Riskified’s Earnings Call Highlights Profitable Growth Pivot

Riskified Ltd. Class A ((RSKD)) has held its Q4 earnings call. Read on for the main highlights of the call.

Riskified’s latest earnings call struck an upbeat tone, underscoring strong operational momentum and a clear march toward durable profitability. Management highlighted record revenue, expanding margins, healthier retention metrics, and rising free cash flow, while acknowledging FX pressures, U.S. softness, and emerging fraud complexity in new commerce channels.

Record Revenue and First-Ever GAAP Profit

Riskified delivered a record fourth quarter with revenue of $99.3 million and achieved its first quarter of GAAP profitability, a key milestone for the fraud-prevention specialist. Full-year revenue reached $344.6 million, rising 65% year over year and signaling that the company’s growth engine is firmly back in gear after prior resets.

Margin Expansion and Improving Profitability

Non-GAAP gross profit in Q4 climbed 16% year over year to $57.3 million, supporting a robust adjusted EBITDA margin of roughly 18% on about $17.7 million of adjusted EBITDA. For the full year, non-GAAP gross profit grew 4% to $180.3 million while adjusted EBITDA jumped more than 55% to $26.7 million, highlighting better unit economics even as growth normalizes.

GMV Scale Strengthens the Data Moat

The company processed $46.7 billion in gross merchandise volume in Q4, up 18% year over year, with full-year GMV reaching $155.1 billion for 10% annual growth. Cumulatively, Riskified has now analyzed around $750 billion of GMV and more than 1 billion unique customer interactions, deepening the data moat that underpins its machine-learning fraud models.

Retention Metrics Signal Healthier Monetization

Customer metrics showed notable improvement as annual dollar retention moved up to roughly 100% from 96% and net dollar retention reached 105% from 96%. These gains point to stronger post-sale monetization, better upsell performance, and more stable relationships with merchants that are increasingly turning Riskified into a strategic partner.

New Business Wins Fuel the Growth Pipeline

New business momentum was a standout, with Q4 delivering the strongest quarter of wins since the IPO and accounting for about 55% of the company’s 2025 new business already locked in. Management reported competitive win rates above 75%, which supports confidence in the 2026 pipeline and suggests Riskified is displacing rivals in key enterprise accounts.

International Strength and Vertical Outperformance

Growth outside the U.S. led the story as non-U.S. revenue expanded about 22% year over year, with APAC surging around 53% and EMEA increasing roughly 18%. Within verticals, money transfer, payments, and travel were major contributors, including an estimated 75% year-over-year jump from the money transfer and payments segment in the fourth quarter alone.

Product Expansion and Multi-Product Adoption

Riskified’s newer solutions—Policy Protect, AccountSecure, and Dispute Resolve—are approaching roughly $10 million in aggregate revenue for 2025, with a management target of $15 million to $20 million in 2026. The company also reported about a 50% increase in merchants using more than one product, enhancing stickiness and lifting contribution profit per customer as the platform broadens.

Cash Generation, Strong Balance Sheet, and Buybacks

The balance sheet remains a key asset, ending the year with about $298 million in cash, deposits, and investments and no debt. Full-year free cash flow reached $33.1 million, including $10.7 million in Q4, and the board authorized an additional $75 million in share repurchases, leaving roughly $84 million available to return capital to shareholders.

Operating Discipline and Efficiency Gains

Operating expenses fell 2% year over year to $153.6 million and shrank from 48% to 45% of revenue, reflecting disciplined cost control. Headcount declined 3% to 617 even as development capacity rose through AI and automation, and share-based compensation dropped to $51.6 million with a further reduction to about $40 million targeted for 2026.

FX Headwinds Weigh on Margin Optics

Management flagged foreign-exchange as a meaningful margin drag, citing roughly a 400-basis-point headwind to adjusted EBITDA margin, or about $14 million, primarily from the stronger Israeli shekel. This FX impact will distort year-over-year margin comparisons in 2026 even as underlying profitability and free cash flow continue to improve.

U.S. Revenue and Sub-Vertical Softness

Not all geographies and categories are firing, as full-year U.S. revenue slipped about 6% year over year amid weakness in the home category. Tickets and live events also showed year-over-year softness on tougher comparisons, while certain high-end and sneaker merchants continue to face same-store sales pressure and the 2022 cohort has yet to catch up with the broader portfolio.

Agentic Commerce: Early Risk in a New Channel

The rise of agentic commerce, where purchases are routed through general-purpose AI agents, introduces new complexity for Riskified’s models. Management estimates that these flows strip away 30% to 40% of essential model features, heightening fraud risk and necessitating higher take rates, and while volumes are still limited, they are a key source of early-stage uncertainty.

Quarterly Variability and Modest Full-Year Gross Profit Growth

The company cautioned that onboarding new merchants, especially in regions such as Latin America, can drive noticeable quarter-to-quarter swings in gross profit and risk metrics. Despite a strong Q4, full-year non-GAAP gross profit grew only 4%, showing that cohort quality, mix shifts, and product adoption remain important levers for accelerating profit expansion.

Guidance and Outlook for 2026

For 2026, Riskified guided revenue to $372 million to $384 million, implying 8% to 11% growth and about 10% at the midpoint, with non-GAAP gross profit expected to rise 7% to 12%. Adjusted EBITDA is projected at $26 million to $34 million, or around an 8% margin at the midpoint after absorbing the FX headwind, alongside roughly $40 million in free cash flow, steady net dollar retention, and continued buybacks.

Riskified’s earnings call painted the picture of a company transitioning from recovery to disciplined, profitable growth while leveraging its expanding data moat. Strong international momentum, product diversification, and rising free cash flow offset FX and category headwinds, leaving investors with a constructive, albeit execution-sensitive, path into 2026.