Riskified Ltd. Q3 FY2025 earnings call

• Built solid momentum in 2025, with non-GAAP gross profit turning around from a 4% decline in the first half to 5% growth in Q3. - Invested heavily in machine learning capabilities, shifted ~70% of models from manual to autonomous training, and 100% of autonomously trained models outperform previous manual ones. - Revenue momentum in money transfer and payments category, growing 100% in Q3. - Executed well against 2025 product roadmap, with adaptive checkout showing impressive conversion rate improvements. - Focused on agentic e-commerce, collaborating to help merchants navigate related risks.

Third quarter GMV was $37.8 billion, with first nine months at $108.4 billion, reflecting a 97% year-over-year increase. Third quarter revenue was a record $81.9 million, up 4% year over year, and first nine months revenue was $245.3 million, up 5% year over year. Non-GAAP gross profit in the third quarter was $41.5 million, a 5% year-over-year increase, with a non-GAAP gross profit margin of approximately 51%. Total non-GAAP operating expenses for the third quarter were $36 million, down from $38.7 million in the prior year. Positive adjusted EBITDA of $5.6 million was achieved in the third quarter, and fourth quarter adjusted EBITDA margin is expected to approximate 15%. Ended the third quarter with $325 million of cash deposits and investments, zero debt, and achieved quarterly free cash flows of $13.4 million in the third quarter.

• Raised the bottom end of revenue guidance for 2025 to between $338 million and $346 million. - Expect fourth quarter adjusted EBITDA to be between $21 million and $27 million, with adjusted EBITDA margin approximating 15%. - Now expect over $30 million of positive free cash flow for the full year 2025. - Target an annual non-GAAP gross profit margin of 52%.

Forward-looking statements involve risks, uncertainties, and other factors beyond control that could cause actual results to differ materially from expectations. These include factors from the annual report on Form 20-F and subsequent SEC filings that could affect actual performance.

Q: Connor Pasquali asked about emerging verticals for 2026 and prioritizing resources.

A: Eido Gal said they focus on large, product-fit verticals, geographic expansion, and M distribution considerations.

Q: Cristopher David Kennedy asked about revenue contribution from non-chargeback guarantee products.

A: Eido Gal said it's been very strong over 100% and helpful in winning new business and renewals.

Q: William Alfred Nance asked about gross margin trajectory and one-time expenses.

A: Eido Gal said model improvements helped, but new categories and regions can be headwinds; Aglika Dotcheva explained one-time expenses related to payroll adjustments in Israeli office.

Q: Ryan Tomasello asked about stablecoin adoption and agentic commerce impact.

A: Eido Gal said stablecoins introduce complexity driving business, and agentic commerce is creating new business discussions.

Q: Clark Joseph Wright asked about GMV growth and expense management.

A: Aglika Dotcheva talked about expense management and Eido Gal mentioned increasing development capacity by almost 50%.

Q: Timothy Chiodo asked about wallet liability and share.

A: Eido Gal explained liability differences, but was less certain on wallet share in agentic channel.

Q: Reginald Lawrence Smith asked about opportunities and threats of agentic commerce and 2026 EBITDA targets.

A: Eido Gal said agentic commerce is a net positive as it brings complexity, and they are positive about 2026 EBITDA targets but noted some merchant event impacts