Riskified Ltd.

Good day, and thank you for standing by. Welcome to the Riskify third quarter 2022 earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Chet Mandel, head of investor relations. Please go ahead.

Good morning, and thank you for joining us today. My name is Chet Mandel, Riskified's Head of Investor Relations. We are hosting today's call to discuss Riskified's results for the third quarter of 2022. Participating on today's call are Ido Gal, Riskified's co-founder and CEO, and Agi Docheva, Riskified's Chief Financial Officer. We released our results for the third quarter earlier today. Our earnings materials, including a replay of today's webcast, are available on our investor relations website at ir.riskified.com. Certain statements made on the call today will be forward-looking statements related to our operating performance, financial goals, and business outlook, which reflect management's best judgment based on currently available information and are not guarantees of future performance. Please note that these forward-looking statements reflect our opinions as of the date of this call and accept as required by applicable law we undertake no obligation to revise this information as a result of new developments that may occur after the time of this call. These forward-looking statements involve risks, uncertainties, and other factors, some of which are beyond our control, and that could cause actual results to differ materially from our expectations. You should not put undue reliance on any forward-looking statement. Please refer to our periodic and other SEC filings for more information on the specific factors that could cause actual results to differ materially from our expectations. Additionally, non-GAAP financial measures will be discussed on the call. Reconciliations to the most direct comparable GAAP financial measures are available in our earnings release issued and furnished with the SEC on form 6K today, in our prior filings with the SEC, and in the appendix of our investor relations presentation, all of which are posted on our investor relations website. I will now turn the call over to Ido.

Thanks, Jeff, and hello, everyone. Building off the momentum from a strong first half of the year, we saw an acceleration in our growth during the third quarter. Revenues were 63 million, representing 20% year-over-year growth, which is more than double our second quarter year-over-year growth. On a constant currency basis, our revenues were 65 million, representing 24% year-over-year growth. We achieved our strongest quarter of the year through increased upsell activity, new logo wins, and a very busy quarter for our tickets and travel vertical. This positive momentum more than opposite declines in the organic growth of some of our existing merchants, which we primarily attribute to the tougher macroeconomic environment. Overall, I am pleased that our total growth outpaced the growth in the broader e-commerce market. Our achievements in the first nine months of 2022 go well beyond our financial performance. We have strengthened our leadership team, and I am more confident than ever in our current go-to-market position. We have focused on thoughtfully expanding our global footprint, further penetrating emerging categories, broadening our partnership channels, and developing new products. We believe that this strategy will enhance our ability to solve a growing number of high-value use cases for our merchants. This will help in enabling Riskify to capture an increased share of the broader e-commerce landscape which would allow us to grow sustainably over the long term. This differentiated positioning, combined with the powerful value proposition that we believe we offer to our merchants, is leading to strong traction for our sales team. Proof of this success is evidenced in the quality of our new logo wins and strength in recent upsells. A great example of a recent new logo win, and as we've highlighted in our earnings release, was the onboarding of one of the world's largest secondary ticket marketplaces for live sports concerts, theater, and events. This merchant processes billions of dollars worth of transactions annually. We earned this big win by demonstrating superior performance in a competitive process, and we're proud to have entered into a contract to review nearly all of this merchant's e-commerce volume. We believe tickets and travel is an industry in which we are rapidly extending our competitive position. I want to highlight that the breadth of our new logos goes beyond tickets and travel. For example, some of our top new logos signed during the quarter were in fashion, retail, and in our money transfer category. As we continue to expand our portfolio of merchants, we are becoming more diversified than ever before. We also continue to execute on our successful land and expand strategy. We believe this strategy drives GMV and long-term gross profit gains as customer engagement grows and matures. We saw strength in upsells across varying merchant sizes with particular momentum from our merchants with more than 3 billion in online sales volumes per year. We also had success from both merchants in our more mature cohort and from newer logos. We are continuously deepening our relationships and increasing the value that we offer our merchants as they submit additional order populations through our platform. In addition to the momentum in our sales effort, during the third quarter, our gross profit growth of 35% exceeded our revenue growth, reflecting the benefits of the ongoing investment in our technology and the strength and leverage in our business model. As we discussed in depth on the last earnings call, a key initiative for the second half of 2022 and beyond has been to prioritize profitable growth. Through thoughtfully reducing our expenses and recognizing additional operating leverage, we believe that we are accelerating our path to profitability all while keeping our long-term growth outlook intact. This goal remains a top priority for the company, and I am very pleased with the progress that we have made in executing on this important initiative. During the quarter, we lowered our expense base, and combined with an acceleration in our revenue growth, we saw 33% improvement in our adjusted EBITDA results sequentially, which Augie will expand on shortly. As we approach year end, I am proud that our diversified and global company has continued to grow and strengthen despite the challenging economic environment that we are operating in. Our dialogue with merchants is high, our pipeline is healthy, and we believe that our go-to-market positioning is the best it has ever been. By leveraging our superior data and strong technology, we believe that this will allow us to continue to do what we do best. helping enable the best outcomes and operational improvements for our merchants, which we expect will, in turn, help drive value for our shareholders. Before I turn it to Avi, who will cover the financial results in more detail, I want to thank all of Riskify's employees for their relentless dedication in accomplishing this fantastic quarter. I look forward to ending the year strong as we aim to execute on the goals of the company together.