Riskified at D.A. Davidson Conference: Strategic Insights into E-commerce Risk Management

On Tuesday, 10 June 2025, Riskified (NYSE:RSKD) participated in the D.A. Davidson 1st Annual Consumer & Technology Conference. The discussion offered a strategic overview of Riskified’s business model, highlighting its approach to managing e-commerce risk and its future growth plans. While the company is optimistic about expanding its product portfolio and geographical reach, it also faces challenges such as client churn and competitive pressures.

Key Takeaways

• Riskified uses advanced machine learning to identify and prevent e-commerce fraud.
• The company aims for 15% to 20% EBITDA margins by 2026.
• Newer products saw significant growth, with a 190% year-over-year increase in Q1 2025.
• Riskified’s services reduced costs for its top 10 clients by 30%.
• International growth is robust, with most top clients based outside the US.

Financial Results

• Newer products generated $4 million in 2024, with expectations for low double-digit millions in 2025.
• A major client churn in Q4 2024 is anticipated to impact 2025 revenues by approximately $20 million.
• The company drove a 7% incrementally higher approval rate for its top 10 clients.
• Riskified targets 15% to 20% EBITDA margins in 2026, focusing on top-line growth and expense management.

Operational Updates

• Ticket and travel sectors now contribute significantly to billings.
• Riskified is expanding into new categories such as payments and remittance.
• The policy product aids merchants in analyzing returns and refunds, enhancing customer experience.
• Competitive win rates have remained at or above 70% in recent quarters.

Future Outlook

• Riskified plans to expand its product portfolio and increase its market share.
• The company intends to enhance its capabilities across various geographies and industries.
• Continued focus on a strong go-to-market strategy and expansion into new regions is a priority.

Q&A Highlights

• Riskified’s main competitors are in-house teams using multiple solutions.
• Share repurchases are currently considered the best use of capital due to limited M&A opportunities.
• The impact of tariffs is expected to be minimal, with less than 1% direct impact from China to the US.

For more detailed insights, readers are encouraged to refer to the full transcript below.

Full transcript - D.A. Davidson 1st Annual Consumer & Technology Conference:

Clark: Well, you guys for showing up today. We have the pleasure of having Ito Gao from Riskified. And then for maybe those who don’t know Riskified well, can Ito, could you maybe provide just a brief overview of what Riskified does?

Ito Gao, Riskified, Riskified: Sure. So we started by helping merchants manage ecommerce risk, looking at incoming transactions and understanding if they’re fraudulent or not. And over the years, we’ve expanded to also helping them manage their different store policies and find abuse. So for example, if someone is claiming that they never received their package even though they did, to manage their chargeback representment process with the banks when someone does file a a claim against them, and also to protect consumer accounts.

Clark: Awesome. And then maybe you talked about the specific problems, but maybe for reference, it’d be helpful to know how big this market actually is.

Ito Gao, Riskified, Riskified: Sure. So the problem starts that, if you’re not familiar, merchants are liable for card not present fraud. Right? So basically what that means is that if I steal your credit card, I order something from an online merchant, I receive the package, you see it on your statement, you ask around at home, hey, did anyone order something from, you know, whoever this merchant is? Everyone says, no.

It wasn’t us. You contact your card issuer, and you say, you know, it’s an unauthorized usage. Someone stole my credit card. They say, hey. No problem.

You’re protected. Right? They pay you back that amount, and that amount is taken out of the merchant’s account. So merchants are liable for card not present fraud. And, you know, on an aggregate basis, they end up paying hundreds of billions, okay, because of this.

So the sample p and l for an ecommerce merchant might look like this. 25 basis points in chargebacks related to fraud, another three basis points in staffing, so those are the people that need to manage this process, And another two basis points that they pay to tools to help them, you know, build better rules and modeling and detection to, you know, kind of identify that fraud. And when we started Riskified back in in 2013, we kinda said, hey. You know what? We we don’t think that we wanna just be a tool that they use internally.

