Release Date: August 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Riskified Ltd (RSKD, Financial) achieved an 8% year-over-year revenue growth in Q2 2024.
- The company reported a 13% year-over-year increase in GMV, reaching $35 billion.
- Non-GAAP gross profit margin improved to 53% in Q2 2024, up from 52% in the prior year.
- Riskified Ltd (RSKD) achieved positive adjusted EBITDA of $2.3 million in Q2 2024, marking the eighth consecutive quarter of year-over-year improvement.
- The company has a strong balance sheet with approximately $422 million in cash deposits and investments and zero debt.
Negative Points
- Riskified Ltd (RSKD) anticipates softer third and fourth quarters due to macroeconomic headwinds, including worsening consumer spending trends.
- The high-end fashion, tickets and travel, and home industries are expected to be particularly impacted by these macro headwinds.
- The company expects its net dollar retention rate to be slightly below 100% due to the removal of recovery trends and increased new logo revenue.
- EMEA region is projected to be relatively flat for the year, primarily due to lower travel volumes and high weighting from fashion and travel industries.
- Despite positive new business activity, the company acknowledges that some merchants may have code freezes during the holiday season, potentially delaying implementations.
Q & A Highlights
Q: Did the CrowdStrike outage in July impact Riskified or its merchants?
A: No, there was no impact on Riskified or its merchants related to the CrowdStrike issue. (Aglika Dotcheva, CFO)
Q: Can you provide an update on the penetration rate of your platform approach and cross-sell efforts?
A: We have seen sequential improvements and are still in the zone of 0.5% improvement to the gross profit margin with a strong pipeline heading into the back half of the year. (Eido Gal, CEO)
Q: What level of net dollar retention does the current guidance reflect, and how does it compare to earlier expectations?
A: We now expect net dollar retention to be a few percentage points below 100% due to macro factors and the removal of recovery trends. Last year was 98%, and this year we expect closer to 97%. (Aglika Dotcheva, CFO)
Q: How is the sales and go-to-market strategy evolving to support the platform offering beyond chargeback guarantee?
A: We are focusing on new logos and leveraging our platform approach to sell to more stakeholders, which has resulted in higher win rates and the ability to sell multiple products to new clients. (Eido Gal, CEO)
Q: Can you provide a framework for 2025 growth given the new sales activity?
A: It is too early to model out 2025, but the acceleration into Q4 is based on new business activity and growth in those areas. We expect a slower back half of the year due to macro factors. (Eido Gal, CEO)
Q: Are you still comfortable with your 2026 EBITDA margin target of 15% to 20%?
A: Yes, we are confident in reaching those midterm targets through various operational levers. (Eido Gal, CEO)
Q: What internal efforts have been made to enhance go-to-market strategies and drive new business success?
A: It involves having the best product, differentiated offerings, and a strong sales force with the right marketing collaterals and training. (Eido Gal, CEO)
Q: How do you view the impact of Apple Pay and Google Pay on your TAM for chargeback guarantee?
A: While there is some impact, many merchants still prefer to send us those transactions for guarantee or scoring. Our pricing is risk-adjusted, and the overall impact on revenue is minimal. (Eido Gal, CEO)
Q: Can you provide more color on your implementation pipeline for the back half of the year?
A: We are seeing more diversification across products and geographies, with a focus on new business wins and new logo activity. (Eido Gal, CEO)
Q: How did the Ascend conference contribute to new business momentum?
A: Ascend was a catalyst for new business conversations, providing a platform for networking and feedback, which translated into new business momentum. (Eido Gal, CEO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
