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Riskified Reports Strong 20% Year-over-Year Growth, Fueled by Key New Merchant Wins and Ongoing Momentum in Tickets and Travel

Further Raises Guidance and Financial Outlook for FY 2022

Riskified Ltd. (NYSE: RSKD) (the “Company”), a risk management platform enabling frictionless eCommerce, today announced financial results for the three and nine months ended September 30, 2022. The Company will host an investor call to discuss these results today at 8:30 a.m. Eastern Time.

“Building off of momentum from a strong first half of the year, we saw an acceleration in our top line growth to achieve a very strong third quarter. Our year-over-year growth more than doubled our second quarter 2022 year-over-year growth and our tickets and travel vertical remained an active and growing part of the business,” said Eido Gal, Co-Founder and Chief Executive Officer of Riskified.

“As we head towards the end of the year, I am excited by our enhanced Go-to-Market positioning and the increased traction we are seeing with new and existing merchants. We recently went live with our largest new merchant of the year, and are building a solid pipeline of new merchants and future upsell opportunities within our existing merchant base.”

Q3 2022 Business Highlights

  • Further Strengthened Leadership Position in Tickets & Travel Vertical: Riskified recently onboarded one of the world's largest secondary ticket marketplaces for live sports, concerts, theater, and events. We are reviewing nearly all of this merchant's eCommerce volume, which we believe further strengthens our positioning as a leader in the tickets and travel vertical.
  • Execution of Upsell Strategy Results in Strong Quarter of Activity: During the third quarter of 2022, Riskified achieved strong year-over-year growth in upsell activity. We saw robust activity across varying merchant sizes, with particular momentum from our merchants with more than $3 billion in online sales volumes per year. Our upsell activity was distributed across merchants in our more mature cohorts as well as newer logos. This positive momentum, with the addition of new logos, more than offset declines in the organic growth of some of our existing merchants, which we primarily attribute to the tougher macro-economic environment.
  • Meaningful Margin and Free Cash Flow Improvements Accelerate Path to Profitability: We saw a 33% year-over-year and sequential improvement in our Adjusted EBITDA during the third quarter. This led to a meaningful decline of our free cash outflows during the quarter as we continue to build towards sustainable profitability.
  • Further Increases to 2022 Revenue and Adjusted EBITDA Guidance: We are increasing our full year revenue outlook as a result of our record first nine month performance. In addition, through a further reduction in our budgeted expense base, we are improving our Adjusted EBITDA outlook for the full year of 2022 by approximately 18% from our previous upward guidance revision in August of 2022.
  • Hosted Riskified’s Annual Merchant Summit: Attended by over 100 merchant contacts and prospects across all major verticals, this multiday event focused on new business pipeline generation, information sharing with industry experts and potential partnership opportunities.

Q3 2022 Financial Performance Highlights

The following table summarizes our consolidated financial results for the three and nine months ended September 30, 2022 and 2021, in thousands except where indicated:

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

 

(unaudited)

 

(audited)

Gross merchandise volume ("GMV") in millions(1)

$

25,314

 

 

$

20,948

 

 

$

73,391

 

 

$

61,329

 

Increase in GMV year over year

 

21

%

 

 

 

 

20

%

 

 

Revenue

$

63,172

 

 

$

52,533

 

 

$

181,949

 

 

$

159,308

 

Increase in revenues year over year

 

20

%

 

 

 

 

14

%

 

 

 

 

 

 

 

 

 

 

Gross profit

$

32,679

 

 

$

24,283

 

 

$

93,653

 

 

$

86,213

 

Gross profit margin

 

52

%

 

 

46

%

 

 

51

%

 

 

54

%

 

 

 

 

 

 

 

 

Operating profit (loss)

$

(25,992

)

 

$

(27,590

)

 

$

(91,605

)

 

$

(32,589

)

Net profit (loss)

$

(25,869

)

 

$

(91,687

)

 

$

(92,161

)

 

$

(155,828

)

 

 

 

 

 

 

 

 

Adjusted EBITDA(1)

$

(9,182

)

 

$

(13,759

)

 

$

(36,254

)

 

$

(12,500

)

“Through focused expense discipline, we further flattened our expense base in the third quarter, achieving our strongest quarterly Adjusted EBITDA result of the year. Our long-term growth trajectory remains intact, and we believe that our efforts to optimize our cost structure should continue to have a meaningful impact on our bottom line,” said Aglika Dotcheva, Chief Financial Officer of Riskified.

