NYSE:RSKD Riskified Q4 2023 Earnings Report $4.59 -0.08 (-1.71%) Closing price 04/28/2025 03:59 PM EasternExtended Trading$4.61 +0.02 (+0.33%) As of 04/28/2025 04:05 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast Riskified EPS ResultsActual EPS-$0.01Consensus EPS -$0.05Beat/MissBeat by +$0.04One Year Ago EPSN/ARiskified Revenue ResultsActual Revenue$84.07 millionExpected Revenue$83.87 millionBeat/MissBeat by +$200.00 thousandYoY Revenue GrowthN/ARiskified Announcement DetailsQuarterQ4 2023Date3/5/2024TimeN/AConference Call DateTuesday, March 5, 2024Conference Call Time8:30AM ETUpcoming EarningsRiskified's Q1 2025 earnings is scheduled for Wednesday, May 14, 2025, with a conference call scheduled at 8:30 AM ET. Check back for transcripts, audio, and key financial metrics as they become available.Q1 2025 Earnings ReportConference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Annual Report (20-F)Earnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by Riskified Q4 2023 Earnings Call TranscriptProvided by QuartrMarch 5, 2024 ShareLink copied to clipboard.There are 11 speakers on the call. Operator00:00:00Good day, and thank you for standing by. Welcome to the Riskified's 4th Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer Speaker 100:00:23Please be advised that today's conference is being recorded. Operator00:00:26I would now like to hand the conference over to your first speaker, Chet Mendel, Riskified's Head of Investor Relations. Please go ahead. Speaker 200:00:34Good morning, and thank you for joining us today. My name is Chet Mandel, Riskify's Head of Investor Relations. We are hosting today's call to discuss Riskify's financial results for the full year and Q4 of 2023. Participating on today's call are E. Dogal, Riskify's Co Founder and Chief Executive Officer and Agi Doceva, Riskified's Chief Financial Officer. Speaker 200:00:57We released our results for the full year and Q4 of 2023 earlier today. Our earnings materials, including a replay of today's webcast, will be available on our Investor Relations website at ir.riskify.com. Certain statements made on the call today will be forward looking statements related to our operating performance, business and financial goals, outlooks as to revenues, gross profit margin, adjusted EBITDA profitability, adjusted EBITDA margins and expectations as to positive cash flows, 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. Speaker 200:01:55These forward looking statements involve risks, uncertainties and other factors, some of which are beyond our control, that could cause actual results to differ materially from our expectations. You should not put undue reliance on any forward looking statement. Please refer to our annual report on Form 20 F for the year ended December 31, 2023 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 ks and in the appendix of our Investor Relations presentation, all of which are posted on our Investor Relations website. Speaker 200:02:49I will now turn the call over to Itau. Speaker 300:02:51Thanks, Jeff, and hello, everyone. I'm proud to report that Riskified ended the year strong despite facing macroeconomic and geopolitical headwinds. We entered 2023 looking to increase our new logo base, further penetrate our existing accounts, expand our geographic footprint and strengthen our platform sales motion while improving our technology and achieving profitability on an adjusted EBITDA basis in the Q4. I am pleased that we were able to accomplish our 2023 goals, but acknowledge our work is not yet done. In particular, I'm excited about achieving a gross margin of 58% in the 4th quarter. Speaker 300:03:28We believe that the cumulative multi year impact of focusing on the continuous advancement of our technology stack contributed to an outstanding 4th quarter. This represents our highest gross margin in 10 quarters, all while maintaining very high levels of performance for our merchants. Allow me to provide some further insight into our technology strategy. In 2023, we focused on a 3 pronged approach to drive improved performance, while we expanded deeper into new geographies, industries and payment methods. We strengthened our machine learning factory by leaning further into autonomously training models. Speaker 300:04:05This allows us to train, test and deploy models more quickly, which in turn expands the capacity of our data scientists to develop and enhance additional features to drive powerful performance. And finally, we built out an automated performance management platform designed to optimize approval and chargeback rates per merchant in an automated and constant way. We believe that this automation will allow us to continue to scale the business with high leverage. I am optimistic that some of the leverage seen in Q4 will flow through to 2024 and beyond. But I encourage you to continue analyzing our gross margin on an annual basis given individual quarters can vary due to many factors, including the ramping of new merchants and the risk profiles of transactions approved. Speaker 300:04:57I want to thank the team for their attention in responding so quickly from 3rd quarter fraud event to achieve such fantastic results in Q4. We have further diversified our portfolio across merchants, industries and geographies to become a more broad based and resilient company that is able to continue to grow across all macro environments. We continue to have success penetrating the e commerce landscape through new merchant wins and through upsells within our existing merchant wide space, which contributed to total annual GMV growth of 17% and total annual revenue growth of 14% in 2023. Aine will walk you through the drivers of our top line growth shortly, but overall I am encouraged by our performance in 2023. In particular, 5 out of our 6 verticals contributed positively to performance during the year. Speaker 300:05:51All of our regions achieved at least double digit growth year over year and we have more enterprise merchants accounts on our platform than ever before. In fact, we had over 50 accounts that contributed $1,000,000 or more to our top line in 2023. Our go to market team met their annual revenue targets and delivered a strong end to the year with 1 third of the new merchant activity in 2023 coming in the Q4 providing positive momentum heading into 2024. Also in our first full year of having our refined platform sales strategy, new bookings derived from our PolicyProtect, Dispute Resolve and AccountSecure products were up approximately 3 times. Our 4th quarter was the strongest quarter ever for our PolicyProtect product as over 50% of the Policy Protect deals that we won during the year went live during the quarter. Speaker 300:06:46And while the revenue from these products still represents only a small percentage of our overall revenue base, we believe that our ability to sell an end to end platform has proven to be a very successful differentiator and stickiness tool. We executed and focused on improving our technology stack throughout the year. For example, based on direct feedback from our merchants, we increased the number of use cases we help solve beyond just blocking fraudulent refunds and serial returners to also solve promo abuse, item limits and reseller policies for our PolicyProtect product. On Dispute Resolve, we prioritize developing a holistic and automated solution for the fraud and non fraud chargeback representment process. This product allows us to become a one stop shop that automates the entire dispute flow to help reduce higher win rates for our merchants. Speaker 300:07:39Both products are proving to have a true market need based on recent activity and existing pipeline and service key tools in our land and expand strategy. The new product traction we've seen and the enhancements we've made combined with our market leading core chargeback guarantee offering led to a very strong 4th quarter overall win rate of almost 80%. The proven performance, accuracy and predictability that our core chargeback guarantee product generates is why merchants are initially drawn to Riskify. Now our expanded end to end platform dedicated to solving multiple high value e commerce use cases gives them even more reason to stay. This is evident in our low churn numbers. Speaker 300:08:23Our annual dollar retention in 2023 was 98%, which was inclusive of a few unusual churn events as a result of merchant bankruptcies. We are proud of the deep rooted partnerships that we have built with many of the world's largest e commerce merchants. Moving lower in the income statement and on to the areas that are more within our operational control. In mid-twenty 22, we made the decision to accelerate our timeline to profitability and have executed on that accelerated timeframe. Our 2023 annual adjusted EBITDA of negative $8,500,000 exceeded our guidance by 37% and we achieved positive free cash flow for the year of $5,900,000 Furthermore, our 2023 annual adjusted EBITDA margin expanded by 1100 basis points from the prior year. Speaker 300:09:20I am pleased that we have achieved positive adjusted EBITDA in the Q4 and that we are guiding to positive adjusted EBITDA on an annual basis in 2024 and beyond. We have made a lot of progress in getting to this point and I believe it is important to communicate how to think about the financial milestones we plan on achieving over the next few years. As a management team, we are building towards adjusted EBITDA margins between 15% 20% by 2026. In addition, we also plan on achieving positive adjusted EBITDA inclusive of our share based compensation expenses by 2026. Allow me to provide some further context. Speaker 300:10:03Over the past 2 years, we have faced a challenging macro environment and volatile consumer spending, which has led to a net dollar retention in the low 100s down significantly from higher rates of 115 to over 120 that we've seen historically even pre COVID. Overall, this has produced lower growth rates than our historical known and is not where we aspire to be longer term. We remain focused on accelerating our revenue growth and we believe that there are multiple ways to achieve that. As a leader in e commerce fraud and risk intelligence, we believe that we can capitalize on the large opportunities in front of us. As always, our goal remains to land and expand our platform with the world's largest e commerce merchants and the speed and frequency at which we are able to execute on this strategy is a top area of focus. Speaker 300:10:56In addition, potential improvements to our same cohort base would also result in a more positive impact on our net dollar retention rate, which would also allow us to grow revenue faster. However, even at similar revenue growth rates as compared to the last few years, we are confident in our ability to manage the business and how to optimize the operational levers available to us in our gross margin and OpEx line items to continue driving adjusted EBITDA improvements in order to achieve these targets. Overall, I am confident in our ability to efficiently run the business to constantly bring our top line growth down to the bottom line. Before I turn it over to Agi to provide further color on our results and on our 2024 annual guide, it's important to highlight our commitment to managing share based compensation expense and dilution to meaningfully lower levels than they are currently at. First, in 2023, share based compensation expense as a percentage of revenue decreased by approximately 500 basis points from 2022. Speaker 300:12:07And in 2023, we granted approximately 30% fewer equity awards as compared to 2022. We expect to see share based compensation as a percentage of revenue continue to decline in 2024. Many of the larger awards that we granted in 2021 through 2023 have a 4 to 5 year vesting period and as these awards complete our vesting requirements by the end of 2026, we expect to see a meaningful drop off in our share based compensation expenses. 2nd and perhaps even more important to discuss is our focus on controlling our equity awards to meaningfully lower levels. In 2023, equity awards granted represented approximately 6% of our weighted average diluted shares, down from approximately 9% in 2022. Speaker 300:12:59We anticipate that this number will be approximately 4% to 5% in 2024 as we continue to manage the business in a disciplined manner. Assuming valuation levels similar to today and absent any unanticipated executive or senior hiring and any additional buyback authorization, we expect to target similar levels going forward. 