Riskified Ltd. (RSKD) Q1 2026 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by, and welcome to Riskified First Quarter 2026 Earnings Call. [Operator Instructions] Please be advised that, today's conference is being recorded. I would like now to turn the conference over to [ Cody Slach ], Investor Relations for Riskified. Please go ahead.

Good morning, and thank you for joining us today. We are hosting today's call to discuss Riskified's financial results for the first quarter of 2026. Participating on today's call are Eido Gal, Riskified's Co-Founder and Chief Executive Officer; and Aglika Dotcheva, Riskified's Chief Financial Officer. We released our results for the first quarter of 2026 earlier today. Our earnings materials, including a replay of today's webcast will be available on our Investor Relations website at ir.riskified.com. Certain statements made on the call today will be forward-looking statements related to, without limitation, our operating performance, business and financial goals, outlook as to revenues, gross profit, pipeline generation, pipeline conversion, adjusted EBITDA profitability and adjusted EBITDA margins, which reflect management's best judgment based on currently available information and are not guarantees of future performance. We intend all forward-looking statements to be covered by the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect our expectations as of the date of this call, and except as required by law, we undertake no obligation to revise this information as a result of new developments that may occur after the time of this call. Please refer to our Annual Report on Form 20-F for the year ended December 31, 2025, and subsequent reports we file or furnish with the SEC for more information on the specific factors that could cause actual results to differ materially from our expectations. Additionally, we will discuss certain non-GAAP financial measures and key performance indicators on the call. Reconciliations to the most directly comparable GAAP financial measures are available in our earnings release issued earlier today and also furnished with the SEC on Form 6-K and in the appendix of our Investor Relations presentation, all of which are posted on our Investor Relations website. I will now turn the call over to Eido.