“Looking ahead to the fourth quarter, we expect our broad-based and diversified business to continue driving strong revenue generation. Combined with our thoughtful efforts to manage our operating expenses, we expect to continue on our accelerated path to profitability.”

Financial Outlook

Our record first nine month performance and an expected solid fourth quarter of new revenue gives us confidence to raise the full-year revenue outlook. As such, we are increasing our revenue guidance for the year ending December 31, 2022 as follows:

  • Revenue between $257 million and $261 million, up from between $255 million and $258 million

In addition, during the prior quarter we initiated a plan to efficiently and thoughtfully reduce and optimize our operating expenses. We continued to successfully execute on this plan, and were successful in further reducing our expense base in the third quarter of 2022. We are diligently managing our expenses, while maintaining our long-term growth outlook. As a result, we are raising our Adjusted EBITDA guidance for the year ending December 31, 2022 as follows:

  • Adjusted EBITDA(2) between negative $47 million and negative $44 million, an improvement from between negative $57 million and negative $54 million

This revision represents an improvement of approximately 18% from our August guidance. Overall, we have improved our Adjusted EBITDA guidance by 33% from our initial guidance range provided in February 2022.

(1) GMV is a key performance indicator and Adjusted EBITDA is a non-GAAP metric. See “Key Performance Indicators and Non-GAAP Metrics” for additional information regarding this non-GAAP metric and “Reconciliation of Non-GAAP to GAAP Metrics” for a reconciliation of this non-GAAP metric to the most directly comparable GAAP metric.

(2) We are not able to provide a reconciliation of Adjusted EBITDA guidance for the fiscal year ending December 31, 2022 to net profit (loss) because certain items that are excluded from Adjusted EBITDA but included in net profit (loss), the most directly comparable GAAP financial measure, cannot be predicted on a forward-looking basis without unreasonable effort or are not within our control. In particular, we are unable to forecast the magnitude of share-based compensation expense and foreign currency transaction gains or losses as applicable without unreasonable efforts, and these items could significantly impact, either individually or in the aggregate, GAAP metrics in the future.

Conference Call and Webcast Details

The Company will host a conference call to discuss its financial results today, November 9, 2022 at 8:30 a.m. Eastern Time. A live webcast of the call can be accessed from Riskified’s Investor Relations website at ir.riskified.com. A replay of the webcast will also be available for a limited time at ir.riskified.com.

Key Performance Indicators and Non-GAAP Metrics

This press release and the accompanying tables contain certain key performance indicators and non-GAAP metrics: GMV, Adjusted EBITDA, non-GAAP gross profit, non-GAAP gross profit margin, non-GAAP cost of revenue, non-GAAP operating expenses by line item, Free Cash Flow, non-GAAP net profit (loss), and non-GAAP net profit (loss) per share. These non-GAAP metrics should not be construed as an inference that our future results will be unaffected by unusual or other items. Adjusted EBITDA, non-GAAP gross profit, non-GAAP gross profit margin, non-GAAP cost of revenue, non-GAAP operating expenses by line item, non-GAAP net profit (loss) and non-GAAP net profit (loss) per share have limitations as analytical tools in that they do not reflect certain cash costs that may recur in the future, including, among other things, cash requirements for costs to replace assets being depreciated and amortized or cash payments for taxes. Management compensates for these limitations by relying on our GAAP results in addition to using these non-GAAP metrics as supplemental measures of our performance. The non-GAAP metrics used herein are not necessarily comparable to similarly titled captions of other companies due to different methods of calculation. Non-GAAP financial metrics should not be considered in isolation, as an alternative to, or superior to information prepared and presented in accordance with GAAP. These metrics are frequently used by analysts, investors and other interested parties to evaluate companies in our industry. By providing these non-GAAP metrics together with a reconciliation to the most comparable U.S. GAAP measure, we believe we are enhancing investors' understanding of our business and our results of operations, as well as assisting investors in evaluating how well we are executing our strategic initiatives.

