Intends to File Motion Seeking Court Approval
in Israel for its Repurchase Program
Riskified Ltd. (NYSE: RSKD) (the “Company”), a leader in
eCommerce fraud and risk intelligence, today announced financial
results for the three and six months ended June 30, 2023. The
Company will host an investor call to discuss these results today
at 8:30 a.m. Eastern Time.
“I am extremely pleased by our strong results, highlighted by
year-over-year revenue growth of 21% and a 67% year-over-year
improvement in Adjusted EBITDA performance. As we get closer to
sustained profitability on an Adjusted EBITDA basis, our Board of
Directors has determined that it is the right time for the Company
to initiate a share repurchase program for the benefit of the
company and our shareholders. We believe that we have sufficient
capital to continue investing and pursuing profitable growth and
are taking this step to enable us to be able to take advantage of
attractive repurchase opportunities as they arise. We continue to
execute on our business model and position our business for the
long-term,” said Eido Gal, Co-Founder and Chief Executive Officer
of Riskified.
Q2 2023 Business Highlights
- Growth Outside and within Tickets & Travel: We
continued to see strong growth in our Tickets and Travel vertical,
propelled by the ongoing activity in live-events and experiences.
Outside of this category, for the first time in several quarters
our other verticals, in aggregate resumed their growth trajectories
in the second quarter, an encouraging development, and a sign of
the fundamental health of our overall business.
- Further Diversification of the Business Outside of the
United States: Deepened our geographic reach with the
onboarding of new merchants. Eight of the top 10 new merchants won
during the second quarter represented regions outside of the United
States. In particular, we added new merchants in Canada, United
Kingdom, France, Australia and China, all exciting areas of
expansion.
- Announced Relationship with Global Leader in eCommerce
Dedicated to Health and Wellness: Merchant is leveraging
Riskified’s eCommerce fraud and risk intelligence platform with the
objective of boosting approval rates and revenues, streamlining its
manual review processes, and minimizing fraud losses. Riskified’s
machine learning platform now automates the review of all
transactions, improving the speed and accuracy of fraud detection
and decision-making. As a result of the relationship with
Riskified, only 1.5% of transactions require additional manual
review, a reduction of over 90%.
- Successful Cross-Sell of Policy Protect: During the
second quarter of 2023, we went live with our Policy Protect
product with an existing Enterprise level merchant in the
electronics industry. Using Policy Protect, Riskified is able to
help solve abusive returns and block bad customers upon checkout,
potentially saving millions in returns for the merchant, and
addressing a large and growing problem.
- Completed Integration with Enterprise eCommerce Platform
commercetools: In August 2023, we completed a critical
integration with commercetools, a global leader in composable
commerce, to seamlessly deliver Riskified’s award-winning product
Chargeback Guarantee at scale. The integration solidifies an
innovation-led partnership that enables merchants to leverage
Riskified’s AI-driven approach to increase eCommerce approval
rates, lower chargeback and fraud losses, and improve operational
efficiencies.
- Board Authorizes Share Repurchase Program: Our Board of
Directors authorized the repurchase of up to $75 million of the
Company’s ordinary shares, subject to receipt of approval by the
Tel Aviv District Court Economic Department (the "Israeli court").
Share repurchases are expected to be used to manage share dilution
and to take advantage of attractive repurchase opportunities. Our
strong balance sheet, with zero debt and approximately $480 million
of cash, deposits and accrued interest as of June 30, 2023, enables
us to continue investing in the growth of our business, and
simultaneously enhance shareholder value through a share repurchase
program.
- Hosted Riskified’s Annual Merchant Summit: The 2023
summit, Ascend, was attended by over 120 merchant contacts and
prospects from over ten countries and across all major verticals,
and represented an increase in participation from the prior year.
Ascend brings together eCommerce industry leaders and experts
united in tackling emerging challenges in fraud, policy abuse, and
payments.
