Earnings call transcript: Riskified Q2 2025 beats revenue expectations

Riskified Ltd (RSKD) reported its earnings for the second quarter of 2025, revealing an earnings per share (EPS) of $0.02, surpassing the forecasted EPS of -$0.06, marking a surprise of -133.33%. The company also exceeded revenue expectations, reporting $81.1 million against a forecast of $79.99 million. Despite these positive results, the stock experienced a premarket decline of 7.41%, trading at $4.87. According to InvestingPro data, the company maintains strong financial health with a 6.96x current ratio, indicating robust liquidity. InvestingPro analysis reveals 7 additional key insights about RSKD’s financial position, available to subscribers.

Key Takeaways

• Riskified achieved a 45% year-over-year increase in gross merchandise volume.
• Revenue for Q2 2025 rose by 3% year-over-year.
• Positive adjusted EBITDA recorded for the seventh consecutive quarter.
• Premarket stock drop of 7.41% despite earnings beat.
• Strong international growth, particularly in the APAC region.

Company Performance

Riskified demonstrated robust growth in the second quarter of 2025, with a significant increase in gross merchandise volume (GMV), reaching $36.4 billion, a 45% rise from the previous year. The company’s revenue grew by 3% year-over-year, totaling $81.1 million for the quarter. This performance was driven by strong gains in money transfer and payment sectors, which saw a 90% year-over-year increase. The company also reported positive adjusted EBITDA of $2.1 million, maintaining a positive trend for the seventh consecutive quarter.

Financial Highlights

• Revenue: $81.1 million, up 3% year-over-year.
• Earnings per share: $0.02, surpassing the forecast of -$0.06.
• Gross margin: Approximately 50%, with an annual expectation of 52%.
• Cash and investments: $339 million.
• Free cash flow: $5.3 million, up from $4.1 million the previous year.

Earnings vs. Forecast

Riskified’s Q2 2025 earnings per share of $0.02 exceeded the forecasted EPS of -$0.06, resulting in a surprise of -133.33%. This marks a significant improvement over expectations, indicating stronger-than-anticipated operational performance. The revenue of $81.1 million also surpassed the forecast of $79.99 million, with a revenue surprise of 1.34%.

Market Reaction

Despite Riskified’s positive earnings results, the stock experienced a premarket decline of 7.41%, trading at $4.87. This movement contrasts with the company’s recent performance, as the stock had previously closed at $5.26. The decline may reflect investor concerns over broader market trends or sector-specific pressures. InvestingPro analysis indicates that RSKD is currently undervalued based on its Fair Value calculation, with the stock showing an 11.21% YTD price return. The company maintains a "GOOD" overall financial health score of 2.82, particularly strong in growth (3.84) and cash flow (3.7) metrics.

Outlook & Guidance

Riskified revised its full-year revenue guidance to a range of $336-$346 million, maintaining its adjusted EBITDA guidance of $18-$26 million. The company aims for double-digit revenue growth in 2026 and continues to focus on platform expansion and new product offerings.

Executive Commentary

"We continue to grow our revenue in the second quarter, primarily through sustained new business wins and robust upsell activity," stated Idogal, CEO. Aggie Doceva, CFO, added, "As the e-commerce landscape evolves, our services are becoming more integral to merchants every day." CEO Idogal also noted the increasing complexity of e-commerce fraud as a positive for the company, given its expertise in fraud prevention.

Risks and Challenges

• Increasing complexity in e-commerce fraud could strain resources.
• Market saturation in core sectors may limit growth.
• Macroeconomic pressures could impact consumer spending.
• Competitive pressures from other fraud prevention providers.
• Dependence on international markets, which may face geopolitical risks.

Q&A

During the earnings call, analysts inquired about the opportunities presented by AgenTic Commerce and the company’s response to coordinated fraud attacks. Riskified highlighted a 100% renewal rate with existing customers and ongoing investments in AI and fraud prevention technologies to address these challenges.

Full transcript - Riskified Ltd (RSKD) Q2 2025:

Conference Operator: Good morning. Thank you for standing by, and welcome to RiskAfight’s Second Quarter twenty twenty five Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers’ presentation, there will be a question and answer session. Please note that today’s conference is being recorded.

I will now hand the conference over to your speaker host, Chet Mendel, head of Investor Relations. Please go ahead.

