Riskified Ltd.

Good day, and welcome to Riskified's first quarter 2024 earnings call. At this time, all participants are in a listen-only mode. After the speaker 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. You will then hear an automated message advising your hand is raised. To withdraw your question, press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker, Mr. 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 financial results for the first quarter of 2024. Participating on the call today are Ido Gal, Riskified's Co-Founder and Chief Executive Officer, and Aggie Docheva, Riskified's Chief Financial Officer. We released our results for the first quarter of 2024 earlier today. Our earnings materials, including a replay of today's webcast, will be available on our investor relations website at ir.riskify.com. Certain statements made on the call today will be forward-looking statements related to our operating performance, business and financial goals, outlook as to revenues, gross profit margin, adjusted EBITDA profitability, adjusted EBITDA margins and expectations as to positive cash flows, which reflect management's best judgment based on currently available information and are not guarantees of future performance. We intend all forward-looking statements to be covered by the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect our expectations as of the date of this call, and except as required by 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, 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 annual report on Form 20F for the year ended December 31st, 2023 and subsequent reports we file or furnish with the SEC for more information on the specific factors that could cause actual results to differ materially from our expectations. Additionally, we will discuss certain non-GAAP financial measures and key performance indicators in the call. Reconciliations to the most directly comparable GAAP financial measures are available in our earnings release issued earlier today and also furnished with the SEC on Form 6K 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 Idel.

Thanks, Chet, and hello, everyone. This was truly a quarter of execution. During the first quarter, we achieved revenue growth of 11%, non-GAAP gross profit growth of 18%, improved our adjusted EBITDA margin by 1200 basis points year over year, and repurchased approximately 4% of our shares outstanding. While it is still very early in the year, we remain confident in executing on our 2024 goals across the organization. Our team is hard at work and focused on driving towards our annual, near, and long-term targets. As discussed in depth on our previous calls, and what remains unchanged today is our focus on landing new customers to drive vertical depth and geographic diversification, while continuing to upsell to our existing merchants. Allow me to highlight an interesting proof point of how we are successfully executing on this strategy. Historically, we have found that when we are able to onboard a significant number of merchants in the vertical, and then perform well with those merchants, we can reach an inflection point where future sales in that vertical become easier, faster, and more streamlined. As a result, we end up owning the category from a competitive standpoint. We believe that this is what we have achieved over the last 10 years in our fashion and luxury vertical through working with many of the world's most prestigious brands in this category. Now, I believe that we are building a similar competitive moat in our tickets and live events up vertical. We identified the tickets and live event space about five years ago as an opportunity for expansion. We have executed on this opportunity as evidenced by our growth in this category over the last several years. Furthermore, in the first quarter, our top new logo win and our largest upsell were both in the tickets and live event space. Each win involved taking volume from the merchant's incubate vendors, which were newer generation competitors. We believe that we are delivering compelling ROI for these merchants. Many of the top merchants in the space are already leveraging the powerful flywheel effect of our network, and we have further opportunities in our pipeline to continue expanding our market share. In addition to our network effect, we believe that the merchant level data that we analyze through very deep and robust integrations with our merchants' internal systems and gateways is a core differentiator and a key reason why we win. Combined with the technology and product advancements that we have made over the past few years, we have built a flexible and dynamic platform designed to utilize domain-specific features tailored to individual industries. We believe that by focusing on improvements to our technological capabilities, we are continuing to strengthen the accuracy and performance of our machine learning factory. Outside of tickets and live events, during Q1, we had key wins in another of our marquee competencies, the fashion and luxury vertical, with notable wins in the United States, EMEA, and Japan. In addition, we onboarded a food merchant in EMEA, a growing vertical for us. To highlight the geographic breadth and success of our go-to-market efforts, seven of our top 10 new chargeback guarantee logos closed during the first quarter or outside of the United States. And continuing the momentum from the fourth quarter, our go-to-market team continues to do a great job selling our multi-product platform with important new logo wins in both our Policy Protect and Dispute Resolve products. The top new logos in each of these products were both standalone sales to merchants not currently using our core chargeback guarantee product. Like we have said before, our refined multi-product platform has unlocked multiple entry points into enterprise e-commerce companies, which helps lead to increased merchant coverage and opportunities to continuously sell our platform. In addition, through focused expense discipline and year-over-year gross margin improvements, we achieved adjusted EBITDA of $2.8 million during the first quarter. This marks consecutive quarters of positive adjusted EBITDA. we continue to flow the leverage from our top line performance down to the bottom line. And as we continue to scale and grow revenues, we expect that this will continue to be a powerful driver for further margin expansion. To that end, we are improving our bottom line annual guidance to reflect our strong performance in the first quarter and confidence in our annual gross margin in the face of an uneven but generally resilient spending environment. Maggie will touch on this more shortly. In conclusion, I remain optimistic about the trajectory of the business and of our ability to manage the business to deliver value to our shareholders. I am excited about the strong technology that we have built to capture the ever-expanding e-commerce universe and the opportunities we have in front of us. Now, over to Agi.