Riskified Outperforms FY'23 Adjusted EBITDA Guidance by 37% and Ends Year with Positive Free Cash Flow
- None.
- None.
Insights
With Riskified Ltd. announcing its strongest adjusted EBITDA result in the company's history, this indicates a robust operational performance and efficient cost management, which are critical factors for investor confidence. The positive EBITDA reflects not only the company's ability to generate profits but also hints at potential cash flow improvements. This could lead to reinvestment in the business or return on investment for shareholders. It is essential to understand the drivers behind this growth, such as increased sales, improved margins, or cost reductions, as they will have different implications for the company's future growth trajectory and financial health.
Moreover, the mention of successful execution on strategic initiatives suggests that the company is effectively navigating its business plan, which could have favorable prospects for long-term growth. Investors should monitor how these initiatives translate into sustained performance, as the competitive landscape of e-commerce fraud prevention is rapidly evolving with new technologies and regulatory changes. The ability to adapt and innovate is crucial for maintaining a competitive edge in this sector.
The e-commerce fraud and risk intelligence sector is on a growth trajectory due to the increasing volume of online transactions and the sophistication of fraud. Riskified Ltd.'s financial results, particularly the strong EBITDA, suggest that the company is capitalizing on this market trend effectively. The results could also be indicative of the company's market positioning and product effectiveness, which are vital for customer acquisition and retention. As the industry grows, Riskified's ability to scale its solutions and maintain a high level of service will be essential. The company's performance may also reflect broader industry dynamics, such as the adoption rate of fraud prevention solutions and the potential for market consolidation.
Understanding the competitive landscape and how Riskified differentiates itself from other players in the market is crucial for assessing its long-term viability. The company's innovation cycle, customer feedback and how it manages the balance between fraud prevention and user experience are all factors that can significantly impact its market share and profitability.
The broader economic context in which Riskified Ltd. operates can greatly influence its business outcomes. For instance, economic downturns typically lead to an increase in fraud, which could result in higher demand for the company's services. Conversely, a strong economy might lead to increased e-commerce activity, also benefiting the company. However, it's important to note that macroeconomic factors such as interest rates, inflation and consumer spending patterns can have nuanced effects on the sector. For example, higher interest rates could increase operational costs or affect consumer spending, potentially impacting Riskified's client base and, by extension, its revenue.
Additionally, global economic trends, such as cross-border e-commerce and digital payment adoption, can create opportunities and challenges for Riskified. The company's ability to navigate these trends, including currency fluctuations and international regulatory environments, will be critical for its continued success and potential expansion into new markets.
Provides Initial 2024 Outlook
“The fourth quarter marks a significant milestone as we achieved our strongest adjusted EBITDA result in our history. We believe that this is a testament to the strength of our business model and of our ability to execute on our strategic initiatives. I want to thank the entire Riskified team, whose hard work and dedication have been instrumental in realizing these successes. We are excited about the opportunities that lie ahead and remain committed to delivering value to our merchants and shareholders while staying at the forefront of innovation in the industry,” said Eido Gal, Co-Founder and Chief Executive Officer of Riskified.
Q4 and Full Year 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 different categories across three geographies.
- Landed New Account in Money Transfer & Remittance Category: During the fourth quarter, we onboarded a multi-billion global money transfer company with a presence in 50 countries. We believe that this category represents an exciting area of potential expansion for Riskified.
- Continued Upsell Activity in Fashion and Luxury Vertical: Key existing customers expanded their contractual relationships with us during the fourth quarter. In particular, we successfully executed upsells with one of our top merchants in our Fashion and Luxury category, and had a successful cross-sell of Policy Protect for a Luxury merchant, who was already using our core Chargeback Guarantee product.
-
Execution of Platform Sales Motion: Our fourth quarter was the strongest quarter ever for our Policy Protect product, as over
50% of the Policy Protect deals that we won during the year went live during the quarter, reflecting increasing momentum and merchant acceptance of these products throughout the year.
-
Strong Cash Flow Model: We continued to maintain a healthy cash flow model and generated positive free cash flow of
for 2023. We believe we are well positioned to continue generating strong cash flow in 2024. We are confident in our ability to manage our cash position and ended the year with$5.9 million of cash, deposits, and investments on the balance sheet, with zero debt.$474.8 million
-
Share Repurchase Program Update: On November 20, 2023, we received Israeli court approval to implement our previously announced
share repurchase program. Through February 29, 2024, we have repurchased approximately 7.6 million shares at a total cost of approximately$75 million . We remain committed to repurchasing our shares at what we believe are attractive valuation levels.$34 million
- Expanded Chargeback Management System: During the year we further expanded our Dispute Resolve platform to streamline chargeback operations for our merchant teams. The expanded solution leverages deeper gateway and artificial intelligence integrations to auto-compile and format Compelling Evidence submissions for every chargeback, saving merchant teams time and enabling them to dispute more chargebacks.