We actually think we can do a better job of, you know, just doing an end to end decisioning network because we have better machine learning capabilities. Back then, it was machine learning. It it was not AI yet. So we have better ML. We have kind of better network effects, and we have better engineering resources to solve this problem.

So we wanna provide our customers guaranteed performance. Right? And we come to our customers and we say, hey. We’re gonna guarantee your cost. So basically, if we approve a transaction and it results in a chargeback, we would pay you back.

And we also guarantee the approval rate that we provide our merchants. Right? Because really, the easiest way to take fraud down is to take approval rates down, which is obviously not, you know, kind of very helpful if you want long term great relationships with your customers. So we guarantee both the cost, and by doing that, we’re able to replace the entire 30 bps of cost and not just, what was historically the two basis points that merchants paid their service providers. So that was a long answer, but hopefully it gives more context.

Clark: That’s very helpful. And I guess you talked about solving the problem, but how is it that Riskified looks at this problem and effectively solves it on the behalf of merchants? And then I guess building off that as well is how are you compensated? You mentioned 30 basis points. What is the take rate that or how do you, I guess, look at solving for that take rate component to be compensated for the risk?

Ito Gao, Riskified, Riskified: Sure. So let me start with the technology, how we do it, and then kind of the economics and how we work with our clients. So the technology starts with a very deep deep level of data capture per transaction. So we have a beacon that sits on the merchant’s website. So we see the different pages that you’re browsing, we understand what products you’re looking at, we understand if you’re creating an account, things that you add to your account, things that are in your cart, and then we have the checkout page information.

We also have merchant specific data that they pass to us. So for the OTAs that we work with, for example, they would pass us the flight route, the cabin affair, right, so that’s very specific merchant related data per industry. Afterwards, we also have data if you contact the support team. What did you say? Did you request an address change?

We have information if you filed a chargeback, you know, kind of for fraud or non fraud reason codes because we have the dispute product. We also know if you’ve requested a refund or return because of the policy product. So that very rich level of data comes to us and, you know, we checked and it was actually three times what a payment processor might get. And and that all sits in a very unique modeling environment with supervised machine learning that’s really been tagged and trained by us in our internal and kind of proprietary data. And focus on enterprises.

We work with over 50 publicly traded companies. We’re a kind of best of breed solution in our space, and they test us and continue to choose us. And we’ve also created what we call an an autonomous training environment. So if you’re a large merchant working with Riskify, the model that we deploy for you is gonna be trained based on your specific data points and tailored to you, which really just allows us to optimize performance to a very high degree. So we don’t need to have a very generalized model that works on all electronics merchants.

Mhmm. Right? We can really work with a single merchant that, you know, again, we work with large complex enterprises, so we might have a different model on their gift cards. We might have a different model on their international travel business. We might have a different model on their domestic accommodation.

And we do all those things to really, again, optimize performance. So that’s the technology, really, like, very, very broadly. And if we think about the, you know, how the pricing structure works, so we talked about the various components that make up the merchant’s p and l. Right? And we do risk adjusted pricing, and that’s how we can work with very safe merchants in categories like groceries and food delivery, and very high risk merchants in categories like remittance and digital gift cards.

So if you’re in a safer industry, we would provide you a lower fee because risk adjusted, you have lower fraud rates. And at the same time, we would also provide you a higher approval rate guarantee. Right? So maybe 10 basis point fee with a 98% approval rate. If you’re in a higher risk industry, you know, luxury fashion globally, whatever it is, then you would anticipate a lower approval rate, 93, and a higher fee, let’s say, 35 basis points.

So in that sense, the risk adjusted fee means that we’re applicable to various, you know, kind of categories and industries, which we think is very important. The common thread and theme is that for a 100% of our clients, we’re able to outperform their internal systems and internal teams and drive value. So around the time of the IPO, we actually did an analysis, And for the top 10 clients, we were able to reduce cost by 30%. Right? So the fee that they paid riskified was 30% lower than their cost of managing fraud internally.

Mhmm. And at the same time, we were also driving, I think, 7% incrementally higher approval rates.