Chet Mendel, Head of Investor Relations, Riskify: Good morning, and thank you for joining us today. My name is Chet Mendel, Riskify’s head of investor relations. We are hosting today’s call to discuss Riskify’s financial results for the 2025. Participating on today’s call are Idogal, Riskifyd’s cofounder and chief executive officer and Aggie Doceva, Riskifyd’s chief financial officer. We released our results for the 2025 earlier today.

Our earnings materials, including a replay of today’s webcast, will be available on our Investor Relations website at ir.riskify.com. Certain statements made on the call today will be forward looking statements related to our operating performance, business and financial goals, outlook as to revenues, gross profit margin, adjusted EBITDA profitability, adjusted EBITDA margins and expectations as to positive cash flows, which reflect management’s best judgment based on currently available information and are not guarantees of future performance. We intend all forward looking statements to be covered by the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995. These forward looking statements reflect our expectations as of the date of this call. Except as required by law, we undertake no obligation to revise this information as a result of new developments that may occur after the time of this call.

These forward looking statements involve risks, uncertainties, and other factors, some of which are beyond our control, that could cause actual results to differ materially from our expectations. You should not put undue reliance on any forward looking statement. Please refer to our annual report, Form 20 F, for the year ended 12/31/2024, and subsequent reports we file or furnish with the SEC for more information on the specific factors that could cause actual results to differ materially from our expectations. Additionally, we will discuss certain non GAAP financial measures and key performance indicators on the call. Reconciliations to the most directly directly comparable GAAP measures are available in our earnings release issued earlier today and also furnished with the SEC on Form six ks and in the appendix of our Investor Relations presentation, all of which are posted on our Investor Relations website.

I will now turn the call over to Idau.

Idogal, Co-founder and Chief Executive Officer, Riskify: Thanks, Chad, and hello, everyone. We’re pleased to report a solid second quarter with performance that reflects both the expanding value we continue to deliver to our global merchant place and our operational discipline. We continue to grow our revenue in the second quarter, primarily through sustained new business wins and robust upsell activity. We also achieved positive adjusted EBITDA for the seventh consecutive quarter. Our entire organization executed well this quarter, and I wanna thank them for their hard work.

I believe that our results demonstrate the continued strength of our platform and the growing demand for AI fraud and risk intelligence solutions. I’m encouraged by our performance in the first half of the year. And since our last call in May and through quarter to date q three, we have observed relatively resilient consumer spending. I believe that we are well positioned to improve in our first half results in the second half supported by our robust new business pipeline and a focus on advancing the AI capabilities of our multi product platform. We have remained focused on gaining market share in existing categories and geographies, while also expanding into new verticals to further diversify our merchant base and position us for continued growth.

We saw consistent international growth in the second quarter with seven of our top 10 new logos coming from outside The US and across four separate categories. In addition, we continue to deepen our presence in non discretionary categories such as money transfer and payments, which delivered exceptional year over year growth. As the global e commerce environment evolves and as we continue to expand our visibility across more categories and geographies, it’s increasingly clear that fraud is becoming more complex, dynamic, and sophisticated. We’re seeing fraudsters leverage advanced techniques, including the nascent capabilities of agentic commerce to launch dedicated attacks. This growing sophistication further reinforces Riskify’s unique value proposition, our proprietary global data network and powerful artificial intelligence platform is designed to enable us to stay ahead of these emerging threats.

While AgenTek commerce remains in the early stages, our R and D teams are already strengthening our offering by developing new capabilities to provide merchants with the visibility they need to embrace legitimate AI shoppers while blocking sophisticated threats. To that end, we recently announced the introduction of multiple solutions and tools designed to advance fraud and abuse prevention in the world of AgenTi Commerce. I believe that our deep e commerce expertise and unique data network will play a valuable role in setting the standard for how AgenTi Commerce can grow safely and profitably for merchants. As part of the expansion of our AgenTi Commerce capabilities, we also announced a partnership with Human Security. This collaboration combines humans’ AI agent visibility, governance, and trust capabilities with Riskify’s e commerce risk intelligence expertise in fraud prevention, chargeback protection, and policy abuse prevention.

This partnership will leverage our industry leading AI platform and expansive network insights to secure the next era of digital commerce. In addition to our progress with AgenTik AI, we continue to see increased adoption of our Policy Protect product during the first half, driven by new logo wins, cross sell activity within our existing customer base and across geographies. We continue to invest in product innovation. During the quarter, we launched a new refund abuse model, which is generating an improvement of at least 15% in technical performance compared to the previous model. This new model leverages behavioral features that we are already using in our fraud models to evaluate abusive behavior on an identity level across our network.

