Reaffirms Financial Outlook for FY 2022
Management to host a conference call today, May
17, at 8:30 a.m. Eastern Time
Riskified Ltd. (NYSE: RSKD) (the “Company”), a risk management
platform enabling frictionless eCommerce, today announced financial
results for the three months ended March 31, 2022. The Company will
host an investor call to discuss these results today at 8:30 a.m.
Eastern Time.
“We are pleased with our first quarter results, which reflect
the impact of continued growth within our existing customer base,
combined with the addition of new customers, as well as improving
volume growth both in GMV and Billings from our ticketing and
travel merchants,” said Eido Gal, Co-Founder and Chief Executive
Officer of Riskified. “With the vast majority of merchants globally
still relying on in-house solutions that we consider to be slow,
inaccurate, expensive, and inflexible, we believe the market
remains ripe for disruption. We are already seeing positive returns
and momentum from our previous investments, and we remain focused
on opportunities that we expect to deliver high ROI for Riskified.
These focused efforts include pursuing market share gains in new
industries and new geographies, and continuing to expand our
product suite to help merchants navigate adjacent eCommerce
friction points.”
Q1 2022 Business Highlights
- Leveraging diversified base of industries to benefit from
reopening trends: Existing merchants started selling
significant volumes of airline travel, event tickets and similar
products within our ticketing & travel category. As a result,
Riskified’s total GMV from ticketing and travel grew 291%
year-over-year.
- Adding several of the world's pre-eminent online retailers
to the platform: Several new merchants in established verticals
joined the Riskified ecosystem, including luxury fashion, fast
fashion, and diversified omnichannel retailing. Of particular
significance, Riskified signed one of the world’s largest online
fashion retailers that is revolutionizing the fashion industry with
a presence in over 150 countries globally, which we believe expands
the already large upsell opportunity within our existing customer
base.
- Strong Execution of Land and Expand Strategy: Riskified
continued to successfully execute our "land-and-expand" strategy
that we believe drives GMV gains and long term gross margin
expansion as customer engagements grow and mature. Several large
existing customers expanded their contractual relationships by
submitting additional order populations through our platform.
Q1 2022 Financial Performance Highlights
The following table summarizes our consolidated financial
results for the three months ended March 31, 2022 and 2021, in
thousands except where indicated:
Three Months Ended March
31,
2022
2021
(unaudited)
Gross merchandise volume ("GMV") in
millions(1)
$
22,678
$
18,928
Increase in GMV year over year
20
%
77
%
Revenue
$
58,845
$
51,083
Increase in revenues year over year
15
%
54
%
Gross profit
$
30,368
$
28,628
Gross profit margin
52
%
56
%
Operating profit (loss)
$
(32,826
)
$
(3,349
)
Net profit (loss)
$
(33,264
)
$
(43,652
)
Adjusted EBITDA(1)
$
(13,447
)
$
(296
)
“Our year is off to a good start, with first quarter GMV and
revenue growth driven primarily by the continued expansion of our
platform across new and existing merchants, and penetration across
broadly diversified industries and geographies,” said Aglika
Dotcheva, Chief Financial Officer of Riskified. “We are pleased
with our momentum, encouraged by recent growth in the tickets and
travel industry, our geographic expansion and the long-term growth
opportunities in front of us. We’re keeping intact the full year
financial outlook that we communicated in late February. We believe
this approach balances our enthusiasm about the continued growth of
our business against global economic volatility and a return of
broader eCommerce volumes to normalized pre-pandemic levels.”
Financial Outlook
For the year ending December 31, 2022, Riskified continues to
expect:
- Revenue between $254 million and $257 million
- Adjusted EBITDA(2) between negative $69 million and $66
million
_______________
(1)
GMV is a key performance
indicator and Adjusted EBITDA is a non-GAAP metric. See “Key
Performance Indicators and Non-GAAP Metrics” for additional
information regarding this non-GAAP metric and “Reconciliation of
GAAP to Non-GAAP Metrics” for a reconciliation of this non-GAAP
metric to the most directly comparable GAAP metric.