3rd, since the implementation of our 75,000,000 share repurchase program in November, we have repurchased approximately 7,600,000 shares at a total cost of $34,000,000 as of February 29. We remain committed to repurchasing our shares at what we believe are attractive valuation levels. Looking forward, we are excited and energized by the opportunity in front of us in 2024. Speaker 300:13:50There is plenty of white space for us to penetrate and we believe that our product and platform leadership position will allow us to do that. Combined with the global network scale that we have built and the financial and operational discipline of our business model, I have great confidence that we are well positioned to execute on these initiatives for the benefit of our shareholders. Now over to Agi. Speaker 100:14:13Thank you, Ido, team and everyone for joining today's call. We achieved 4th quarter revenue of $84,100,000 and full year revenue of $297,600,000 dollars up 6% year over year and 14% respectively. Our 4th quarter GMV of $35,200,000,000 was the highest quarter of volume reviews in our history. This was driven by continued new and upsell growth and solid Black Friday through Cyber Monday holiday activity, which grew approximately 6% compared to last year's season. For the full year, we grew our GMV 17% to 123,100,000,000 dollars During the Q4, we had strong performance in our home category, primarily driven by up sell activity and in our food category, primarily driven by new merchants. Speaker 100:15:09These two categories historically have not had large seasonal increases in the 4th quarter, unlike more traditional retailers, which tend to experience a higher holiday shopping season compared to other parts of the year. In addition, our fashion and luxury category remained relatively flat similar to the 1st 9 months of the year. Our Tickets and Travel category was also flat this quarter as we had a tougher comparable period in Q4 of 2022, driven by fewer large live events in the Q4 of this year. The combination of these factors contributed to the step down in our Q4 growth rate, but we remain bullish on these key categories and we expect to see tickets and travel return to growth in 2024. For the full year, approximately $30,000,000 of the increase in revenue was attributable to increases in GMV and billings associated with new merchants, primarily within our tickets and travel category, which grew by more than 30% year over year. Speaker 100:16:13In addition, we saw 45% year over year growth in our food category and 19% growth in our home category. The remaining increase in revenue was primarily due to upsells, net of organic declines and attrition, which contributed to our net dollar retention rate of 105%. Our ticket and travel category contributed just under $100,000,000 in billings, which represented approximately 30% of our overall portfolio. In our travel portfolio of merchants, year over year activity was driven by a higher number of transactions for both flights and accommodations against relatively stable consumer pricing. Our fashion and luxury goods category, which represents approximately 30% of our portfolio was relatively flat year over year. Speaker 100:17:05Throughout the year, we continued to see softness within our luxury brands and sneakers subsegment, which was positively offset by better growth in other subsegments such as fast fashion and by addition of new merchants and up sales within the category. Finally, we also saw growth in billings across all geographies year over year. The United States, which is our largest region, grew by 10% and EMEA grew by 15%. Percent. Our Americas and APAC regions grew approximately 30% 40% respectively, primarily due to momentum in new and up sell activity. Speaker 100:17:42We believe that our continued growth in regions outside of the United States demonstrates continued market share gains and validates our decision to invest in these regions. Overall, our contribution by region was more evenly distributed than in previous years as we continue to build a global and diversified company. As Edel mentioned, while our gross margin continues to be best analyzed on an annual basis, allow me to provide more detail on how we achieved 58% non GAAP gross margin in the 4th quarter. The ongoing improvements to our model and enhancements to our monitoring tools and systems led to better performance. Consistent with prior years, our Q4 plans to have a safer population of transactions than the rest of the year and we did not have any unexpected fraud events. Speaker 100:18:38Also as always, the timing of new revenue and merchant mix can impact the gross margin in a given quarter. Overall, the success of this quarter contributed to an annual non GAAP gross profit margin of 52%. As Edel mentioned, we're expecting some of the margin expansion that we achieved in Q4 to carry into 2024. As it relates to 2024, for the full year, we're targeting a non GAAP gross profit margin between 52% to 53%, which is 1% higher on each end than the initial range of 2023. Directionally, our Q1 margin is expected to be within this range. Speaker 100:19:21Q2 and Q3 are expected to be below the range and Q4 is expected to be higher than the range. Moving to expenses. Total non GAAP operating expenses were $39,400,000 for the 4th quarter and $163,500,000 for the full year of 2023, both representing a year over year decline of 6%. We're becoming more efficient and have a deeper understanding of the working needs of each area of the business. We ended the year with decreased costs across most areas of spend with savings generated through the negotiation of contracts in our AWS and other optimization efforts of our data sources. Speaker 100:20:09Lower human resources expenses resulting from decreased headcount and recruiting needs, more focused spending in our sales and marketing line item and savings from the pleasing space. For the year, our non GAAP operating expenses as a percentage of revenue declined from 66% to 55%, reflecting leverage in the business model. We anticipate continuing to see further leverage in 2024 compared to 2023 and anticipate operating an approximately $40,000,000 per quarter run rate. In addition, we have now substantially completed the global expansion of our go to market footprint and we expect to start seeing improved leverage as we further realize the returns on these previous investments. In the Q4, we achieved our strongest adjusted EBITDA results ever with $9,700,000 in positive adjusted EBITDA. Speaker 100:21:12To highlight exactly how much progress we have made in achieving profitability, our adjusted EBITDA margin of 12% in the 4th quarter compares with minus 10% in Q4 of 2021, which was the 1st full quarter of operations following our IPO. For the year, we reported negative $8,500,000 in adjusted EBITDA, an improvement of nearly 80% year over year. Our annual results represent 1100 basis points expansion in our operating margin from the prior year. I'm extremely pleased by our ability to execute on our profitability goals on an accelerated timeline and have set ourselves up for profitability on an adjusted EBITDA basis in 2024. We will continue to seek ways to strengthen our adjusted EBITDA results in 2024. Speaker 100:22:08In addition, we continue to maintain a healthy cash flow model and achieved record positive free cash flow of $7,100,000 in the 4th quarter. We generated positive free cash flow of $5,900,000 during 2023 and we believe we are in a great position to continue generating strong free cash flow and expect approximately $30,000,000 of positive free cash flow in 2024 assuming a constant capital allocation strategy. Moving to the balance sheet. We ended the year with approximately $475,000,000 of cash, deposits and investments on the balance sheet and we carry 0 debt. This amount represents a decline of approximately $3,000,000 from last year, primarily due to our repurchase activity in the Q4 of 2023 offset by the strong free cash flow activity mentioned previously. Speaker 100:23:05This leads me to the topic of capital allocation. On November 20, 2023, we received Israeli court approval begin executing our previously announced share repurchase program. Since receiving this approval, we have been aggressive in utilizing this program to take advantage of what we believe are attractive repurchasing opportunities. In the Q4, we repurchased approximately 3,000,000 shares for a total price of approximately $13,100,000 As of February 29, year to date, we have repurchased an additional 4,500,000 shares for a total price of 20,800,000 dollars We anticipate that our repurchasing activity will more than offset the dilutive impact of equity issuances associated with option exercises investing of RSUs in 2024. At valuation levels well below that of companies with similar financial profiles, we believe that we have a great opportunity to continue repurchasing our stock at attractive prices. Speaker 100:24:11We continue to believe that our strong balance sheet and liquidity position are strong underappreciated assets. We will continue to be thoughtful in how we utilize our capital to drive shareholder value, including executing on additional repurchases and opportunistic bolt on M and A. As we previously announced on February 13, as part of our effort to drive faster and more meaningful progress towards our margin targets, we made a decision to reduce our global workforce by approximately 6%. We expect to recognize net operating expense savings related to this reduction of approximately $6,000,000 on an annualized basis, subject to reinvestments, which is factored in our 2024 outlook. As a result of the reduction in force initiatives, we anticipate recording an incremental expense of approximately $2,000,000 primarily in the Q1 of 2024. Speaker 100:25:11This expense primarily relates to severance payments, employee benefits and other costs related to the reduction in force. Charges incurred in connection with the reduction in force are excluded from adjusted EBITDA guidance. The actual amounts mentioned could differ slightly from what is currently expected upon the completion of this reduction. We ended 2023 with 742 employees, a decline of 5% from the prior year and following the completion of this transaction we'll have approximately 700 employees. Now turning to our outlook. Speaker 100:25:48As we look forward to 2024, we currently anticipate revenue of between $323,000,000 $335,000,000 dollars or $329,000,000 to the midpoint. Consistent with the past 2 years, we anticipate that our growth will be driven primarily by new activity and at the midpoint of our guidance, we're forecasting a relatively similar net dollar retention rate as of 2023. The behavior of the macro environment either positively or negatively can impact our net dollar retention rate and may ultimately determine where we fall within our revenue range. In addition, we feel confident about the new business activity levels, which is supported by a more robust pipeline than at this point last year. Like we saw this year, the timing of when new merchants go live during the year can be difficult to predict and may have an impact on our calendar year revenues. Speaker 100:26:48For modeling purposes, we currently expect all of our quarters in 2024 to reflect a similar percentage of the total revenue as they did in 2023. Now let me discuss our adjusted EBITDA outlook. We currently expect adjusted EBITDA to be between $10,000,000 $17,000,000 or approximately $13,500,000 to the midpoint. The midpoint of our adjusted EBITDA guide represents additional margin expansion of approximately 700 basis points from the prior year, demonstrating leverage in the business model and the commitment to managing the business in a disciplined manner. Overall, I'm encouraged by our market positioning and executing on the elements within our operational control. Speaker 100:27:35Heading into 2024, we have set ourselves up to be a more productive and leaner company in a challenging environment And Ito and I remain excited by the continuous prospects for long term growth and our ability to deliver value to our shareholders. Operator, we're ready to take the first question please. Operator00:27:56Thank you. Our first question comes from the line of Will Nance