Riskified Ltd. (RSKD) Q3 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call summary and Q&A session highlight strong financial performance, including improved gross profit margins, reduced operating expenses, and significant free cash flow. The company is also actively repurchasing shares, indicating confidence in its financial health. The focus on product innovation and strategic partnerships, alongside a positive outlook for both upselling existing clients and acquiring new ones, further supports a positive sentiment. Despite some uncertainties in new regions, the overall guidance and strategic initiatives suggest a positive stock price movement over the next two weeks.
Key Financial Performance
GMV (Gross Merchandise Volume) $37.8 billion for Q3 2025, reflecting a 9% year-over-year increase. The growth was driven by new merchant and upsell activity.
Revenue $81.9 million for Q3 2025, up 4% year-over-year. Growth was primarily driven by new merchant and upsell activity.
Tickets & Travel Category Grew 6% during Q3 2025. Growth was driven by strong new business wins and upsell activity, offset by softness in tickets and live events due to tougher comparable periods versus 2024.
Fashion & Luxury Category Grew 13% during Q3 2025. Growth was supported by new business activity and improvements in some of the largest merchants, partially offset by same-store sales pressure in high-end fashion.
Money Transfer & Payments Category Achieved approximately 100% year-over-year growth in Q3 2025. Growth was driven by new business activity.
Home Category Contracted by approximately 70% year-over-year in Q3 2025. Decline was attributed to dynamics impacting the first 9 months of 2025.
Revenue in the United States Declined 12% year-over-year in Q3 2025, primarily due to contraction in the home category.
APAC Region Revenue Grew approximately 55% year-over-year in Q3 2025, driven by new business and upsell activity, particularly in the travel subvertical.
Other Americas Revenue Grew approximately 18% year-over-year in Q3 2025, driven by new business and upsell activity, with strength in the travel subvertical.
EMEA Region Revenue Grew approximately 19% year-over-year in Q3 2025, supported by new business and upsell momentum in Fashion & Luxury, Tickets & Travel, and Money Transfer & Payments verticals.
Non-GAAP Gross Profit $41.5 million for Q3 2025, up 5% year-over-year. Growth was driven by improvements in machine learning models and new product revenue, offset by ramping of merchants in newer categories.
Non-GAAP Gross Profit Margin Approximately 51% for Q3 2025, an improvement of 1% year-over-year. Growth was driven by machine learning improvements and new product revenue.
Non-GAAP Operating Expenses $36 million for Q3 2025, down from $38.7 million in the prior year. Decline was due to onetime positive impacts and reflects leverage in the business model.
Adjusted EBITDA $5.6 million for Q3 2025, representing a 7% margin and a 560 basis points year-over-year improvement. Growth was driven by operating leverage and scalability of the platform.
Free Cash Flow $13.4 million for Q3 2025, contributing to $22.4 million for the first 9 months of 2025. Growth reflects a healthy cash flow model.
Share Repurchase 5.2 million shares repurchased in Q3 2025 for approximately $25.3 million. For the first 9 months, 14.2 million shares were repurchased for $69.2 million.
You have reached the limit. Sign up to access full content
Get started
Operating Highlights
Adaptive Checkout: Launched several quarters ago, it uses AI to raise conversion rates by adding friction only when needed. Results include a 5% increase in conversion for a U.S. ticketing merchant and a 26% increase for an EMEA electronics merchant.
Agentic Commerce: Positioning Riskified to address AI-driven shopping trends through strategic partnerships, innovative technology, and enhanced infrastructure to mitigate risks like chargebacks and disputes.
Money Transfer & Payments: Achieved 100% year-over-year growth in Q3, driven by new business activity. Expected to nearly double revenue in this category for full year 2025.
Fashion & Luxury: Grew 13% in Q3, supported by new business activity and improvements in large merchants, despite some same-store sales pressure.
Tickets & Travel: Grew 6% in Q3, driven by new business wins and upsell activity, with strong growth in travel subvertical.
APAC Region: Revenue grew approximately 55% year-over-year in Q3, driven by new business and upsell activity.
EMEA Region: Revenue grew approximately 19% year-over-year in Q3, with strong performance in Fashion & Luxury, Tickets & Travel, and Money Transfer & Payments.
Machine Learning Automation: Shifted 70% of models from manual to autonomous training, with 100% of autonomously trained models outperforming manual ones. Enables real-time retraining and scalability.
Non-GAAP Gross Profit Margin: Improved to 51% in Q3, up 1% year-over-year, driven by machine learning improvements and new product revenue.
Adjusted EBITDA Margin: Expanded by 560 basis points year-over-year in Q3, with Q4 margin expected to approximate 15%.
Share Repurchase Program: Repurchased 5.2 million shares in Q3 for $25.3 million, with a total of 14.2 million shares repurchased in the first 9 months of 2025.
Revenue Guidance Update: Raised bottom end of revenue guidance for the second consecutive quarter, now expecting $338 million to $346 million for full year 2025.