Thanks, Cody, and hello, everyone. We're off to a strong start in '26 to date, and I'm pleased with the momentum we've been seeing across the business. Our performance this quarter was largely the product of disciplined execution across 3 fronts: converting the growing pipeline into new business at high rates, deepening our platform relationships with existing merchants, and expanding our addressable opportunity, across new verticals and payment methods. In the first quarter, we delivered non-GAAP gross profit of $46.3 million and revenue of $88.3 million, up 13% and 7% year-over-year, respectively, along with adjusted EBITDA of $6.2 million, a 370% increase from the prior year. Allow me to highlight the key areas of execution that drove our results this quarter. Our pipeline grew substantially year-over-year with the U.S. being the largest contributor, alongside continued momentum in international markets such as Japan and LatAm. From an industry perspective, we saw healthy activity, particularly in new emerging categories in our travel sub vertical. Travel was also supported by our recently announced partnership with Outpayce from Amadeus, which deepened our go-to-market reach into airlines globally and contributed to pipeline growth. Our competitive win rates in the first quarter remained above 75%, a testament to the strength and differentiation of our platform. 5 of our top 10 new logos won in Q1 were headquartered outside of the United States, with those 5 wins spanning 3 verticals: General, Home and Tickets & Travel. We believe that the momentum built in Q1 reinforces our ability to convert our pipeline into paying merchants at high rates in the quarters to come. Over the course of the first quarter, our committed revenue position for '26 and beyond strengthened, reflecting the durable long-term relationships we continue to build with our merchants. Moving to product. We have seen strong demand for ACH fraud intelligence for merchants, supporting our thesis that our fraud platform applies across the full spectrum of digital transactions, not just traditional card payments. We positioned ourselves to capture that demand by investing in building ACH-specific models and bespoke features over the past few years, and that investment is now contributing meaningfully to incremental gross profit this quarter. Three of our top 10 deals this quarter were in the ACH space, featuring our largest new logo win. Each new ACH transaction we process deepens our data advantage, sharpening our models and reinforcing the flywheel effect that compounds performance improvements over time. As noncard payment methods continue to proliferate, we believe we are well positioned to protect merchants no matter how consumers choose to pay. We expect this to be a growing theme throughout '26 as recently onboarded merchants in this category continue to ramp. We have also seen traction in our nonpayment fraud products, demonstrating that our platform is gaining momentum beyond our core chargeback guarantee offering. The number of merchants who are using more than one product grew approximately 50% year-over-year, and these accounts now drive over 30% of our revenue base. Multiproduct merchants also generally carry a stronger margin profile. During the quarter, we also released our first stand-alone identity data product. Allow me to explain. One of our most unique assets is our graph database of hundreds of millions of identities with billions of nodes. This graph is built from the global data of hundreds of the world's largest e-commerce merchants. We cluster, tag and update this graph in real time and leverage it to power our product suite and AI models. Now for the first time, we are making this data available to our merchants to leverage in real time across the entire customer journey. Our first use case involves identity intelligence integrated directly into service workflows, including CRM and service consoles. Agents receive a real-time risk score the moment a customer contacts them, enabling them to fast track loyal members and apply the right friction to serial of users. Merchants using this capability have seen an up to a 30% reduction in complaint rates and in several cases, a 7-figure reduction in refund and return costs. Our recently announced partnership with Rue Gilt Groupe, where we are integrated directly into their Zendesk service console is the clearest proof point of this in action. We are still in the early stages, and we look forward to sharing more as this matures, but the pipeline and merchant conversations it has generated so far give us confidence this represents a meaningful expansion of our addressable opportunity. We recently hosted Ascend 26 North America, the first stop in our global event series for e-commerce risk management leaders. Among hundreds of large enterprise e-commerce leaders representing more than $1.1 trillion in total processing volume, we introduced Riskified ARIA, our AI Risk Intelligence Analyst. Leveraging ARIA, merchants can use simple conversational language to instantly zoom in on transaction level explainability, visualize specific performance trends or isolate specific risk indicators. ARIA serves as an always-on risk analyst that provides risk intelligence and insight across every touch point of the buyer journey in plain language and in seconds. On our prior earnings call, we shared that we were seeing general purpose LLMs being used for discovery purposes and not checkout, while merchants were focusing on native LLMs designed to handle the full shopping journey. One quarter on, that remains the case. While still nascent, we now have merchants leveraging Riskified as the identity and risk intelligence layer that makes those interactions both safe and economically viable. The dialogue with merchants on this topic has continued to deepen, and we see it as a growing driver of pipeline and strategic engagement heading into the rest of '26. Moving to distribution. We've started expanding our reach through new channels. This quarter, we've launched dispute resolve for Shopify, expanding our reach directly into a large and growing merchant ecosystem. We also announced our partnership with Radial, one of North America's largest e-commerce solutions and omnichannel fulfillment providers, embedding our fraud and risk intelligence at the intersection of payment processing and fulfillment. This reflects our broader strategy to make our platform easily accessible for everyone. I'm excited by the increasing velocity of our product releases enabled by Agentic coding tools. We believe that our deep integrations and network data allow us to provide an expanding set of services and that what we are building across products, channels, payment methods and geographies is showing up where it matters in pipeline growth, high win rates and an addressable market that we believe continues to expand. We enter the rest of '26 with confidence in our growth trajectory. I will now turn it over to Agi for a deeper dive into our financial results.