We define Gross Merchandise Volume ("GMV") as the gross total dollar value of orders received by our merchants and reviewed through our eCommerce risk management platform during the period indicated, including orders that we did not approve.

We define Adjusted EBITDA as net profit (loss) adjusted to remove the effects of the provision for income taxes, interest income, net, other income (expense), net, depreciation and amortization, share-based compensation expense, and payroll taxes related to share-based compensation.

We define non-GAAP gross profit as GAAP gross profit adjusted to remove the effects of depreciation and amortization, share-based compensation expense, and payroll taxes related to share-based compensation, if applicable. Non-GAAP gross profit margin represents Non-GAAP gross profit expressed as a percentage of revenue.

We define non-GAAP cost of revenue as GAAP cost of revenue adjusted to remove the effects of depreciation and amortization, share-based compensation expense, and payroll taxes related to share-based compensation, if applicable.

We define non-GAAP operating expenses by line item as GAAP operating expenses adjusted to remove the effects of depreciation and amortization, share-based compensation expense, and payroll taxes related to share-based compensation, where applicable.

We define Free Cash Flow as net cash provided by (used in) operating activities, less cash payments for property and equipment and capitalized software development costs.

We define non-GAAP net profit (loss), which is used to compute non-GAAP net profit (loss) per share, as GAAP net profit (loss) adjusted to remove the effects of unique or non-recurring items such as remeasurement losses on our convertible preferred share warrant liabilities and convertible preferred share tranche rights, as well as non-cash expenses such as depreciation and amortization, share-based compensation expense, and payroll taxes related to share-based compensation. We define non-GAAP net profit (loss) per share as non-GAAP net profit (loss) divided by non-GAAP weighted-average shares. We define non-GAAP weighted-average shares, which is used to compute non-GAAP net profit (loss) per share, as GAAP weighted average shares used to compute net profit (loss) per share, adjusted to reflect the ordinary shares issued in connection with the IPO that are outstanding as of the end of the period as if they were outstanding as of the beginning of the earliest period presented for comparability.

Adjusted EBITDA, non-GAAP gross profit, non-GAAP gross profit margin, non-GAAP cost of revenue, non-GAAP operating expenses by line item, Free Cash Flow, non-GAAP net profit (loss), and non-GAAP net profit (loss) per share are non-GAAP metrics that management and our board of directors use as a supplemental measure of our performance because they assist us in comparing our operating performance on a consistent basis, as they remove the impact of items that we believe do not directly reflect our core operations. We also use Adjusted EBITDA for planning purposes, including the preparation of our internal annual operating budget and financial projections, to evaluate the performance and effectiveness of our strategic initiatives and to evaluate our capacity to expand our business. Additionally, we provide Free Cash Flow because it is a non-GAAP liquidity measure that we believe provides useful information to management and investors about the amount of cash generated by the business that can be used for strategic opportunities, including investing in our business and strengthening our balance sheet. Free Cash Flow is limited, however, because it does not represent the residual cash flow available for discretionary expenditures. Free Cash Flow is not necessarily a measure of our ability to fund our cash needs.

See the tables below for reconciliations of these non-GAAP financial metrics to the most directly comparable GAAP metrics.