Q4 and Full Year 2023 Financial Summary
The following table summarizes our consolidated financial results for the three and twelve months ended December 31, 2023 and 2022, in thousands except where indicated:
|
Three Months Ended December 31, |
|
Year Ended December 31, |
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
(unaudited) |
|
(unaudited) |
||||||||||||
Gross merchandise volume ("GMV") in millions(1) |
$ |
35,209 |
|
|
$ |
32,179 |
|
|
$ |
123,106 |
|
|
$ |
105,570 |
|
Increase in GMV year over year |
|
9 |
% |
|
|
|
|
17 |
% |
|
|
||||
Revenue |
$ |
84,065 |
|
|
$ |
79,298 |
|
|
$ |
297,610 |
|
|
$ |
261,247 |
|
Increase in revenues year over year |
|
6 |
% |
|
|
|
|
14 |
% |
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Gross profit |
$ |
48,515 |
|
|
$ |
41,444 |
|
|
$ |
152,519 |
|
|
$ |
135,097 |
|
Gross profit margin |
|
58 |
% |
|
|
52 |
% |
|
|
51 |
% |
|
|
52 |
% |
|
|
|
|
|
|
|
|
||||||||
Operating profit (loss) |
$ |
(6,564 |
) |
|
$ |
(17,251 |
) |
|
$ |
(76,849 |
) |
|
$ |
(109,348 |
) |
Net profit (loss) |
$ |
(3,265 |
) |
|
$ |
(12,052 |
) |
|
$ |
(59,035 |
) |
|
$ |
(104,705 |
) |
|
|
|
|
|
|
|
|
||||||||
Adjusted EBITDA(1) |
$ |
9,713 |
|
|
$ |
(330 |
) |
|
$ |
(8,490 |
) |
|
$ |
(37,076 |
) |
Adjusted EBITDA margin(1) |
|
12 |
% |
|
|
(0 |
)% |
|
|
(3 |
)% |
|
|
(14 |
)% |
“I am proud of our ability to expand our adjusted EBITDA margin by 1100 bps from the prior period and we expect to see continued margin expansion in 2024 and beyond. We remain committed to driving value for our shareholders by focusing on the operational levers available to us, and by managing the business in a disciplined way,” said Aglika Dotcheva, Chief Financial Officer of Riskified.
Financial Outlook:
For the year ending December 31, 2024, we currently expect:
-
Revenue between
and$323 million $335 million
We anticipate positive Adjusted EBITDA in 2024. For the year ending December 31, 2024, we currently expect:
-
Adjusted EBITDA(2) between
and$10 million $17 million
(1) GMV is a key performance indicator while Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP measures 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, 2024 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 which are subject to many economic and other factors beyond our control. For the same reasons, we are unable to address the probable significance of the unavailable information, which could have a potentially unpredictable and potentially significant impact on our future GAAP financial results.
Conference Call and Webcast Details
The Company will host a conference call to discuss its financial results today, March 5, 2024 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. A replay of the webcast will also be available for a limited time at ir.riskified.com. The press release with the financial results, as well as the investor presentation materials will be accessible on the Company’s Investor Relations website prior to the conference call.
Key Performance Indicators and Non-GAAP Measures
This press release and the accompanying tables contain references to Gross Merchandise Volume ("GMV"), which is a key performance indicator, and to certain non-GAAP measures which include non-GAAP measures of financial performance, including Adjusted EBITDA, Adjusted EBITDA margin, non-GAAP gross profit, non-GAAP gross profit margin, 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, and non-GAAP measures of liquidity, including Free Cash Flow. Management and our Board of Directors use key performance indicators and non-GAAP measures as supplemental measures of performance and liquidity 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. Free Cash Flow 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.
These non-GAAP measures should not be construed as an inference that our future results will be unaffected by unusual or other items. Non-GAAP measures of financial performance have limitations as analytical tools in that these measures do not reflect our cash expenditures, or future requirements for capital expenditures, or contractual commitments; these measures do not reflect changes in, or cash requirements for, our working capital needs; these measures do not reflect our tax expense or the cash requirements to pay our taxes, and assets being depreciated and amortized will often have to be replaced in the future and these measures do not reflect any cash requirements for such replacements. Free Cash Flow is limited because it does not represent the residual cash flow available for discretionary expenditures. Free Cash Flow is not necessarily a measure of our ability to fund our cash needs.
