Riskified's Q2 2025: Unpacking Contradictions in Sales Performance, Product Revenue, and Competitive Strategy

Win rates and sales pipeline performance, new product revenue contribution, revenue growth and billing dynamics, competitive landscape and win rates, and AgenTek Commerce impact on fraud and AI shopping are the key contradictions discussed in Riskified's latest 2025Q2 earnings call.



Revenue and Gross Margin Trends:
- Riskify reported record second quarter revenue of $81.1 million, up 3% year over year, and GMV for the second quarter was $36.4 billion, reflecting a 45% increase year over year.
- The gross margin for the second quarter was approximately 50%, consistent with the first quarter but down from 53% in the prior year.
- Growth was primarily driven by sustained new business wins and upsell activity, while the decline in gross margin was primarily due to the ramping of merchants in emerging categories and geographies, which resulted in lower risk profiles.

Geographical and Vertical Growth:
- Consistent international growth in the second quarter was observed with seven of the top ten new logos coming from outside the US across four separate categories.
- The fashion and luxury category grew 18% year over year, driven by strong new business wins and upsell activity, despite some same store sales pressure.
- Growth in the money transfer and payments category was approximately 90% year over year, attributed to new merchant activity and momentum.

Operating Efficiency and Cash Flow:
- Non-GAAP operating expenses as a percentage of revenue declined from 50% to 47% year over year, reflecting ongoing leverage in the business model.
- Quarterly free cash flows increased to $5.3 million, up from $4.1 million in the prior year.
- The strong balance sheet and liquidity position allowed Riskify to authorize an additional 75 million share repurchase program.

AI and Product Innovation:
- Riskify launched a new refund abuse model, improving technical performance by at least 15%, which leverages behavioral features to evaluate abusive behavior on an identity level across the network.
- The company's strategic partnership with Human Security combines merchant AI agent visibility and risk intelligence expertise to enhance its AgenTi Commerce capabilities.
- Investments in product innovation and strategic partnerships are aimed at expanding the value proposition and market reach, enabling Riskify to stay ahead of emerging threats and market trends.