Thank you, Eido, team and everyone, for joining today's call. Unless otherwise noted, this discussion will reference non-GAAP financial measures. We have provided a reconciliation of GAAP to non-GAAP financial measures in our earnings release. Our GMV for the first quarter was $37.2 billion, reflecting a 9% increase year-over-year. We achieved first quarter revenue of $88.3 million, up 7% year-over-year. Our GMV and revenue growth during this quarter was primarily driven by continued new merchant and upsell activity. Our first quarter billings grew 11% compared to reported revenue growth of 7%, a gap that is among the widest we have seen in several years. This reflects the timing of revenue recognition under our guarantee accounting framework, and we expect this variance to narrow as we move throughout the year with billings and revenue growth converging on a full year basis, consistent with prior years. Billings growth in the first quarter was broad-based across nearly all of our categories, led by Tickets & Travel and Money Transfer and Payments. Tickets & Travel grew approximately 18% year-over-year, driven by upsell activity across both the verticals and continued same-store sales momentum in travel. Notably, tickets and live events returned to positive growth after several quarters of contraction, and we expect it to remain a positive contributor throughout the year. Our Money Transfer and Payments category grew 30% year-over-year, driven by strong upsell activity with existing merchants. These gains were partially offset by softness in our fashion and luxury vertical concentrated in APAC, driven primarily by a strong prior year comparable period. Looking ahead, we expect our Tickets & Travel, Money Transfer and Payments and Fashion & Luxury categories to collectively approximate 75% of total billings for the year. Within that, we expect Tickets & Travel and Money Transfer and Payments to sustain strong growth throughout 2026, while we expect fashion and luxury to revert to growth as the year progresses. Turning to our regional performance, bidding through across all regions during the first quarter, driven by a combination of new logo wins and upsell activity. The United States, our largest region, grew 10% year-over-year, returning to positive growth. APAC grew 15% and is expected to accelerate as the year progresses. Other Americas grew approximately 11% and EMEA delivered approximately 11% growth, supported by same-store sales performance in the Tickets & Travel vertical. We believe that our broad-based growth across geographies reflects ongoing market share gains globally. Our gross profit for the first quarter was $46.3 million, reflecting a 13% increase year-over-year. The growth was primarily driven by the contribution of new business onboarded over the past year. This was further supported by improved performance across our existing merchant base, with particular strength in our Money Transfer and Payments category, reflecting ongoing enhancements to our core machine learning model. Nonpayment front products contributed incrementally, reflecting the continued broadening of our platform, as did ACH, where expanding merchant demand is deepening the contribution of our fraud capabilities across a growing set of payment flows. As a result of our solid first quarter, we now expect our gross profit growth range to be between 8% to 12% for the full year. At the midpoint, this implies quarterly growth generally around 10%. In addition, we estimate that each quarter in 2026 will approximate the same percentage of the total as they did in 2025. Moving to expenses. We continue to manage the business in a focused and disciplined manner. Total non-GAAP operating expenses were $40.1 million for the first quarter. Our non-GAAP operating expenses as a percentage of revenue declined year-over-year from 48% in Q1 of 2025 to 45% in Q1 of 2026, and on a constant currency basis to 42%, reflecting ongoing leverage in the business model. This came in below our anticipated range of $41 million to $42 million per quarter, driven by the timing of certain expenses that shifted into the second quarter. As a result, we expect the second quarter to be approximately $43 million. For the second half of the year, we continue to expect quarterly expenses to approximate between $42 million to $43 million, consistent with our prior guidance. We achieved adjusted EBITDA of $6.2 million in the first quarter, up 370% from $1.7 million in Q1 of 2025, reflecting the continuing leverage in our cost structure as the business scales. On a GAAP basis, we reported a net loss of $4.4 million in the first quarter of 2026 compared to a net loss of $13.9 million in Q1 of 2025, an improvement of 68% year-over-year, primarily reflecting lower share-based compensation expense and ongoing discipline in our overall compensation program. I'm encouraged about this progress and our continued execution as we continue taking steps to narrow the gap towards GAAP profitability. Moving to the balance sheet. We ended the first quarter with approximately $276 million of cash, deposits and investments, and continue to carry 0 debt. In addition, we continue to maintain a healthy cash flow model. In the first quarter, we achieved free cash flow of $9 million. We expect approximately $40 million of positive free cash flow in 2026. During Q1 of 2026, we repurchased approximately 6.2 million shares at an average price per share of $4.44 for total consideration of $27.5 million, which contributed to a reduction of 3% in total shares outstanding. Since the inception of our buyback program in the fourth quarter of 2023, we have repurchased approximately 58.2 million shares for a total price of $287 million, which helped contribute to a 19% reduction in total shares outstanding over that period. We believe that our strong balance sheet and liquidity position are strategic assets that provide us with the flexibility to navigate a range of operating environments. We intend to remain disciplined and thoughtful in how we deploy capital to create long-term shareholder value. And now turning to our outlook. As a result of our first quarter performance, we are raising the low end of our full year guidance range across both metrics. We now anticipate full year revenue to be between $376 million and $384 million or $380 million to the midpoint. This reflects the flow-through of our first quarter revenue performance as well as an incremental rate to our outlook based on the momentum we're seeing in the business. We anticipate all of the quarters in 2026 to reflect a similar percentage of the total revenue as they did in 2025. We currently expect adjusted EBITDA to be between $28 million and $34 million or $31 million to the midpoint, up from our prior range of $26 million to $34 million. The primary factors that may determine where we fall within each range are consistent with what we shared last quarter, the timing of new merchant go-lives and existing merchant upsells, our success in retaining our merchants and the broader macro environment. We're pleased with how the year has started. Gross profit grew 13%. We raised the low end of our full year guidance on both revenue and adjusted EBITDA, and we continue to generate meaningful free cash flow. We remain focused on our execution and believe we are well positioned to continue driving profitable growth. Operator, we're ready to take the first question, please.