Forward Looking Statements

Certain statements in this press release may constitute “forward-looking” statements and information, within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995 that relate to our current expectations and views of future events. In some cases, these forward-looking statements can be identified by words or phrases such as “may,” “might,” “will,” “could,” “would,” “should,” “expect,” “plan,” “anticipate,” “intend,” “seek,” “believe,” “estimate,” “predict,” “potential,” “continue,” “contemplate,” “possible” or similar words. These forward-looking statements are subject to risks, uncertainties and assumptions, some of which are beyond our control. In addition, these forward-looking statements, including statements regarding our revenue and adjusted EBITDA guidance for fiscal year 2022, future growth potential in new industries and new geographies, internal modeling assumptions, expectations as to our new merchant pipeline and upsell opportunities, expectations as to the impact of cost reduction measures, and business plans and strategy, reflect our current views with respect to future events and are not a guarantee of future performance. Actual outcomes may differ materially from the information contained in the forward-looking statements as a result of a number of factors, including, without limitation, the following: our limited operating history and ability to manage our growth; our history of net losses and anticipated increasing operating expenses; our ability to achieve profitability; our ability to maintain and enhance our brand; our ability to attract new merchants, retain existing merchants and increase the sales of our products to existing enterprises; our dependence on the continued use of credit cards and other payment methods that expose our merchant to the risk of payment fraud; changes in laws and regulations related to the use of credit cards, such as PSD2, which have and may continue to impact our GMV and to change or reduce the use cases for our products; our ability to successfully implement our business plan in light of macroeconomic conditions, such as economic downturn, changes in consumer behavior (including as a result of COVID-19 related restrictions and macroeconomic conditions, including the rising inflationary environment), global supply chain issues and other factors that may impact eCommerce volumes and that may impact the demand for our services or have a material adverse impact on our and our business partners’ financial condition and results of operations; our ability to continue to improve our machine learning models or if our machine learning models contain errors or are otherwise ineffective or do not operate properly; our ability to predict our future revenue given our lengthy sales cycles; seasonality; our ability to operate in a highly competitive industry; merchant concentration; our ability to achieve desired operating margins; our compliance with a wide variety of U.S. and international laws and regulations; our ability to develop enhancements to our products; our dependence on our executive officers and senior management, and our ability to attract new talent, particularly in Israel; our limited experience in determining the optimal pricing for our products; our ability to obtain additional financing on favorable terms or at all; our reliance on Amazon Web Services; our ability to detect errors, defects or disruptions in our platform; our ability to protect our merchants' and their consumers’ personal or other data from a security breach and to comply with laws and regulations relating to consumer data privacy and data protection; our ability to expand into markets outside the United States; our ability to effectively expand our sales force to facilitate revenue growth; the concentration of our voting power as a result of our dual class structure; and other risk factors set forth in Item 3.D - “Risk Factors” in our Annual Report on Form 20-F, filed with the Securities and Exchange Commission ("SEC") on February 25, 2022, and other documents filed with or furnished to the SEC. These statements reflect management’s current expectations regarding future events and operating performance and speak only as of the date of this press release. You should not put undue reliance on any forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that future results, levels of activity, performance and events and circumstances reflected in the forward-looking statements will be achieved or will occur. Except as required by applicable law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.

Correction of Immaterial Error

In preparing the consolidated financial statements as of and for the year ended December 31, 2021, we identified an immaterial error in our previously issued Q3 2021 earnings release relating to the recognition of share-based compensation expense. Accordingly, the Q3 2021 figures presented herein include the correction of the error. We evaluated the error and determined that the related impacts were not material. The correction does not impact our 2021 results as presented in our Annual Report on Form 20-F, filed with the SEC on February 25, 2022.

About Riskified

Riskified empowers businesses to realize the full potential of eCommerce by making it safe, accessible, and frictionless. We have built a next-generation eCommerce risk management platform that allows online merchants to create trusted relationships with their consumers. Leveraging machine learning that benefits from a global merchant network, our platform identifies the individual behind each online interaction, helping merchants—our customers—eliminate risk and uncertainty from their business. We drive higher sales and reduce fraud and other operating costs for our merchants and strive to provide superior consumer experiences, as compared to our merchants’ performance prior to onboarding us. Learn more at riskified.com.