Clark: That’s helpful. Appreciate that. And then, I guess, given your gut you guys have been around for all you know, over ten years. How has fraud changed during that time frame?

Ito Gao, Riskified, Riskified: So the great thing for us about fraud is that it it’s it’s a game of Ken Maps. Okay? It’s not something that you solve once and it goes away. And in that sense, in order to, you know, go after it, merchants need to continuously invest resources in order to catch the newer fraud trends. Because fraud is becoming more sophisticated, it it remains very challenging them for to do that.

And those challenges, you know, are better suited by a specialized company like ours to it. You know, why is fraud increasing? You know, just potentially the fact that there’s so much more ecommerce and omnichannel and you can get very high value goods. The fact that there’s no regulated market in law enforcement in these industries, like if you were to go and call someone and say, hey. Someone defrauded me, an online retailer, for a few thousand dollars.

They would say, you know, I I don’t know. Is that Korea or Russia? Like, what exactly do you expect me to do there? And and the rise of AI tools and capabilities have also helped fraudsters perform more sophisticated fraud with a lower barrier of entry.

Clark: Awesome. And you’ve talked about previously on earnings calls and at Ascent last year about the riskified flywheel. Can you talk more about what that means and how it differentiates you from competitors in the So

Ito Gao, Riskified, Riskified: as time goes by, we see that we get more accurate. And we get more accurate because more merchants join the network and we have a better data advantage. We get more accurate because we’re a bigger company and we’re able to develop more machine learning based capabilities that improve our engine. And that just means that the value that merchants are getting from us is higher than it was when they started. Right?

They started at a 96% approval rate. Now they’re at 99. And it’s not just the approval rate. And by the way, that delta in approval rate means that any competitor, it’s much more difficult for them to reach our level and to provide value, is why we have high retention rates. But it’s not just the the approval rates in the core product.

We’ve also added and started attaching these auxiliary products. So it used to be that Riskified only helped you with fraudulent chargebacks. But now we help you with your policy abuse issues, and that’s significant. Right? And in in most merchants that work with us on policy, we’re able to block upwards of 10% of their refund and return requests and tell them, that’s actually that’s not a real customer.

There’s no one in Clark that never received a package. This is someone who created a fake account. We see them linked to others in our network, and you don’t even need to honor this return request or refund request. You can just keep the money. So that’s massive ROI and savings for them right there.

Together with the with the dispute management product, the account secure, so we’re providing more value to our clients as time goes by, helping us increase our, you know, kind of merchant size, our revenue base, helping us develop more products for them. So I think we’ll continue to see that type of product innovation and value creation for our clients.

Clark: Appreciate that. And then I’ve heard you recently mention your ability to resolve the true identity behind each online interaction with your identity engine. Can you walk through why this is specifically important?

Ito Gao, Riskified, Riskified: Yeah. So when you think about policy as an example, what a retailer sees is let’s use the same example. Right? Clark is a time new customer, and he’s initiate and he’s saying that he never received his package. What do I do in this scenario?

Probably 90% of merchants would say, you know, reasonable. I want to give Clark an amazing experience. Let’s honor that request. Because we’re able to understand across our networks using various device fingerprinting and other links and kind of some more sophisticated cyber analysis, we’re able to say, sure, this is Clark, but actually it’s also, you know, Johnny from that story over here and Chet from that story over there. So by understanding the identity, you can make a smarter decision.

And and that’s the same thing for the fraud decisioning as it is for the policy decisioning. For example, with our dispute resolve product, right, a lot of the times the the nuance is how to win what’s called a friendly fraud, like chargeback, which is basically an underage kid taking their parents’ card, buying something, the parent sees it, says, I didn’t order this, and then, you know, creating a chargeback by being able to link the the device or the identities in a household. We’re able to submit that as file to the banks and have high win rates. So really understanding identities is the core of all of the the product platform that we have.

Clark: Interesting. And as we think about AI commerce becoming the norm and risk provides leadership in the traditional e commerce space, what changes and how are you positioned to help customers navigate these changes?