In light of these limitations, management uses these non-GAAP measures to supplement, not replace, our GAAP results. The non-GAAP measures used herein are not necessarily comparable to similarly titled captions of other companies due to different calculation methods. Non-GAAP financial measures should not be considered in isolation, as an alternative to, or superior to information prepared and presented in accordance with GAAP. These measures are frequently used by analysts, investors and other interested parties to evaluate companies in our industry. By providing these non-GAAP measures together with a reconciliation to the most comparable 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 GMV as the gross total dollar value of orders reviewed through our ecommerce risk intelligence platform during the period indicated, including the value of orders that we did not approve.
We define each of our non-GAAP measures of financial performance, as the respective GAAP balances shown in the below tables, adjusted for, as applicable, depreciation and amortization (including amortization of capitalized internal-use software as presented in our statement of cash flows), share-based compensation expense, payroll taxes related to share-based compensation, litigation-related expenses, provision for (benefit from) income taxes, other income (expense) including foreign currency transaction gains and losses and gains and losses on non-designated hedges, and interest income (expense). Adjusted EBITDA margin represents Adjusted EBITDA expressed as a percentage of revenue. Non-GAAP Gross Profit Margin represents Non-GAAP Gross Profit expressed as a percentage of revenue. We define non-GAAP net profit (loss) per share as non-GAAP net profit (loss) divided by non-GAAP weighted-average shares. We define non-GAAP weighted-average shares, as GAAP weighted average shares, adjusted to reflect any dilutive ordinary share equivalents resulting from non-GAAP net profit (loss), if applicable.
We define Free Cash Flow as net cash provided by (used in) operating activities, less cash purchases of property and equipment, and cash spent on capitalized software development costs.
Management believes that by excluding certain items from the associated GAAP measure, these non-GAAP measures are useful in assessing our performance and provide meaningful supplemental information due to the following factors:
Depreciation and amortization: We exclude depreciation and amortization (including amortization of capitalized internal-use software) because we believe that these costs are not core to the performance of our business and the utilization of the underlying assets being depreciated and amortized can change without a corresponding impact on the operating performance of our business. Management believes that excluding depreciation and amortization facilitates comparability with other companies in our industry.
Share-based compensation expense: We exclude share-based compensation expense primarily because it is a non-cash expense that does not directly correlate to the current performance of our business. This is because the expense is calculated based on the grant date fair value of an award which may vary significantly from the current fair market value of the award based on factors outside of our control. Share-based compensation expense is principally aimed at aligning our employees’ interests with those of our shareholders and at long-term retention, rather than to address operational performance for any particular period.
Payroll taxes related to share-based compensation: We exclude employer payroll tax expense related to share-based compensation in order to see the full effect that excluding that share-based compensation expense had on our operating results. These expenses are tied to the exercise or vesting of underlying equity awards and the price of our common stock at the time of vesting or exercise, which may vary from period to period independent of the operating performance of our business.
Litigation-related expenses: We exclude costs associated with the legal matter previously disclosed under the caption "Legal Proceedings" in our Form 6-K furnished with the Securities and Exchange Commission ("SEC") on August 15, 2023, because such costs are not reflective of costs associated with our ongoing business and operating results and are viewed as unusual and infrequent.
See the tables below for reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures.
Forward Looking Statements
This press release contains forward-looking statements within the meaning of the safe harbor provisions of the
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 ability to manage our growth effectively; continued use of credit cards and other payment methods that expose merchants to the risk of payment fraud, and other changes in laws and regulations, including card scheme rules, related to the use of these payment methods, and the emergence of new alternative payments products; our history of net losses and ability to achieve profitability; our ability to attract new merchants and retain existing merchants; the impact of macroeconomic conditions on us and on the performance of our merchants; our ability to continue to improve our machine learning models; fluctuations in our CTB Ratio and gross profit margin, including as a result of large-scale merchant fraud attacks or other security incidents; our ability to protect the information of our merchants and consumers; our ability to predict future revenue due to lengthy sales cycles; seasonal fluctuations in revenue; competition; our merchant concentration; the financial condition of our merchants, particularly in challenging macroeconomic environments; our ability to increase the adoption of our products and to develop and introduce new products; our ability to mitigate the risks involved with selling our products to large enterprises; our ability to retain the services of our executive officers, and other key personnel, including our co-founders; our ability to attract and retain highly qualified personnel, including software engineers and data scientists, particularly in
About Riskified
Riskified empowers businesses to grow ecommerce revenues and profit by mitigating risk. An unrivaled network of merchant brands partner with Riskified for guaranteed protection against chargebacks, to fight fraud and policy abuse at scale, and to improve customer retention. Developed and managed by the largest team of ecommerce risk analysts, data scientists, and researchers, Riskified’s AI-powered fraud and risk intelligence platform analyzes the individual behind each interaction to provide real-time decisions and robust identity-based insights. Learn more at riskified.com.