Our ability to leverage our network of features and insights is just part of what makes PolicyProtect so valuable to our merchants. In fact, we’ve heard this feedback directly from merchants. For example, one merchant recently shared that their implementation of Policy Protect, which allows them to reward their best customers with early refunds, was, in part, responsible for a substantial increase in their customer satisfaction scores. This merchant is focused on improving their customer experience to aid in retention and increase the likelihood of repeat shopping. These outcomes reinforce the type of value and differentiated capabilities we aim to deliver to the market.

And as we continue to enhance our product portfolio to intelligently solve a wider, more complex range of use cases for merchants beyond chargeback fraud, we have had success building the pipeline for the remainder of ’twenty five and beyond. Our go to market team surpassed their activity levels in the ’5 compared to the ’4 and is well positioned for an even stronger second half with most second half activity currently expected to convert in Q4. Finally, as a reflection of our confidence in Riskify’s long term trajectory, I’m pleased to announce that our board has authorized an additional 75,000,000 share repurchase program. This decision reflects our conviction in the fundamentals of the business, supported by strong free cash flow, a debt free balance sheet, and a disciplined capital allocation strategy. In conclusion, we remain confident that our powerful AI platform, global data network and strong balance sheet allows us to pursue our growth initiatives to generate value for our shareholders.

I will now turn it over to Agi.

Aggie Doceva, Chief Financial Officer, Riskify: Thank you, Ito, team and everyone for joining today’s call. Our GMV for the second quarter was 36,400,000,000 and our first half GMV was $70,600,000,000 reflecting a 45% increase year over year, respectively. We achieved record second quarter revenue of 81,100,000.0, up 3% year over year, and our first half revenue of 163,400,000.0 was up 5% year over year. Our GMV and revenue growth during this quarter was primarily driven by continued new merchant and upsell activity. Our two largest categories, tickets and travel and fashion and luxury, grew 1510% year over year, respectively, driven primarily by strong new business wins and upsell activity.

Consistent with recent years, growth in our fashion and luxury category was partially offset by continued same store sales pressure, particularly within our high end fashion and sneakers sub verticals. We continue to expect year over year growth in both categories to moderate slightly through the second half of the year, reflecting a continuation of the same store sales pressure observed in the first half and due to tougher comparable periods with respect to the tickets and live events space in the second half of the year. We remain confident that both of these categories will deliver full year growth supported by a strong pipeline of new business opportunities, which we believe will more than offset the same store softness we have seen. As anticipated, we saw year over year declines in our home category, which contracted by 74%. And consistent with the first quarter, our money transfer and payments category achieved approximately 90% year over year growth in the second quarter.

This growth was driven by new merchant activity, which continued to be a key area of expansion. The United States declined 11% year over year, primarily as a result of the contraction in our home category. But encouragingly, we continue to grow across all of our other regions. During the second quarter, APAC grew approximately 40% year over year, and other Americas, which represents Canada and Latin America, grew approximately 16% year over year, primarily due to momentum in new business and upsell activity with particular strength in travel. EMEA grew approximately 23% year over year with the strongest performance concentrated in our fashion and luxury, tickets and travel, and money transfer and payments verticals supported by both new business and upsell momentum.

We believe that our continued international growth reflects ongoing progress in capturing market share. Moving to gross margin. Our non GAAP gross profit margin for the 2025 was approximately 50%, consistent with the first quarter and down from 53% in the prior year. Similar to the first quarter, the year over year decline was primarily driven by the ramping of merchants in emerging categories, such as money transfer and payments, and geographies such as other Americas. The impact of these factors was partially offset by the improvements in our core machine learning models and continued growth in new product revenue.

As a reminder, I encourage you to continue analyzing our gross margin on an annual basis, given individual quarters can vary due to various factors, including the ramping of new merchants and the risk profiles of transactions approved. As we progress through the year and have more clarity on these factors, we anticipate delivering an annual non GAAP gross profit margin of approximately 52% for 2025, which is at the low end of the initial target range set on our fourth quarter twenty twenty four call. For modeling purposes, we currently expect our non GAAP gross profit margin for the second half of the year to be higher than the first half, with the third quarter to be slightly below 52% and the fourth quarter to be higher than the targets. Moving to expenses. We continue to manage the business in a focused and disciplined manner.