Q2 2023 Financial Performance Highlights
The following table summarizes our consolidated financial
results for the three and six months ended June 30, 2023 and 2022,
in thousands except where indicated:
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
(unaudited)
(unaudited)
Gross merchandise volume ("GMV") in
millions(1)
$
30,955
$
25,399
$
58,223
$
48,077
Increase in GMV year over year
22
%
21
%
Revenue
$
72,766
$
59,932
$
141,673
$
118,777
Increase in revenues year over year
21
%
19
%
Gross profit
$
37,023
$
30,606
$
72,864
$
60,974
Gross profit margin
51
%
51
%
51
%
51
%
Operating profit (loss)
$
(22,086
)
$
(32,952
)
$
(45,075
)
$
(65,927
)
Net profit (loss)
$
(16,894
)
$
(33,193
)
$
(34,845
)
$
(66,606
)
Adjusted EBITDA(1)
$
(4,586
)
$
(13,790
)
$
(9,755
)
$
(27,386
)
“We believe that our strong second quarter and first half of
2023 results demonstrate the resilience of the business, and our
ability to execute on our go-to-market goals. Continuing with our
commitment to optimize our cost base and accelerate our timeline to
profitability, we once again meaningfully improved our Adjusted
EBITDA performance year-over-year. Looking forward, we remain on
track to deliver positive Adjusted EBITDA in the fourth quarter of
2023,” said Aglika Dotcheva, Chief Financial Officer of
Riskified.
Financial Outlook:
We are improving our revenue guidance for the year ending
December 31, 2023 as follows:
- Revenue between $298 million and $303 million, or $300.5
million to the midpoint.
We assume no further changes to the macro-environment in the
near term, which remains factored into our revenue guidance for the
year.
We continue to expect:
- Adjusted EBITDA(2) to be between negative $17 million and
negative $12 million, or negative $14.5 million to the
midpoint.
We are committed to continuing to manage the business in a
disciplined manner and seek to identify further leverage in the
business model.
(1) GMV is a key performance indicator and Adjusted EBITDA is a
non-GAAP measure of financial performance. See “Key Performance
Indicators and Non-GAAP Measures” for additional information and
“Reconciliation of GAAP to Non-GAAP Measures” for a reconciliation
to the most directly comparable GAAP measure.
(2) We are not able to provide a reconciliation of Adjusted
EBITDA guidance for the fiscal year ending December 31, 2023 to net
profit (loss) because certain items that are excluded from Adjusted
EBITDA but included in net profit (loss), the most directly
comparable GAAP financial measure, cannot be predicted on a
forward-looking basis without unreasonable effort or are not within
our control. For example, we are unable to forecast the magnitude
of foreign currency transaction gains or losses which are subject
to many economic and other factors beyond our control. For the same
reasons, we are unable to address the probable significance of the
unavailable information, which could have a potentially
unpredictable and potentially significant impact on our future GAAP
financial results.
Authorization to Repurchase Ordinary Shares
On August 8, 2023, the Company's Board of Directors authorized
the repurchase of up to $75 million of the Company’s ordinary
shares, subject to the completion of required Israeli regulatory
procedures. Any share repurchases under the program may be made
from time to time in the open market, including through trading
plans intended to qualify under Rule 10b5-1 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), in privately
negotiated transactions or by other means in accordance with U.S.
federal securities laws. The Company intends to fund repurchases
from existing cash and cash equivalents. If and when approved by
the Israeli court, the timing, as well as the number and value of
any shares repurchased under the program, will be determined by the
Company at its discretion under the Board authorized program and
will depend on a variety of factors, including management's
assessment of the intrinsic value of the Company's ordinary shares,
the market price of the Company's ordinary shares, general market
and economic conditions, available liquidity, alternative
investment opportunities, and applicable legal requirements. The
Company is not obligated to acquire any particular amount of
ordinary shares under the program, and the program may be
suspended, modified or discontinued at any time without prior
notice. This press release is neither an offer to purchase nor a
solicitation of an offer to buy any securities.