RISKIFIED LTD.
|
|||||||
|
As of
|
|
As of
|
||||
|
|
||||||
|
(unaudited) |
|
|
||||
Assets |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
440,838 |
|
|
$ |
188,670 |
|
Restricted cash |
|
— |
|
|
|
2,347 |
|
Short-term deposits |
|
5,000 |
|
|
|
287,000 |
|
Accounts receivable, net |
|
46,886 |
|
|
|
37,547 |
|
Prepaid expenses and other current assets |
|
10,607 |
|
|
|
14,371 |
|
Short-term investments |
|
28,968 |
|
|
|
— |
|
Total current assets |
|
532,299 |
|
|
|
529,935 |
|
Property and equipment, net |
|
15,639 |
|
|
|
18,586 |
|
Operating lease right-of-use assets |
|
29,742 |
|
|
|
35,158 |
|
Deferred contract acquisition costs |
|
15,562 |
|
|
|
14,383 |
|
Other assets, noncurrent |
|
8,690 |
|
|
|
8,922 |
|
Total assets |
$ |
601,932 |
|
|
$ |
606,984 |
|
Liabilities and Shareholders’ Equity |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Accounts payable |
$ |
2,573 |
|
|
$ |
2,110 |
|
Accrued compensation and benefits |
|
24,016 |
|
|
|
24,134 |
|
Guarantee obligations |
|
12,719 |
|
|
|
12,361 |
|
Provision for chargebacks, net |
|
12,092 |
|
|
|
11,980 |
|
Operating lease liabilities, current |
|
5,615 |
|
|
|
6,214 |
|
Accrued expenses and other current liabilities |
|
12,796 |
|
|
|
15,813 |
|
Total current liabilities |
|
69,811 |
|
|
|
72,612 |
|
Operating lease liabilities, noncurrent |
|
25,694 |
|
|
|
31,202 |
|
Other liabilities, noncurrent |
|
14,706 |
|
|
|
8,734 |
|
Total liabilities |
|
110,211 |
|
|
|
112,548 |
|
Shareholders’ equity: |
|
|
|
||||
Class A ordinary shares, no par value; 900,000,000 shares authorized as of December 31, 2023 and 2022; 128,738,857 and 102,084,746 shares issued and outstanding as of December 31, 2023 and 2022, respectively |
|
— |
|
|
|
— |
|
Class B ordinary shares, no par value; 232,500,000 shares authorized as of December 31, 2023 and 2022; 49,814,864 and 68,945,014 shares issued and outstanding as of December 31, 2023 and 2022, respectively |
|
— |
|
|
|
— |
|
Treasury shares at cost, 3,038,865 and zero ordinary shares as of December 31, 2023 and 2022, respectively |
|
(13,155 |
) |
|
|
— |
|
Additional paid-in capital |
|
916,371 |
|
|
|
848,609 |
|
Accumulated other comprehensive profit (loss) |
|
74 |
|
|
|
(1,639 |
) |
Accumulated deficit |
|
(411,569 |
) |
|
|
(352,534 |
) |
Total shareholders’ equity |
|
491,721 |
|
|
|
494,436 |
|
Total liabilities and shareholders’ equity |
$ |
601,932 |
|
|
$ |
606,984 |
|
RISKIFIED LTD.