Total non GAAP operating expenses were $38,200,000 for the second quarter, down from $39,300,000 in the prior year. Our non GAAP operating expenses as a percentage of revenue for the second quarter declined year over year from 50% to 47%, reflecting ongoing leverage in the business model. We anticipate having quarterly non GAAP operating expenses of approximately $38,500,000 in the third and fourth quarter. We achieved positive adjusted EBITDA of $2,100,000 in the second quarter and $3,500,000 for the 2025. Our second quarter results reflect the seventh consecutive quarter of positive adjusted EBITDA.

Moving to the balance sheet. We ended the second quarter with $339,000,000 of cash, deposits and investments, and we continue to carry zero debt. In addition, we continue to maintain a healthy cash flow model. And in the second quarter, we achieved quarterly free cash flows of $5,300,000 up from $4,100,000 in the prior year. We expect approximately $30,000,000 of positive free cash flow based on current conditions in 2025, with the majority of the cash flow generation expected to occur in the fourth quarter of the year.

As Idel mentioned, I am excited to announce that our Board of Directors has authorized an additional 75,000,000 of share repurchases subject to the satisfaction of Israeli regulatory requirements. When combined with amounts that remain available under our existing share repurchase authorization, our total outstanding authorization is approximately 85,000,000. In the 2025, we repurchased 9,000,000 shares for a total price of approximately 44,000,000. As a result of our buyback activity and our commitment to prudent dilution management, we continue to expect our share count to decline year over year. We believe that our strong balance sheet and liquidity position are strategic assets that provide us with the flexibility to navigate a range of operating environment.

We intend to remain disciplined and thoughtful in how we deploy capital to create long term shareholder value. Now turning to our outlook. As a result of the solid first half of the year, we’re improving the bottom end of our revenue range to now anticipate revenue between $336,000,000 and $346,000,000 or $341,000,000 to the midpoint. We maintain our adjusted EBITDA guidance that we reaffirmed on our previous call to between $18,000,000 and $26,000,000 or $22,000,000 to the midpoint. Overall, I’m encouraged by our solid first half of results and execution, and I believe that we’re well positioned to improve on these results in the second half.

As the ecommerce landscape evolves, our services are becoming more integral to merchants every day, and I believe that our leading market positioning and opportunities to accelerate growth will enable us to realize riskify’s full potential and deliver value to shareholders. Operator, we’re ready to take the first question, please.

Conference Operator: Thank you. Now first question coming from the line of Terry Tillman with SUIZ Securities.

Terry Tillman, Analyst, SUIZ Securities: I had a the first question is going to be kind of looking into second half of the year and assumptions, and then the second one is going to be more of a strategic kind of high level question on But first, in terms of I think you all talked about strong second half sales pipeline, which sounds great. How much though are you assuming converts to business and actually live implementations by the holiday season? And the second part of this first question is in 4Q around the all important holiday season, do you think fashion and luxury would have positive same store sales or are you assuming flat or down? And then I had a follow-up.

Aggie Doceva, Chief Financial Officer, Riskify: Hi, Terry. Thank you for the questions. I’ll take the first one, and I’ll pass it to it down. So thinking through, our very solid first half of the year, I’m very happy with the way we performed. And, just now being almost, eight months into the year, I’m happy that we’re able to flow some of the outperformance.

When we think about the back half of the year, there’s a number of opportunities in our pipeline. Some of them are already integrated or in a committed stage, and probably some parties kind of like to work later in the year. It’s still in the pipeline, but usually these are kind of like less material to some of the calendar numbers in a way. So overall, happy with the new business with the execution and looking forward to performing in the second half of the year.

Idogal, Co-founder and Chief Executive Officer, Riskify: Yeah. We’re expecting win rates or conversion rates similar to what we’ve seen historically.

Terry Tillman, Analyst, SUIZ Securities: Okay. Got it. Thanks, Steve, both on that. And I guess, yeah, mean, we’re hearing a lot about AgenTek Commerce and then what seems like even the discovery process for shoppers during Prime, the multi day Prime period. There is a lot going on around AgenTek commerce, but it does open up potentially new threat factors or just creates more complexity.

Is this sparking some net new conversations? Or is it helping kind of speed up some of your existing kind of pipeline conversations? Or is it actually maybe something that could be a little bit stymieing because, hey, this is a new development. We wanna get through the holidays before we really kind of embrace this and and talk about how you all could help us with this. Maybe you could just share a little bit more on AgenTic Commerce.

Thank you.