(2)
We are not able to provide a
reconciliation of Adjusted EBITDA guidance for the fiscal year
ending December 31, 2022 to net profit (loss) because certain items
that are excluded from Adjusted EBITDA but included in net profit
(loss), its most directly comparable GAAP financial measure, cannot
be predicted on a forward-looking basis without unreasonable effort
or are not in our control. In particular, we are unable to forecast
the timing or magnitude of share-based compensation expense and
foreign currency transaction gains or losses as applicable without
unreasonable efforts, and these items could significantly impact,
either individually or in the aggregate, GAAP metrics in the
future.
Conference Call and Webcast Details
The Company will host a conference call to discuss its financial
results today, May 17, 2022 at 8:30 a.m. Eastern Time. A live
webcast of the call can be accessed from Riskified’s Investor
Relations website at ir.riskified.com. The conference call can be
accessed telephonically by dialing 1-877-311-0521 (for callers in
the United States) or 1-470-495-9499 (for callers outside of the
United States) and entering conference ID 8772848. The press
release with the financial results as well as the investor
presentation materials will be accessible from the Company’s
website prior to the conference call at ir.riskified.com.
Approximately one hour after completion of the live call and
webcast, an archived version of the webcast will be available on
Riskified's Investor Relations website at ir.riskified.com for a
period of at least 30 days. A telephonic replay of the conference
call will be available until May 24, 2022, beginning two hours
after the end of the conference call. To access the replay, callers
in the United States may dial 1-855-859-2056 or 1-404-537-3406 and
enter the same conference ID listed above for the live call.
Key Performance Indicators and Non-GAAP Metrics
This press release and the accompanying tables and related
presentation materials contain certain key performance indicators
and non-GAAP metrics: GMV, Adjusted EBITDA, non-GAAP cost of
revenue, non-GAAP operating expenses by line item, Free Cash Flow,
non-GAAP net profit (loss) and non-GAAP net profit (loss) per
share. These non-GAAP metrics should not be construed as an
inference that our future results will be unaffected by unusual or
other items. Adjusted EBITDA, non-GAAP cost of revenue, non-GAAP
operating expenses by line item, non-GAAP net profit (loss) and
non-GAAP net profit (loss) per share have limitations as analytical
tools in that they do not reflect certain cash costs that may recur
in the future, including, among other things, cash requirements for
costs to replace assets being depreciated and amortized or cash
payments for taxes. Management compensates for these limitations by
relying on our GAAP results in addition to using these non-GAAP
metrics as supplemental measures of our performance. The non-GAAP
metrics used herein are not necessarily comparable to similarly
titled captions of other companies due to different methods of
calculation. Non-GAAP financial metrics should not be considered in
isolation, as an alternative to, or superior to information
prepared and presented in accordance with GAAP. These metrics are
frequently used by analysts, investors and other interested parties
to evaluate companies in our industry. By providing these non-GAAP
metrics together with a reconciliation to the most comparable U.S.
GAAP measure, we believe we are enhancing investors' understanding
of our business and our results of operations, as well as assisting
investors in evaluating how well we are executing our strategic
initiatives.
We define Gross Merchandise Volume ("GMV") as the gross total
dollar value of orders received by our merchants and reviewed
through our eCommerce risk management platform during the period
indicated, including orders that we did not approve.
We define Adjusted EBITDA as net profit (loss) adjusted to
remove the effects of the provision for income taxes, interest
income, net, other income (expense), net, depreciation and
amortization, share-based compensation expense, and payroll taxes
related to share-based compensation.
We define non-GAAP cost of revenue as GAAP cost of revenue
adjusted to remove the effects of depreciation and amortization,
share-based compensation expense, and payroll taxes related to
share-based compensation, if applicable.