Under Israeli law, the Company’s ability to repurchase ordinary
shares is subject to receipt of Israeli court approval, which would
cover an initial period of six months, after which period renewed
court approval would be needed to continue the program. We expect
to file a motion with the Israeli court on or around September 6,
2023, requesting that the Israeli court provide up to $75 million
of share repurchase authority. The court approval process is
expected to take several months. The Company will announce the
Israeli court’s decision promptly once it is obtained.
Conference Call and Webcast Details
The Company will host a conference call to discuss its financial
results today, August 15, 2023 at 8:30 a.m. Eastern Time. A live
webcast of the call can be accessed from Riskified’s Investor
Relations website at ir.riskified.com. A replay of the webcast will
also be available for a limited time at ir.riskified.com. The press
release with the financial results, as well as the investor
presentation materials will be accessible on the Company’s Investor
Relations website prior to the conference call.
Key Performance Indicators and Non-GAAP Measures
This press release and the accompanying tables contain
references to Gross Merchandise Volume ("GMV"), which is a key
performance indicator, and to certain non-GAAP measures which
include non-GAAP measures of financial performance, including
Adjusted EBITDA, non-GAAP gross profit, non-GAAP gross profit
margin, non-GAAP cost of revenue, non-GAAP operating expenses by
line item, non-GAAP net profit (loss), and non-GAAP net profit
(loss) per share, and non-GAAP measures of liquidity, including
Free Cash Flow. Management and our Board of Directors use key
performance indicators and non-GAAP measures as supplemental
measures of performance and liquidity because they assist us in
comparing our operating performance on a consistent basis, as they
remove the impact of items that we believe do not directly reflect
our core operations. We also use Adjusted EBITDA for planning
purposes, including the preparation of our internal annual
operating budget and financial projections, to evaluate the
performance and effectiveness of our strategic initiatives, and to
evaluate our capacity to expand our business. Free Cash Flow
provides useful information to management and investors about the
amount of cash generated by the business that can be used for
strategic opportunities, including investing in our business and
strengthening our balance sheet.
These non-GAAP measures should not be construed as an inference
that our future results will be unaffected by unusual or other
items. Non-GAAP measures of financial performance have limitations
as analytical tools in that these measures do not reflect our cash
expenditures, or future requirements for capital expenditures, or
contractual commitments; these measures do not reflect changes in,
or cash requirements for, our working capital needs; these measures
do not reflect our tax expense or the cash requirements to pay our
taxes, and assets being depreciated and amortized will often have
to be replaced in the future and these measures do not reflect any
cash requirements for such replacements. Free Cash Flow is limited
because it does not represent the residual cash flow available for
discretionary expenditures. Free Cash Flow is not necessarily a
measure of our ability to fund our cash needs.
In light of these limitations, management uses these non-GAAP
measures to supplement, not replace, our GAAP results. The non-GAAP
measures used herein are not necessarily comparable to similarly
titled captions of other companies due to different calculation
methods. Non-GAAP financial measures should not be considered in
isolation, as an alternative to, or superior to information
prepared and presented in accordance with GAAP. These measures are
frequently used by analysts, investors and other interested parties
to evaluate companies in our industry. By providing these non-GAAP
measures together with a reconciliation to the most comparable GAAP
measure, we believe we are enhancing investors' understanding of
our business and our results of operations, as well as assisting
investors in evaluating how well we are executing our strategic
initiatives.
We define GMV as the gross total dollar value of orders reviewed
through our eCommerce risk intelligence platform during the period
indicated, including orders that we did not approve.
We define each of our non-GAAP measures of financial
performance, as the respective GAAP balances shown in the below
tables, adjusted for, as applicable, depreciation and amortization
(including amortization of capitalized internal-use software as
presented in our statement of cash flows), share-based compensation
expense, payroll taxes related to share-based compensation,
litigation-related expenses, provision for (benefit from) income
taxes, other income (expense) including foreign currency
transaction gains and losses and gains and losses on non-designated
hedges, and interest income (expense). Non-GAAP Gross Profit Margin
represents Non-GAAP Gross Profit expressed as a percentage of
revenue. We define non-GAAP net profit (loss) per share as non-GAAP
net profit (loss) divided by non-GAAP weighted-average shares. We
define non-GAAP weighted-average shares, as GAAP weighted average
shares, adjusted to reflect any dilutive ordinary share equivalents
resulting from non-GAAP net profit (loss), if applicable.