Idogal, Co-founder and Chief Executive Officer, Riskify: Sure. That’s a great question. I mean, obviously, it’s really a fast evolving space, and we just want to be there for our merchants and position ourselves as kind of the leader in AgenTic Trust. And when you think about what we’re actually doing, we’re enabling our merchants to identify AgenTic agents from other traffic and bots and both accept those transactions and create custom rules and policies and approval matrixes based on those different agents. And for the agents themselves, we’re creating a risk service that enables them to provide a risk free commerce solution.

I think from a pipeline perspective, it’s a net benefit for us because both merchants now have more budgets related to solving AI related hurdles. So that opens up budget opportunity. And it also enables more conversations as merchants wanna be at the forefront of this and make sure that they have the right infrastructure to support Agenza Commerce. So we’re really excited about that.

Terry Tillman, Analyst, SUIZ Securities: Thank you.

Conference Operator: Thank you. Our next question coming from the line of Will Nance with Goldman Sachs. Your line is now open.

Will Nance, Analyst, Goldman Sachs: Hey, guys. Appreciate you taking the question. Wanted to ask a question on some of the performance you mentioned by vertical. I think you mentioned you had a couple of expectations around a deceleration in one or two of your verticals, offset by really continued strength on the remittance side. So wondering if you could go maybe just a level deeper and talk through what are some of the recent trends that you’ve been seeing across the business and anything to call out or anything that you, wondering what you’re basing some of those, same store sales commentary in the back half of the year on as well.

Appreciate it.

Aggie Doceva, Chief Financial Officer, Riskify: Hi, Will. Thank you for the question. So, what we’ve been seeing in, in the second quarter, some of it is continuation of what we saw in Q1. For example, travel and payments performed really well and really strong. And some of the expectations there also kind of to continue this strong performance for the rest half of the year.

Some other categories like tickets have been a little bit softer. It’s important to point out tickets had an explosive growth and it was really, really strong in 2024. We added a number of new merchants there as well. Q4 of last year was exceptionally strong. There were just a variety of events that I believe brought record tickets for most of our merchants.

Looking into this space this year, we’ve seen some more volatility. Q1, started kind of relatively strong, but this trend softened now in Q2. We’re actually seeing some softness in a number of our, merchants in this category. And I would say June was specifically soft. And looking towards the rest half of the year, I think that lapping of the very strong second half of the year in 2024 is going be just a little bit harder.

And in terms of activity and type of events that are lined up, just in conversations with our merchants, like, I don’t see particular strength that can carry this type of performance that we saw a year ago. So that’s kind of like around more tickets and travel. In terms of fashion, we’ve seen some stability, same corporate numbers are still negative, but some stability. And we continue to execute there by adding more new merchants and executing on upsell. So that drives some of the growth in this category for us.

Will Nance, Analyst, Goldman Sachs: That’s very helpful. And then just on the OpEx side, OpEx continues to be very well managed and kind of flat to down over time. Just maybe talk through any notable moving pieces in the OpEx space and any line of sight to getting to a point where the OpEx needs to start growing again would be helpful as well. Thank you.

Aggie Doceva, Chief Financial Officer, Riskify: Of course. So we started the year and we did some of the offshoring activities. We kind of mentioned that we expect Q2 to be lower. It ended up a slightly bit lower just for a variety of reasons. Some of it is just doing the execution of the offshoring, which has been going really well.

Some other variances there are more around just timing of backfills and vacation taking, etcetera. So all in all, what I guided is around 38.5 towards back half of the year. I think it’s like relatively similar to where we performed in Q2 and I expect this to be our back half of the year kind

Chet Mendel, Head of Investor Relations, Riskify: of run rate.

Will Nance, Analyst, Goldman Sachs: Awesome. Thanks for taking the question.

Conference Operator: Thank you. Our next question coming from the line of Timothy Kyoto with UBS. This

Jing, Analyst, UBS: is Jing on for Tim. I wanted to dig in on adaptive checkout offering. So I understand this product not monetized separately, but more as a key enhancement to your chargeback guarantee offering. So can you share some of the trends of merchant adoption and whether it helped you win some of the new logos mentioned in this quarter?

Idogal, Co-founder and Chief Executive Officer, Riskify: Sure. I’ll take that. Thanks for the question. So maybe just taking a step back to refamiliarize everyone, adaptive checkout allows us to optimize the end to end conversion funnel by both sending smart singles pre auth, to some of the payment, processors or card issuers to enhance authorization rates. And it also enables us to, you know, kind of VR models run very a very smart friction stack on borderline transactions, thus approving more transactions.