[Operator Instructions] Our first question comes from Terrell Tillman with Truist.

Connor Passarella on for Terrell. Eido, you highlighted the success in ACH-related use cases this quarter, including your largest new logo win. Can you help us understand how materially ACH and other alternative payment methods expand the long-term addressable market for Riskified? And as you move deeper into those workflows, how does the competitive landscape differ versus traditional markets you served?

Sure, Connor. Thanks for the question. The way I would view it is that merchants are looking at an increasingly complex landscape. They need to be able to support both ACH, both digital wallets, both stablecoins, obviously, credit card transactions, other smaller localized payment methods. They need to be able to secure accounts that have stored financials. So there's a lot of dispersion kind of risk vectors that they're looking to solve. And I think that they're looking at, hey, how do we kind of consolidate and create a single best-in-breed vendor that can help us across these various channels. And we've really seen a lot of success kind of this wider platform that helps solve multiple payment use cases be successful. So in that sense, we actually see ACH and digital payments and some of these other things that I mentioned, they just help us with all payment methods, right? Because there's both some interaction between the types of fraud and that kind of focus on single vendor capabilities.

Great. That's helpful. And then just as a follow-up, you partnered with Shopify for a number of years. And this quarter, you expanded that relationship with the launch of Dispute Resolve for those merchants. As you deepen the integration within the Shopify ecosystem, do you see the partnership becoming a more meaningful growth driver over time from both a customer acquisition and multiproduct adoption standpoint?

I think taking a step back, we've always been very focused on our direct-to-merchant enterprise sales motion. And the reason being some of the configurations and the modeling and the operational environment required to successfully deploy leverage Riskified. And over the past few quarters, as we've been working on it, we've developed what we view to be a best-in-breed reseller and kind of rethought about the distribution channel. And for us, it's kind of making sure that the Riskified platform is easily available to anyone everywhere. So as part of this strategy, kind of revamping both the capabilities on Shopify, but also thinking about -- we announced the partnership with Radial, which has wider platform components. We announced a deeper integration with Outpayce, Amadeus to enable more travel merchants. So I think it's kind of revamping the distribution channel to make it easier for merchants globally to consume Riskified.

[Operator Instructions] And the next question will come from Ryan Tomasello with KBW.

This is Huan Chong on for Ryan. So nice to see that 50% growth in merchants using more than one solution. Could you maybe share an update on what you're assuming for ancillary non-chargeback product revenue for the year? I think previously, you called out $15 million to $20 million in 2026.

Yes. And we definitely still feel we're still on track to achieve that target. We're very happy with the growth in the kind of multiproduct adoption. It's predominantly being driven by policy and dispute. We see kind of better satisfaction with multiproduct merchants. We see better incremental gross profit, better overall retention. So we think that the strategy is working well.