You have reached the limit. Sign up to access full content
Get started
Risk or Challenges
Temporary softness in the first half of 2025: The company experienced a 4% decline in non-GAAP gross profit during the first half of 2025, which could indicate challenges in maintaining profitability during certain periods.
Softness in tickets and live events vertical: The tickets and live events vertical faced challenges due to tougher comparable periods versus 2024's record activity, potentially impacting revenue growth in this category.
Same-store sales pressure in high-end fashion: Continued same-store sales pressure in the high-end fashion subvertical could hinder growth in the Fashion & Luxury category.
Year-over-year revenue decline in the United States: Revenue in the United States declined by 12% year-over-year, primarily due to contraction in the home category, which could signal challenges in this market.
Contraction in the home category: The home category contracted by approximately 70% year-over-year, significantly impacting overall revenue performance.
Risk of agentic commerce: The rise of agentic commerce, where AI agents make purchases on behalf of consumers, could reintroduce risks such as higher chargebacks, disputes, and policy abuse, posing challenges for merchants.
Ramping of merchants in newer categories: The ramping of merchants in newer categories, such as money transfer and payments, has impacted gross profit margins, indicating potential challenges in scaling these categories profitably.
You have reached the limit. Sign up to access full content
Get started
Guidance & Outlook
Revenue Guidance: The company has raised the bottom end of its revenue guidance for the second consecutive quarter, now anticipating revenue between $338 million and $346 million for the full year 2025, with a midpoint of $342 million.
Adjusted EBITDA Margin: The company expects a significant step-up in adjusted EBITDA margin in Q4, approximating 15%, driven by operating leverage, platform scalability, and efficiency gains.
Free Cash Flow: The company now expects over $30 million of positive free cash flow for the full year 2025.
Category Growth Expectations: The Money Transfer & Payments category is expected to nearly double its absolute revenue dollars for the full year 2025 compared to 2024. The Fashion & Luxury category is expected to continue growing, supported by a strong pipeline of new business opportunities and anticipated macroeconomic steadiness in the high-end fashion subvertical. The Home category, which contracted by approximately 70% year-over-year, is expected to revert to year-over-year growth in Q4.
Geographic Growth: Continued international growth is expected, with strong performance in APAC, EMEA, and other Americas regions driven by new business and upsell activity.
Machine Learning and Automation: The company has shifted approximately 70% of its models from manual to autonomous training, with 100% of autonomously trained models outperforming their manual counterparts. This automation is expected to allow for continued scaling of the business with high leverage.
Holiday Season Outlook: The company is cautiously optimistic for a healthy holiday season, supported by resilient consumer spending and solid performance in its three largest categories: Tickets & Travel, Fashion & Luxury, and Money Transfer & Payments.
Product Development: The Adaptive Checkout product, which uses AI to optimize conversion rates, continues to gain adoption and is expected to capture more market share in the global e-commerce market.
Agentic Commerce: The company is positioning itself to address the rise of agentic commerce through strategic partnerships, innovative technology, and enhanced infrastructure to help merchants navigate this shift safely.
You have reached the limit. Sign up to access full content
Get started
Shareholder Return Plan
Share Repurchase: In the third quarter, Riskified repurchased 5.2 million shares for a total price of approximately $25.3 million. For the first 9 months of the year, the company repurchased 14.2 million shares for a total price of approximately $69.2 million. This buyback activity is part of the company's ongoing commitment to prudent dilution management, with an expectation that shares outstanding will decline by at least 5% year-over-year.
You have reached the limit. Sign up to access full content
Get started
Key Q&A
Q:How is the company thinking about growth outlook in terms of upselling and cross-selling to existing merchants versus driving new business?
A:The company expects strong performance in both areas, with a focus on onboarding new merchants and gaining net new clients, consistent with prior years.
Q:Are there any emerging verticals to watch in 2026, and how does the company prioritize resources for these verticals?
A:The company targets large verticals where their product fits well, expands geographically, and considers distribution strategies like partnerships and mid-market focus. These factors are part of their 2026 planning cycle.
Q:What is the revenue contribution from non-chargeback guarantee products for 2025?
A:The revenue contribution has been very strong, over 100%, and has helped secure longer-term contracts with existing clients and win new business at a higher rate.
Q:How do machine learning investments and non-chargeback guarantee products impact the long-term margin profile?
A:The margin profile varies based on product mix, with a focus on generating increasing gross profit dollars.
Q:What is the trajectory of gross margins into 2026, considering recent model improvements and money transmitter impacts?
A:Model improvements have enhanced performance across the portfolio, expected to improve Q4 and beyond. However, headwinds from newer regions and categories are anticipated to persist.
Q:What were the one-time expense impacts in Q3, and what is the expected OpEx for Q4?
A:Positive impacts in Q3 included payroll adjustments and event movements, particularly in the Israeli office. Q4 OpEx is expected to be around $39 million, representing a better run rate.