RISKIFIED LTD.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

 

 

As of

September 30, 2022

 

As of

December 31, 2021

 

(unaudited)

 

 

   

Assets

 

   

 

 

   

Current assets:

 

   

 

 

   

Cash and cash equivalents

$

294,853

 

 

$

418,143

 

Restricted cash

 

2,578

 

 

 

6,984

 

Short-term deposits

 

186,859

 

 

 

85,132

 

Accounts receivable, net

 

30,507

 

 

 

35,477

 

Prepaid expenses and other current assets

 

6,869

 

 

 

19,338

 

Total current assets

 

521,666

 

 

 

565,074

 

Property and equipment, net

 

18,827

 

 

 

16,968

 

Operating lease right-of-use assets

 

36,212

 

 

 

 

Deferred contract acquisition costs

 

13,149

 

 

 

11,630

 

Other assets, noncurrent

 

8,940

 

 

 

6,962

 

Total assets

$

598,794

 

 

$

600,634

 

Liabilities, Convertible Preferred Shares, and Shareholders’ Equity

 

   

 

 

   

Current liabilities:

 

   

 

 

   

Accounts payable

$

2,350

 

 

$

228

 

Accrued compensation and benefits

 

20,295

 

 

 

24,748

 

Guarantee obligations

 

9,767

 

 

 

12,112

 

Provision for chargebacks, net

 

10,711

 

 

 

12,020

 

Operating lease liabilities, current

 

6,488

 

 

 

 

Accrued expenses and other current liabilities

 

18,871

 

 

 

13,306

 

Total current liabilities

 

68,482

 

 

 

62,414

 

Operating lease liabilities, noncurrent

 

32,390

 

 

 

 

Other liabilities, noncurrent

 

7,535

 

 

 

9,359

 

Total liabilities

 

108,407

 

 

 

71,773

 

Shareholders’ equity:

 

   

 

 

   

Class A ordinary shares, no par value; 900,000,000 shares authorized as of September 30, 2022 and December 31, 2021; 94,981,604 and 75,909,531 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively

 

 

 

 

 

Class B ordinary shares, no par value; 232,500,000 shares authorized as of September 30, 2022 and December 31, 2021; 74,284,784 and 88,055,520 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively

 

 

 

 

 

Additional paid-in capital

 

831,909

 

 

 

775,249

 

Accumulated other comprehensive profit (loss)

 

(2,797

)

 

 

176

 

Accumulated deficit

 

(338,725

)

 

 

(246,564

)

Total shareholders’ equity

 

490,387

 

 

 

528,861

 

Total liabilities, convertible preferred shares, and shareholders’ equity

$

598,794

 

 

$

600,634

 

RISKIFIED LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share data)

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

 

(unaudited)

 

(unaudited)

Revenue

$

63,172

 

 

$

52,533

 

 

$

181,949

 

 

$

159,308

 

Cost of revenue

 

30,493

 

 

 

28,250

 

 

 

88,296

 

 

 

73,095

 

Gross profit

 

32,679

 

 

 

24,283

 

 

 

93,653

 

 

 

86,213

 

Operating expenses:

 

 

 

 

 

 

 

Research and development

 

17,452

 

 

 

14,251

 

 

 

53,512

 

 

 

38,384

 

Sales and marketing

 

20,534

 

 

 

19,512

 

 

 

66,555

 

 

 

46,996

 

General and administrative

 

20,685

 

 

 

18,110

 

 

 

65,191

 

 

 

33,422

 

Total operating expenses

 

58,671

 

 

 

51,873

 

 

 

185,258

 

 

 

118,802

 

Operating profit (loss)

 

(25,992

)

 

 

(27,590

)

 

 

(91,605

)

 

 

(32,589

)

Interest income (expense), net

 

3,123

 

 

 

145

 

 

 

5,116

 

 

 

214

 

Other income (expense), net

 

(1,133

)

 

 

(64,601

)

