Riskified Starts Year Strong

Riskified Ltd. a leader in eCommerce fraud and risk intelligence, today announced financial results for the three months ended March 31, 2023.

“We remain confident in our ability to continue to drive growth and deliver value to our shareholders through focused execution of the business. With each passing quarter we are deepening our relationships with our merchants through accuracy, value, and trust, to which we attribute our strong first quarter results,” said Eido Gal, Co-Founder and Chief Executive Officer of Riskified.

Q1 2023 Business Highlights

• Expanded New Logos Outside of Tickets and Travel: Further diversified the platform with the onboarding of new merchants. Eight of the top 10 new merchants won during the first quarter represented categories outside of Tickets and Travel. In particular, one new merchant is based in APAC and is in our Digital Goods and Gaming vertical, which we view as an exciting potential area of opportunity for expansion.
• Captured Upsell Volume From Competitor: One of our largest upsells during the first quarter was from a key, existing merchant in the Tickets & Travel vertical that processes approximately $1 billion in online order volume annually. After demonstrating strong performance during a competitive process, we captured additional volume away from their existing eCommerce fraud vendor.
• Generated Positive Free Cash Flow During the Quarter: We continue working towards strengthening our Free Cash Flow position. For the first quarter, our free cash flow exceeded our Adjusted EBITDA by $5.2 million and we are confident in our ability to manage our working capital needs on an ongoing basis.
• Appointed First Chief Marketing Officer: Jeff Otto will be responsible for a global integrated marketing strategy that will amplify our brand, strengthen its category leadership and accelerate demand for our expanding product suite. We believe that Mr. Otto has the ideal blend of experience and expertise to definitively establish Riskified as the preeminent risk management platform for the largest eCommerce merchants across industries, throughout the globe.
• Announced Unique Partnership With Deloitte: We recently announced an industry first partnership to help retailers formulate a scorecard that can uncover new opportunities to reduce operational costs, lower chargeback and fraud losses, and boost revenues by minimizing false declines. This partnership is intended to empower merchants with Riskified’s data to provide real-time insight into how their chargebacks, approval rates and fraud costs compare to similar companies in their space. Deloitte will analyze the benefits of an automated risk strategy approach and provide their expert recommendations on improvements via our product offering.
• Won TrustRadius “Top Rated” Awards: Awarded a “Top Rated” distinction from TrustRadius, a B2B decisioning platform for technology buyers. Riskified earned top rankings in all four product categories: conversion rate optimization, eCommerce analytics, fraud detection and chargeback management. Customer reviews of Riskified highlight satisfaction with its product innovation, fraud reduction capabilities, 100% chargeback guarantee and superior customer service.

Q1 2023 Financial Performance Highlights

The following table summarizes our consolidated financial results for the three months ended March 31, 2023 and 2022, in thousands except where indicated:

“We continue to execute and build a stronger, more efficient and resilient company in this ever-changing macroeconomic environment. Our commitment to optimizing our cost base and accelerating our timeline to profitability has resulted in meaningful year-over-year improvements in Adjusted EBITDA in each of the past three quarters. We continue to work towards achieving profitability on an adjusted EBITDA basis in the fourth quarter of 2023. Consistent with recent quarters, we will seek to identify additional leverage in our operating expenses,” said Aglika Dotcheva, Chief Financial Officer of Riskified.

Financial Outlook

For the year ending December 31, 2023, we continue to expect:

• Revenue between $297 million and $303 million

We assume no further changes to the macro-environment in the near term, which remains factored into our revenue guidance for the year.

As a result of our strong first quarter performance, focused discipline in managing our expenses and improved Adjusted EBITDA outlook, for the year ending December 31, 2023, we now expect:

• Adjusted EBITDA⁽²⁾ between negative $17 million and negative $12 million

This would represent a 41% improvement to our previous guidance mid-point of between negative $27 million, and negative $22 million. We are committed to continuing to manage the business in a disciplined manner, and seek to identify further leverage in the business model.

⁽¹⁾ GMV is a key performance indicator and Adjusted EBITDA is a non-GAAP measure of financial performance. See “Key Performance Indicators and Non-GAAP Measures” for additional information and “Reconciliation of GAAP to Non-GAAP Measures” for a reconciliation to the most directly comparable GAAP measure.

⁽²⁾ We are not able to provide a reconciliation of Adjusted EBITDA guidance for the fiscal year ending December 31, 2023 to net profit (loss) because certain items that are excluded from Adjusted EBITDA but included in net profit (loss), the most directly comparable GAAP financial measure, cannot be predicted on a forward-looking basis without unreasonable effort or are not within our control. For example, we are unable to forecast the magnitude of foreign currency transaction gains or losses without unreasonable efforts, and this item could significantly impact GAAP measures in the future.