Riskified (RSKD) FY Conference Transcript

Summary of Riskified (RSKD) FY Conference June 04, 2025 Company Overview - Company Name: Riskified - Founded: 2013 - Public Listing: 2021 - Core Business: Provides fraud management solutions for e-commerce, focusing on chargeback guarantee products and expanding into new areas [2][6] Industry Insights - E-commerce Market Size: The total addressable market (TAM) for e-commerce is approximately $6 trillion, with Riskified managing over $140 billion in gross merchandise volume (GMV) [17][40] - Fraud Management Challenge: E-commerce merchants face significant costs due to chargebacks, averaging around 25 basis points (bps) of revenue, which can be substantial [9][11] Core Product Offerings - Chargeback Guarantee: Riskified offers a chargeback guarantee that reduces the cost structure for merchants from an average of 30 bps to 20-25 bps, while also guaranteeing transaction approval rates [14][40] - Adaptive Checkout: A product that enhances bank payment authorization rates by sending enriched data to issuing banks, improving overall transaction success [19] - Policy Protect: The fastest-growing product with 90% year-over-year growth, aimed at identifying and blocking fraudulent refund requests [20][21][26] - Chargeback Management Software: A tool for managing chargebacks, allowing fraud teams to handle disputes efficiently [27] Financial Performance - Cost Structure: The cost of chargebacks is the largest component affecting gross margins, which hover around 50% [44] - Operational Efficiency: The company has focused on reducing operational expenses (OpEx) while improving profitability, with a flat OpEx forecast for the current year [41] - Cash Flow: Strong cash flow generation, with guidance over $30 million for the year [44] Growth Opportunities - Market Expansion: Riskified is targeting geographic expansion in regions like APAC and LATAM, with a focus on diversifying into non-discretionary categories [42][49] - Upselling Potential: There is significant white space for upselling within existing clients, with 80% of the top 30 clients having at least one upsell [49] - New Product Development: Continuous innovation in machine learning and data analytics to enhance product offerings and improve fraud detection capabilities [35][39] Key Metrics and Results - ROI for Merchants: On average, top clients experience a 30% reduction in costs and a high single-digit increase in approval rates [17][40] - Data Capture Advantage: Riskified's ability to capture extensive data per transaction allows for more accurate fraud detection and tailored solutions for enterprise clients [33] Conclusion Riskified is positioned as a leading player in the e-commerce fraud management space, leveraging machine learning and extensive data capture to provide value to merchants while addressing the significant challenges posed by fraud and chargebacks. The company is focused on expanding its product offerings and geographic reach, aiming for sustained growth and improved profitability in the coming years.