 

 

(1,209

)

 

 

(122,888

)

Profit (loss) before income taxes

 

(24,002

)

 

 

(92,046

)

 

 

(87,698

)

 

 

(155,263

)

Provision for (benefit from) income taxes

 

1,867

 

 

 

(359

)

 

 

4,463

 

 

 

565

 

Net profit (loss)

$

(25,869

)

 

$

(91,687

)

 

$

(92,161

)

 

$

(155,828

)

Other comprehensive profit (loss), net of tax:

 

 

 

 

 

 

 

Other comprehensive profit (loss)

 

121

 

 

 

 

 

 

(2,973

)

 

 

 

Comprehensive profit (loss)

$

(25,748

)

 

$

(91,687

)

 

$

(95,134

)

 

$

(155,828

)

 

 

 

 

 

 

 

 

Net profit (loss) per share attributable to Class A and B ordinary shareholders, basic and diluted

$

(0.15

)

 

$

(0.82

)

 

$

(0.55

)

 

$

(3.31

)

Weighted-average shares used in computing net profit (loss) per share attributable to Class A and B ordinary shareholders, basic and diluted

 

168,798,761

 

 

 

111,164,396

 

 

 

166,598,745

 

 

 

47,073,853

 

RISKIFIED LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

 

(unaudited)

 

(unaudited)

Cash flows from operating activities:

 

 

 

 

 

 

 

Net profit (loss)

$

(25,869

)

 

$

(91,687

)

 

$

(92,161

)

 

$

(155,828

)

Adjustments to reconcile net profit (loss) to net cash provided by (used in) operating activities:

 

 

 

 

 

 

 

Unrealized loss (gain) on foreign currency

 

504

 

 

 

(42

)

 

 

(1,191

)

 

 

(25

)

Provision for (benefit from) account receivable allowances

 

210

 

 

 

195

 

 

 

35

 

 

 

273

 

Depreciation and amortization

 

1,010

 

 

 

655

 

 

 

2,938

 

 

 

1,787

 

Amortization of deferred contract costs

 

1,642

 

 

 

1,107

 

 

 

4,536

 

 

 

2,845

 

Remeasurement of convertible preferred share warrant liabilities

 

 

 

 

64,401

 

 

 

 

 

 

101,413

 

Remeasurement of convertible preferred share tranche rights

 

 

 

 

 

 

 

 

 

 

21,260

 

Share-based compensation expense

 

15,711

 

 

 

13,176

 

 

 

52,234

 

 

 

18,302

 

Non-cash operating lease right-of-use asset changes

 

1,161

 

 

 

 

 

 

3,299

 

 

 

 

Changes in accrued interest on short-term deposits

 

(319

)

 

 

 

 

 

(974

)

 

 

 

Ordinary share warrants issued to a customer

 

384

 

 

 

362

 

 

 

1,151

 

 

 

394

 

Other

 

29

 

 

 

30

 

 

 

136

 

 

 

30

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

Accounts receivable

 

(2,490

)

 

 

2,336

 

 

 

4,860

 

 

 

13,357

 

Deferred contract acquisition costs

 

(2,510

)

 

 

(1,462

)

 

 

(5,008

)

 

 

(3,707

)

Prepaid expenses and other assets

 

119

 

 

 

(4,376

)

 

 

7,054

 

 

 

(10,928

)

Accounts payable

 

544

 

 

 

573

 

 

 

2,151

 

 

 

1,185

 

Accrued compensation and benefits

 

1,763

 

 

 

1,907

 

 

 

(3,822

)

 

 

2,241

 

Guarantee obligations

 

(3

)

 

 

(1,457

)

 

 

(2,345

)

 

 

(3,991

)

Provision for chargebacks, net

 

1,077

 

 

 

1,208

 

 

 

(1,309

)

 

 

(2,387

)

Operating lease liabilities

 

1,385

 

 

 

 

 

 

(985

)

 

 

 

Accrued expenses and other liabilities

 