We define Free Cash Flow as net cash provided by (used in)
operating activities, less cash purchases of property and
equipment, and cash spent on capitalized software development
costs.
Management believes that by excluding certain items from the
associated GAAP measure, these non-GAAP measures are useful in
assessing our performance and provide meaningful supplemental
information due to the following factors:
Depreciation and amortization: We exclude depreciation and
amortization (including amortization of capitalized internal-use
software) because we believe that these costs are not core to the
performance of our business and the utilization of the underlying
assets being depreciated and amortized can change without a
corresponding impact on the operating performance of our business.
Management believes that excluding depreciation and amortization
facilitates comparability with other companies in our industry.
Share-based compensation expense: We exclude share-based
compensation expense primarily because it is a non-cash expense
that does not directly correlate to the current performance of our
business. This is because the expense is calculated based on the
grant date fair value of an award which may vary significantly from
the current fair market value of the award based on factors outside
of our control. Share-based compensation expense is principally
aimed at aligning our employees’ interests with those of our
shareholders and at long-term retention, rather than to address
operational performance for any particular period.
Payroll taxes related to share-based compensation: We exclude
employer payroll tax expense related to share-based compensation in
order to see the full effect that excluding that share-based
compensation expense had on our operating results. These expenses
are tied to the exercise or vesting of underlying equity awards and
the price of our common stock at the time of vesting or exercise,
which may vary from period to period independent of the operating
performance of our business.
Litigation-related expenses: We exclude costs associated with
the legal matter discussed under the caption "Legal Proceedings" in
our Form 6-K furnished with the Securities and Exchange Commission
("SEC") on August 15, 2023, because such costs are not reflective
of costs associated with our ongoing business and operating results
and are viewed as unusual and infrequent.
See the tables below for reconciliations of these non-GAAP
financial measures to the most directly comparable GAAP
measures.
Immaterial Error Correction
During the quarter ended June 30, 2023, we identified an
immaterial error relating to the period over which certain sales
commissions were amortized. We assessed the materiality of the
error on the financial statements for prior years individually and
in the aggregate, and concluded that it was not material to any
previously issued interim or annual financial statements. We
corrected the error by revising the consolidated statements of
operations appearing herein by increasing sales and marketing
expense by $0.2 million and $0.3 million for the three and six
months ended June 30, 2022, respectively as well as by revising the
consolidated balance sheet as of December 31, 2022, by decreasing
deferred contract acquisition costs and increasing accumulated
deficit by $2.0 million.
Forward Looking Statements
This press release contains forward-looking statements within
the meaning of the safe harbor provisions of the U.S. Private
Securities Litigation Reform Act of 1995. We intend such
forward-looking statements to be covered by the safe harbor
provisions for forward looking statements contained in Section 27A
of the U.S. Securities Act of 1933, as amended (the "Securities
Act") and Section 21E of the Exchange Act. All statements contained
in this press release other than statements of historical fact,
including, without limitation, statements regarding our revenue and
adjusted EBITDA guidance for fiscal year 2023, future growth
potential in new industries and new geographies, anticipated
implementation timeline and benefits of our proposed share
repurchase program, internal modeling assumptions, expectations as
to our new merchant pipeline and upsell opportunities and our
ability to compete, the performance of our products, our management
of our cash outflow, and business plans and strategy are forward
looking statements, which reflect our current views with respect to
future events and are not a guarantee of future performance. The
words “believe,” “may,” “will,” “estimate,” “potential,”
“continue,” “anticipate,” “intend,” “expect,” “could,” “would,”
“project,” “forecasts,” “aims,” “plan,” “target,” and similar
expressions are intended to identify forward-looking statements,
though not all forward-looking statements use these words or
expressions.