So you can imagine instead of having just a straight 200 basis points of declines, we would send some kind of 100 basis points of those to Smart Friction, either that could be an SMS, a three d secure notification, a request for CVV really depending on the risk characteristics of the transaction. And as we talk to kind of sophisticated enterprise merchants, they love it. It’s exactly the type of stuff that they want, they think about, that they try to build internally and have a hard time managing. And we’ve seen great adoption, double digit percentage, really growing quickly both within our current installed base and on a new prospect logo. Know, we’ve definitely continued to see high win rates that we believe are related to the platform offering.

It’s hard for me to pinpoint how much of that is exactly just because of adaptive, but I think it’s a great contributor to the overall story in value prop.

Jing, Analyst, UBS: Awesome. Thank you so much for all the color. My follow-up would be a quick follow-up on AgenTek Commerce. So in the press release you put out with human, you mentioned there is about 2x higher risk traffic driven by agentic traffic volumes. So can you expand on some of the risky traffic that you saw?

And also, does it ultimately help increase demand for any type of chargeback guarantee offer that merchants will now seek with the higher risk associated with AgenTek?

Idogal, Co-founder and Chief Executive Officer, Riskify: Yeah. So what we see time and again is with every new type of flow in ecommerce, fraudsters are early adopters because they understand exceedingly well that protections are usually put in place later in the game. So just by the virtue of fraudsters being early adopters, and to be clear, what’s happening here is that you see stolen credit cards being loaded into some of these agents that perform the commerce, and that’s really the main MO that we’re seeing. So I think that’s driving the initial bump in fraudulent activity, the challenges that merchants have in identifying some of this traffic. At the same time, I do wanna kinda level set that it is still still nascent.

But, obviously, you know, we have to position ourselves in this kind of incredibly strategic field. So that’s that’s what we’re seeing today.

Jing, Analyst, UBS: Got you. Makes a lot of sense. I’ll pass it on. Thank you.

Conference Operator: Thank you. Our next question coming from the line of Ryan Summastella with KBW. Your line is now open.

Ryan Summastella, Analyst, KBW: Hi, everyone. Thanks for taking the questions. Just in terms of the implied second half guidance, I think that suggests revenue growth at the midpoint in the low single digit percentage range. Agi, can you just help us unpack I think there’s just mainly two moving pieces there in terms of lapping last year’s large customer churn. And then I also think you guys have called out this billing versus revenue growth dynamic that I think was an important delta to call out, especially into year end.

So if you’re just able to give us what the implied 4Q exit growth rate is in the implied guidance range on a normalized basis, that’d be helpful, whether that’s on billings or revenue, whatever you think is a better number to look at here. Thanks.

Aggie Doceva, Chief Financial Officer, Riskify: Sure. So you pointed out exactly some of the main two reasons why we expect to see on a billings, some of the acceleration in Q4. It’s not evident in revenue, just some of because of the accounting, the way it works. But as an exit rate, we are on track and we are building and executing towards double double digit revenue growth in 2026. This is our North Star, this is what we’re executing and nothing has changed.

Ryan Summastella, Analyst, KBW: Okay, great. Thanks for reiterating that. And then just on the competitive front, you guys have clearly made some great strides expanding the breadth of the product set as you’re evolving more into a platform solution. I think you’ve called out in your prepared remarks some nice competitive wins from another player in the core chargeback guarantee product. But just bigger picture, if there’s any color you can provide on just how you’re seeing the competitive landscape evolve, particularly relative to next gen competitors in this space, how your win rates have been evolving and if there’s any other recent examples to highlight in terms of what might be starting to resonate more here with customers as you’ve executed on the platform expansion?

Thanks.

Idogal, Co-founder and Chief Executive Officer, Riskify: Sure, I’ll take that. I mean, think our win rates have been high or remained high in kind of the 70% range for a few quarters now. And I think for us what we’re seeing is that most of the market is still on these legacy solutions and from a handful of modern ones, it’s really the field is narrowing in a pretty meaningful way. And I fully expect that over the coming years, the increase in GMV, the amount of e commerce activity flowing through Riskify will be by far the largest. The reason I think that and I’m optimistic is not just the win rates, it’s all the global expansion that we’re experiencing, that we’re highlighting.