2,870

 

 

 

1,528

 

 

 

7,247

 

 

 

7,522

 

Net cash provided by (used in) operating activities

 

(2,782

)

 

 

(11,546

)

 

 

(22,154

)

 

 

(6,257

)

Cash flows from investing activities:

 

 

 

 

 

 

 

Purchases of short-term deposits

 

(143,789

)

 

 

(85,000

)

 

 

(335,753

)

 

 

(110,000

)

Maturities of short-term deposits

 

149,789

 

 

 

24,979

 

 

 

235,000

 

 

 

38,985

 

Purchases of property and equipment

 

(434

)

 

 

(3,123

)

 

 

(3,413

)

 

 

(4,217

)

Capitalized software development costs

 

(563

)

 

 

(238

)

 

 

(1,535

)

 

 

(728

)

Net cash provided by (used in) investing activities

 

5,003

 

 

 

(63,382

)

 

 

(105,701

)

 

 

(75,960

)

Cash flows from financing activities:

 

 

 

 

 

 

 

Proceeds from issuance of convertible preferred shares and warrants, net of issuance costs

 

 

 

 

 

 

 

 

 

 

26,781

 

Proceeds from exercise of share options

 

828

 

 

 

1,908

 

 

 

3,009

 

 

 

2,467

 

Proceeds from initial public offering, net of underwriting discounts and commissions

 

 

 

 

392,273

 

 

 

 

 

 

392,273

 

Proceeds from cash exercise of series E-1 warrants

 

 

 

 

6,489

 

 

 

 

 

 

6,489

 

Payments of deferred offering costs

 

(14

)

 

 

(1,345

)

 

 

(204

)

 

 

(3,375

)

Net cash provided by (used in) financing activities

 

814

 

 

 

399,325

 

 

 

2,805

 

 

 

424,635

 

Net increase (decrease) in cash, cash equivalents, and restricted cash

 

3,035

 

 

 

324,397

 

 

 

(125,050

)

 

 

342,418

 

Effects of exchange rates on cash, cash equivalents, and restricted cash

 

(722

)

 

 

 

 

 

(2,646

)

 

 

 

Cash, cash equivalents, and restricted cash—beginning of period

 

295,118

 

 

 

124,678

 

 

 

425,127

 

 

 

106,657

 

Cash, cash equivalents, and restricted cash—end of period

 

297,431

 

 

 

449,075

 

 

 

297,431

 

 

 

449,075

 

Reconciliation of Non-GAAP to GAAP Metrics

The following tables reconcile non-GAAP metrics to the most directly comparable GAAP metric and are presented in thousands except for share and per share amounts.

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

 

(unaudited)

 

(unaudited)

Net profit (loss)

$

(25,869

)

 

$

(91,687

)

 

$

(92,161

)

 

$

(155,828

)

Provision for (benefit from) income taxes

 

1,867

 

 

 

(359

)

 

 

4,463

 

 

 

565

 

Interest (income) expense, net

 

(3,123

)

 

 

(145

)

 

 

(5,116

)

 

 

(214

)

Other (income) expense, net

 

1,133

 

 

 

64,601

 

 

 

1,209

 

 

 

122,888

 

Depreciation and amortization

 

1,010

 

 

 

655

 

 

 

2,938

 

 

 

1,787

 

Share-based compensation expense

 

15,711

 

 

 

13,176

 

 

 

52,234

 

 

 

18,302

 

Payroll taxes related to share-based compensation

 

89

 

 

 

 

 

 

179

 

 

 

 

Adjusted EBITDA

$

(9,182

)

 

$

(13,759

)

 

$

(36,254

)

 

$

(12,500

)

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

 

(unaudited)

 

(unaudited)

GAAP gross profit

$

32,679

 

 

$

24,283

 

 

$

93,653

 

 

$

86,213

 

Plus: depreciation and amortization

 

177

 

 

 

159

 

 

 

521

 

 

 

435

 

Plus: share-based compensation expense

 