We define non-GAAP operating expenses by line item as GAAP
operating expenses adjusted to remove the effects of depreciation
and amortization, share-based compensation expense, and payroll
taxes related to share-based compensation, where applicable.
We define Free Cash Flow as net cash provided by (used in)
operating activities, less cash payments for property and equipment
and capitalized software development costs.
We define non-GAAP net profit (loss) per share as non-GAAP net
profit (loss) divided by non-GAAP weighted-average shares, which
are defined below.
We define non-GAAP net profit (loss), which is used to compute
non-GAAP net profit (loss) per share, as GAAP net profit (loss)
adjusted to remove the effects of unique or non-recurring items
such as remeasurement losses on our convertible preferred share
warrant liabilities and convertible preferred share tranche rights,
as well as non-cash expenses such as depreciation and amortization,
share-based compensation expense, and payroll taxes related to
share-based compensation.
We define non-GAAP weighted-average shares, which is used to
compute non-GAAP net profit (loss) per share, as GAAP weighted
average shares used to compute net profit (loss) per share,
adjusted to reflect the ordinary shares issued in connection with
the IPO that are outstanding as of the end of the period as if they
were outstanding as of the beginning of the earliest period
presented for comparability.
Adjusted EBITDA, non-GAAP cost of revenue, non-GAAP operating
expenses by line item, Free Cash Flow, non-GAAP net profit (loss)
and non-GAAP net profit (loss) per share are non-GAAP metrics that
management and our board of directors use as a supplemental measure
of our performance because they assist us in comparing our
operating performance on a consistent basis, as they remove the
impact of items that we believe do not directly reflect our core
operations. We also use Adjusted EBITDA for planning purposes,
including the preparation of our internal annual operating budget
and financial projections, to evaluate the performance and
effectiveness of our strategic initiatives and to evaluate our
capacity to expand our business. Additionally, we provide Free Cash
Flow because it is a non-GAAP liquidity measure that we believe
provides useful information to management and investors about the
amount of cash generated by the business that can be used for
strategic opportunities, including investing in our business and
strengthening our balance sheet.
See the tables below for reconciliations of these non-GAAP
financial metrics to the most directly comparable GAAP metrics.
Forward Looking Statements
Certain statements in this press release may constitute
“forward-looking” statements and information, within the meaning of
Section 27A of the Securities Act of 1933, Section 21E of the
Securities Exchange Act of 1934, and the safe harbor provisions of
the U.S. Private Securities Litigation Reform Act of 1995 that
relate to our current expectations and views of future events. In
some cases, these forward-looking statements can be identified by
words or phrases such as “may,” “might,” “will,” “could,” “would,”
“should,” “expect,” “plan,” “anticipate,” “intend,” “seek,”
“believe,” “estimate,” “predict,” “potential,” “continue,”
“contemplate,” “possible” or similar words. These forward-looking
statements are subject to risks, uncertainties and assumptions,
some of which are beyond our control. In addition, these
forward-looking statements, including statements regarding our
revenue and adjusted EBITDA guidance for fiscal year 2022, future
growth potential in new industries and new geographies, internal
modeling assumptions, and business plans and strategy, reflect our
current views with respect to future events and are not a guarantee
of future performance. Actual outcomes may differ materially from
the information contained in the forward-looking statements as a
result of a number of factors, including, without limitation, the
following: our limited operating history and ability to manage our
growth; our history of net losses and anticipated increasing
operating expenses; our ability to achieve profitability; our
ability to maintain and enhance our brand; our ability to attract
new merchants, retain existing merchants and increase the sales of
our products to existing enterprises; our dependence on the
continued use of credit cards and other payment methods that expose
our merchant to the risk of payment fraud; changes in laws and
regulations related to the use of credit cards, such as PSD2, which
have and may continue to impact our GMV and to change or reduce the
use cases for our products; our ability to successfully implement
our business plan in light of macroeconomic conditions, such as
economic downturn, changes in consumer behavior (including as a
result of COVID-19 related restrictions), global supply chain
issues and other factors that may impact eCommerce volumes and that
may impact the demand for our services or have a material adverse