Ito Gao, Riskified, Riskified: I think it’ll be interesting to see kind of agenda commerce where it goes and and how it leads, and it is a really fascinating use case. And and will it be leveraged by the current existing brands, or is there gonna be some kind of, you know, this intermediation by a centralized player where that’s where you you perform your shopping? Those are all interesting perspectives for us. The question is how do we identify the person creating the purchase and it’s usually related to bot activity which we’re good at identifying or not. And now that you’ve identified that it’s a bot, it can actually be positive or negative.

Right? It could be a positive bot and you want to enable that as a merchant or it can be a nefarious fraudulent or even if it’s not nefarious, maybe you just don’t want that type of business on your store. So I think for us it starts with being able to identify it. Once we’re able to identify it, understand is the intent positive or negative, this result in a chargeback. And from a go to market perspective, you know, is this gonna work through our existing channels, I.

E, the merchants that we already work with or is this one of the newer, you know, kind of AI platforms where the purchasing would would happen through them and then it’s more of a integration and process with them.

Clark: Interesting. And then kind of pivoting here to the kind of the customer base regarding the vertical mix and distribution of the business. Tickets and travel now accounts for roughly a of billings, which is a step up from where we saw 2020, 2021. How does the value proposition resonate with this specific vertical?

Ito Gao, Riskified, Riskified: Yeah. So that’s right. So it used to be that about 45% of the business was fashion, predominantly luxury, and that’s gone down as we’ve tried to diversify the base. And now we have a in fashion, a in tickets and travel, and the remaining in other categories like payments and remittance and electronics and groceries and food delivery. I think what we’ve seen is is that as we’ve been able to become more successful in a specific industry like tickets or or travel, we’re able to understand the nuances from a fraud and value proposition perspective.

Right? And that helps us drive both, you know, kind of the the incremental performance that they need. So, a, we obviously understand the fraud trends in the ticketing space related to brokers or fan to fan purchases or primary tickets or, you know, secondary broker sales. So those are all, like, nuances that we know how to take into account that help us drive incremental approval rates. At the same time, we also have the best network effect within these categories that helps us drive superior performance.

And we’re also able to come to every, you know, secondary or primary ticket and say, hey. Look at this list. This is everyone who works with us. Don’t you, you know, kinda wanna join as well? Which are all helpful.

Right? So we’re making a conscious effort to expand into newer categories for us, and I think we highlighted payments and remittance as one that we feel has has a lot of promise. And we think we’ll continue to see that trend of being able to build a network effect within some of these categories.

Clark: And then you also call that international growth being strong in recent quarters. Can you talk about the company’s go to market motion outside The United States?

Ito Gao, Riskified, Riskified: Sure. So I think we shared that eight out of the 10 top clients in Q1 were outside The US, so very, very strong international growth. We have global direct sales in a lot of regions, and we’re our sales team is by geography and merchant tier. And what we see is that once we are able to build a presence and, you know, gain a foothold with, you know, one to two marquee accounts, that helps us penetrate and build a wider pipeline and kind of take like we do from an industry perspective, also gain more market share in a geography. Awesome.

Clark: And then one of the most more interesting components I believe in in my view is that the non chargeback guarantee products and kind of the opportunity set that you have there. Can you talk more about these offerings, the problems that these offering solves and what really these products kind of bring that’s incremental to the value proposition?

Ito Gao, Riskified, Riskified: You’re right. So the newer products grew a 190%, and they generated about, year over year q one. We those are the results we shared. They were about 4,000,000 in 2024, and we anticipate them to be low double digit millions in ’25. The biggest revenue component there is from our policy product.

And our policy product, like we discussed, it helps merchants analyze returns and refunds and tells them, stop. This is abuse. You don’t need to honor that. But more than that, it allows them to build a different experience for different customers. So some merchants are leveraging this product to say, not just, hey, Clark initiated a return, do I provide him a refund or not?