It’s the entrance into new verticals. If a few years ago people said, hey, maybe riskified is really tied into fashion, maybe just advancing into ticketing. I think we’re seeing a really strong breadth that we’re showcasing, whether it’s through remnants and groceries and some of the other categories. So I think that’s putting us in a great position and the continued focus and increase in accuracy further creates distance between us and some of the other smaller competitors. The range of offerings from the platform, whether it’s some of the paid offerings like policy or some of the add ons, the chargeback like adaptive checkout, continue to create more value and just create a bigger barrier of entry towards other solutions.

So that’s kind of the slightly longer view on that.

Ryan Summastella, Analyst, KBW: Great. Thanks for the color.

Conference Operator: Thank you. Our next question coming from the line of Chris Kennedy with William Blair. Your line is now open.

Chris Kennedy, Analyst, William Blair: Thanks for taking the question. Can you just talk about the revenue contribution or the revenue growth from some of the newer products such as PolicyProtect, Dispute Resolve or AccountSecure?

Idogal, Co-founder and Chief Executive Officer, Riskify: Yeah. I think similar to the prior quarter, it was well over 100% in the range of yeah. 150.

Chris Kennedy, Analyst, William Blair: Okay. Great. And still on track for, I think, I don’t know, single, low double digit total contribution for this year?

Idogal, Co-founder and Chief Executive Officer, Riskify: Correct.

Chris Kennedy, Analyst, William Blair: Okay, great. Thanks for clarifying that. And then clearly, the repurchase program is out there. But can you just talk about kind of your strategy on the M and A environment or anything you’re seeing out there in the market for capital allocation? Thanks for taking the questions.

Idogal, Co-founder and Chief Executive Officer, Riskify: Of course. I mean, it remains consistent, right? Where if there is a good opportunity to enhance our product portfolio and leverage the strategic relationship we have with so many blue chip publicly traded companies, we’ll definitely look to acquire small technologies that we can cross sell into this great base. We think that there’s opportunity to consolidate smaller players that don’t have alternative exit options, and we continue to believe that’s an opportunity in the medium term. At the same time, we’re always looking at current valuations relative to our expectations for the business and making repurchase decisions based on that.

Reggie Smith, Analyst, JPMorgan: Thank you.

Conference Operator: Thank you. Our next question coming from the line of Reggie Smith with JPMorgan. Your line is now open.

Reggie Smith, Analyst, JPMorgan: Thank you. Good morning. Congrats on the quarter. I had a question on, I guess, Agenda Commerce as well and maybe just risk more broadly. Can you remind us, I guess, what proportion of the fraud you see is kind of like large coordinated attacks and whether or that mix has been increasing?

And then as you think about Agintiq, is the bigger threat in your eyes LLM fraud or maybe purpose built AI platforms, spamming websites or things like that? And I have a follow-up. Thank you.

Idogal, Co-founder and Chief Executive Officer, Riskify: Sure. So I would say there has been an increase in what you would consider professional, coordinated, large scale fraud attacks. It usually happens as people take over devices with remote desktop hacking. It can happen with large data breaches where people have access to a large number of accounts. And obviously, the exposure to merchants is much larger in those instances.

So that’s probably the bigger portion of fraud attacks, and that has been increasing. Specifically with regards to Gen2 Commerce, what we tend to see is people loading stolen information or stolen cards into these different AI shopping agents. And that’s really the attack vector that we’re seeing right now. Not that the LLMs themselves are being purposefully billed, like, from fraudulent reasons. They’re just being manipulated or managed in a way that performs fraud.

Reggie Smith, Analyst, JPMorgan: Got it. Yeah, I was actually more talking about whether that was like open AIs at making fraudulent LLMs, but like whether or not that technology and capability and I guess coding were being used to make purpose built fraud engines and things like that. But that’s fine. And then last one for me, guess with the human announcement, is that deal exclusive? Do you expect to work with other kind of AI security type vendors?

And then lastly, you mentioned something about potentially partnering with LLMs directly. What can you share about those efforts so far? Thank you.

Idogal, Co-founder and Chief Executive Officer, Riskify: Sure. So on our partnership with human, we do think it creates very unique and differentiated offerings. Some of their capabilities more on the perimeter to identify bots. And based on that identification, being able to understand more if it’s an agent or a bot just for various pricing activities and whatnot. And as we think about the LLMs themselves, if you think about, hey.

I’m creating a dedicated shopper that’s doing everything end to end, including the purchasing process, that’s when you have, you know, a risk component on the shopper and you would need to query a service like Riskified in order to make sure that you have safety and guaranteed and there’s trusted commerce in this place.

