Riskified’s Earnings Call Highlights Robust Growth

Riskified Ltd. Class A ((RSKD)) has held its Q1 earnings call. Read on for the main highlights of the call.

Riskified Ltd. Class A’s recent earnings call painted a picture of robust international growth and high retention rates, with a notable surge in new product revenue. The company maintained a positive adjusted EBITDA, although it faced challenges in the home category and same-store sales pressure, which contributed to a decline in gross margins.

Record Revenue and Growth

Riskified reported an impressive revenue growth of 8% year-over-year, reaching $82.4 million in the first quarter of 2025. The Gross Merchandise Volume (GMV) for the quarter was $34.2 billion, reflecting a 7% increase year-over-year, showcasing the company’s ability to drive substantial growth.

High Retention Rates

The company achieved a remarkable 100% renewal rate across its top 20 contracts up for renewal during the first quarter, with nearly half of these extended as multiyear agreements. This high retention rate underscores Riskified’s strong customer relationships and the value of its offerings.

Significant Growth in New Product Revenue

Riskified experienced a significant 190% year-over-year increase in new product revenue, driven by the adoption of its expanded product portfolio. This growth highlights the company’s successful innovation and ability to meet evolving customer needs.

International Growth

International expansion was a key highlight, with eight of Riskified’s top 10 new logos won during the first quarter headquartered outside of the United States. The company saw significant growth in the Asia-Pacific region (70%) and the Outer Americas (13%), indicating a successful global strategy.

Positive Adjusted EBITDA

For the sixth consecutive quarter, Riskified reported a positive adjusted EBITDA of $1.3 million. This consistent performance demonstrates the company’s operational efficiency and financial health.

Decline in Home Category

The home category saw a contraction of 74%, contributing to a 5% year-over-year decline in the United States. This decline highlights challenges in certain market segments that Riskified is currently navigating.

Same-Store Sales Pressure

Continued pressure in same-store sales was noted, particularly in the high-end fashion and sneakers sub-verticals, impacting overall growth. This indicates a need for strategic adjustments in these areas.

Gross Margin Decline

The non-GAAP gross profit margin for Q1 2025 was approximately 50%, marking a year-over-year decline. This was attributed to the ramp-up of significant new merchants in newer categories and geographies, reflecting the costs associated with expansion.

Forward-Looking Guidance

Riskified’s guidance for the year projects full-year revenue between $333 million and $346 million, with adjusted EBITDA ranging from $18 million to $26 million. The company remains optimistic about its ability to expand its adjusted EBITDA margin and deliver long-term shareholder value, despite macroeconomic challenges.

In summary, Riskified’s earnings call highlighted strong international growth and high retention rates, with significant new product revenue gains. Despite facing challenges in certain categories, the company maintained a positive adjusted EBITDA and provided optimistic forward-looking guidance, underscoring its strategic focus on long-term growth.