It it actually goes a step further and says, you know what? If Clark is one of my best customers, and they can define best customers based on LTV, propensity to buy, there’s a lot of functionality there, I wanna offer Clark, once he hits that refund button, give him the cash immediately or give him the opportunity to to select a new size and color and ship it to him directly. If not, maybe I’ll wait until you drop the box off at the UPS or UPS collects it and, you know, you scan it in and then we know that, you know, that reduces their likelihood of fraud. And if I don’t know Clark at all or I think he’s not one of my best customers, I’m gonna wait until the package reaches my warehouse fulfillment system. I’ve inspected the goods that you’re returning and only after I’ve inspected them, I issue you your refund.

So, basically, the way to think about it is if today a lot of merchants are doing something very generic and unsophisticated in the sense that every customer receives the same experience, merchants are using our policy product to create different flows and experiences based on the type of customer. And I think that’s really exciting.

Clark: With the with the new product cycle, what are your expectations between growth and and the formula going forward between new logos and expansion?

Ito Gao, Riskified, Riskified: Yeah. So I think we’ve always seen, you know, kind of a healthy mix of new new logo growth versus upsell and cross sell to the existing base. It’s ranged from, you know, $50.50 to 60 40 in both directions depending on the year. And I would anticipate that to kind of continue from what I see.

Clark: Got it. And then from an expense perspective, discipline has been a focal point in recent quarters. How do you think about balancing investments in the future to continue to drive growth in the top line?

Ito Gao, Riskified, Riskified: You’re right. So over the past three years, we’ve really focused in not just flattening our expense base, also lowering it and a lot of great accomplishments there. And basically, every gross profit dollar has flowed through to the bottom line. I think we shared some, you know, kinda early indications about maintaining control for ’26. Beyond that, at some point, I do think, you know, it would be incrementally beneficial to continue to invest at some level.

Clark: Got it. And then you also plan, I think it was in Q4 that you mentioned explaining the R and D capacity. What areas are you most excited about from that standpoint?

Ito Gao, Riskified, Riskified: We continue to see just a lot of traction in the newer products and it’s not just the revenue opportunity themselves because when you think about the growth in the pipeline and the overall competitive win rates, which have been, you know, at or above 70% past few quarters and have improved, a lot of that is because of that platform sale. Right? So, you know, we’re we’re basically providing guaranteed ROI. So why aren’t more merchants joining faster? And some of the pushback has always been, well, this sounds interesting, but, you know, I have capacity to integrate four new projects in a year, and I’m changing my finance system, and I have a new marketing stack, and chargebacks, you know, isn’t burning priority for the business right now.

Now that we’re that our value proposition is wider and we’re helping solve more problems, we’re able to both generate more at bats and get more resources from the clients to integrate the solution, which is just a longer way to say we we believe that by continuing to invest in these r and d capabilities, it would help drive more growth as well.

Clark: Got it. Is there anything on the product road map that really excites you that you could potentially elaborate on?

Ito Gao, Riskified, Riskified: Outside of the products that we’ve discussed, there’s nothing that we’ve announced publicly and just from a competitive situation perspective, I think that’s important. But we do can see ourselves continuing to innovate, and I think that the runway in the products that we have announced and also in the core charge by guarantee is still significant. Right? If you think about, you know, ecommerce being, you know, the trillion plus opportunity that it is, We’re proud of the 140,000,000,000 in GMV, but there’s still obviously a lot of opportunity to grow. And as we think about creating more value through both the chargeback product and the other products, we think it’ll be easier to add more GMV to our system.

Clark: Appreciate that. And in terms of the, you know, the macro, how is riskified positioned to weather a more volatile environment? And what impact, if any, is there from the implementation of tariffs?

Ito Gao, Riskified, Riskified: So look, historically, macro has impacted us and whether that’s been as we’ve come out of COVID, stay at home beneficiaries like Peloton and others have, you know, had meaningful volume drops. You know, we share that originally 45% of the business was tied to fashion. Some of that luxury fashion, That’s been a headwind and, you know, has and is still showing softness. Because of that, we’ve really tried to diversify the client base and really focused on creating something that more resembles the wider ecommerce environment. And some of the recent ads into the nondiscretionary categories, food delivery and groceries.