Actual outcomes may differ materially from the information
contained in the forward-looking statements as a result of a number
of factors, including, without limitation, the following: our
ability to manage our growth effectively; our history of net losses
and ability to achieve profitability; our ability to attract new
merchants and retain existing merchants; continued use of credit
cards and other payment methods that expose merchants to the risk
of payment fraud, and changes in laws and regulations related to
use of these payment methods, such as PSD2, and the emergence of
new alternative payment products; the impact of macroeconomic
conditions on us and on the performance of our merchants; our
ability to continue to improve our machine learning models;
fluctuations in our CTB Ratio and gross profit margin, including as
a result of large-scale merchant fraud attacks or other security
incidents; our ability to protect the information of our merchants
and consumers; our ability to predict future revenue due to lengthy
sales cycles; seasonal fluctuations in revenue; competition; our
merchant concentration; the financial condition of our merchants,
particularly in challenging macroeconomic environments; our ability
to increase the adoption of our products and to develop and
introduce new products; our ability to mitigate the risks involved
with selling our products to large enterprises; our ability to
retain the services of our executive officers, and other key
personnel, including our co-founders; our ability to attract and
retain highly qualified personnel, including software engineers and
data scientists, particularly in Israel; changes to our prices and
pricing structure; our exposure to existing and potential future
litigation claims; our exposure to fluctuations in currency
exchange rates; our ability to obtain additional capital; risks
associated with our proposed share repurchase program, including
the risk that the program could increase volatility and fail to
enhance shareholder value, risks relating to our ability to obtain
authorization and re-authorization, as necessary, by the Tel Aviv
District Court Economic Department to permit share repurchases, or
other factors; our third-party providers of cloud-based
infrastructure; our ability to protect our intellectual property
rights; technology and infrastructure interruptions or performance
problems; the efficiency and accuracy of our machine learning
models and access to third-party and merchant data; our ability to
comply with evolving data protection, privacy and security laws;
our ability to comply with lending regulation and oversight; the
development of regulatory frameworks for machine learning
technology and artificial intelligence; our use of open-source
software; our ability to enhance and maintain our brand; our
ability to execute potential acquisitions, strategic investments,
partnerships, or alliances; our ability to successfully establish
partnership channels and to integrate with these partners;
potential claims related to the violation of the intellectual
property rights of third parties; our limited experience managing a
public company; our failure to comply with anti-corruption, trade
compliance, and economic sanctions laws and regulations;
disruption, instability and volatility in global markets and
industries; our ability to enforce non-compete agreements entered
into with our employees; our ability to maintain effective systems
of disclosure controls and financial reporting; our ability to
accurately estimate or judgements relating to our critical
accounting policies; our business in China; changes in tax laws or
regulations; increasing scrutiny of, and expectations for,
environmental, social and governance initiatives; potential future
requirements to collect sales or other taxes; potential future
changes in the taxation of international business and corporate tax
reform; changes in and application of insurance laws or
regulations; conditions in Israel that may affect our operations;
the impact of the dual class structure of our ordinary shares; our
status as a foreign private issuer; and other risk factors set
forth in Item 3.D - “Risk Factors” in our Annual Report on Form
20-F, filed with the SEC on February 24, 2023, and other documents
filed with or furnished to the SEC. These statements reflect
management’s current expectations regarding future events and
operating performance and speak only as of the date of this press
release. You should not put undue reliance on any forward-looking
statements. Although we believe that the expectations reflected in
the forward-looking statements are reasonable, we cannot guarantee
that future results, levels of activity, performance and events and
circumstances reflected in the forward-looking statements will be
achieved or will occur. Except as required by applicable law, we
undertake no obligation to update or revise publicly any
forward-looking statements, whether as a result of new information,
future events or otherwise.
About Riskified
Riskified empowers businesses to grow eCommerce revenues and
profit by mitigating risk. The world’s largest merchants and
prestige brands partner with Riskified for guaranteed protection
against chargebacks, to fight fraud and policy abuse at scale and
to improve customer retention. Supported by a deeply experienced
team of eCommerce risk analysts, data scientists and researchers,
Riskified’s award-winning machine learning platform analyzes the
individual behind each interaction to provide real-time decisions
and robust identity-based insights. Learn more at
riskified.com.