with Goldman Sachs. Your line is now open. Speaker 400:28:23Hey, guys. I appreciate you taking the question and appreciate all the details on the long term targets by 2026. So maybe I'll kind of start there. I think just some kind of back of the envelope math, it seems like you can kind of hit the low end of that EBITDA margin target with kind of flattish gross margins, flattish OpEx and revenue growth in the low double digits. Like maybe you can kind of flush out like what kind of puts you at the lower end or the higher end and kind of what your planning scenarios over the next couple of years sort of look like across some of the key line items? Speaker 400:28:55I think that would be helpful. Speaker 300:28:58Hey, Will, Sharon. So look, I think there are a lot of different permutations across revenue, gross margin and OpEx that would get us to kind of various scenarios within that range. And I think that I just have confidence that as a management team quarter by quarter as we see how things are progressing, we understand the levers and how to get to those areas, whether it's kind of faster traction in some of the newer products, which help outperform on the margin side, whether it's some acceleration on the revenue growth. So again, a lot of different combinations to take us there. But if I look at the margin improvements this year, 1100 basis points, 24, guiding to 700, at the midpoint, I think we understand how to achieve those results in various conditions. Speaker 400:29:47Got it. That's helpful. So a lot of different ways to hit the range. Okay. And then maybe on the gross margin outperformance this quarter, just maybe you could dive a little bit deeper on that. Speaker 400:29:56It sounds like a couple of different factors contributing to that and at least some of that is carrying forward into the outlook into 2024. So I think the numbers were something like 300 or 400 basis points of outperformance. What would you kind of describe most of that to? And how should we think about kind of room for further improvements in the gross margin longer term? Speaker 300:30:17Yes. So I think the holistic story is, look, there was a lot of focus from the management, the employees post the Q3 fraud event to make sure that we focus and burn everything down. But really it's the technology platform that we've developed over the past few years that allowed us to It's a combination of the holiday season just being safer volumes in general. The fact that we had some of the go lives went live later in the quarter and newer merchants tend to start off with a higher chargeback rate. And in fact, I kind of encourage everyone to look at the supplemental material. Speaker 300:31:00I think there's a very illustrative chart that shows how performance improves for different cohorts over time. So I think all of those factors holistically together are kind of factored into the outperformance in the quarter. And we're very pleased. We do believe that some of that will carry forward. But I do want to kind of mention that this is best analyzed on an annual Speaker 400:31:22basis. Got it. Super helpful. Appreciate all the details on the supplement today as well. Thanks for taking the questions. Operator00:31:28Thank you. One moment for our next question please. Our next question comes from the line of Ramsey El Assal with Barclays. Your line is now open. Speaker 500:31:38Hi, good morning and thanks for taking my question. I wanted to ask about revenue retention and maybe ask you to comment a bit further on given the lower net dollar revenue retention this quarter, is that you mentioned primarily sort of macro and lower consumer spend is the driver. So I'm just trying to understand, is that sort of like a lower same store sales given macro pressure rather than customers reducing scope or it doesn't sound like exiting the platform, but just any more color you could provide on those dynamics around revenue retention would be helpful. Speaker 100:32:14Yes, sure. And thank you for the question. So we do disclose our net dollar retention on an annual basis, I believe, but there's a lot of lumpiness during the quarter, but on an annual basis, it presents like a good overall picture. I think some of the factors that are going into our net dollar retention this year compared to prior years since IPO, I think that net dollar retention has kind of hovered around 100 This year is a little bit higher than last year. But prior to our APO and just during even before call it, our net dollar retention rate was 110, 120 plus. Speaker 100:32:53And I would say the main factor there was some of the macro trends and some of the growth profile in our merchants at a different kind of macro environment. And since post COVID, we just haven't seen this type of growth. We're actually seeing some softness in different industries and in different areas, as we've mentioned. And that has been driving primarily some of kind of the fluctuations from our historical levels. Speaker 500:33:22Got it. Okay. And then one also broad macro question about the e commerce spending environment. What you're seeing now, what you're expecting in 2024 versus what we've seen in the past couple of years. I guess the question is, do you think that where are we now in terms of a normalized e commerce spending pattern for consumers? Speaker 500:33:42I know we've seen goods versus services and travel spending swing around and maybe a discretionary spending pull forward, other sort of cycles within cycles. I know this is kind of a tough question without a crystal ball, but where do you think we are now in terms of normalization? Or is this the new normal? Speaker 100:33:59I've definitely seen some normalization since in the past couple of years. I think that just seeing where our growth is coming out from this year, it's tickets and travel continues to be a strong category, but definitely we've seen some normalization from the past 2 years. And we've seen some healthy uptick in some of our other categories. As I mentioned, home and fashion, this is the addition of new merchants and just like stroll upsell activity is starting to be a positive trend for us, something that wasn't the case a year or 2 ago. So while we know, like just looking at our merchant spends, what we see on our end, I'll say that definitely it's heading towards normalization and more kind of healthy contribution from growth from a number of areas. Speaker 100:34:49But there's still definitely some softness. We've kind of mentioned some sub segments with high luxury fashion or sneakers. There's still areas that are continuing to be soft. And more broadly, just kind of looking through industry reports and understanding where we are, I think the macro environment continues still to be tougher in kind of in the face of rising interest rates. Now there is a prospect that these are going to stabilize or maybe start decreasing. Speaker 100:35:19And we're starting to see that some of our merchants that are public companies start to kind of talk about stabilization or even recovery to better trends in the back half of the year. Inflation just appeared to be sticky, but we've seen some normalization in prices, especially across tickets and travel. And hopefully, this can drive higher consumer demand. So all in all, I think that it's still somewhat volatile, but I think we're kind of like on the kind of closer hopefully to the light at the end of the tunnel with hopefully better prospects by the end of this year. Speaker 500:35:57Very helpful. Thank you very much. Operator00:36:00Thank you. One moment for our next question, please. Our next question comes from the line of Chris Kennedy with William Blair. Your line is now open. Speaker 600:36:10Good morning. Thanks for taking the question. Can you talk about some of the newer initiatives, the non chargeback guarantee products and services? You mentioned they don't represent a large portion of revenues today. Can you just talk about when you think they will move the needle? Speaker 300:36:28Yes. I think we have great momentum. So we mentioned that the revenue from them grew 3x in 2023 and that for specifically for our policy product in Q4, we saw almost over 50% of the go lives of the year went live. So we think the momentum is great. And they're also helping us generate more conversations, increase the win rates also on our core chargeback guarantee. Speaker 300:36:52And that helped us result in that kind of almost 80% win rate in the quarter. So we think they're already contributing meaningfully to our success. And I think that the momentum is going to carry forward into 2024 and we'll continue to see increased usage of them and we'll continue to solve more pain points and kind of get it in the hands of more and more clients. And I'm sure that more meaningful revenue uplift will come once we do that. Speaker 600:37:23Okay. Thank you. And then just real quickly going back to the net dollar retention, what levers do you have to drive to improve that go from 105% back to your historical average of 115% to 120%. Is there anything that you guys can do to drive improvement there? Thank you. Speaker 300:37:45Yes. I mean, look, if you just think about the way that that number is built, the more we upsell, cross sell and better retain our clients, the higher this number will be. We're definitely focused on executing on those paths. Just to highlight again that if we were to compare today's net dollar retention to that of the prior periods where it was higher, the biggest difference is in kind of the macro same stores category. Having said that again, we still focus on the things that are controlled in order to improve that. Speaker 600:38:18Thank you for taking the questions. Operator00:38:21Thank you. One moment for our next question please. Our next question comes from the line of Terry Tillman with Tuohy Securities. Your line is now open. Speaker 700:38:31Yes, good morning, Ito, Agi and Chad. Thanks for taking my questions. Nice to see the EBITDA progression. Just the first question, it's kind of a mouthful and then I had a follow-up for, Augie. But for you in terms of you guys have touted in the past this powerful ROI where it drives more revenue and also reduces costs around chargeback. Speaker 700:38:49I'm just curious if you take a step back, where are we in the penetration level for a modern kind of next gen chargeback guarantee platform adoption versus legacy approaches or review solutions, etcetera. I'm just kind of curious where you think we are in terms of penetration. And the second part of my question is, I think there was a remark about the pipeline being higher. Is this just the market, more people are willing to look at things or would you attribute it more to the platform go to market initiatives and the investments you've made Speaker 200:39:21in your sales and marketing? Speaker 700:39:22And then I had a follow-up for Agi. Speaker 300:39:26Hey, Terry. Thanks for that. So look, I think that let me dissect it into a few different ways. I think that on the platform side, and when I say platform, I include the value for something like policy and the dispute management. I think we're just at a stage where, honestly, the technology is catching up to the promise. Speaker 300:39:45So I think it's completely underpenetrated. And I think that some of the value that we're seeing that it's generating to merchants is not understood or kind of well played out in the market yet. For example, one of the kind of Q4 results that we had around policies and cutting item not received chargebacks basically by half or helping other merchants manage different parts of the business. When you think about just the chargeback guarantee component, while I'm proud of our accomplishments to date, it's still a relatively small portion of the overall e commerce volume. So I do think that is still a lot of runway to growth once we have kind of more traction and understanding of the value and we definitely see that increasing. Speaker 300:40:29More specifically to what's leading to the stronger pipeline, I think it's hard to isolate one specific thing. But when I think about the initiatives we've undertook over the past 2 years, like expanding our global go to market footprint and building the product platform, those are definitely contributing. You can see that in the 30% 40% growth respectively and kind of LATAM and APAC. You can see that in kind of the outperformance on the win rates