Riskified Ltd. (RSKD) Earnings

Management highlights

- Business Momentum and Go-To-Market Performance * Q1 2026 delivered a strong start to the year, with disciplined execution across pipeline conversion, existing merchant relationship deepening, and addressable market expansion. * Total pipeline grew substantially year-over-year, led by the U.S. with continued momentum in international markets including Japan and Latin America; the travel vertical saw particularly strong activity, supported by the new Outcast (Amadeus) partnership that expanded global reach to airlines. * Competitive win rates remained above 75% in Q1; 5 of the top 10 new merchant logos were headquartered outside the U.S., spanning multiple verticals. - Product Innovation and Expansion * The proprietary global identity graph database (hundreds of millions of identities, billions of nodes) built from merchant transaction data was launched as a standalone identity data product for the first time, integrated into merchant CRM and customer service workflows. Early use cases show up to 30% reduction in customer complaint rates and seven-figure annual reductions in refund/return costs for early adopters. * Riskified ARIA, an AI-powered conversational risk intelligence analyst tool, was launched; it enables fraud teams to get instant, plain-language explanations of transaction and performance trends, and is available to all Riskified merchants with very positive early feedback. * Strong demand for ACH fraud intelligence confirms the platform's viability across all digital transaction types, not just traditional card payments; years of targeted product investment are now driving incremental gross profit, with a growing data flywheel effect that improves model performance over time. * Non-payment fraud products continue to gain traction, expanding the platform beyond core chargeback guarantee offerings. - Distribution and Strategic Partnerships * Expanded distribution channels with the launch of Dispute Resolve for Shopify, extending reach into the large Shopify merchant ecosystem, and a new partnership with Radial, a leading North American e-commerce fulfillment provider, embedding Riskified capabilities at the intersection of payments and fulfillment. * Broader channel expansion strategy aims to make the Riskified platform accessible to merchants of all sizes globally, complementing the core direct-to-enterprise sales motion. - Financial Performance * Q1 2026 results: $37.2 billion GMV (+9% YoY), $88.3 million total revenue (+7% YoY), $46.3 million non-GAAP gross profit (+13% YoY), $6.2 million adjusted EBITDA (+370% YoY vs Q1 2025), $9 million positive free cash flow. * GAAP net loss improved 68% YoY to $4.4 million from $13.9 million in Q1 2025, driven by lower share-based compensation and disciplined cost management. * Non-GAAP operating expenses came in at $40.1 million, below the expected $41-$42 million range, as some expenses shifted to Q2; operating expenses as a share of revenue declined to 45% from 48% YoY, demonstrating operating leverage. * Ended Q1 with $276 million in cash, deposits, and investments, zero debt; repurchased 6.2 million shares for $27.5 million in Q1, reducing total shares outstanding by 3%; cumulative buybacks since Q4 2023 total 58.2 million shares for $287 million, cutting shares outstanding by 19%.

Guidance

- Full-year 2026 revenue guidance is raised at the low end, to a range of $376 million to $384 million (midpoint of $380 million), reflecting stronger than expected Q1 performance and ongoing business momentum. - Full-year gross profit growth guidance range is set at 8% to 12%, with quarterly growth expected to average ~10% at the midpoint, maintaining the same quarterly revenue percentage distribution as 2025. - Full-year adjusted EBITDA guidance is raised at the low end to a range of $28 million to $34 million (midpoint of $31 million), up from the prior range of $26 million to $34 million. - Q2 2026 non-GAAP operating expenses are expected to be ~$43 million, reflecting expense timing shifts from Q1; H2 2026 quarterly non-GAAP operating expenses are maintained at the prior guidance of $42 million to $43 million per quarter. - Full-year 2026 positive free cash flow is expected to be ~$40 million, maintained from prior guidance. - Non-core product revenue is still on track to hit the prior target of $15 million to $20 million for full-year 2026. - Billings and revenue growth gaps are expected to narrow over the course of the year, with full-year growth rates expected to converge consistent with historical patterns. - Tickets and travel and money transfer and payments are expected to sustain strong growth throughout 2026, while fashion and luxury is expected to return to growth in the second half of the year.