Food delivery, obviously, you know, is that discretionary or not that $24 burrito post all the different fees. That’s another question. But remittance and payments, so I think we’re we’re closer to approximating the wider ecommerce environment, which we would call as high single digit growth. At the same time, you know, our macro same store sales have been flat to slightly negative over the past few years. Thank you for that.

I’m sorry. For tariffs, I I forgot the the last part. We size the direct impact of China to US as less than 1%, So we think we’re not very exposed there.

Clark: Got it. Got it. And then you but I guess also year to date, you’ve about the fact that the pipeline has been very strong. Do you see more growth coming from this is, I guess, alludes to the kind of the growth mix. Is that coming from new logos?

Or, you know, how is growth being driven by, you know, expansion of of sales to existing clients? Talk to your point about the same store sales.

Ito Gao, Riskified, Riskified: Well, no. The the pipeline is either coming from, obviously, from so same store sales increase wouldn’t be in that category. Right? We would look at it separately. We’d say the pipeline is being driven primarily by new logos and upsells, meaning capturing more volume from our existing clients and to a smaller degree by cross selling our newer products to the existing base.

Clark: Appreciate that. And then moving more to the technical side and the perspective that you provided maybe initially here, how has the platform changed? And then can you talk about the data advantage that Risk ifyd has over maybe said peers and competitors in the space?

Ito Gao, Riskified, Riskified: Yeah. So I think the depth of the data that we shared, like the amount of data we have per transaction, not to repeat myself, but that’s probably a key component. I will say that we’ve since day one, we’ve always done the What’s unique about it is that in order to get reimbursed, merchants provide their charge backs to us, meaning that we continuously have source of truth tagging and data to train our machine learning models. The two years of Riskify’s existence, we were basically getting high risk transactions that other systems were declining.

We were receiving those transactions. In order to make any money, we had to approve that. But obviously we need to be very certain because we need to pay back if we make a mistake, and we were somewhat manual at that point. Right? So we would do a lot of like manual checks and reviews and try to understand how to approve that transaction.

And through that very slow and meticulous process where we own that data and training set, that’s how we build our automation and machine learning systems on top of that. So I think that’s just another one of the reasons why, like, the scaled automated engine that we have right now started, you know, from very beginnings that are difficult to replicate at scale with a high barrier of entry.

Clark: Appreciate that. With that with that advantage, you also kind of flipping back to kind of the financial framework here. It’s able to scale effectively, and there’s lot of operating leverage in that model. And the target that you outlined was 15% to 20% EBITDA margins in 2026, which implies that we should see a continued meaningful expansion from current levels. What are the main drivers to get there?

And how does that include top line reacceleration?

Ito Gao, Riskified, Riskified: Yes. So we kind of talked about that 15% kind of North Star. We want to make sure that we manage expenses until we reach that trajectory. We definitely anticipate an acceleration from current levels exiting the year to kind of double digit growth rates, which we think would be a meaningful driver there and some of that is more mechanical. We disclosed kind of a large client churn the prior q four twenty four that we sized in the range of 20,000,000 for ’25.

So just by virtue of lapping that, that’s kind of incrementally accretive there. And being able to maintain the leverage that we’ve shown over the past few years should be kind of good drivers.

Clark: Appreciate that. And also in terms of the financials, you already have a stockpile of cash, balance sheet with no debt. You’ve already been actively repurchasing shares. Do you see this as the best use of capital at this point in time?

Ito Gao, Riskified, Riskified: We do. We look. We try to find the right M and A opportunity and that for us would be an interesting technology that we can cross sell to our existing, you know, kind of blue chip base that looks at us to us kind of great partners. Unfortunately, think the the bid ask spread between public companies, private companies, our current valuation is still somewhat large. So within that analysis, we’ve historically always defaulted to let’s just increase and authorize more buybacks.