|
|||||||||||||||
|
Three Months Ended December 31, |
|
Year Ended December 31, |
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
(unaudited) |
|
(unaudited) |
|
|
||||||||||
Revenue |
$ |
84,065 |
|
|
$ |
79,298 |
|
|
$ |
297,610 |
|
|
$ |
261,247 |
|
Cost of revenue |
|
35,550 |
|
|
|
37,854 |
|
|
|
145,091 |
|
|
|
126,150 |
|
Gross profit |
|
48,515 |
|
|
|
41,444 |
|
|
|
152,519 |
|
|
|
135,097 |
|
Operating expenses: |
|
|
|
|
|
|
|
||||||||
Research and development |
|
17,122 |
|
|
|
18,502 |
|
|
|
71,577 |
|
|
|
72,014 |
|
Sales and marketing |
|
21,344 |
|
|
|
21,391 |
|
|
|
88,441 |
|
|
|
88,438 |
|
General and administrative |
|
16,613 |
|
|
|
18,802 |
|
|
|
69,350 |
|
|
|
83,993 |
|
Total operating expenses |
|
55,079 |
|
|
|
58,695 |
|
|
|
229,368 |
|
|
|
244,445 |
|
Operating profit (loss) |
|
(6,564 |
) |
|
|
(17,251 |
) |
|
|
(76,849 |
) |
|
|
(109,348 |
) |
Interest income (expense), net |
|
5,994 |
|
|
|
5,064 |
|
|
|
22,775 |
|
|
|
10,180 |
|
Other income (expense), net |
|
(218 |
) |
|
|
1,714 |
|
|
|
837 |
|
|
|
505 |
|
Profit (loss) before income taxes |
|
(788 |
) |
|
|
(10,473 |
) |
|
|
(53,237 |
) |
|
|
(98,663 |
) |
Provision for (benefit from) income taxes |
|
2,477 |
|
|
|
1,579 |
|
|
|
5,798 |
|
|
|
6,042 |
|
Net profit (loss) |
$ |
(3,265 |
) |
|
$ |
(12,052 |
) |
|
$ |
(59,035 |
) |
|
$ |
(104,705 |
) |
Other comprehensive profit (loss), net of tax: |
|
|
|
|
|
|
|
||||||||
Other comprehensive profit (loss) |
|
3,251 |
|
|
|
1,158 |
|
|
|
1,713 |
|
|
|
(1,815 |
) |
Comprehensive profit (loss) |
$ |
(14 |
) |
|
$ |
(10,894 |
) |
|
$ |
(57,322 |
) |
|
$ |
(106,520 |
) |
|
|
|
|
|
|
|
|
||||||||
Net profit (loss) per share attributable to Class A and B ordinary shareholders, basic and diluted |
$ |
(0.02 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.33 |
) |
|
$ |
(0.62 |
) |
Weighted-average shares used in computing net profit (loss) per share attributable to Class A and B ordinary shareholders, basic and diluted |
|
180,172,629 |
|
|
|
170,734,172 |
|
|
|
176,773,398 |
|
|
|
167,667,374 |
|
RISKIFIED LTD.
|
|||||||||||||||
|
Three Months Ended December 31, |
|
Year Ended December 31, |
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
(unaudited) |
|
(unaudited) |
|
|
||||||||||
Cash flows from operating activities: |
|
|
|
|
|
|
|
||||||||
Net profit (loss) |
$ |
(3,265 |
) |
|
$ |
(12,052 |
) |
|
$ |
(59,035 |
) |
|
$ |
(104,705 |
) |
Adjustments to reconcile net profit (loss) to net cash provided by (used in) operating activities: |
|
|
|
|
|
|
|
||||||||
Unrealized loss (gain) on foreign currency |
|
534 |
|
|
|
(1,684 |
) |
|
|
(850 |
) |
|
|
(2,875 |
) |
Provision for (benefit from) account receivable allowances |
|
22 |
|
|
|
(32 |
) |
|
|
198 |
|
|
|
3 |
|
Depreciation and amortization |
|
896 |
|
|
|
1,040 |
|
|
|
3,568 |
|
|
|
3,607 |
|
Amortization of capitalized internal-use software costs |
|
383 |
|
|
|
296 |
|
|
|
1,532 |
|
|
|
667 |
|
Amortization of deferred contract costs |
|
2,613 |
|
|
|
2,107 |
|
|
|
9,567 |
|
|
|
7,135 |
|
Share-based compensation expense |
|
14,925 |
|
|
|
15,233 |
|
|
|
62,410 |
|
|
|
67,467 |
