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Riskified Ltd. (NYSE: RSKD) has reported robust financial results for the third quarter of 2024, showcasing significant strides in various business verticals. The company achieved a revenue of $78.849 million, marking a 10% increase from the $71.872 million recorded in the same quarter last year.
This growth was primarily driven by the company’s advanced artificial intelligence platform, which has facilitated new business activity and market share gains across key verticals. The company’s gross merchandise volume (GMV) also saw a notable increase, reaching $34.706 billion, a 17% rise from the previous year’s $29.674 billion.
In terms of profitability, Riskified reported a GAAP gross profit of $38.956 million, up from $31.140 million in the previous year, with a gross profit margin of 49%, an improvement from 43% last year. The company’s non-GAAP gross profit margin also improved, standing at 50% compared to 44% in the previous year. Despite these positive metrics, the company reported a net loss of $9.699 million, although this was a significant improvement from the $20.925 million loss reported in the same period last year. The net loss per share was $(0.06), compared to $(0.12) in the prior year.
Riskified’s cash flow performance was particularly impressive, with a positive operating cash flow of $14 million, a substantial increase from $4.5 million in the previous year. The company’s free cash flow also reached a record high of $13.9 million, improving from $3.7 million in the prior year. This strong cash flow performance underscores the company’s commitment to profitable growth and financial discipline.
Riskified Reports Double Beat in Third Quarter
Riskified’s third-quarter performance surpassed market expectations, particularly in terms of revenue and earnings per share (EPS). The company reported a revenue of $78.849 million, exceeding the expected $75.01 million. This revenue outperformance can be attributed to Riskified’s strategic initiatives and successful expansion in various verticals, including fashion and ticketing. The company’s largest Policy Protect deal in its history, with an annual contract value of nearly $2 million, played a crucial role in driving this revenue growth.
On the earnings front, Riskified reported a non-GAAP net profit per share of $0.03, which was a significant improvement from the expected EPS of $-0.072. This positive surprise was largely due to the company’s effective cost management and operational efficiencies, which helped in narrowing the net loss margin to 12% from 29% in the previous year. The adjusted EBITDA also turned positive, reaching $899,000, compared to a negative $8.448 million in the prior year, reflecting a marked improvement in the company’s operational performance.
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Riskified Revises Full Year Outlook, Expects $322M to $327M in Revenue
Riskified has provided an optimistic financial outlook for the remainder of 2024. The company has revised its full-year revenue guidance upward, now expecting revenue to be between $322 million and $327 million.
This revised guidance reflects the company’s confidence in its growth trajectory and its ability to capitalize on emerging opportunities in the e-commerce fraud prevention space. Riskified’s strategic focus on expanding its vertical and geographic reach is expected to continue driving revenue growth in the coming quarters.
In terms of profitability, Riskified anticipates adjusted EBITDA to be between $14 million and $20 million for the full year 2024. This guidance underscores the company’s commitment to achieving sustainable profitability while maintaining financial discipline. Riskified’s strong balance sheet, with approximately $389.8 million in cash, deposits, and investments, provides a solid foundation for executing its growth strategy and enhancing shareholder value.
The company’s board of directors has also authorized an additional $75 million share repurchase program, reflecting management’s confidence in Riskified’s intrinsic value and long-term growth potential. This share repurchase program is expected to mitigate dilution and enhance shareholder returns, further strengthening the company’s financial position.
Disclaimer: The author does not hold or have a position in any securities discussed in the article.
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