Riskified Ltd. (RSKD) Q4 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
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.
Key Financial Performance
Non-GAAP Gross Profit (Q4 2025) $57.3 million, representing a strong year-over-year growth of 16%. This growth demonstrates the scale and strength of the business.
Adjusted EBITDA (Q4 2025) $17.7 million, translating to a margin of 18%. This quarterly amount exceeded the full year adjusted EBITDA of $17.2 million in 2024, showcasing improved operational efficiency.
Revenues (Q4 2025) Nearly $100 million, a record since inception, contributing to the first-ever quarter of GAAP profitability. This reflects consistent high-quality execution.
Annual Dollar Retention (ADR) Approximately 100%, up from 96% in 2024. This improvement indicates better customer retention.
Net Dollar Retention (NDR) 105%, significantly improved from 96% in 2024, driven by upselling and new business wins.
Non-U.S. Regions Growth Collectively grew 22% year-over-year, with notable outperformance in APAC and Latin America. This was driven by localized product development and pipeline generation.
Money Transfer and Payments Category Growth (2025) 90% year-over-year, following 66% growth in 2024. This was driven by new business wins and upsell activity.
Revenues from Policy Protect, Account Secure, and Dispute Resolve (2025) Nearly $10 million in aggregate annual revenues, reflecting growth outside core fraud services.
GMV (Q4 2025) $46.7 billion, the highest quarter of volume reviewed in history, representing growth of 18% compared to the prior year period.
Full Year GMV (2025) $155.1 billion, a 10% year-over-year growth, driven by strong performance in travel and money transfer categories.
Revenue (Q4 2025) $99.3 million, up 6% year-over-year, driven by strong performance in travel and money transfer categories.
Revenue (Full Year 2025) $344.6 million, up 5% year-over-year, with growth driven by money transfer, fashion, and travel categories.
Operating Expenses (2025) $153.6 million, a decline of 2% from 2024, reflecting disciplined cost management and increased efficiency through AI tools.
Adjusted EBITDA (Full Year 2025) $26.7 million, representing a year-over-year increase of over 55%, driven by operational efficiency and revenue growth.
Free Cash Flow (Q4 2025) $10.7 million, contributing to $33.1 million for the full year, reflecting a healthy cash flow model.
Cash, Deposits, and Investments (End of 2025) Approximately $298 million, with zero debt, showcasing a strong balance sheet.
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Operating Highlights
Policy Protect, Account Secure, and Dispute Resolve: Generated nearly $10 million in aggregate annual revenues in 2025. Plan to grow revenues outside core fraud services in 2026.
Agentic commerce offering: Expanded and enhanced to support agentic commerce across various forms and flows. Provides risk intelligence for AI shopping assistants.
Geographic expansion: Non-U.S. regions collectively grew 22% year-over-year, with APAC and Latin America as key outperformers. Plans to develop localized products and features to boost pipeline generation.
Vertical expansion: Scaled presence in payments and money transfer category with 90% growth in 2025. Plans to penetrate additional verticals for market share gains.
AI adoption: Utilized AI to automate workflows, improve productivity, and reduce costs. Engineering teams saw over 2x increase in tickets completed between Q2 and Q4 2025.
Operational efficiency: Operating expenses declined 2% year-over-year in 2025. Increased development capacity despite a 3% reduction in global employees.
Share repurchase program: Board authorized an additional $75 million share repurchase program, reflecting confidence in long-term trajectory.
Focus on gross profit growth: Prioritizing gross profit growth over revenue growth in 2026 to enhance profitability.
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Risk or Challenges
Fraud and Security Risks: The company faces escalating complexity of fraud schemes targeting every touch point across the customer journey, including account creation, stored value credentials, returns, customer service, and dispute portals. Fraud risks vary across payment types, including ACH, credit cards, digital wallets, crypto, and stablecoins. The rise in AI-related fraud attempts further complicates the landscape.