|
Non-cash right-of-use asset changes |
|
1,095 |
|
|
|
912 |
|
|
|
4,605 |
|
|
|
4,211 |
|
Changes in accrued interest |
|
934 |
|
|
|
(3,639 |
) |
|
|
2,593 |
|
|
|
(4,613 |
) |
Ordinary share warrants issued to a customer |
|
384 |
|
|
|
384 |
|
|
|
1,536 |
|
|
|
1,535 |
|
Other |
|
38 |
|
|
|
44 |
|
|
|
161 |
|
|
|
180 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
||||||||
Accounts receivable |
|
(15,873 |
) |
|
|
(6,575 |
) |
|
|
(9,685 |
) |
|
|
(1,715 |
) |
Deferred contract acquisition costs |
|
(3,700 |
) |
|
|
(4,699 |
) |
|
|
(8,893 |
) |
|
|
(9,707 |
) |
Prepaid expenses and other assets |
|
279 |
|
|
|
(3,028 |
) |
|
|
(1,618 |
) |
|
|
4,026 |
|
Accounts payable |
|
(29 |
) |
|
|
(220 |
) |
|
|
373 |
|
|
|
1,931 |
|
Accrued compensation and benefits |
|
4,093 |
|
|
|
4,113 |
|
|
|
(199 |
) |
|
|
291 |
|
Guarantee obligations |
|
3,230 |
|
|
|
2,594 |
|
|
|
358 |
|
|
|
249 |
|
Provision for chargebacks, net |
|
1,394 |
|
|
|
1,269 |
|
|
|
112 |
|
|
|
(40 |
) |
Operating lease liabilities |
|
(1,086 |
) |
|
|
(1,624 |
) |
|
|
(4,580 |
) |
|
|
(2,609 |
) |
Accrued expenses and other liabilities |
|
556 |
|
|
|
1,463 |
|
|
|
5,126 |
|
|
|
8,710 |
|
Net cash provided by (used in) operating activities |
|
7,423 |
|
|
|
(4,098 |
) |
|
|
7,279 |
|
|
|
(26,252 |
) |
Cash flows from investing activities: |
|
|
|
|
|
|
|
||||||||
Purchases of short-term deposits |
|
— |
|
|
|
(127,997 |
) |
|
|
(55,000 |
) |
|
|
(463,750 |
) |
Maturities of short-term deposits |
|
10,000 |
|
|
|
26,750 |
|
|
|
337,000 |
|
|
|
261,750 |
|
Purchases of investments |
|
— |
|
|
|
— |
|
|
|
(29,086 |
) |
|
|
— |
|
Purchases of property and equipment |
|
(281 |
) |
|
|
(2,713 |
) |
|
|
(1,355 |
) |
|
|
(6,126 |
) |
Capitalized software development costs |
|
— |
|
|
|
(351 |
) |
|
|
— |
|
|
|
(1,886 |
) |
Net cash provided by (used in) investing activities |
|
9,719 |
|
|
|
(104,311 |
) |
|
|
251,559 |
|
|
|
(210,012 |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
|
||||||||
Proceeds from exercise of share options |
|
728 |
|
|
|
1,050 |
|
|
|
3,841 |
|
|
|
4,059 |
|
Payments of deferred offering costs |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(204 |
) |
Purchases of treasury shares |
|
(13,155 |
) |
|
|
— |
|
|
|
(13,155 |
) |
|
|
— |
|
Net cash provided by (used in) financing activities |
|
(12,427 |
) |
|
|
1,050 |
|
|
|
(9,314 |
) |
|
|
3,855 |
|
Effects of exchange rates on cash, cash equivalents, and restricted cash |
|
650 |
|
|
|
945 |
|
|
|
297 |
|
|
|
(1,701 |
) |
Net increase (decrease) in cash, cash equivalents, and restricted cash |
|
5,365 |
|
|
|
(106,414 |
) |
|
|
249,821 |
|
|
|
(234,110 |
) |
Cash, cash equivalents, and restricted cash—beginning of period |
|
435,473 |
|
|
|
297,431 |
|
|
|
191,017 |
|
|
|
425,127 |
|
Cash, cash equivalents, and restricted cash—end of period |
$ |
440,838 |
|
|
$ |
191,017 |
|
|
$ |
440,838 |
|
|
$ |
191,017 |
|
Reconciliation of GAAP to Non-GAAP Measures
The following tables reconcile non-GAAP measures to the most directly comparable GAAP measure and are presented in thousands except for share and per share amounts.