Segment performance

By Vertical: - Tickets and Travel: Billings grew approximately 18% year-over-year, driven by upsell activity and same-store sales momentum; tickets and live events returned to positive growth after multiple quarters of contraction. Expected to be a positive growth contributor for 2026. - Money Transfer and Payments: Billings grew 30% year-over-year, driven by strong upsell activity with existing merchants; strong gross profit contribution supported by machine learning model enhancements. - Fashion and Luxury: Softness in the APAC region due to a strong prior year comparable period; expected to return to growth later in 2026. Collectively, these three verticals are expected to represent ~75% of total 2026 full-year billings. By Region: - United States (largest region): Billings grew 10% year-over-year, returning to positive growth. - APAC: Billings grew 15% year-over-year, with growth expected to accelerate through 2026. - Other Americas: Billings grew ~11% year-over-year. - EMEA: Billings grew ~11% year-over-year, supported by same-store sales performance in tickets and travel. By Product Line: - Core chargeback guarantee: Remains the foundation of revenue, with expanding penetration across existing merchants. - ACH and alternative payments: 3 of the top 10 Q1 2026 deals were ACH-related, including the quarter's largest new logo win; now contributes meaningfully to incremental gross profit. - Non-payment fraud products: The number of multi-product merchants grew ~50% year-over-year, and these merchants now generate over 30% of total revenue, with a stronger margin profile than single-product accounts; on track to hit 2026 ancillary revenue target of $15-$20 million.

Risks & headwinds

No explicit material risks or operational failures were discussed during the call. Management noted that forward-looking statements are subject to general uncertainties including: the timing of new merchant go-lives, existing merchant upsell execution, merchant retention rates, and broader macroeconomic conditions that could cause actual results to differ from guidance.

Analyst Q&A

• Q: How much do ACH and alternative payment methods expand Riskified's long-term addressable market, and how does the competitive landscape differ from traditional card payments? /

  A: Merchants face growing complexity from rising payment method fragmentation and need a single best-in-breed vendor to manage risk across all payment types. ACH and alternative payments expand the overall addressable market by opening new use cases, and Riskified's existing cross-payment data advantage lets it outcompete niche vendors that only cover one payment type. The overlap in fraud vectors across payment methods also reinforces demand for a consolidated platform. (312 characters)

• Q: How does the expanded Shopify partnership fit into growth strategy, and will it become a more meaningful driver over time? /

  A: Riskified has historically focused on direct-to-enterprise sales, but is revamping its distribution strategy to make its platform accessible to all merchants everywhere. The Dispute Resolve launch for Shopify is part of this broader channel expansion, alongside other new partnerships with Amadeus (travel) and Radial (e-commerce solutions). This new distribution model will open up meaningful new customer acquisition and multi-product adoption opportunities over time. (376 characters)

• Q: How will the new standalone identity product and Riskified ARIA be monetized? /

  A: ARIA is already available to all existing Riskified merchants as an added value platform feature, with strong early feedback. The standalone identity graph product is initially being offered as an add-on integrated into customer support and CRM tools (like the Rue Gilt Groupe Zendesk integration), and will be priced as an incremental incremental add-on service. Multiple additional future use cases for the identity data, including supporting merchant AI initiatives, are expected to drive additional future revenue. (368 characters)

• Q: Does expanding into non-fraud use cases unlock new budgets and decision makers within customer organizations? /

  A: Yes, the expansion into new use cases like customer support identity scoring and AI risk intelligence means Riskified now engages with departments outside of traditional fraud and payments teams, including customer experience and engineering. The Rue Gilt Groupe customer support example demonstrates this new penetration, which opens up incremental budget pools that were previously not accessible to the company. (321 characters)