based on the platform sales. You can see it on the actual platform traction. Speaker 300:41:03So it's probably a combination of all that resulting in kind of the global pipeline, improvements that we're seeing. Speaker 700:41:11That's really helpful. Thanks for all that color there. And I guess, Ajay, just for you in terms of free cash flow, I think you said about $30,000,000 for the year. Is there anything we should consider seasonality wise or maybe there's some cash kind of cash expenses because of the restructuring? Just trying to understand how we flow the $30,000,000 in the year. Speaker 700:41:27Thank you. Speaker 100:41:30Yes, Terry. I did generally say $30,000,000 for 2024. It's I don't have any more precise kind of spread. Maybe it's going to follow mostly some of the trends around adjusted EBITDA as well. And more particularly, probably Q4 is just tends to carry some of the receivables from Q1 tends to carry the receivables from Q4, so maybe some adjustments there as well. Speaker 100:41:58But nothing to provide more kind of more precise around that right now. Just on an annual basis around 30. Speaker 700:42:05Yes. Okay. Thank you. Operator00:42:07Thank you. One moment for our next question. Our next question comes from the line of Timothy Chioda with UBS. Your line is now open. Speaker 800:42:19Great. Thank you for taking the question. Looking at Slide 26 in the investor deck, and I appreciate that during the remarks earlier, you mentioned that it was a very Q4 heavy year in terms of new merchant activity. I believe you said about 1 third of new merchants boarded in Q4. You also noted the refined sales strategy and that the teams overall met the revenue goals for the year. Speaker 800:42:45From the chart, if there's any additional context on the 2023 cohort that you could provide, is it maybe that the sales teams met the goals this year a little bit more by gaining wallet share with existing customers relative to bringing on new logos? Is that a fair conclusion from looking at this table? Or if there's anything else that you could help us with related to Slide 26? That would be appreciated. Speaker 300:43:15Yes. I think the distribution between new and upsells is somewhat similar with prior years. So I don't think there's anything unique or different to call out in that regards. Speaker 800:43:29Okay. Okay. Thank you. Yes, I was just looking Speaker 900:43:31at the Speaker 800:43:33Go ahead, Agi. Sorry. Speaker 100:43:35Yes. Just to kind of point as well, it's relatively even between new and upsell. Speaker 800:43:43Okay, great. Okay, thank you for taking the question. Operator00:43:46Thank you. One moment for our next question, please. Our next question comes from the line of Brent Bracelin with Piper Sandler. Your line is now open. Speaker 1000:43:58Good morning. Thank you for taking the question here. Great to see the commitment to profitability here going forward. My question as we think about the growth profile the pipeline is a little strong growing this year versus last year. What's the algorithm to accelerate growth from here? Speaker 1000:44:30As you think about upside levers, is it going to be expanding customers at a faster pace? Is it going to be the new product cross sell? Just walk us through how you're thinking about maybe over a 3 year period, how you accelerate growth from here? Thanks. Speaker 300:44:48No, that's a great question. I mean, look, what we focus internally that we believe will lead to kind of faster growth rates is 1 selling more globally. So that's part of the international expansion, which we kind of highlighted the 30% 40% growth. 2nd is generating more revenue and more sales from the platform, from policy, dispute, account protection. So that would be number 2. Speaker 300:45:11And number 3 is making sure that that helps us win more core chargeback guarantee deals even in some of our kind of established markets, retaining merchants at a better rate even though it's very high today would also be meaningful. So I think those are all the areas within our scope of control that we're focused on, that we believe could lead to accelerated growth. Now obviously the macro being outside of our control, which can also lead to that. And to your kind of point, well, hey, if the pipeline and everything, what's different this year because the net dollar attention is picking up. I think that we tend to work on a slightly smaller amount of larger deals. Speaker 300:45:53I think we mentioned that we have over 50 accounts, each generates over $1,000,000 in revenue for us. And just the timing of when in the year those accounts go live can have a meaningful impact on the calendar year revenue. So that's also probably something to mention. Speaker 1000:46:10Fair enough. And then just back to that third point, the winning more chargeback deals with existing customers. What's your best guess, the percent of volume attached that you have across your largest customer base? Is it 50% of volumes? Is it 80% of volumes? Speaker 1000:46:30Any sort of level set for us as just we think about that third lever to accelerate growth where you're at today as a baseline? Speaker 300:46:40Sure. That's a great question. I mean, it's after a lot lots of ins and outs throughout the year, we're kind of around the 30%, 30% plus range, which is actually a bit similar to historical years. Speaker 1000:46:56Helpful color. My last question is really around automation. You mentioned several internal efforts to further automate some of the internal processes and procedures to be able to ramp capacity and drive leverage. Can you double click into the most the biggest change from an automation standpoint that you're seeing success with? That would be helpful. Speaker 1000:47:20Thanks. Speaker 300:47:22Sure. So I think we've created merchant, right. So it's something that you historically someone would actually have to look at the performance and maybe manage the models or the different thresholds. And just the fact that we were able to roll this out and have a high enough confidence in the performance of this platform allows us to onboard merchants pretty much at an endless scale, while maintaining the very kind of unique performance metrics that the chargeback guarantee model can provide. Speaker 1000:48:03Helpful color. Thank you. And great to see the commitment to profitable growth going forward. Thanks. Operator00:48:09Thank you. One moment for our next question. Our next question comes from the line of Reggie Smith with JPMorgan. Your line is now open. Speaker 900:48:19Hey, good morning. Thanks for taking the question. I joined late, so this may have been covered. But I was curious what, I guess, kind of broader ecom growth assumptions are embedded in your '24 guidance. And it sounds like you may have given longer term guidance. Speaker 900:48:40Maybe if you could talk about what you're thinking about over that horizon as well? And then, I guess, it's kind of implicit in your guidance, but like what's the internally, how do you guys think about the growth algorithm? Is it ecomplus, ecomtimesomeratio or what's the internal view there? And I have a follow-up. Thank you. Speaker 100:49:08Of course, Reggie. Thank you for the question. So just thinking about the first half of the year, it's the broader economy and kind of like picture. I don't think anything is much different than what we saw in 2023. Inflation continues to be sticky and consumer spending relying on more on credit. Speaker 100:49:30It's just potentially more of the same in the first half of the year, I think. And then going into the second half of the year, there's more optimism around potential stabilization or recovery. But again, too early to say right now. So we try to be kind of balanced in our approach. We talk to our merchants, we look at the industry reports and we factor in what we see. Speaker 100:49:59But potentially if things recover and they're much more optimistic and faster, that can be a positive effect. And if things continue to be kind of completely sluggish like last year, that can be probably more of like a neutral to negative effect depending on where we think about our guide. Speaker 900:50:24Got it. Okay. That's good. So basically assuming stability, I guess you called out highlighted several PolicyProtect implementations in the Q4. I was curious, was there a reason that they all kind of flipped on at the same time? Speaker 900:50:41And maybe talk a little bit about the lead time for that type of upsell. Is there a reason that the Q4 would be particularly strong? And did you have any view or insight of that coming ahead of time, so lead time? Thank you. Speaker 300:51:00I think we've made a lot of progress in the technology throughout the year and we've added more and more use cases. And as we've onboarded more merchants and have more testimonials and solve more use cases and understand better the ROI and how to sell it, it just naturally leads to better movement and traction. Specifically, these are cross sells mainly to existing merchants. So the additional integration is very simple. And the entire process from selling it to going live is not time consuming. Speaker 900:51:38Got it. And if I could sneak one more in, thinking about kind of the pipeline that you guys talked about and looking at kind of Slide 23 in the presentation, Is the same kind of mix are you seeing the same mix in terms of new pipelines? Does it kind of approximate the current volume mix? Are you seeing any pockets of strength in any particular geography that would deviate from historic for your existing billings? Speaker 300:52:12I think we continue to see more and more pipelines across the platform, continue to see it across the global areas where we have shown recent strength. So I would say it's diversified and reflective in kind of the overall performance of the business, the pipeline. So nothing unique to call out there. Speaker 900:52:35Roughly consistent with the current billing? Speaker 100:52:41Yes, I Speaker 300:52:41would say so. Speaker 200:52:43Thank you. Operator00:52:45Thank you. I'm currently showing no further questions at this time. I'd like to turn the call back over to Mr. Ito Gal, Founder and Chief Executive Officer for closing remarks. Speaker 300:52:56Thank you everyone for joining. The team and I are very excited for the year ahead and we look forward to updating you on our progress. Operator00:53:03This concludes today's conference call. Thank you for your participation. You may now disconnect. Everyone have a wonderful day.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallRiskified Q4 202300:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckPress Release(8-K)Annual report(20-F) Riskified Earnings HeadlinesCritical Contrast: Society Pass (NASDAQ:SOPA) vs. Riskified (NYSE:RSKD)April 25, 2025 | americanbankingnews.comRiskified To Report First Quarter 2025 Financial Results on Wednesday, May 14April 23, 2025 | finance.yahoo.comWarning: “DOGE Collapse” imminentElon Strikes Back You may already sense that the tide is turning against Elon Musk and DOGE. Just this week, President Trump promised to buy a Tesla to help support Musk in the face of a boycott against his company. But according to one research group, with connections to the Pentagon and the U.S. government, Elon's preparing to strike back in a much bigger way in the days ahead.April 29, 2025 | Altimetry (Ad)Riskified price target lowered to $6 from $7 at DA DavidsonApril 15, 2025 | markets.businessinsider.comIs Riskified Ltd. (RSKD) the Best Technology Penny Stock to Buy Right Now?March 31, 2025 | insidermonkey.comRiskified Ltd.: Free Cash Flow And Balance Sheet Are The Best Part Of The StoryMarch 28, 2025 | seekingalpha.comSee More Riskified Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Riskified? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Riskified and other key companies, straight to your email. Email Address About RiskifiedRiskified (NYSE:RSKD), together with its subsidiaries, develops and offers an e-commerce risk management platform that allows online merchants to create trusted relationships with consumers in the United States, Europe, the Middle East, Africa, the Asia-Pacific, and the Americas. It offers Chargeback Guarantee that ensures the legitimacy of merchants' online orders; Policy Protect, a machine learning solution designed to detect and prevent refund and returns policy abuse in real-time; Account Secure, a solution that cross-checks every login attempt; Dispute Resolve, which is used to compile submissions for fraud and non-fraud related chargeback issues; and PSD2 Optimize that helps merchants avoid bank authorization failures and abandoned shopping carts. The company serves direct-to-consumer brands, online-only retailers, omnichannel retailers, online marketplaces, and e-commerce service providers in various industries, such as payments, money transfer and crypto, tickets and travel, electronics, home, and fashion and luxury goods. Riskified Ltd. was incorporated in 2012 and is headquartered in Tel Aviv, Israel.View Riskified ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Alphabet Rebounds After Strong Earnings and Buyback AnnouncementMarkets Think Robinhood Earnings Could Send the Stock UpIs the Floor in for Lam Research After Bullish Earnings?Texas Instruments: Earnings Beat, Upbeat Guidance Fuel RecoveryMarket Anticipation Builds: Joby Stock Climbs Ahead of EarningsIs Intuitive Surgical a Buy After Volatile Reaction to Earnings?Seismic Shift at Intel: Massive Layoffs Precede Crucial Earnings Upcoming Earnings AstraZeneca (4/29/2025)Booking (4/29/2025)DoorDash (4/29/2025)Honeywell International (4/29/2025)Mondelez International (4/29/2025)PayPal (4/29/2025)Regeneron Pharmaceuticals (4/29/2025)Starbucks (4/29/2025)American Tower (4/29/2025)América Móvil (4/29/2025) Get 30 Days of MarketBeat All Access for Free Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools. Start Your 30-Day Trial MarketBeat All Access Features Best-in-Class Portfolio Monitoring Get personalized stock ideas. Compare portfolio to indices. Check stock news, ratings, SEC filings, and more. Stock Ideas and Recommendations See daily stock ideas from top analysts. Receive short-term trading ideas from MarketBeat. Identify trending stocks on social media. Advanced Stock Screeners and Research Tools Use our seven stock screeners to find suitable stocks. Stay informed with MarketBeat's real-time news. Export data to Excel for personal analysis. Sign in to your free account to enjoy these benefits In-depth profiles and analysis for 20,000 public companies. Real-time analyst ratings, insider transactions, earnings data, and more. Our daily ratings and market update email newsletter. Sign in to your free account to enjoy all that MarketBeat has to offer. Sign In Create Account Your Email Address: Email Address Required Your Password: Password Required Log In or Sign in with Facebook Sign in with Google Forgot your password? Your Email Address: Please enter your email address. Please enter a valid email address Choose a Password: Please enter your password. Your password must be at least 8 characters long and contain at least 1 number, 1 letter, and 1 special character. Create My Account (Free) or Sign in with Facebook Sign in with Google By creating a free account, you agree to our terms of service. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
There are 11 speakers on the call. Operator00:00:00Good day, and thank you for standing by. Welcome to the Riskified's 4th Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer Speaker 100:00:23Please be advised that today's conference is being recorded. Operator00:00:26I would now like to hand the conference over to your first speaker, Chet Mendel, Riskified's Head of Investor Relations. Please go ahead. Speaker 200:00:34Good morning, and thank you for joining us today. My name is Chet Mandel, Riskify's Head of Investor Relations. We are hosting today's call to discuss Riskify's financial results for the full year and Q4 of 2023. Participating on today's call are E. Dogal, Riskify's Co Founder and Chief Executive Officer and Agi Doceva, Riskified's Chief Financial Officer. Speaker 200:00:57We released our results for the full year and Q4 of 2023 earlier today. Our earnings materials, including a replay of today's webcast, will be available on our Investor Relations website at ir.riskify.com. Certain statements made on the call today will be forward looking statements related to our operating performance, business and financial goals, outlooks as to revenues, gross profit margin, adjusted EBITDA profitability, adjusted EBITDA margins and expectations as to positive cash flows, 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. Speaker 200:01:55These forward looking statements involve risks, uncertainties and other factors, some of which are beyond our control, that could cause actual results to differ materially from our expectations. You should not put undue reliance on any forward looking statement. Please refer to our annual report on Form 20 F for the year ended December 31, 2023 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 ks and in the appendix of our Investor Relations presentation, all of which are posted on our Investor Relations website. Speaker 200:02:49I will now turn the call over to Itau. Speaker 300:02:51Thanks, Jeff, and hello, everyone. I'm proud to report that Riskified ended the year strong despite facing macroeconomic and geopolitical headwinds. We entered 2023 looking to increase our new logo base, further penetrate our existing accounts, expand our geographic footprint and strengthen our platform sales motion while improving our technology and achieving profitability on an adjusted EBITDA basis in the Q4. I am pleased that we were able to accomplish our 2023 goals, but acknowledge our work is not yet done. In particular, I'm excited about achieving a gross margin of 58% in the 4th quarter. Speaker 300:03:28We believe that the cumulative multi year impact of focusing on the continuous advancement of our technology stack contributed to an outstanding 4th quarter. This represents our highest gross margin in 10 quarters, all while maintaining very high levels of performance for our merchants. Allow me to provide some further insight into our technology strategy. In 2023, we focused on a 3 pronged approach to drive improved performance, while we expanded deeper into new geographies, industries and payment methods. We strengthened our machine learning factory by leaning further into autonomously training models. Speaker 300:04:05This allows us to train, test and deploy models more quickly, which in turn expands the capacity of our data scientists to develop and enhance additional features to drive powerful performance. And finally, we built out an automated performance management platform designed to optimize approval and chargeback rates per merchant in an automated and constant way. We believe that this automation will allow us to continue to scale the business with high leverage. I am optimistic that some of the leverage seen in Q4 will flow through to 2024 and beyond. But I encourage you to continue analyzing our gross margin on an annual basis given individual quarters can vary due to many factors, including the ramping of new merchants and the risk profiles of transactions approved. Speaker 300:04:57I want to thank the team for their attention in responding so quickly from 3rd quarter fraud event to achieve such fantastic results in Q4. We have further diversified our portfolio across merchants, industries and geographies to become a more broad based and resilient company that is able to continue to grow across all macro environments. We continue to have success penetrating the e commerce landscape through new merchant wins and through upsells within our existing merchant wide space, which contributed to total annual GMV growth of 17% and total annual revenue growth of 14% in 2023. Aine will walk you through the drivers of our top line growth shortly, but overall I am encouraged by our performance in 2023. In particular, 5 out of our 6 verticals contributed positively to performance during the year. Speaker 300:05:51All of our regions achieved at least double digit growth year over year and we have more enterprise merchants accounts on our platform than ever before. In fact, we had over 50 accounts that contributed $1,000,000 or more to our top line in 2023. Our go to market team met their annual revenue targets and delivered a strong end to the year with 1 third of the new merchant activity in 2023 coming in the Q4 providing positive momentum heading into 2024. Also in our first full year of having our refined platform sales strategy, new bookings derived from our PolicyProtect, Dispute Resolve and AccountSecure products were up approximately 3 times. Our 4th quarter was the strongest quarter ever for our PolicyProtect product as over 50% of the Policy Protect deals that we won during the year went live during the quarter. Speaker 300:06:46And while the revenue from these products still represents only a small percentage of our overall revenue base, we believe that our ability to sell an end to end platform has proven to be a very successful differentiator and stickiness tool. We executed and focused on improving our technology stack throughout the year. For example, based on direct feedback from our merchants, we increased the number of use cases we help solve beyond just blocking fraudulent refunds and serial returners to also solve promo abuse, item limits and reseller policies for our PolicyProtect product. On Dispute Resolve, we prioritize developing a holistic and automated solution for the fraud and non fraud chargeback representment process. This product allows us to become a one stop shop that automates the entire dispute flow to help reduce higher win rates for our merchants. Speaker 300:07:39Both products are proving to have a true market need based on recent activity and existing pipeline and service key tools in our land and expand strategy. The new product traction we've seen and the enhancements we've made combined with our market leading core chargeback guarantee offering led to a very strong 4th quarter overall win rate of almost 80%. The proven performance, accuracy and predictability that our core chargeback guarantee product generates is why merchants are initially drawn to Riskify. Now our expanded end to end platform dedicated to solving multiple high value e commerce use cases gives them even more reason to stay. This is evident in our low churn numbers. Speaker 300:08:23Our annual dollar retention in 2023 was 98%, which was inclusive of a few unusual churn events as a result of merchant bankruptcies. We are proud of the deep rooted partnerships that we have built with many of the world's largest e commerce merchants. Moving lower in the income statement and on to the areas that are more within our operational control. In mid-twenty 22, we made the decision to accelerate our timeline to profitability and have executed on that accelerated timeframe. Our 2023 annual adjusted EBITDA of negative $8,500,000 exceeded our guidance by 37% and we achieved positive free cash flow for the year of $5,900,000 Furthermore, our 2023 annual adjusted EBITDA margin expanded by 1100 basis points from the prior year. Speaker 300:09:20I am pleased that we have achieved positive adjusted EBITDA in the Q4 and that we are guiding to positive adjusted EBITDA on an annual basis in 2024 and beyond. We have made a lot of progress in getting to this point and I believe it is important to communicate how to think about the financial milestones we plan on achieving over the next few years. As a management team, we are building towards adjusted EBITDA margins between 15% 20% by 2026. In addition, we also plan on achieving positive adjusted EBITDA inclusive of our share based compensation expenses by 2026. Allow me to provide some further context. Speaker 300:10:03Over the past 2 years, we have faced a challenging macro environment and volatile consumer spending, which has led to a net dollar retention in the low 100s down significantly from higher rates of 115 to over 120 that we've seen historically even pre COVID. Overall, this has produced lower growth rates than our historical known and is not where we aspire to be longer term. We remain focused on accelerating our revenue growth and we believe that there are multiple ways to achieve that. As a leader in e commerce fraud and risk intelligence, we believe that we can capitalize on the large opportunities in front of us. As always, our goal remains to land and expand our platform with the world's largest e commerce merchants and the speed and frequency at which we are able to execute on this strategy is a top area of focus. Speaker 300:10:56In addition, potential improvements to our same cohort base would also result in a more positive impact on our net dollar retention rate, which would also allow us to grow revenue faster. However, even at similar revenue growth rates as compared to the last few years, we are confident in our ability to manage the business and how to optimize the operational levers available to us in our gross margin and OpEx line items to continue driving adjusted EBITDA improvements in order to achieve these targets. Overall, I am confident in our ability to efficiently run the business to constantly bring our top line growth down to the bottom line. Before I turn it over to Agi to provide further color on our results and on our 2024 annual guide, it's important to highlight our commitment to managing share based compensation expense and dilution to meaningfully lower levels than they are currently at. First, in 2023, share based compensation expense as a percentage of revenue decreased by approximately 500 basis points from 2022. Speaker 300:12:07And in 2023, we granted approximately 30% fewer equity awards as compared to 2022. We expect to see share based compensation as a percentage of revenue continue to decline in 2024. Many of the larger awards that we granted in 2021 through 2023 have a 4 to 5 year vesting period and as these awards complete our vesting requirements by the end of 2026, we expect to see a meaningful drop off in our share based compensation expenses. 