impact on our and our business partners’ financial condition and
results of operations; our ability to continue to improve our
machine learning models or if our machine learning models contain
errors or are otherwise ineffective or do not operate properly; our
ability to predict our future revenue given our lengthy sales
cycles; seasonality; our ability to operate in a highly competitive
industry; merchant concentration; our ability to achieve desired
operating margins; our compliance with a wide variety of U.S. and
international laws and regulations; our ability to develop
enhancements to our products; our dependence on our executive
officers and senior management, and our ability to attract new
talent, particularly in Israel; our limited experience in
determining the optimal pricing for our products; our ability to
obtain additional financing on favorable terms or at all; our
reliance on Amazon Web Services; our ability to detect errors,
defects or disruptions in our platform; our ability to protect our
merchants' and their consumers’ personal or other data from a
security breach and to comply with laws and regulations relating to
consumer data privacy and data protection; our ability to expand
into markets outside the United States; our ability to effectively
expand our sales force to facilitate revenue growth; the
concentration of our voting power as a result of our dual class
structure; and other risk factors set forth in Section 3.D - “Risk
Factors” in our Annual Report on Form 20-F, filed with the
Securities and Exchange Commission ("SEC") on February 25, 2022,
and other documents filed with or furnished to the SEC. These
statements reflect management’s current expectations regarding
future events and operating performance and speak only as of the
date of this press release. You should not put undue reliance on
any forward-looking statements. Although we believe that the
expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee that future results, levels of
activity, performance and events and circumstances reflected in the
forward-looking statements will be achieved or will occur. Except
as required by applicable law, we undertake no obligation to update
or revise publicly any forward-looking statements, whether as a
result of new information, future events or otherwise, after the
date on which the statements are made or to reflect the occurrence
of unanticipated events.
About Riskified
Riskified empowers businesses to realize the full potential of
eCommerce by making it safe, accessible, and frictionless. We have
built a next-generation eCommerce risk management platform that
allows online merchants to create trusted relationships with their
consumers. Leveraging machine learning that benefits from a global
merchant network, our platform identifies the individual behind
each online interaction, helping merchants—our customers—eliminate
risk and uncertainty from their business. We drive higher sales and
reduce fraud and other operating costs for our merchants and strive
to provide superior consumer experiences, as compared to our
merchants’ performance prior to onboarding us. Learn more at
riskified.com.
RISKIFIED LTD.
CONSOLIDATED BALANCE
SHEETS
(in thousands, except share
and per share data)
As of March 31, 2022
As of December 31,
2021
(unaudited)
Assets
Current assets:
Cash and cash equivalents
$
341,421
$
418,143
Restricted cash
7,155
6,984
Short-term deposits
151,945
85,132
Accounts receivable, net
23,644
35,477
Prepaid expenses and other current
assets
10,816
19,338
Total current assets
534,981
565,074
Property and equipment, net
18,266
16,968
Operating lease right-of-use assets
38,404
—
Deferred contract acquisition costs
11,375
11,630
Other assets, noncurrent
7,676
6,962
Total assets
$
610,702
$
600,634
Liabilities, Convertible Preferred
Shares, and Shareholders’ Equity
Current liabilities:
Accounts payable
$
1,184
$
228
Accrued compensation and benefits
17,425
24,748
Guarantee obligations
9,134
12,112
Provision for chargebacks, net
9,306
12,020
Operating lease liabilities, current
4,372
—
Accrued expenses and other current
liabilities
12,803
13,306
Total current liabilities
54,224
62,414
Operating lease liabilities,
noncurrent
36,813
—
Other liabilities, noncurrent
3,880
9,359
Total liabilities
94,917
71,773
Shareholders’ equity:
Class A ordinary shares, no par value;
900,000,000 shares authorized as of March 31, 2022 and December 31,
2021; 90,775,880 and 75,909,531 shares issued and outstanding as of
March 31, 2022 and December 31, 2021, respectively
—
—
Class B ordinary shares, no par value;
232,500,000 shares authorized as of March 31, 2022 and December 31,
2021; 74,284,784 and 88,055,520 shares issued and outstanding as of
March 31, 2022 and December 31, 2021, respectively
—
—
Additional paid-in capital
794,862
775,249
Accumulated other comprehensive profit
(loss)
751
176
Accumulated deficit
(279,828
)
(246,564
)
Total shareholders’ equity
515,785
528,861
Total liabilities, convertible preferred
shares, and shareholders’ equity
$
610,702
$
600,634
RISKIFIED LTD.