RISKIFIED LTD.
CONSOLIDATED BALANCE
SHEETS
(in thousands, except share
data)
As of
June 30, 2023
As of
December 31, 2022
(unaudited)
Assets
Current assets:
Cash and cash equivalents
$
383,769
$
188,670
Restricted cash
2,326
2,347
Short-term deposits
90,000
287,000
Accounts receivable, net
38,021
37,547
Prepaid expenses and other current
assets
11,393
14,371
Total current assets
525,509
529,935
Property and equipment, net
17,139
18,586
Operating lease right-of-use assets
32,948
35,158
Deferred contract acquisition costs
14,223
14,383
Other assets, noncurrent
8,674
8,922
Total assets
$
598,493
$
606,984
Liabilities and Shareholders’
Equity
Current liabilities:
Accounts payable
$
3,854
$
2,110
Accrued compensation and benefits
17,904
24,134
Guarantee obligations
9,892
12,361
Provision for chargebacks, net
11,027
11,980
Operating lease liabilities, current
6,606
6,214
Accrued expenses and other current
liabilities
15,681
15,813
Total current liabilities
64,964
72,612
Operating lease liabilities,
noncurrent
28,275
31,202
Other liabilities, noncurrent
10,928
8,734
Total liabilities
104,167
112,548
Shareholders’ equity:
Class A ordinary shares, no par value;
900,000,000 shares authorized as of June 30, 2023 and December 31,
2022; 115,157,270 and 102,084,746 shares issued and outstanding as
of June 30, 2023 and December 31, 2022, respectively
—
—
Class B ordinary shares, no par value;
232,500,000 shares authorized as of June 30, 2023 and December 31,
2022; 60,945,014 and 68,945,014 shares issued and outstanding as of
June 30, 2023 and December 31, 2022, respectively
—
—
Additional paid-in capital
884,312
848,609
Accumulated other comprehensive profit
(loss)
(2,607
)
(1,639
)
Accumulated deficit
(387,379
)
(352,534
)
Total shareholders’ equity
494,326
494,436
Total liabilities and shareholders’
equity
$
598,493
$
606,984
RISKIFIED LTD.
CONSOLIDATED STATEMENTS OF
OPERATIONS
(in thousands, except share
and per share data)
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
(unaudited)
(unaudited)
Revenue
$
72,766
$
59,932
$
141,673
$
118,777
Cost of revenue
35,743
29,326
68,809
57,803
Gross profit
37,023
30,606
72,864
60,974
Operating expenses:
Research and development
18,264
17,947
37,058
36,060
Sales and marketing
23,216
23,057
45,339
46,335
General and administrative
17,629
22,554
35,542
44,506
Total operating expenses
59,109
63,558
117,939
126,901
Operating profit (loss)
(22,086
)
(32,952
)
(45,075
)
(65,927
)
Interest income (expense), net
5,617
1,319
11,064
1,993
Other income (expense), net
503
(44
)
1,248
(76
)
Profit (loss) before income taxes
(15,966
)
(31,677
)
(32,763
)
(64,010
)
Provision for (benefit from) income
taxes
928
1,516
2,082
2,596
Net profit (loss)
$
(16,894
)
$
(33,193
)
$
(34,845
)
$
(66,606
)
Other comprehensive profit (loss), net of
tax:
Other comprehensive profit (loss)
(20
)
(3,669
)
(968
)
(3,094
)
Comprehensive profit (loss)
$
(16,914
)
$
(36,862
)
$
(35,813
)
$
(69,700
)
Net profit (loss) per share attributable
to Class A and B ordinary shareholders, basic and diluted
$
(0.10
)
$
(0.20
)
$
(0.20
)
$
(0.40
)
Weighted-average shares used in computing
net profit (loss) per share attributable to Class A and B ordinary
shareholders, basic and diluted
175,618,208
166,365,844
174,238,825
165,480,508
RISKIFIED LTD.