2nd and perhaps even more important to discuss is our focus on controlling our equity awards to meaningfully lower levels. In 2023, equity awards granted represented approximately 6% of our weighted average diluted shares, down from approximately 9% in 2022. Speaker 300:12:59We anticipate that this number will be approximately 4% to 5% in 2024 as we continue to manage the business in a disciplined manner. Assuming valuation levels similar to today and absent any unanticipated executive or senior hiring and any additional buyback authorization, we expect to target similar levels going forward. 3rd, since the implementation of our 75,000,000 share repurchase program in November, we have repurchased approximately 7,600,000 shares at a total cost of $34,000,000 as of February 29. We remain committed to repurchasing our shares at what we believe are attractive valuation levels. Looking forward, we are excited and energized by the opportunity in front of us in 2024. Speaker 300:13:50There is plenty of white space for us to penetrate and we believe that our product and platform leadership position will allow us to do that. Combined with the global network scale that we have built and the financial and operational discipline of our business model, I have great confidence that we are well positioned to execute on these initiatives for the benefit of our shareholders. Now over to Agi. Speaker 100:14:13Thank you, Ido, team and everyone for joining today's call. We achieved 4th quarter revenue of $84,100,000 and full year revenue of $297,600,000 dollars up 6% year over year and 14% respectively. Our 4th quarter GMV of $35,200,000,000 was the highest quarter of volume reviews in our history. This was driven by continued new and upsell growth and solid Black Friday through Cyber Monday holiday activity, which grew approximately 6% compared to last year's season. For the full year, we grew our GMV 17% to 123,100,000,000 dollars During the Q4, we had strong performance in our home category, primarily driven by up sell activity and in our food category, primarily driven by new merchants. Speaker 100:15:09These two categories historically have not had large seasonal increases in the 4th quarter, unlike more traditional retailers, which tend to experience a higher holiday shopping season compared to other parts of the year. In addition, our fashion and luxury category remained relatively flat similar to the 1st 9 months of the year. Our Tickets and Travel category was also flat this quarter as we had a tougher comparable period in Q4 of 2022, driven by fewer large live events in the Q4 of this year. The combination of these factors contributed to the step down in our Q4 growth rate, but we remain bullish on these key categories and we expect to see tickets and travel return to growth in 2024. For the full year, approximately $30,000,000 of the increase in revenue was attributable to increases in GMV and billings associated with new merchants, primarily within our tickets and travel category, which grew by more than 30% year over year. Speaker 100:16:13In addition, we saw 45% year over year growth in our food category and 19% growth in our home category. The remaining increase in revenue was primarily due to upsells, net of organic declines and attrition, which contributed to our net dollar retention rate of 105%. Our ticket and travel category contributed just under $100,000,000 in billings, which represented approximately 30% of our overall portfolio. In our travel portfolio of merchants, year over year activity was driven by a higher number of transactions for both flights and accommodations against relatively stable consumer pricing. Our fashion and luxury goods category, which represents approximately 30% of our portfolio was relatively flat year over year. Speaker 100:17:05Throughout the year, we continued to see softness within our luxury brands and sneakers subsegment, which was positively offset by better growth in other subsegments such as fast fashion and by addition of new merchants and up sales within the category. Finally, we also saw growth in billings across all geographies year over year. The United States, which is our largest region, grew by 10% and EMEA grew by 15%. Percent. Our Americas and APAC regions grew approximately 30% 40% respectively, primarily due to momentum in new and up sell activity. Speaker 100:17:42We believe that our continued growth in regions outside of the United States demonstrates continued market share gains and validates our decision to invest in these regions. Overall, our contribution by region was more evenly distributed than in previous years as we continue to build a global and diversified company. As Edel mentioned, while our gross margin continues to be best analyzed on an annual basis, allow me to provide more detail on how we achieved 58% non GAAP gross margin in the 4th quarter. The ongoing improvements to our model and enhancements to our monitoring tools and systems led to better performance. Consistent with prior years, our Q4 plans to have a safer population of transactions than the rest of the year and we did not have any unexpected fraud events. Speaker 100:18:38Also as always, the timing of new revenue and merchant mix can impact the gross margin in a given quarter. Overall, the success of this quarter contributed to an annual non GAAP gross profit margin of 52%. As Edel mentioned, we're expecting some of the margin expansion that we achieved in Q4 to carry into 2024. As it relates to 2024, for the full year, we're targeting a non GAAP gross profit margin between 52% to 53%, which is 1% higher on each end than the initial range of 2023. Directionally, our Q1 margin is expected to be within this range. Speaker 100:19:21Q2 and Q3 are expected to be below the range and Q4 is expected to be higher than the range. Moving to expenses. Total non GAAP operating expenses were $39,400,000 for the 4th quarter and $163,500,000 for the full year of 2023, both representing a year over year decline of 6%. We're becoming more efficient and have a deeper understanding of the working needs of each area of the business. We ended the year with decreased costs across most areas of spend with savings generated through the negotiation of contracts in our AWS and other optimization efforts of our data sources. Speaker 100:20:09Lower human resources expenses resulting from decreased headcount and recruiting needs, more focused spending in our sales and marketing line item and savings from the pleasing space. For the year, our non GAAP operating expenses as a percentage of revenue declined from 66% to 55%, reflecting leverage in the business model. We anticipate continuing to see further leverage in 2024 compared to 2023 and anticipate operating an approximately $40,000,000 per quarter run rate. In addition, we have now substantially completed the global expansion of our go to market footprint and we expect to start seeing improved leverage as we further realize the returns on these previous investments. In the Q4, we achieved our strongest adjusted EBITDA results ever with $9,700,000 in positive adjusted EBITDA. Speaker 100:21:12To highlight exactly how much progress we have made in achieving profitability, our adjusted EBITDA margin of 12% in the 4th quarter compares with minus 10% in Q4 of 2021, which was the 1st full quarter of operations following our IPO. For the year, we reported negative $8,500,000 in adjusted EBITDA, an improvement of nearly 80% year over year. Our annual results represent 1100 basis points expansion in our operating margin from the prior year. I'm extremely pleased by our ability to execute on our profitability goals on an accelerated timeline and have set ourselves up for profitability on an adjusted EBITDA basis in 2024. We will continue to seek ways to strengthen our adjusted EBITDA results in 2024. Speaker 100:22:08In addition, we continue to maintain a healthy cash flow model and achieved record positive free cash flow of $7,100,000 in the 4th quarter. We generated positive free cash flow of $5,900,000 during 2023 and we believe we are in a great position to continue generating strong free cash flow and expect approximately $30,000,000 of positive free cash flow in 2024 assuming a constant capital allocation strategy. Moving to the balance sheet. We ended the year with approximately $475,000,000 of cash, deposits and investments on the balance sheet and we carry 0 debt. This amount represents a decline of approximately $3,000,000 from last year, primarily due to our repurchase activity in the Q4 of 2023 offset by the strong free cash flow activity mentioned previously. Speaker 100:23:05This leads me to the topic of capital allocation. On November 20, 2023, we received Israeli court approval begin executing our previously announced share repurchase program. Since receiving this approval, we have been aggressive in utilizing this program to take advantage of what we believe are attractive repurchasing opportunities. In the Q4, we repurchased approximately 3,000,000 shares for a total price of approximately $13,100,000 As of February 29, year to date, we have repurchased an additional 4,500,000 shares for a total price of 20,800,000 dollars We anticipate that our repurchasing activity will more than offset the dilutive impact of equity issuances associated with option exercises investing of RSUs in 2024. At valuation levels well below that of companies with similar financial profiles, we believe that we have a great opportunity to continue repurchasing our stock at attractive prices. Speaker 100:24:11We continue to believe that our strong balance sheet and liquidity position are strong underappreciated assets. We will continue to be thoughtful in how we utilize our capital to drive shareholder value, including executing on additional repurchases and opportunistic bolt on M and A. As we previously announced on February 13, as part of our effort to drive faster and more meaningful progress towards our margin targets, we made a decision to reduce our global workforce by approximately 6%. We expect to recognize net operating expense savings related to this reduction of approximately $6,000,000 on an annualized basis, subject to reinvestments, which is factored in our 2024 outlook. As a result of the reduction in force initiatives, we anticipate recording an incremental expense of approximately $2,000,000 primarily in the Q1 of 2024. Speaker 100:25:11This expense primarily relates to severance payments, employee benefits and other costs related to the reduction in force. Charges incurred in connection with the reduction in force are excluded from adjusted EBITDA guidance. The actual amounts mentioned could differ slightly from what is currently expected upon the completion of this reduction. We ended 2023 with 742 employees, a decline of 5% from the prior year and following the completion of this transaction we'll have approximately 700 employees. Now turning to our outlook. Speaker 100:25:48As we look forward to 2024, we currently