|
Three Months Ended December 31, |
|
Year Ended December 31, |
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
(unaudited) |
|
(unaudited) |
||||||||||||
Net profit (loss) |
$ |
(3,265 |
) |
|
$ |
(12,052 |
) |
|
$ |
(59,035 |
) |
|
$ |
(104,705 |
) |
Provision for (benefit from) income taxes |
|
2,477 |
|
|
|
1,579 |
|
|
|
5,798 |
|
|
|
6,042 |
|
Interest (income) expense, net |
|
(5,994 |
) |
|
|
(5,064 |
) |
|
|
(22,775 |
) |
|
|
(10,180 |
) |
Other (income) expense, net |
|
218 |
|
|
|
(1,714 |
) |
|
|
(837 |
) |
|
|
(505 |
) |
Depreciation and amortization |
|
1,279 |
|
|
|
1,336 |
|
|
|
5,100 |
|
|
|
4,274 |
|
Share-based compensation expense |
|
14,925 |
|
|
|
15,233 |
|
|
|
62,410 |
|
|
|
67,467 |
|
Payroll taxes related to share-based compensation |
|
73 |
|
|
|
40 |
|
|
|
459 |
|
|
|
219 |
|
Litigation-related expenses |
|
— |
|
|
|
312 |
|
|
|
390 |
|
|
|
312 |
|
Adjusted EBITDA |
$ |
9,713 |
|
|
$ |
(330 |
) |
|
$ |
(8,490 |
) |
|
$ |
(37,076 |
) |
Adjusted EBITDA Margin |
|
12 |
% |
|
|
(0 |
)% |
|
|
(3 |
)% |
|
|
(14 |
)% |
|
Three Months Ended December 31, |
|
Year Ended December 31, |
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
(unaudited) |
|
(unaudited) |
||||||||||||
GAAP gross profit |
$ |
48,515 |
|
|
$ |
41,444 |
|
|
$ |
152,519 |
|
|
$ |
135,097 |
|
Plus: depreciation and amortization |
|
427 |
|
|
|
359 |
|
|
|
1,726 |
|
|
|
880 |
|
Plus: share-based compensation expense |
|
196 |
|
|
|
144 |
|
|
|
770 |
|
|
|
621 |
|
Plus: payroll taxes related to share-based compensation |
|
3 |
|
|
|
— |
|
|
|
11 |
|
|
|
4 |
|
Non-GAAP gross profit |
$ |
49,141 |
|
|
$ |
41,947 |
|
|
$ |
155,026 |
|
|
$ |
136,602 |
|
Gross profit margin |
|
58 |
% |
|
|
52 |
% |
|
|
51 |
% |
|
|
52 |
% |
Non-GAAP gross profit margin |
|
58 |
% |
|
|
53 |
% |
|
|
52 |
% |
|
|
52 |
% |
|
Three Months Ended December 31, |
|
Year Ended December 31, |
||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||
|
(unaudited) |
|
(unaudited) |
||||||||
GAAP cost of revenue |
$ |
35,550 |
|
$ |
37,854 |
|
$ |
145,091 |
|
$ |
126,150 |
Less: depreciation and amortization |
|
427 |
|
|
359 |
|
|
1,726 |
|
|
880 |
Less: share-based compensation expense |
|
196 |
|
|
144 |
|
|
770 |
|
|
621 |
Less: payroll taxes related to share-based compensation |
|
3 |
|
|
— |
|
|
11 |
|
|
4 |
Non-GAAP cost of revenue |
$ |
34,924 |
|
$ |
37,351 |
|
$ |
142,584 |
|
$ |
124,645 |
|
|
|
|
|
|
|
|
||||
GAAP research and development |
$ |
17,122 |
|
$ |
18,502 |
|
$ |
71,577 |
|
$ |
72,014 |
Less: depreciation and amortization |
|
394 |
|
|
461 |
|
|
1,566 |
|
|
1,581 |
Less: share-based compensation expense |
|
3,060 |
|
|
2,584 |
|
|
13,152 |
|
|
10,005 |
Less: payroll taxes related to share-based compensation |
|
1 |
|
|
— |
|
|
2 |
|
|
— |
Non-GAAP research and development |
$ |
13,667 |
|
$ |
15,457 |
|
$ |
56,857 |
|
$ |
60,428 |
|
|
|
|
|
|
|
|
||||
GAAP sales and marketing |
$ |
21,344 |
|
$ |
21,391 |
|
$ |
88,441 |
|
$ |
88,438 |
Less: depreciation and amortization |
|
258 |
|
|
282 |
|
|
1,025 |
|
|
1,013 |
Less: share-based compensation expense |
|
4,706 |
|
|
4,177 |
|
|
19,420 |
|
|
18,253 |
Less: payroll taxes related to share-based compensation |
|
40 |
|
|
19 |
|
|
248 |
|
|
118 |
Non-GAAP sales and marketing |
$ |
16,340 |
|
$ |
16,913 |
|
$ |