Macroeconomic and Regional Risks: Revenue in the United States declined 6% year-over-year, primarily due to contraction in the home category. Additionally, the company faces FX headwinds, particularly from the appreciation of the Israeli shekel against the U.S. dollar, which impacts adjusted EBITDA margins by approximately 400 basis points.
Operational and Strategic Risks: The company is focusing on gross profit growth rather than revenue growth, which may limit top-line expansion. Additionally, the ramping of merchants in newer geographies, such as Latin America, has yet to reach performance levels of the broader portfolio. The 2022 merchant cohort also underperformed compared to other cohorts.
Competitive and Market Risks: The company operates in a highly competitive market, with risks of losing market share to competitors. The increasing prevalence of agentic commerce and merchant-native AI systems introduces new transaction risks that require continuous innovation to address.
Sector-Specific Risks: The tickets and live events subvertical experienced a year-over-year decline due to tougher comparable periods and larger live events in 2024. Same-store sales pressure continues in high-end and sneaker subverticals within the fashion, cosmetics, and luxury vertical.
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Guidance & Outlook
Revenue Growth: The company anticipates revenue of between $372 million and $384 million for 2026, representing growth of 8% to 11%.
Adjusted EBITDA: Expected to be between $26 million and $34 million, with a midpoint of $30 million, representing a margin of 8%. This includes a 400 basis point FX headwind.
Free Cash Flow: Projected to increase by at least 20% to approximately $40 million in 2026.
Gross Profit Growth: Targeting non-GAAP gross profit growth of 7% to 12% for 2026, with each quarter at or near 10% growth at the midpoint.
Geographic Expansion: Plans to expand further in APAC and Latin America regions by developing localized products and features to boost pipeline generation.
Market Trends: Fraud losses related to online transactions are expected to more than double over the next 5 years, outpacing e-commerce growth. The company is leveraging AI to address increasing fraud complexity.
Product Expansion: Plans to grow revenues outside of core fraud services in 2026, building on the $10 million generated from Policy Protect, Account Secure, and Dispute Resolve in 2025.
Share Repurchase Program: The Board has authorized an additional $75 million share repurchase program, reflecting confidence in the company's long-term trajectory.
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Shareholder Return Plan
Share Repurchase Program: Over the past 2 years, Riskified has repurchased shares representing approximately 2/3 of its current enterprise value. In 2025, the company repurchased approximately 22 million shares for a total price of $105.9 million, contributing to an 8% reduction in shares outstanding. Since the inception of the buyback program in Q4 2023, Riskified has repurchased approximately 52 million shares for a total price of $259.5 million, resulting in a 17% reduction in shares outstanding. The Board of Directors has authorized an additional $75 million share repurchase program, bringing the total outstanding authorization to approximately $84 million. This decision reflects the company's confidence in its fundamentals, supported by strong free cash flow, a debt-free balance sheet, and a disciplined capital allocation strategy.
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Key Q&A
Q:Can you quantify any early GMV from the two agentic commerce scenarios and describe the monetization or take rate? How many merchants are actively trying this out?
A:Eido Gal explained two main flows in agentic commerce: merchant native AI agents and general-purpose LLMs. Merchant native AI agents show promise, supporting the entire lifecycle on their website. General-purpose LLMs predominantly handle referrals, with low purchasing traffic. Take rates are higher for general-purpose LLMs due to higher risk traffic. Merchants are preparing for changes, but traffic is not significant yet.
Q:Do you see outsized growth in money transfer and payments continuing in your 2026 guidance?
A:Aglika Dotcheva stated that money transfers and payments experienced exceptional growth this year. For 2026, the category is expected to grow but normalize in terms of total growth.
Q:What is the potential for rising adoption of agentic commerce to impact fraud levels and the structure of the system?