anticipate revenue of between $323,000,000 $335,000,000 dollars or $329,000,000 to the midpoint. Consistent with the past 2 years, we anticipate that our growth will be driven primarily by new activity and at the midpoint of our guidance, we're forecasting a relatively similar net dollar retention rate as of 2023. The behavior of the macro environment either positively or negatively can impact our net dollar retention rate and may ultimately determine where we fall within our revenue range. In addition, we feel confident about the new business activity levels, which is supported by a more robust pipeline than at this point last year. Like we saw this year, the timing of when new merchants go live during the year can be difficult to predict and may have an impact on our calendar year revenues. Speaker 100:26:48For modeling purposes, we currently expect all of our quarters in 2024 to reflect a similar percentage of the total revenue as they did in 2023. Now let me discuss our adjusted EBITDA outlook. We currently expect adjusted EBITDA to be between $10,000,000 $17,000,000 or approximately $13,500,000 to the midpoint. The midpoint of our adjusted EBITDA guide represents additional margin expansion of approximately 700 basis points from the prior year, demonstrating leverage in the business model and the commitment to managing the business in a disciplined manner. Overall, I'm encouraged by our market positioning and executing on the elements within our operational control. Speaker 100:27:35Heading into 2024, we have set ourselves up to be a more productive and leaner company in a challenging environment And Ito and I remain excited by the continuous prospects for long term growth and our ability to deliver value to our shareholders. Operator, we're ready to take the first question please. Operator00:27:56Thank you. Our first question comes from the line of Will Nance with Goldman Sachs. Your line is now open. Speaker 400:28:23Hey, guys. I appreciate you taking the question and appreciate all the details on the long term targets by 2026. So maybe I'll kind of start there. I think just some kind of back of the envelope math, it seems like you can kind of hit the low end of that EBITDA margin target with kind of flattish gross margins, flattish OpEx and revenue growth in the low double digits. Like maybe you can kind of flush out like what kind of puts you at the lower end or the higher end and kind of what your planning scenarios over the next couple of years sort of look like across some of the key line items? Speaker 400:28:55I think that would be helpful. Speaker 300:28:58Hey, Will, Sharon. So look, I think there are a lot of different permutations across revenue, gross margin and OpEx that would get us to kind of various scenarios within that range. And I think that I just have confidence that as a management team quarter by quarter as we see how things are progressing, we understand the levers and how to get to those areas, whether it's kind of faster traction in some of the newer products, which help outperform on the margin side, whether it's some acceleration on the revenue growth. So again, a lot of different combinations to take us there. But if I look at the margin improvements this year, 1100 basis points, 24, guiding to 700, at the midpoint, I think we understand how to achieve those results in various conditions. Speaker 400:29:47Got it. That's helpful. So a lot of different ways to hit the range. Okay. And then maybe on the gross margin outperformance this quarter, just maybe you could dive a little bit deeper on that. Speaker 400:29:56It sounds like a couple of different factors contributing to that and at least some of that is carrying forward into the outlook into 2024. So I think the numbers were something like 300 or 400 basis points of outperformance. What would you kind of describe most of that to? And how should we think about kind of room for further improvements in the gross margin longer term? Speaker 300:30:17Yes. So I think the holistic story is, look, there was a lot of focus from the management, the employees post the Q3 fraud event to make sure that we focus and burn everything down. But really it's the technology platform that we've developed over the past few years that allowed us to It's a combination of the holiday season just being safer volumes in general. The fact that we had some of the go lives went live later in the quarter and newer merchants tend to start off with a higher chargeback rate. And in fact, I kind of encourage everyone to look at the supplemental material. Speaker 300:31:00I think there's a very illustrative chart that shows how performance improves for different cohorts over time. So I think all of those factors holistically together are kind of factored into the outperformance in the quarter. And we're very pleased. We do believe that some of that will carry forward. But I do want to kind of mention that this is best analyzed on an annual Speaker 400:31:22basis. Got it. Super helpful. Appreciate all the details on the supplement today as well. Thanks for taking the questions. Operator00:31:28Thank you. One moment for our next question please. Our next question comes from the line of Ramsey El Assal with Barclays. Your line is now open. Speaker 500:31:38Hi, good morning and thanks for taking my question. I wanted to ask about revenue retention and maybe ask you to comment a bit further on given the lower net dollar revenue retention this quarter, is that you mentioned primarily sort of macro and lower consumer spend is the driver. So I'm just trying to understand, is that sort of like a lower same store sales given macro pressure rather than customers reducing scope or it doesn't sound like exiting the platform, but just any more color you could provide on those dynamics around revenue retention would be helpful. Speaker 100:32:14Yes, sure. And thank you for the question. So we do disclose our net dollar retention on an annual basis, I believe, but there's a lot of lumpiness during the quarter, but on an annual basis, it presents like a good overall picture. I think some of the factors that are going into our net dollar retention this year compared to prior years since IPO, I think that net dollar retention has kind of hovered around 100 This year is a little bit higher than last year. But prior to our APO and just during even before call it, our net dollar retention rate was 110, 120 plus. Speaker 100:32:53And I would say the main factor there was some of the macro trends and some of the growth profile in our merchants at a different kind of macro environment. And since post COVID, we just haven't seen this type of growth. We're actually seeing some softness in different industries and in different areas, as we've mentioned. And that has been driving primarily some of kind of the fluctuations from our historical levels. Speaker 500:33:22Got it. Okay. And then one also broad macro question about the e commerce spending environment. What you're seeing now, what you're expecting in 2024 versus what we've seen in the past couple of years. I guess the question is, do you think that where are we now in terms of a normalized e commerce spending pattern for consumers? Speaker 500:33:42I know we've seen goods versus services and travel spending swing around and maybe a discretionary spending pull forward, other sort of cycles within cycles. I know this is kind of a tough question without a crystal ball, but where do you think we are now in terms of normalization? Or is this the new normal? Speaker 100:33:59I've definitely seen some normalization since in the past couple of years. I think that just seeing where our growth is coming out from this year, it's tickets and travel continues to be a strong category, but definitely we've seen some normalization from the past 2 years. And we've seen some healthy uptick in some of our other categories. As I mentioned, home and fashion, this is the addition of new merchants and just like stroll upsell activity is starting to be a positive trend for us, something that wasn't the case a year or 2 ago. So while we know, like just looking at our merchant spends, what we see on our end, I'll say that definitely it's heading towards normalization and more kind of healthy contribution from growth from a number of areas. Speaker 100:34:49But there's still definitely some softness. We've kind of mentioned some sub segments with high luxury fashion or sneakers. There's still areas that are continuing to be soft. And more broadly, just kind of looking through industry reports and understanding where we are, I think the macro environment continues still to be tougher in kind of in the face of rising interest rates. Now there is a prospect that these are going to stabilize or maybe start decreasing. Speaker 100:35:19And we're starting to see that some of our merchants that are public companies start to kind of talk about stabilization or even recovery to better trends in the back half of the year. Inflation just appeared to be sticky, but we've seen some normalization in prices, especially across tickets and travel. And hopefully, this can drive higher consumer demand. So all in all, I think that it's still somewhat volatile, but I think we're kind of like on the kind of closer hopefully to the light at the end of the tunnel with hopefully better prospects by the end of this year. Speaker 500:35:57Very helpful. Thank you very much. Operator00:36:00Thank you. One moment for our next question, please. Our next question comes from the line of Chris Kennedy with William Blair. Your line is now open. Speaker 600:36:10Good morning. Thanks for taking the question. Can you talk about some of the newer initiatives, the non chargeback guarantee products and services? You mentioned they don't represent a large portion of revenues today. Can you just talk about when you think they will move the needle? Speaker 300:36:28Yes. I think we have great momentum. So we mentioned that the revenue from them grew 3x in 2023 and that for specifically for our policy product in Q4, we saw almost over 50% of the go lives of the year went live. So we think the momentum is great. And they're also helping us generate more conversations, increase the win rates also on our core chargeback guarantee. Speaker 300:36:52And that helped us result in that kind of almost 80% win rate in the quarter. So we think they're already contributing meaningfully to our success. And I think that the momentum is going to carry forward into 2024 and we'll continue to see increased usage of them and we'll continue to solve more pain points and kind of get it in the hands of more and more clients. And I'm sure that more meaningful revenue uplift will come once we do that. Speaker 600:37:23Okay. Thank you. And then just real quickly going back to the net dollar retention, what levers do you have to drive to improve that go from 105% back to your historical average of 115% to 120%. Is there anything that you guys can do to drive improvement there? Thank you. Speaker 300:37:45Yes. I mean, look, if you just think about the way that that number is built, the more we upsell, cross sell and better retain our clients, the higher this number will be. We're definitely focused on executing on those paths. Just to highlight again that if we were to compare today's net dollar retention to that of the prior periods where it was higher, the biggest difference is in kind of the macro same stores category. Having said that again, we still focus on the things that are controlled in order to improve that. Speaker 600:38:18Thank you for taking the questions. Operator00:38:21Thank you. One moment for our next question please. Our next question comes from the line of Terry Tillman with Tuohy Securities. Your line is now open. Speaker 700:38:31Yes, good morning, Ito, Agi and Chad. Thanks for taking my questions. Nice to see the EBITDA progression. Just the first question, it's kind of a mouthful and then I had a follow-up for, Augie. But for you in terms of you guys have touted in the past this powerful ROI where it drives more revenue and also reduces costs around chargeback. Speaker 700:38:49I'm just curious if you take a step back, where are we in the penetration level for a modern kind of next gen chargeback guarantee platform adoption versus legacy approaches or review solutions, etcetera. I'm just kind of curious where you think we are in terms of penetration. And the second part of my question