensation
Slide 30: Q4 and FY 2023 GAAP Financial Results
Q4 and FY 2023 GAAP Financial Results $ in thousands Q4'22 Q4'23 FY'22 FY'23 Revenue 79,298 84,065 261,247 297,610 Cost of revenue 37,854 35,550 126,150 145,091 Gross profit 41,444 48,515 135,097 152,519 Operating expenses: Research and development 18,502 17,122 72,014 71,577 Sales and marketing 21,3
Slide 31: Reconciliation of Operating Cash Flow to Free Cash Flow
Q4 and FY 2023 Reconciliation of Net Cash Provided by (Used In) Operating Activities to Free Cash Flow $ in thousands Q4'22 Q4'23 FY'22 FY'23 Net cash provided by (used in) operating activities (4,098) 7,423 (26,252) 7,279 Purchases of property and equipment (2,713) (281) (6,126) (1,355) Capitalized
Slide 32: Transforming GMV into Revenue: Chargeback Guarantee Revenue Model
Chargeback Guarantee Riskified’s GMV Total eCommerce volume submitted to Riskified for review Revenue Model Flow Approval Rate (%) Varies by merchant based on a variety of inputs, including the Take Rate (%) industry of the merchant, the risk level of the end market, the Take percentage of GMV we revi
Slide 33: Investor Relations Contact
Investor Relations: Chett Mandel, Head of Investor Relations ir@riskified.com Corporate Communications: Cristina Dinozo, Senior Director of Communications press@riskified.com