Q:How does stablecoin adoption and payment rails impact the fraud management landscape, and is the company exploring opportunities here?
A:Stablecoins and crypto introduce complexity and new fraud vectors for merchants, which the company helps address. These have been net positive drivers for the business.
Q:Has the emphasis on Agentic commerce solutions driven notable uptick in new business discussions?
A:Yes, merchants are adapting to the complexity of Agentic commerce, and the company's capabilities in bot detection, policy products, and risk engine have facilitated conversations.
Q:What drove the notable sequential increase in GMV in Q3, and does money transfer payments growth affect seasonality trends?
A:GMV growth was driven by revenue inputs and aligned with historical trends. Money transfer payments growth has reduced typical seasonality trends.
Q:How does the company manage expenses while investing in growth and maintaining flat operating expenses?
A:The company focuses on growth-generating areas, optimizes operational areas, and leverages cost-effective locations and offshoring activities. Development capacity has increased by 50%.
Q:What are the liability differences in payment token versus digital wallet transactions, and how does wallet share compare in Agentic commerce?
A:Liability often sits with merchants for payment tokens and with issuing banks for digital wallets. The wallet share in Agentic commerce is uncertain due to limited data.
Q:What are the opportunities and threats of Agentic commerce for the company?
A:Opportunities include addressing merchant complexity and fraud in Agentic transactions. Threats include potential shifts away from enterprise e-commerce to Agentic environments.
Q:Is there an opportunity to provide services to AI labs, and how does the company feel about 2026 EBITDA targets?
A:Yes, AI labs can be clients. The company is targeting 50% margins in Q4 and double-digit growth in 2026, though 15% margin targets may be delayed by a few quarters.
Q:Review of Unclear Management Responses
A:The company avoided providing a data-based answer regarding the wallet share of digital wallets in Agentic commerce compared to traditional website checkouts, stating that it would be more of a guess than a data-based response.
You have reached the limit. Sign up to access full content
Get started
Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
AI conversion
Adaptive Checkout
Checkout AI
Checkout bar
EMEA electronics
GMV activity
Litigation today
Luxury Money
Mandel Head
Payments GMV
Relations statement
abuse merchant
action period
adoption Adaptive
agent purchase
analysis adoption
bar risk
behalf consumer
capability feature
capability offer
category activity
category momentum
category track
chargebacks dispute
collaboration fraud
combination partnership
comm market
commerce research
conclusion platform
confidence end
end holiday
friction exemption
holiday season
merchant conversion
program
step
RSKD Transcript
Riskified Ltd. (RSKD) Q1 2026 Earnings Call Transcript
Positive5-13
The earnings call reveals strong financial performance with revenue and gross profit up 18% and 20% YoY, respectively. Adjusted EBITDA turned positive, and net income improved significantly. The strategic plan includes geographic expansion and product growth, with additional share repurchases signaling confidence. Despite no new partnerships or specific risk discussions, the company's optimistic outlook and financial health suggest a positive stock movement, especially for a small-cap firm.
Riskified Ltd. (RSKD) Q4 2025 Earnings Call Transcript
Positive3-4
The earnings call summary and Q&A indicate strong financial performance with raised revenue guidance and expected EBITDA margin improvement. The company is optimistic about category growth and international expansion. Despite FX headwinds, positive cash flow and growth in new products are expected. Analysts' questions reveal confidence in management's ability to handle complexities in agentic commerce and fraud risks. The positive outlook, combined with strategic initiatives and raised guidance, suggests a positive stock price movement, especially for a small-cap stock like this one.
Riskified Ltd. (RSKD) Q3 2025 Earnings Call Transcript
Positive11-12
The earnings call summary and Q&A session highlight strong financial performance, including improved gross profit margins, reduced operating expenses, and significant free cash flow. The company is also actively repurchasing shares, indicating confidence in its financial health. The focus on product innovation and strategic partnerships, alongside a positive outlook for both upselling existing clients and acquiring new ones, further supports a positive sentiment. Despite some uncertainties in new regions, the overall guidance and strategic initiatives suggest a positive stock price movement over the next two weeks.
Riskified Ltd. (RSKD) Q2 2025 Earnings Call Transcript
Positive8-18
The earnings call highlights strong financial performance with a solid revenue growth forecast, high renewal rates, and a significant increase in new product revenue. Positive insights from the Q&A include high win rates and strategic expansion plans. While some uncertainties exist, such as unaddressed expectations for specific sectors, overall sentiment remains positive with strategic investments in AI and global expansion. The market cap indicates moderate sensitivity, supporting a positive prediction.
RSKD Slides
RSKD Report
Frequently Asked Questions
Where does this earnings call transcript come from?
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
How soon is the transcript available after the earnings call ends?
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
Is the transcript edited or altered in any way?
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
Why do some answers appear as “Unclear” or “Inaudible”?
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