67,748 |
|
$ |
69,054 |
|
|
|
|
|
|
|
|
||||
GAAP general and administrative |
$ |
16,613 |
|
$ |
18,802 |
|
$ |
69,350 |
|
$ |
83,993 |
Less: depreciation and amortization |
|
200 |
|
|
234 |
|
|
783 |
|
|
800 |
Less: share-based compensation expense |
|
6,963 |
|
|
8,328 |
|
|
29,068 |
|
|
38,588 |
Less: payroll taxes related to share-based compensation |
|
29 |
|
|
21 |
|
|
198 |
|
|
97 |
Less: litigation-related expenses |
|
— |
|
|
312 |
|
|
390 |
|
|
312 |
Non-GAAP general and administrative |
$ |
9,421 |
|
$ |
9,907 |
|
$ |
38,911 |
|
$ |
44,196 |
|
Three Months Ended December 31, |
|
Year Ended December 31, |
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
(unaudited) |
|
(unaudited) |
||||||||||||
Net cash provided by (used in) operating activities |
$ |
7,423 |
|
|
$ |
(4,098 |
) |
|
$ |
7,279 |
|
|
$ |
(26,252 |
) |
Purchases of property and equipment |
|
(281 |
) |
|
|
(2,713 |
) |
|
|
(1,355 |
) |
|
|
(6,126 |
) |
Capitalized software development costs |
|
— |
|
|
|
(351 |
) |
|
|
— |
|
|
|
(1,886 |
) |
Free Cash Flow |
$ |
7,142 |
|
|
$ |
(7,162 |
) |
|
$ |
5,924 |
|
|
$ |
(34,264 |
) |
|
Three Months Ended December 31, |
|
Year Ended December 31, |
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
(unaudited) |
|
(unaudited) |
|||||||||||||
Net profit (loss) |
$ |
(3,265 |
) |
|
$ |
(12,052 |
) |
|
$ |
(59,035 |
) |
|
$ |
(104,705 |
) |
Depreciation and amortization |
|
1,279 |
|
|
|
1,336 |
|
|
|
5,100 |
|
|
|
4,274 |
|
Share-based compensation expense |
|
14,925 |
|
|
|
15,233 |
|
|
|
62,410 |
|
|
|
67,467 |
|
Payroll taxes related to share-based compensation |
|
73 |
|
|
|
40 |
|
|
|
459 |
|
|
|
219 |
|
Litigation related expenses |
|
— |
|
|
|
312 |
|
|
|
390 |
|
|
|
312 |
|
Non-GAAP net profit (loss) |
$ |
13,012 |
|
|
$ |
4,869 |
|
|
$ |
9,324 |
|
|
$ |
(32,433 |
) |
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares used in computing net profit (loss) and non-GAAP net profit (loss) per share attributable to Class A and B ordinary shareholders, basic |
|
180,172,629 |
|
|
|
170,734,172 |
|
|
|
176,773,398 |
|
|
|
167,667,374 |
|
Add: Dilutive Class A and B ordinary share equivalents |
|
5,541,867 |
|
|
|
8,877,043 |
|
|
|
7,446,405 |
|
|
|
— |
|
Weighted-average shares used in computing non-GAAP net profit (loss) per share attributable to Class A and B ordinary shareholders, diluted |
|
185,714,496 |
|
|
|
179,611,215 |
|
|
|
184,219,803 |
|
|
|
167,667,374 |
|
|
|
|
|
|
|
|
|
||||||||
Net profit (loss) per share attributable to Class A and B ordinary shareholders, basic and diluted |
$ |
(0.02 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.33 |
) |
|
$ |
(0.62 |
) |
Non-GAAP net profit (loss) per share attributable to Class A and B ordinary shareholders, basic |
$ |
0.07 |
|
|
$ |
0.03 |
|
|
$ |
0.05 |
|
|
$ |
(0.19 |
) |
Non-GAAP net profit (loss) per share attributable to Class A and B ordinary shareholders, diluted |
$ |
0.07 |
|
|
$ |
0.03 |
|
|
$ |
0.05 |
|
|
$ |
(0.19 |
) |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240305369960/en/
Investor Relations: Chett Mandel, Head of Investor Relations | ir@riskified.com
Corporate Communications: Cristina Dinozo, Senior Director of Communications | press@riskified.com
Source: Riskified Ltd.
FAQ
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