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01/11 11:27
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
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.
GMV (Gross Merchandise Volume) $36.4 billion for Q2 2025, reflecting a 4% year-over-year increase. The growth was driven by new merchant and upsell activity.
Revenue $81.1 million for Q2 2025, up 3% year-over-year. Growth was attributed to new merchant and upsell activity.
Revenue (First Half) $163.4 million for the first half of 2025, up 5% year-over-year. Growth was driven by new merchant and upsell activity.
Tickets and Travel Category 15% year-over-year growth, driven by strong new business wins and upsell activity.
Fashion and Luxury Category 10% year-over-year growth, driven by strong new business wins and upsell activity. Growth was partially offset by same-store sales pressure, particularly in high-end fashion and sneakers.
Home Category Contracted by 74% year-over-year, reflecting declines in this segment.
Money Transfer and Payments Category Achieved approximately 90% year-over-year growth, driven by new merchant activity.
United States Region Declined 11% year-over-year, primarily due to contraction in the Home category.
APAC Region Grew approximately 40% year-over-year, driven by new business and upsell activity, particularly in travel.
Other Americas Region (Canada and Latin America) Grew approximately 16% year-over-year, driven by new business and upsell activity, particularly in travel.
EMEA Region Grew approximately 23% year-over-year, with strong performance in Fashion and Luxury, Tickets and Travel, and Money Transfer and Payments verticals, supported by new business and upsell momentum.
Non-GAAP Gross Profit Margin Approximately 50% for Q2 2025, down from 53% in the prior year. The decline was due to ramping of merchants in emerging categories and geographies, partially offset by improvements in machine learning models and new product revenue.
Non-GAAP Operating Expenses $38.2 million for Q2 2025, down from $39.3 million in the prior year. Operating expenses as a percentage of revenue declined from 50% to 47%, reflecting ongoing leverage in the business model.
Adjusted EBITDA $2.1 million for Q2 2025, marking the seventh consecutive quarter of positive adjusted EBITDA.
Free Cash Flow $5.3 million for Q2 2025, up from $4.1 million in the prior year, reflecting a healthy cash flow model.
Cash, Deposits, and Investments $339 million as of the end of Q2 2025, with zero debt.
AI fraud and risk intelligence solutions: Continued demand and advancements in AI capabilities of the multiproduct platform.
Agentic Commerce solutions: Introduced multiple solutions and tools for fraud and abuse prevention in Agentic Commerce.
Policy Protect product: Increased adoption driven by new logo wins, cross-sell activity, and geographic expansion. Launched a new refund abuse model with a 15% improvement in technical performance.
International growth: 7 of the top 10 new logos came from outside the U.S., spanning 4 categories. APAC grew 40%, Other Americas grew 16%, and EMEA grew 23% year-over-year.
Category expansion: Deepened presence in nondiscretionary categories like money transfer and payments, achieving 90% year-over-year growth.
Revenue growth: Achieved record Q2 revenue of $81.1 million, up 3% year-over-year. First half revenue was $163.4 million, up 5% year-over-year.
Gross profit margin: Non-GAAP gross profit margin for Q2 was 50%, with an annual target of approximately 52% for 2025.
Adjusted EBITDA: Positive adjusted EBITDA for the seventh consecutive quarter, with $2.1 million in Q2 and $3.5 million for the first half of 2025.
Share repurchase program: Board authorized an additional $75 million share repurchase program, bringing total authorization to $85 million.
Capital allocation: Maintained a debt-free balance sheet with $339 million in cash and investments. Expected $30 million in positive free cash flow for 2025.
Fraud Complexity and Sophistication: Fraudsters are leveraging advanced techniques, including nascent capabilities of Agentic Commerce, to launch dedicated attacks, increasing the complexity and sophistication of fraud.
Same-Store Sales Pressure: Continued same-store sales pressure, particularly within high-end fashion and sneakers verticals, is impacting growth in the Fashion and Luxury category.
Home Category Decline: The Home category contracted by 74% year-over-year, significantly impacting revenue from this segment.
Geographic Revenue Decline: The United States experienced an 11% year-over-year revenue decline, primarily due to the contraction in the Home category.
Gross Profit Margin Pressure: Non-GAAP gross profit margin declined year-over-year from 53% to 50%, driven by ramping of merchants in emerging categories and geographies, as well as varying risk profiles of transactions.
Regulatory Requirements for Share Repurchase: The $75 million share repurchase program is subject to Israeli regulatory requirements, which could delay or complicate execution.
Revenue Expectations: The company has updated its revenue guidance for 2025 to be between $336 million and $346 million, with a midpoint of $341 million.
Adjusted EBITDA Guidance: The adjusted EBITDA guidance remains between $18 million and $26 million, with a midpoint of $22 million.
Gross Profit Margin: The annual non-GAAP gross profit margin for 2025 is anticipated to be approximately 52%, with the second half expected to have a higher margin than the first half. The third quarter is expected to be slightly below 52%, while the fourth quarter is expected to exceed this target.
Free Cash Flow: The company expects approximately $30 million of positive free cash flow for 2025, with the majority of cash flow generation anticipated in the fourth quarter.
Market Trends and Growth: The company expects continued growth in its Money Transfer and Payments category, which achieved approximately 90% year-over-year growth in Q2 2025. International growth is also expected to continue, with strong performance in regions such as APAC, Other Americas, and EMEA.
Product Innovation and Expansion: The company is focusing on advancing its AI capabilities and expanding its product portfolio, including new solutions for fraud and abuse prevention in Agentic Commerce. It also plans to leverage its partnership with HUMAN Security to enhance its offerings.
Share Repurchase Program: The Board has authorized an additional $75 million share repurchase program, bringing the total outstanding authorization to approximately $85 million.
Share Repurchase Program: The Board of Directors has authorized an additional $75 million share repurchase program, subject to Israeli regulatory requirements. Combined with the remaining amounts under the existing authorization, the total outstanding authorization is approximately $85 million. In the first half of 2025, the company repurchased 9 million shares for a total price of approximately $44 million. The company expects its share count to decline year-over-year as a result of this buyback activity.
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.
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.
The earnings call presents a mixed picture: strong revenue growth and share repurchase are positive, but declining profit margins and risks from international expansion are concerning. The Q&A section reveals management's optimism in product execution and growth potential, but also highlights uncertainty in transaction approvals and margin shifts. The decision to maintain guidance amid tariff uncertainties adds to the neutral sentiment. Given the small-cap nature of the company, the stock price is likely to remain stable, falling within the neutral range of -2% to 2% over the next two weeks.
The earnings call reflects a positive sentiment with strong financial performance, including revenue growth, increased share repurchases, and positive EBITDA. The company has a robust market strategy, with expansion into new categories and a strong focus on AI capabilities. While there are some concerns about margin declines and economic uncertainties, the optimistic guidance, solid cash position, and strategic initiatives like moving down market and expanding payment categories indicate a positive outlook. Given the small-cap nature of the stock, a positive stock price movement of 2% to 8% is expected.
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