Yahoo Finance Riskified Ltd (RSKD) Q1 2024 Earnings Call Transcript Highlights: Strong Growth and Strategic ...
Revenue Growth: 11% increase year-over-year.
Non-GAAP Gross Profit Growth: 18% increase.
Adjusted EBITDA Margin Improvement: 1,200 basis points year-over-year.
Share Repurchase: Approximately 4% of shares outstanding.
GMV: $32 billion, up 17% year-over-year.
Non-GAAP Gross Profit Margin: Improved to 56% from 53% year-over-year.
Adjusted EBITDA: Positive $2.8 million, a 153% improvement year-over-year.
Free Cash Flow: Record $10.5 million in the first quarter.
Share Repurchase Authorization: Additional $75 million authorized.
Annual Revenue Guidance: Maintained at $323 million to $335 million for 2024.
Adjusted EBITDA Guidance: Updated to $12 million to $18 million for the full year.
Release Date: May 15, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Riskified Ltd (NYSE:RSKD) reported an 11% year-over-year revenue growth and an 18% non-GAAP gross profit growth in Q1 2024.
Adjusted EBITDA improved significantly, with a 1,200 basis points increase year-over-year, marking consecutive quarters of positive adjusted EBITDA.
The company successfully repurchased approximately 4% of its shares outstanding, demonstrating confidence in its financial health and commitment to returning value to shareholders.
Riskified Ltd (NYSE:RSKD) continues to expand its market share, particularly in the tickets and live events vertical, where it has achieved significant new customer wins and upsells.
The company's technological advancements and machine learning capabilities have been key differentiators, helping to secure new deals and improve service offerings.
Negative Points
Despite overall growth, Riskified Ltd (NYSE:RSKD) experienced softness in high-end fashion and travel sectors, particularly in the EMEA region, which saw a 4% year-over-year decline.
The company anticipates a softer-than-expected performance in Q2, influenced by ongoing macroeconomic uncertainties and sector-specific challenges.
While there has been significant growth in certain verticals, the largest categories like fashion and luxury and tickets and travel only grew by low single digits.
Riskified Ltd (NYSE:RSKD) faces increasing competition, particularly from newer generation competitors in key verticals.
The company's expense management remains a challenge, with a need to balance growth initiatives against the backdrop of a disciplined cost structure.
Q & A Highlights
Q: Congrats on the quarter. You mentioned in the press release, the policy protected the dispute resolved when potentially unlocking new entry point in the organization. Is the person at the organization of the company that you're working with that you're selling, so is that different than who you typically speak to for those bigger products versus the traditional charge back guarantee? And also, could you talk a little bit about the selling cycles for those products? A: Eido Gal, CEO of Riskified, explained that for dispute resolve, the sales process involves similar stakeholders within the organization and is straightforward with less integration complexity. For policy products, more decision-makers are involved due to critical consumer-related decisions, making the sales cycle similar in length to the charge back guarantee product.
Q: Wondering if you could talk a little bit about, I guess, the linearity of some of the ongoing macro impacts that you discussed in the quarter and then it sounds like are also continuing into April and May. A: Aglika Dotcheva, CFO of Riskified, noted that while there were strengths in the food and payments categories, fashion and travel faced weaker growth than expected, particularly in luxury fashion. She mentioned that the situation appeared more volatile towards the end of March and into April, with varying performance across different merchants.
Q: Great, good morning. This is Scott Bester Terry. First one, just another strong quarter of growth in the food category. It seems like your platform is really resonating with merchants there. Just kind of curious on how you're thinking about momentum continuing in this category throughout the year and maybe how it kind of stack ranks against some of the other ones as more of an upper comer? A: Eido Gal highlighted that once traction is gained in a specific category, Riskified builds more customized features and technology for that category, which aids in acquiring additional merchants and sustaining growth. He expressed satisfaction with the performance in the food category and anticipated continued success.
Q: The call out on the large stand-alone policy protect and dispute resolve deals in the quarter seems notable for these non-charge back guarantee merchants. In general, how much of a focus are you placing in your go-to-market strategy for winning these new products without the Charge back guarantee? A: Eido Gal discussed the strategic use of Riskified's platform capabilities to enable sales teams to address merchant needs effectively, particularly when merchants prioritize products like dispute resolve or policy protect. He mentioned that these capabilities help in positioning Riskified as a preferred vendor and elaborated on the revenue and attach rates for these products.
Q: You mentioned tickets and travel becoming a much bigger piece of the business. Can you just talk a little bit about the economics of that vertical relative to kind of your core fashion and luxury vertical? A: Eido Gal responded that the margin profile for the travel and live events space is similar to other business segments. He noted that any significant differences in economic profiles that might have existed post-COVID have now normalized.
Q: I know that you gave some good regional kind of around the various regions color during the prepared remarks. I wanted to dig in a little bit to some of the European trends. A: Eido Gal clarified that Riskified defines regions based on where a merchant is headquartered, which might differ from how other companies categorize their regional data. Aglika Dotcheva added that Europe appeared softer compared to other regions, particularly in travel and high-end fashion, which showed some weakness.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