A:Eido Gal noted that agentic commerce adds complexity to online commerce and payments, increasing fraud risks, especially in general-purpose LLMs. The complexity benefits Riskified as merchants face more challenges. Fraud in agentic channels is currently incremental to general take rates.
Q:Can you provide an update on the mid-market expansion strategy and its role in 2026 growth?
A:Eido Gal highlighted that Riskified's ability to customize for enterprises is a strength. Automating the lifecycle could open opportunities in the mid-market, but this is not included in the 2026 guidance. Accelerating this would be upside to guidance.
Q:What is the status of integrating into the latest agentic protocols, and what is the value of data from these protocols in detecting fraud?
A:Eido Gal mentioned that the market is fragmented with multiple protocols, some of which are outdated. Riskified supports various protocols, including AI Agent Approve and Google's A2A protocol. The fragmented approach is expected to continue, requiring optimization between protocols.
Q:What is the FX exposure in the cost base, and how does it impact margins?
A:Aglika Dotcheva explained that FX headwinds, particularly the strengthening of the Israeli shekel against the dollar, impacted adjusted EBITDA by approximately 400 basis points or $40 million. Without this, expenses would have been flat year-over-year.
Q:What is the opportunity for newer products like Policy Protect and Account Secure in 2026?
A:Eido Gal stated that increasing complexity in fraud drives demand for a wider product platform. Revenue from products like Policy Protect and Account Secure is expected to be $15 million to $20 million in 2026.
Q:What drove the improvement in the CTB ratio for the 2024 cohort?
A:Aglika Dotcheva attributed the improvement to better performance in the money transfer and payments category, which serves as a strong base for optimizing incoming merchants.
Q:Are Riskified's services used in addition to or instead of value-added services from card networks?
A:Eido Gal clarified that Riskified's services are distinct from card network services, offering features like modern machine learning fraud prevention, policy products, and support for alternative payments, which are not comparable to card network offerings.
Q:Do you anticipate a different card mix in the agentic channel compared to traditional e-commerce?
A:Eido Gal stated that consumer preference for cards remains high, and no significant shift in card mix is expected in the agentic channel compared to traditional e-commerce, except in specific industries like payments and remittance.
Q:How would pricing and contracts work for agentic commerce, and how does Riskified address early fraud risks?
A:Eido Gal explained that pricing for agentic commerce is flexible initially, with merchants open to higher prices due to increased fraud risks. Riskified's system adapts quickly to new fraud patterns, leveraging its network to address early fraud risks effectively.
Q:Will there be an FX tailwind to revenue from the weaker dollar?
A:Aglika Dotcheva mentioned that any FX tailwind to revenue would be minor, less than 0.5%, and already incorporated into projections.
Q:What does focusing on gross profit growth mean for go-to-market strategy and risk tolerance?
A:Eido Gal stated that the focus on gross profit growth aligns sales strategies and commission structures with the goal of targeting accounts that contribute to gross profit dollar growth.
Q:What is the penetration rate of non-chargeback guarantee products, and what are the assumptions for 2026?
A:Eido Gal noted a 50% increase in adoption of non-chargeback guarantee products, with revenue expected to grow from $10 million to $15 million-$20 million in 2026.
Q:Review of Unclear Management Responses
A:Management avoided providing specific details on the number of merchants actively trying agentic commerce and the exact GMV figures. Additionally, they did not clarify the potential long-term impact of agentic commerce on fraud levels or the structure of the system. The fragmented approach to agentic protocols and the lack of a clear winner in the market were also not addressed in detail.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
ADR
AI agent
AI fraud
AI shopping
Mandel Head
NDR
Policy Protect
agent identity
assistance
behavior
calibration
checkout
commerce
complexity fraud
discovery
ecosystem
enhancement
enterprise value
fraud MOs
inception
intelligence
interaction
journey
loss
merchant AI
merchant network
merchant product
model feature
payment type
production
productivity
purchase
purpose LLMs
query
risk payment
service
shopping agent
signal
success
traffic
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
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