Great. And also, thanks for sharing details on the new product enhancement. Could you maybe share a sense of how ARIA and the identity database risk scoring tool will be monetized and maybe help us size that opportunity?

Of course. So let me also just recap what ARIA is, right? Let's say you're a fraud manager and you see a dip in approval rates overnight and your CEO is calling you and asking, "Hey, what happened?" You can now, in simple text say, "Hey, why did my approval rate drop by 2% last night?" And you would get a clear explanation. There was a fraud ring with so and so characteristics. You can continue to dive deeper into this fraud ring. And what's unique about this is that both has our network data to allow you to create better insights for your business. But we've also structured the data in a way that things, like what's an approval rate, what's a fraud ring, it actually makes sense. You can interact with that. And it's been a very clear merchant demand and ask. And right now, we're rolling it out and it's available to every single Riskified customer and the feedback so far has been tremendous on that. So that's on Riskified ARIA. On the Riskified identity, we've spent a lot of time building our graph database over the past few years. And the graph database separate from linking, what's unique about it is it can do linking and can do multi-hops. And really, this is a way for us to understand identities better and understand is this a reshipper? Is this a shared address with multiple identities and it can create these various identities in real time. And that's very helpful and important for us as we're powering some of the features and the capabilities of products like Policy Protect, right? What's the return ratio of this identity, what's the abuse ratio. And as we've continued to develop the identity graph and have kind of hundreds and millions of customers there, billions of nodes, we've started thinking how can we expand this? What other value points can this identity graph create to merchants and in consultation with them, one thing that kept coming up is, hey, we have these customer service agents. When they get requests and call-ins, it would be incredibly helpful, if they have some of this identity data in their various consoles. So our release right now with Rue Gilt Groupe is around their Zendesk console. And now when you call in, agents automatically have Riskified Identity data embedded in that console to make smarter decisions, specifically around returns and refunds right now. But we do see multiple use cases for this moving forward that we believe we will be able to price and have a good revenue contribution from.

And the next question will come from Clark Wright with D.A. Davidson.

First one on my end. As you accelerate the pace of platform innovation and see a ramp in multiproduct adoption, are you beginning to expand beyond the traditional fraud departments and unlock new budgets within organizations?

I mean I think the Rue Guilt Groupe example that I just shared is great because this one is more focused on customer experience and customer support and less directly on fraud. So we are seeing an expansion in those areas. Obviously, the work that we're doing on identity and AI, there's much more engineering and technology orientation than just traditional fraud and payments. So we are starting to touch additional points in the organization. That's a good point.

Got it. And then just wanted to talk about more of the open framework that you talked about in your prepared remarks, with the data graph and being -- opening that database up. What is the strategy there? And longer term, what do you see as kind of the access? Is it primarily just through agents being able to leverage the data that you already have? Or is it through another means? And how does that -- you plan on monetizing that capability?

Sure. So what's unique about the data that we have? We have incredibly rich transactional lifetime data from the time you're browsing on a website from the time you're checking out, from post order flows around returns and refunds. So it's a very rich level of data, with very high level of granularity. And we have it across a network of our largest e-commerce enterprise merchants globally. And not only that we now also have this kind of great relations graph database that we discussed. So it's a very rich updated set of data. That data can be consumed by third-party services in the kind of merchant native AI examples. This is the data that's being queried where the native AI agent is trying to decide, hey, should I approve a payment, should I initiate a refund for this customer? So that's one example. Another example could be the CRM system or the customer support system that's ingesting this data, so that's a CX agent, whether that's a live agent or kind of an AI agentic agent is kind of decide the point from our perspective. And we do anticipate being able to monetize this.

And I am showing no further questions in the queue at this time. I would now like to turn the call back over to the Riskified team for closing remarks.

Okay. Thank you, everyone, for joining our Q1 call. We look forward to updating you in the quarters ahead.

This does conclude today's conference call. Thank you for participating, and you may now disconnect.