Clark: And the philosophy around M and A that you’re using, you haven’t necessarily been acquisitive, but could you walk through how you view shareholder value and what would excite you from an M and A perspective?

Ito Gao, Riskified, Riskified: I mean math. If you can buy it for $10,000,000 and you think that you can cross sell and generate $30,000,000 in a short period of time, that would excite me. At the same time, if we believe that we can take out shares today and that the value based on kind of future cash flows that we anticipate over the next few years or quarters would be so. So that excites us as well. So I think it’s very kind of based in financial analysis.

Clark: Appreciate that. And then as of December 2024, Riskified, you reviewed more $140,000,000,000 in e commerce and GMV globally, but the total e commerce GMV is over $6,000,000,000,000 How do you go from where you are today to becoming a larger market shareholder?

Ito Gao, Riskified, Riskified: Yes. So look, I mean, obviously, we don’t think that the 6,000,000,000,000 is what we consider our same today. But even if you back out some of the, you know, things like China in and some Amazon volume and some PSD two regulation, you’re still left with a multi trillion dollar opportunity, which is incredibly exciting. And for us, it’s how do we continue to create more value to clients. Remember, a few years ago, a fraud manager was, you know, using us to save on chargebacks and approval rates.

Now, by the way, more people within the organization, the fraud manager, the support team, you know, sometimes the security team, they’re using multiple products and getting so much more value. And I think that allows us to capture more GMV, and that in turn helps us become more accurate and provide more value, which should in turn help us accelerate. So I think it’s that type of, you know, kind of product led value creation together with good go to market distribution strategy, which would help us capture more.

Clark: Got it. And you mentioned that enterprises try to do this in house. Why do enterprises merchants enterprise merchants need a risk if I’m

Ito Gao, Riskified, Riskified: It would improve their P and L. They would be able to pay less and get more.

Clark: Appreciate that. Simple and concise. And then maybe lastly here in terms of the long term time horizon, where you see risk if I down the road and where you want to be in the next five years?

Ito Gao, Riskified, Riskified: Look, I think we would have succeeded and again, not getting into guidance and numbers, but if we continue to execute well on our plan of expanding the product portfolio and generating more value to our clients and leveraging that to gain more capabilities geographies and and more industries and creating those network effects, I think that would be a success.

Clark: Awesome. I appreciate it, Ito. Does anyone have any questions?

Ito Gao, Riskified, Riskified: We tend to define our closest competitors as teams in house teams that leverage numerous solutions. Right? And those solutions could be kind of the legacy solutions that some of the card networks have to a handful of some, like, more newer and modern. But really, the main decision point is do I wanna continue to invest and build this internally with, you know, cost involved? And different people in the organization have different priorities there.

If you ask the CFO, no. Why? And if you ask maybe the person managing that team, you would have a different perspective. So that’s really the main decision point that results. Okay.

I’m gonna go with risk of it or not. Yeah. Overall, Yeah. So we have the what we call the CTB ratios. Right?

The chargeback to billings ratio per client. And on an aggregate basis, obviously, everyone is profitable. The difference are for very high for a client where you take a high fee, let’s say a 100 basis points, you should be willing to operate at a higher charge back rate and only have 20 bay and have a 80% charge back to billing ratio because that 20%, that’s a lot on the net spread. Right? For someone who you take a 10 basis point fee, then potentially you would wanna make sure that your margins are higher there because the spread is much lower.

So that’s how we think about it. And that’s, by the way, why we say take rate is an output of the business and not really like a model going in. It doesn’t tell you a lie. Take rate went down. It could be great because from a net perspective we just got a massive client that’s on like a shop protection deal where we get everything.

That could actually be better than having the same client give us 10% of their risky volume for a much higher risk adjusted fee. Take rate would be higher in that scenario, but like net revenue to us would actually be lower.

Clark: Awesome. Well, you, Ito. Appreciate the time.

Ito Gao, Riskified, Riskified: Appreciate it. Thanks, Clark.

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