is, I think there was a remark about the pipeline being higher. Is this just the market, more people are willing to look at things or would you attribute it more to the platform go to market initiatives and the investments you've made Speaker 200:39:21in your sales and marketing? Speaker 700:39:22And then I had a follow-up for Agi. Speaker 300:39:26Hey, Terry. Thanks for that. So look, I think that let me dissect it into a few different ways. I think that on the platform side, and when I say platform, I include the value for something like policy and the dispute management. I think we're just at a stage where, honestly, the technology is catching up to the promise. Speaker 300:39:45So I think it's completely underpenetrated. And I think that some of the value that we're seeing that it's generating to merchants is not understood or kind of well played out in the market yet. For example, one of the kind of Q4 results that we had around policies and cutting item not received chargebacks basically by half or helping other merchants manage different parts of the business. When you think about just the chargeback guarantee component, while I'm proud of our accomplishments to date, it's still a relatively small portion of the overall e commerce volume. So I do think that is still a lot of runway to growth once we have kind of more traction and understanding of the value and we definitely see that increasing. Speaker 300:40:29More specifically to what's leading to the stronger pipeline, I think it's hard to isolate one specific thing. But when I think about the initiatives we've undertook over the past 2 years, like expanding our global go to market footprint and building the product platform, those are definitely contributing. You can see that in the 30% 40% growth respectively and kind of LATAM and APAC. You can see that in kind of the outperformance on the win rates based on the platform sales. You can see it on the actual platform traction. Speaker 300:41:03So it's probably a combination of all that resulting in kind of the global pipeline, improvements that we're seeing. Speaker 700:41:11That's really helpful. Thanks for all that color there. And I guess, Ajay, just for you in terms of free cash flow, I think you said about $30,000,000 for the year. Is there anything we should consider seasonality wise or maybe there's some cash kind of cash expenses because of the restructuring? Just trying to understand how we flow the $30,000,000 in the year. Speaker 700:41:27Thank you. Speaker 100:41:30Yes, Terry. I did generally say $30,000,000 for 2024. It's I don't have any more precise kind of spread. Maybe it's going to follow mostly some of the trends around adjusted EBITDA as well. And more particularly, probably Q4 is just tends to carry some of the receivables from Q1 tends to carry the receivables from Q4, so maybe some adjustments there as well. Speaker 100:41:58But nothing to provide more kind of more precise around that right now. Just on an annual basis around 30. Speaker 700:42:05Yes. Okay. Thank you. Operator00:42:07Thank you. One moment for our next question. Our next question comes from the line of Timothy Chioda with UBS. Your line is now open. Speaker 800:42:19Great. Thank you for taking the question. Looking at Slide 26 in the investor deck, and I appreciate that during the remarks earlier, you mentioned that it was a very Q4 heavy year in terms of new merchant activity. I believe you said about 1 third of new merchants boarded in Q4. You also noted the refined sales strategy and that the teams overall met the revenue goals for the year. Speaker 800:42:45From the chart, if there's any additional context on the 2023 cohort that you could provide, is it maybe that the sales teams met the goals this year a little bit more by gaining wallet share with existing customers relative to bringing on new logos? Is that a fair conclusion from looking at this table? Or if there's anything else that you could help us with related to Slide 26? That would be appreciated. Speaker 300:43:15Yes. I think the distribution between new and upsells is somewhat similar with prior years. So I don't think there's anything unique or different to call out in that regards. Speaker 800:43:29Okay. Okay. Thank you. Yes, I was just looking Speaker 900:43:31at the Speaker 800:43:33Go ahead, Agi. Sorry. Speaker 100:43:35Yes. Just to kind of point as well, it's relatively even between new and upsell. Speaker 800:43:43Okay, great. Okay, thank you for taking the question. Operator00:43:46Thank you. One moment for our next question, please. Our next question comes from the line of Brent Bracelin with Piper Sandler. Your line is now open. Speaker 1000:43:58Good morning. Thank you for taking the question here. Great to see the commitment to profitability here going forward. My question as we think about the growth profile the pipeline is a little strong growing this year versus last year. What's the algorithm to accelerate growth from here? Speaker 1000:44:30As you think about upside levers, is it going to be expanding customers at a faster pace? Is it going to be the new product cross sell? Just walk us through how you're thinking about maybe over a 3 year period, how you accelerate growth from here? Thanks. Speaker 300:44:48No, that's a great question. I mean, look, what we focus internally that we believe will lead to kind of faster growth rates is 1 selling more globally. So that's part of the international expansion, which we kind of highlighted the 30% 40% growth. 2nd is generating more revenue and more sales from the platform, from policy, dispute, account protection. So that would be number 2. Speaker 300:45:11And number 3 is making sure that that helps us win more core chargeback guarantee deals even in some of our kind of established markets, retaining merchants at a better rate even though it's very high today would also be meaningful. So I think those are all the areas within our scope of control that we're focused on, that we believe could lead to accelerated growth. Now obviously the macro being outside of our control, which can also lead to that. And to your kind of point, well, hey, if the pipeline and everything, what's different this year because the net dollar attention is picking up. I think that we tend to work on a slightly smaller amount of larger deals. Speaker 300:45:53I think we mentioned that we have over 50 accounts, each generates over $1,000,000 in revenue for us. And just the timing of when in the year those accounts go live can have a meaningful impact on the calendar year revenue. So that's also probably something to mention. Speaker 1000:46:10Fair enough. And then just back to that third point, the winning more chargeback deals with existing customers. What's your best guess, the percent of volume attached that you have across your largest customer base? Is it 50% of volumes? Is it 80% of volumes? Speaker 1000:46:30Any sort of level set for us as just we think about that third lever to accelerate growth where you're at today as a baseline? Speaker 300:46:40Sure. That's a great question. I mean, it's after a lot lots of ins and outs throughout the year, we're kind of around the 30%, 30% plus range, which is actually a bit similar to historical years. Speaker 1000:46:56Helpful color. My last question is really around automation. You mentioned several internal efforts to further automate some of the internal processes and procedures to be able to ramp capacity and drive leverage. Can you double click into the most the biggest change from an automation standpoint that you're seeing success with? That would be helpful. Speaker 1000:47:20Thanks. Speaker 300:47:22Sure. So I think we've created merchant, right. So it's something that you historically someone would actually have to look at the performance and maybe manage the models or the different thresholds. And just the fact that we were able to roll this out and have a high enough confidence in the performance of this platform allows us to onboard merchants pretty much at an endless scale, while maintaining the very kind of unique performance metrics that the chargeback guarantee model can provide. Speaker 1000:48:03Helpful color. Thank you. And great to see the commitment to profitable growth going forward. Thanks. Operator00:48:09Thank you. One moment for our next question. Our next question comes from the line of Reggie Smith with JPMorgan. Your line is now open. Speaker 900:48:19Hey, good morning. Thanks for taking the question. I joined late, so this may have been covered. But I was curious what, I guess, kind of broader ecom growth assumptions are embedded in your '24 guidance. And it sounds like you may have given longer term guidance. Speaker 900:48:40Maybe if you could talk about what you're thinking about over that horizon as well? And then, I guess, it's kind of implicit in your guidance, but like what's the internally, how do you guys think about the growth algorithm? Is it ecomplus, ecomtimesomeratio or what's the internal view there? And I have a follow-up. Thank you. Speaker 100:49:08Of course, Reggie. Thank you for the question. So just thinking about the first half of the year, it's the broader economy and kind of like picture. I don't think anything is much different than what we saw in 2023. Inflation continues to be sticky and consumer spending relying on more on credit. Speaker 100:49:30It's just potentially more of the same in the first half of the year, I think. And then going into the second half of the year, there's more optimism around potential stabilization or recovery. But again, too early to say right now. So we try to be kind of balanced in our approach. We talk to our merchants, we look at the industry reports and we factor in what we see. Speaker 100:49:59But potentially if things recover and they're much more optimistic and faster, that can be a positive effect. And if things continue to be kind of completely sluggish like last year, that can be probably more of like a neutral to negative effect depending on where we think about our guide. Speaker 900:50:24Got it. Okay. That's good. So basically assuming stability, I guess you called out highlighted several PolicyProtect implementations in the Q4. I was curious, was there a reason that they all kind of flipped on at the same time? Speaker 900:50:41And maybe talk a little bit about the lead time for that type of upsell. Is there a reason that the Q4 would be particularly strong? And did you have any view or insight of that coming ahead of time, so lead time? Thank you. Speaker 300:51:00I think we've made a lot of progress in the technology throughout the year and we've added more and more use cases. And as we've onboarded more merchants and have more testimonials and solve more use cases and understand better the ROI and how to sell it, it just naturally leads to better movement and traction. Specifically, these are cross sells mainly to existing merchants. So the additional integration is very simple. And the entire process from selling it to going live is not time consuming. Speaker 900:51:38Got it. And if I could sneak one more in, thinking about kind of the pipeline that you guys talked about and looking at kind of Slide 23 in the presentation, Is the same kind of mix are you seeing the same mix in terms of new pipelines? Does it kind of approximate the current volume mix? Are you seeing any pockets of strength in any particular geography that would deviate from historic for your existing billings? Speaker 300:52:12I think we continue to see more and more pipelines across the platform, continue to see it across the global areas where we have shown recent strength. So I would say it's diversified and reflective in kind of the overall performance of the business, the pipeline. So nothing unique to call out there. Speaker 900:52:35Roughly consistent with the current billing? Speaker 100:52:41Yes, I Speaker 300:52:41would say so. Speaker 200:52:43Thank you. Operator00:52:45Thank you. I'm currently showing no further questions at this time. I'd like to turn the call back over to Mr. Ito Gal, Founder and Chief Executive Officer for closing remarks. Speaker 300:52:56Thank you everyone for joining. The team and I are very excited for the year ahead and we look forward to updating you on our progress. Operator00:53:03This concludes today's conference call. Thank you for your participation. You may now disconnect. Everyone have a wonderful day.Read morePowered by