Online fraud fighter Riskified saw shares slip nearly 15% Thursday following the release of its quarterly earnings results, a rare setback for the Israel-based company that had a successful IPO launch in July and renewed its partnership with e-commerce titan Wayfair earlier this month.
Riskified shares fell from $35.73 to a low of $30.09 Thursday. Despite some positive indications of year-over-year growth and international expansion, widened losses quelled the company's momentum following the report.
Quarterly revenue was $55.7m (£40.2), up nearly $20m (£14.4m) over last year's second quarter, but a net loss of $1.41 per share compared with $0.52 per share in 2020’s Q2 dampened excitement.
Thursday’s price drop represented a change of fortune for Riskified, which saw its late July IPO raise generate over $350m and beat expectations handily in terms of share price and extended its agreement with Wayfair in early September.
"We are very proud of the positive market reception to our recent IPO and excited for the journey ahead as we continue to benefit from several structural tailwinds that we expect to drive continued demand for our platform," Riskified CEO and co-founder Eido Gal said in a statement.
Despite Thursday’s stumble, revenue increases as well as deeper market penetration in the United Kingdom, China and Australia were touted as encouraging signs. Gross profit was also up, though the increase in net loss increase of $13.2m seemed to steer market reaction.
"The strong 47% growth in revenue and 55% growth in gross merchandise volume we delivered in Q2 2021, as compared to Q2 2020, underscore that many of the world's largest online merchants are increasingly recognising Riskified's machine learning solution as the new paradigm in fraud management," Gal said.
Ongoing partnerships to prevent and diminish the impact of fraud as well as improve payment efficiency have seen Riskified trusted by the likes of Wish and Finish Line.
For the third quarter of 2021, Riskified projected revenue between $50.7m and $51.2m. For 2021, total revenue projects in the $225m range, with adjusted EBITDA losses estimated between $25.3m and $26.3m.
“We intend to leverage our proprietary technology, scaled merchant network, and the powerful data we access to continue to drive return on investment for our merchants and create frictionless shopping experiences for consumers,” said Riskified CFO Aglika Docheva. “In particular, we are excited to continue our targeted global expansion plans, with the goal of entering into several major geographies in the coming years.”