Reggie Smith, Analyst, JPMorgan: Okay. Thank you.

Conference Operator: Thank you. Our next question coming from the line of Clark Jeffries with Piper Sandler. Your line is now open.

Terry Tillman, Analyst, SUIZ Securities: Hello. Thank you for taking the question. I wanted to ask about the proactive renewal effort this year with some larger contracts. Wondering if you could comment on what the renewal rate was this quarter and if there’s any way to size the renewal cohort that’s coming in the back half? And then I have one follow-up.

Idogal, Co-founder and Chief Executive Officer, Riskify: Yeah. It’s been a 100% success rate or kind of similar to prior quarter and feel great about that. I think that we’ve continued to focus on creating, you know, unmatched value even though we’ve had, you know, slightly slightly below gross margin expectation h one. We’ve continued to focus on creating great outcomes for our merchants, and we think they really appreciate that, and that’s kind of showing through in some of the the renewal numbers that we’ve been seeing. At the same time, we have kinda seen a more positive quarter to date improvement so far in q three, so we’re also happy with with how both of these things are progressing.

Terry Tillman, Analyst, SUIZ Securities: Perfect. And then you called out a large merchant in the ticketing and live events vertical moving over remaining volume. Could you talk about what catalyst was the decision for that vendor? And broadly, the upsell that you’re seeing in the business overall, is that being led by volume or by Policy Protect? Thank you.

Idogal, Co-founder and Chief Executive Officer, Riskify: Yeah. Great question. So this is a merchant that started with kind of really a unique segment. I think they were sending anywhere from five to 10% of their volume to some manual review queue and then we were able to fully automate that five percent to 10% at a similar cost structure, probably even slightly better with great approval rates. They saw the performance there for a number of months.

We were already integrated. And then the upsell happened, really, we were able to offer them higher approval rates, better performance, I think in the range of 50 basis points for guaranteed cost savings, probably a 20% reduction in their overall cost of fraud. At the same time, they also did deploy our policy solution, and then it’s looking for brokers that are creating a substandard customer experience where there’s a lot of of deny at gate for the events and being able to block them proactively. So that was definitely I think a consideration when they thought about going for the entire SHOP volume. Interesting.

Thank you.

Conference Operator: Thank you. Our next question coming from the line of Clark Wright with D. A. Davidson. Your line is now open.

Terry Tillman, Analyst, SUIZ Securities: Good morning. So there’s been strategic focus on expanding the role of risk providing the payments or broader payment space. Can you talk about how you guys have progressed this last quarter and how you expect to accelerate growth going forward in this space?

Idogal, Co-founder and Chief Executive Officer, Riskify: In the payments and remittance space? I think, look, similar to other areas, we see once we’ve had success and are able to create both custom features and models and understand the the somewhat unique risk characteristics of a vertical, it just helps us provide more value to other merchants in that vertical together with the brand and name recognition that we start to have. And I think that strategy that worked well in fashion and in tickets, and it’s one that we’re doubling down on for, payments and remnants as well.

Terry Tillman, Analyst, SUIZ Securities: Appreciate that. And then there’s a notable AI, spokesperson who a few weeks ago called out an AI fraud crisis. And I’m just wondering how Riskifyd is positioned to help merchants in this scenario handle this growing issue.

Idogal, Co-founder and Chief Executive Officer, Riskify: Look, for us, it sounds terrible to say it, but an increase in fraud and the complexity of the world of fraud is a positive as fraud becomes more complex and challenging and as you see, attacks lead to an increase of things like social engineering and people taking over devices and doing what we call sophisticated fraud, an individual merchant has a harder time managing all of this and they need a platform similar to Riskify for all the various use cases. If you think even a few years back when we were just talking about Riskify, it was like, okay, this is a solution that helps identify credit card fraud. And now you have things like adaptive checkout, and you have policy, and you have dispute resolve, and you have identifying agenda commerce and being able to create rules around that. So all this complexity means that it’s much more challenging to solve internally, which ends up being a net benefit for us.

Chris Kennedy, Analyst, William Blair: Awesome. Thank you.

Conference Operator: Thank you. I’m showing no further questions in the queue at this time. I will now turn the call back over to Mr. Edougall for any closing remarks.

Idogal, Co-founder and Chief Executive Officer, Riskify: Thank you everyone for joining us on today’s call, and we look forward to updating you on our progress in the quarters ahead.

Conference Operator: This concludes today’s conference call. Thank you for your participation, and you may now disconnect.

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