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(in thousands)
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
(unaudited)
(unaudited)
Cash flows from operating
activities:
Net profit (loss)
$
(16,894
)
$
(33,193
)
$
(34,845
)
$
(66,606
)
Adjustments to reconcile net profit (loss)
to net cash provided by (used in) operating activities:
Unrealized loss (gain) on foreign
currency
(522
)
(1,520
)
(1,408
)
(1,695
)
Provision for (benefit from) account
receivable allowances
54
(73
)
194
(175
)
Depreciation and amortization
880
826
1,780
1,681
Amortization of capitalized internal-use
software costs
383
123
766
247
Amortization of deferred contract
costs
2,514
1,657
4,561
3,208
Share-based compensation expense
15,799
18,136
32,155
36,523
Non-cash right-of-use asset changes
1,116
1,051
2,227
2,138
Changes in accrued interest on
deposits
806
(384
)
445
(655
)
Ordinary share warrants issued to a
customer
384
383
768
767
Other
38
102
75
107
Changes in operating assets and
liabilities:
Accounts receivable
(9,592
)
(4,666
)
(827
)
7,350
Deferred contract acquisition costs
(1,948
)
(1,675
)
(3,531
)
(2,498
)
Prepaid expenses and other assets
521
1,966
1,212
6,935
Accounts payable
1,394
598
1,728
1,607
Accrued compensation and benefits
(2,565
)
1,876
(6,059
)
(5,585
)
Guarantee obligations
(39
)
636
(2,469
)
(2,342
)
Provision for chargebacks, net
4,094
328
(953
)
(2,386
)
Operating lease liabilities
(786
)
(1,095
)
(1,406
)
(2,370
)
Accrued expenses and other liabilities
(503
)
2,578
950
4,377
Net cash provided by (used in) operating
activities
(4,866
)
(12,346
)
(4,637
)
(19,372
)
Cash flows from investing
activities:
Purchases of short-term deposits
—
(40,211
)
(50,000
)
(191,964
)
Maturities of short-term deposits
118,000
—
247,000
85,211
Purchases of property and equipment
(61
)
(434
)
(248
)
(2,979
)
Capitalized software development costs
—
(545
)
—
(972
)
Net cash provided by (used in) investing
activities
117,939
(41,190
)
196,752
(110,704
)
Cash flows from financing
activities:
Proceeds from exercise of share
options
1,574
1,426
2,780
2,181
Payments of deferred offering costs
—
—
—
(190
)
Net cash provided by (used in) financing
activities
1,574
1,426
2,780
1,991
Effects of exchange rates on cash, cash
equivalents, and restricted cash
(33
)
(1,348
)
183
(1,924
)
Net increase (decrease) in cash, cash
equivalents, and restricted cash
114,614
(53,458
)
195,078
(130,009
)
Cash, cash equivalents, and restricted
cash—beginning of period
271,481
348,576
191,017
425,127
Cash, cash equivalents, and restricted
cash—end of period
$
386,095
$
295,118
$
386,095
$
295,118
Reconciliation of GAAP to Non-GAAP Measures
The following tables reconcile non-GAAP measures to the most
directly comparable GAAP measure and are presented in thousands
except for share and per share amounts.
