Riskified Ltd. Class A ((RSKD)) has held its Q4 earnings call. Read on for the main highlights of the call.
Riskified Ltd. Class A’s recent earnings call painted a picture of robust financial performance in 2024, marked by significant revenue and GMV growth. The company successfully expanded its multi-product platform and improved adjusted EBITDA margins. However, challenges in retention rates and pressures in specific verticals like high-end fashion and the home category presented some hurdles.
Revenue and GMV Growth
Riskified reported a commendable 15% growth in Gross Merchandising Volume (GMV) and a 10% increase in revenue, culminating in $327.5 million, surpassing the high end of their guidance. This growth underscores the company’s ability to capitalize on market opportunities and drive financial success.
Adjusted EBITDA Margin Improvement
The company achieved a significant improvement in adjusted EBITDA margins, recording positive adjusted EBITDA in each quarter of 2024. With a year-over-year increase of over 300%, Riskified concluded the year with $17.2 million in adjusted EBITDA, highlighting their operational efficiency.
Strong New Business and Upsell Activity
Riskified generated approximately $45 million in revenue from new merchants added in 2024, demonstrating strong upsell activity, particularly in the Tickets and Travel and Fashion verticals. This reflects the company’s effective strategies in attracting and expanding business with new clients.
Multi-Product Platform Expansion
The expansion of Riskified’s multi-product platform was a key highlight, with new product revenue up approximately 90% year-over-year. New product bookings accounted for about 10% of total bookings won in 2024, showcasing the company’s innovation and adaptability.
Successful Merchant Retention Strategy
Riskified’s merchant retention strategy proved effective, with over 70% of the 2025 book of business secured through multiyear contracts. The company also saw a 30% increase in the weighted average contract term for larger accounts, indicating strong client loyalty and satisfaction.
Continued Market Share Gains
The company experienced billings growth across all geographies, with significant gains in the Americas and APAC regions. This led to continued market share expansion outside the United States, reinforcing Riskified’s global presence.
Annual Dollar Retention and Net Dollar Retention Rates
Despite overall growth, Riskified’s Annual Dollar Retention (ADR) and Net Dollar Retention (NDR) rates fell short of historical benchmarks, with NDR at 96% compared to previous levels of over 110%. This indicates areas for improvement in customer retention and revenue growth.
Challenges in the Home Category
The Home category faced a churn event, resulting in a decline. However, Riskified remains optimistic about growth in this vertical by the end of 2025, suggesting potential recovery and expansion opportunities.
Pressure in High-End Fashion and Sneakers
The Fashion and Luxury vertical continued to experience same-store sales pressure, particularly in high-end fashion and sneakers. Despite these challenges, there are early signs of stabilization, providing hope for future recovery.
Forward-Looking Guidance
Looking ahead, Riskified anticipates revenue for 2025 to range between $333 million and $346 million, with a midpoint of $339.5 million. The company expects adjusted EBITDA to be between $18 million and $26 million, reflecting ongoing margin expansion. Riskified plans to enhance its multi-product platform and aims for a gross profit margin of 52% to 53.5%. Additionally, a restructuring plan has been initiated to maintain flat total expenses while boosting R&D capacity by nearly 20%.
In conclusion, Riskified Ltd. Class A’s earnings call highlighted a year of strong financial growth and strategic expansion, despite facing some challenges in retention rates and specific verticals. The company’s forward-looking guidance suggests continued focus on innovation and operational efficiency, positioning it well for future success.
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