CONSOLIDATED STATEMENTS OF
OPERATIONS
(in thousands, except share
and per share data)
Three Months Ended March
31,
2022
2021
(unaudited)
Revenue
$
58,845
$
51,083
Cost of revenue
28,477
22,455
Gross profit
30,368
28,628
Operating expenses:
Research and development
18,113
11,694
Sales and marketing
23,129
12,672
General and administrative
21,952
7,611
Total operating expenses
63,194
31,977
Operating profit (loss)
(32,826
)
(3,349
)
Interest income (expense), net
674
34
Other income (expense), net
(32
)
(39,722
)
Profit (loss) before income taxes
(32,184
)
(43,037
)
Provision for (benefit from) income
taxes
1,080
615
Net profit (loss)
$
(33,264
)
$
(43,652
)
Other comprehensive profit (loss), net of
tax:
Other comprehensive profit (loss)
575
—
Comprehensive profit (loss)
$
(32,689
)
$
(43,652
)
Net profit (loss) per share attributable
to Class A and B ordinary shareholders, basic and diluted
$
(0.20
)
$
(3.02
)
Weighted-average shares used in computing
net profit (loss) per share attributable to Class A and B ordinary
shareholders, basic and diluted
164,585,333
14,465,175
RISKIFIED LTD.
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(in thousands)
Three Months Ended March
31,
2022
2021
(unaudited)
Cash flows from operating
activities:
Net profit (loss)
$
(33,264
)
$
(43,652
)
Adjustments to reconcile net profit (loss)
to net cash provided by (used in) operating activities:
Unrealized loss (gain) on foreign
currency
(175
)
(101
)
Provision for (benefit from) account
receivable allowances
(102
)
129
Depreciation and amortization
979
504
Amortization of deferred contract
costs
1,402
828
Remeasurement of convertible preferred
share warrant liabilities
—
23,384
Remeasurement of convertible preferred
share tranche rights
—
15,861
Share-based compensation expense
18,387
2,549
Non-cash operating lease right-of-use
asset changes
1,087
—
Other
118
(16
)
Changes in operating assets and
liabilities:
Accounts receivable
12,016
14,561
Deferred contract acquisition costs
(823
)
(1,034
)
Prepaid expenses and other assets
4,969
(5,055
)
Accounts payable
1,009
49
Accrued compensation and benefits
(7,461
)
(2,795
)
Guarantee obligations
(2,978
)
(2,813
)
Provision for chargebacks, net
(2,714
)
(2,456
)
Operating lease liabilities
(1,275
)
—
Accrued expenses and other liabilities
1,799
3,926
Net cash provided by (used in) operating
activities
(7,026
)
3,869
Cash flows from investing
activities:
Purchases of short-term deposits
(151,753
)
—
Maturities of short-term deposits
85,211
7,016
Purchases of property and equipment
(2,545
)
(388
)
Capitalized software development costs
(427
)
(292
)
Net cash provided by (used in) investing
activities
(69,514
)
6,336
Cash flows from financing
activities:
Proceeds from exercise of share
options
755
224
Payments of deferred offering costs
(190
)
(820
)
Net cash provided by (used in) financing
activities
565
(596
)
Net increase (decrease) in cash, cash
equivalents, and restricted cash
(75,975
)
9,609
Effects of exchange rates on cash, cash
equivalents, and restricted cash
(576
)
—
Cash, cash equivalents, and restricted
cash—beginning of period
425,127
106,657
Cash, cash equivalents, and restricted
cash—end of period
348,576
116,266
Reconciliation of GAAP to Non-GAAP Metrics
The following tables reconcile non-GAAP metrics to the most
directly comparable GAAP metric and are presented in thousands
except for share and per share amounts.