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
(unaudited)
(unaudited)
Net profit (loss)
$
(16,894
)
$
(33,193
)
$
(34,845
)
$
(66,606
)
Provision for (benefit from) income
taxes
928
1,516
2,082
2,596
Interest (income) expense, net
(5,617
)
(1,319
)
(11,064
)
(1,993
)
Other (income) expense, net
(503
)
44
(1,248
)
76
Depreciation and amortization
1,263
949
2,546
1,928
Share-based compensation expense
15,799
18,136
32,155
36,523
Payroll taxes related to share-based
compensation
129
77
277
90
Litigation-related expenses
309
—
342
—
Adjusted EBITDA
$
(4,586
)
$
(13,790
)
$
(9,755
)
$
(27,386
)
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
(unaudited)
(unaudited)
GAAP gross profit
$
37,023
$
30,606
$
72,864
$
60,974
Plus: depreciation and amortization
434
173
872
344
Plus: share-based compensation expense
188
146
383
294
Plus: payroll taxes related to share-based
compensation
3
2
5
2
Non-GAAP gross profit
$
37,648
$
30,927
$
74,124
$
61,614
Gross profit margin
51
%
51
%
51
%
51
%
Non-GAAP gross profit margin
52
%
52
%
52
%
52
%
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
(unaudited)
(unaudited)
GAAP cost of revenue
$
35,743
$
29,326
$
68,809
$
57,803
Less: depreciation and amortization
434
173
872
344
Less: share-based compensation expense
188
146
383
294
Less: payroll taxes related to share-based
compensation
3
2
5
2
Non-GAAP cost of revenue
$
35,118
$
29,005
$
67,549
$
57,163
GAAP research and development
$
18,264
$
17,947
$
37,058
$
36,060
Less: depreciation and amortization
388
359
781
733
Less: share-based compensation expense
3,476
2,451
6,910
4,883
Non-GAAP research and development
$
14,400
$
15,137
$
29,367
$
30,444
GAAP sales and marketing
$
23,216
$
23,057
$
45,339
$
46,335
Less: depreciation and amortization
250
238
507
486
Less: share-based compensation expense
4,877
4,881
9,774
10,204
Less: payroll taxes related to share-based
compensation
68
45
137
58
Non-GAAP sales and marketing
$
18,021
$
17,893
$
34,921
$
35,587
GAAP general and administrative
$
17,629
$
22,554
$
35,542
$
44,506
Less: depreciation and amortization
191
179
386
365
Less: share-based compensation expense
7,258
10,658
15,088
21,142
Less: payroll taxes related to share-based
compensation
58
30
135
30
Less: litigation-related expenses
309
—
342
—
Non-GAAP general and administrative
$
9,813
$
11,687
$
19,591
$
22,969
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
(unaudited)
(unaudited)
Net cash provided by (used in) operating
activities
$
(4,866
)
$
(12,346
)
$
(4,637
)
$
(19,372
)
Purchases of property and equipment
(61
)
(434
)
(248
)
(2,979
)
Capitalized software development costs
—
(545
)
—
(972
)
Free Cash Flow
$
(4,927
)
$
(13,325
)
$
(4,885
)
$
(23,323
)
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
(unaudited)
(unaudited)
Net profit (loss)
$
(16,894
)
$
(33,193
)
$
(34,845
)
$
(66,606
)
Depreciation and amortization
1,263
949
2,546
1,928
Share-based compensation expense
15,799
18,136
32,155
36,523
Payroll taxes related to share-based
compensation
129
77
277
90
Litigation related expenses
309
—
342
—
Non-GAAP net profit (loss)
$
606
$
(14,031
)
$
475
$
(28,065
)
Weighted-average shares used in computing
net profit (loss) per share attributable to Class A and B ordinary
shareholders, basic and diluted
175,618,208
166,365,844
174,238,825
165,480,508
Add: Dilutive Class A and B ordinary share
equivalents
8,005,974
—
8,785,919
—
Weighted-average shares used in computing
non-GAAP net profit (loss) per share attributable to Class A and B
ordinary shareholders, diluted
183,624,182
166,365,844
183,024,744
165,480,508
Net profit (loss) per share attributable
to Class A and B ordinary shareholders, basic and diluted
$
(0.10
)
$
(0.20
)
$
(0.20
)
$
(0.40
)
Non-GAAP net profit (loss) per share
attributable to Class A and B ordinary shareholders, basic and
diluted
$
0.00
$
(0.08
)
$
0.00
$
(0.17
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230815465620/en/
Investor Relations: Chett Mandel, Head of Investor
Relations | ir@riskified.com
Corporate Communications: Cristina Dinozo, Senior
Director of Communications | press@riskified.com
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