Three Months Ended March
31,
2022
2021
(unaudited)
Net profit (loss)
$
(33,264
)
$
(43,652
)
Provision for (benefit from) income
taxes
1,080
615
Interest (income) expense, net
(674
)
(34
)
Other (income) expense, net
32
39,722
Depreciation and amortization
979
504
Share-based compensation expense
18,387
2,549
Payroll taxes related to share-based
compensation
13
—
Adjusted EBITDA
$
(13,447
)
$
(296
)
Three Months Ended March
31,
2022
2021
(unaudited)
GAAP cost of revenue
$
28,477
$
22,455
Less: depreciation and amortization
171
111
Less: share-based compensation expense
148
26
Non-GAAP cost of revenue
$
28,158
$
22,318
GAAP research and development
$
18,113
$
11,694
Less: depreciation and amortization
374
155
Less: share-based compensation expense
2,432
825
Non-GAAP research and development
$
15,307
$
10,714
GAAP sales and marketing
$
23,129
$
12,672
Less: depreciation and amortization
248
148
Less: share-based compensation expense
5,323
925
Less: payroll taxes related to share-based
compensation
13
—
Non-GAAP sales and marketing
$
17,545
$
11,599
GAAP general and administrative
$
21,952
$
7,611
Less: depreciation and amortization
186
90
Less: share-based compensation expense
10,484
773
Non-GAAP general and administrative
$
11,282
$
6,748
Three Months Ended March
31,
2022
2021
(unaudited)
Net cash provided by (used in) operating
activities
$
(7,026
)
$
3,869
Purchases of property and equipment
(2,545
)
(388
)
Capitalized software development costs
(427
)
(292
)
Free Cash Flow
$
(9,998
)
$
3,189
Three Months Ended March
31,
2022
2021
(unaudited)
Net profit (loss)
$
(33,264
)
$
(43,652
)
Remeasurement of convertible preferred
share warrant liabilities
—
23,384
Remeasurement of convertible preferred
share tranche rights
—
15,861
Depreciation and amortization
979
504
Share-based compensation expense
18,387
2,549
Payroll taxes related to share-based
compensation
13
—
Non-GAAP net profit (loss)
$
(13,885
)
$
(1,354
)
Net profit (loss) per share attributable
to Class A and B ordinary shareholders, basic and diluted
$
(0.20
)
$
(3.02
)
Non-GAAP net profit (loss) per share
attributable to Class A and B ordinary shareholders, basic and
diluted
$
(0.08
)
$
(0.01
)
Weighted-average shares used in computing
net profit (loss) per share attributable to Class A and B ordinary
shareholders, basic and diluted
164,585,333
14,465,175
Add: Non-GAAP weighting adjustment for
Class A and B ordinary shares issued in connection with IPO
—
146,648,106
Weighted-average shares used in computing
non-GAAP net profit (loss) per share attributable to Class A and B
ordinary shareholders, basic and diluted(1)
164,585,333
161,113,281
(1)
Weighted-average shares used in
computing non-GAAP net profit (loss) per share reflect the Class A
and B ordinary shares issued in connection with the IPO that are
outstanding as of the end of the period as if they were outstanding
as of the beginning of the earliest period presented for
comparability.
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version on businesswire.com: https://www.businesswire.com/news/home/20220517005533/en/
Investor Relations: Chris Mammone | The Blueshirt Group
for Riskified | ir@riskified.com Corporate Communications:
Rowena Kelley | press@riskified.com
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