183

 

 

 

73

 

 

 

477

 

 

 

136

 

Plus: payroll taxes related to share-based compensation

 

2

 

 

 

 

 

 

4

 

 

 

 

Non-GAAP gross profit

$

33,041

 

 

$

24,515

 

 

$

94,655

 

 

$

86,784

 

Gross profit margin

 

52

%

 

 

46

%

 

 

51

%

 

 

54

%

Non-GAAP gross profit margin

 

52

%

 

 

47

%

 

 

52

%

 

 

54

%

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

(unaudited)

 

(unaudited)

GAAP cost of revenue

$

30,493

 

$

28,250

 

$

88,296

 

$

73,095

Less: depreciation and amortization

 

177

 

 

159

 

 

521

 

 

435

Less: share-based compensation expense

 

183

 

 

73

 

 

477

 

 

136

Less: payroll taxes related to share-based compensation

 

2

 

 

 

 

4

 

 

Non-GAAP cost of revenue

$

30,131

 

$

28,018

 

$

87,294

 

$

72,524

 

 

 

 

 

 

 

 

GAAP research and development

$

17,452

 

$

14,251

 

$

53,512

 

$

38,384

Less: depreciation and amortization

 

387

 

 

199

 

$

1,120

 

$

551

Less: share-based compensation expense

 

2,538

 

 

951

 

$

7,421

 

$

2,789

Non-GAAP research and development

$

14,527

 

$

13,101

 

$

44,971

 

$

35,044

 

 

 

 

 

 

 

 

GAAP sales and marketing

$

20,534

 

$

19,512

 

$

66,555

 

$

46,996

Less: depreciation and amortization

 

245

 

 

178

 

 

731

 

 

484

Less: share-based compensation expense

 

3,872

 

 

4,407

 

 

14,076

 

 

6,204

Less: payroll taxes related to share-based compensation

 

41

 

 

 

 

99

 

 

Non-GAAP sales and marketing

$

16,376

 

$

14,927

 

$

51,649

 

$

40,308

 

 

 

 

 

 

 

 

GAAP general and administrative

$

20,685

 

$

18,110

 

$

65,191

 

$

33,422

Less: depreciation and amortization

 

201

 

 

119

 

$

566

 

$

317

Less: share-based compensation expense

 

9,118

 

 

7,745

 

$

30,260

 

$

9,173

Less: payroll taxes related to share-based compensation

 

46

 

 

 

 

76

 

 

Non-GAAP general and administrative

$

11,320

 

$

10,246

 

$

34,289

 

$

23,932

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

 

(unaudited)

 

(unaudited)

Net cash provided by (used in) operating activities

$

(2,782

)

 

$

(11,546

)

 

$

(22,154

)

 

$

(6,257

)

Purchases of property and equipment

 

(434

)

 

 

(3,123

)

 

 

(3,413

)

 

 

(4,217

)

Capitalized software development costs

 

(563

)

 

 

(238

)

 

 

(1,535

)

 

 

(728

)

Free Cash Flow

$

(3,779

)

 

$

(14,907

)

 

$

(27,102

)

 

$

(11,202

)

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

 

(unaudited)

 

(unaudited)

Net profit (loss)

$

(25,869

)

 

$

(91,687

)

 

$

(92,161

)

 

$

(155,828

)

Remeasurement of convertible preferred share warrant liabilities

 

 

 

 

64,401

 

 

 

 

 

 

101,413

 

Remeasurement of convertible preferred share tranche rights

 

 

 

 

 

 

 

 

 

 

21,260

 

Depreciation and amortization

 

1,010

 

 

 

655

 

 

 

2,938

 

 

 

1,787

 

Share-based compensation expense

 

15,711

 

 

 

13,176

 

 

 

52,234

 

 

 

18,302

 

Payroll taxes related to share-based compensation

 

89

 

 

 

 

 

 

179

 

 

 

 

Non-GAAP net profit (loss)

$

(9,059

)

 

$

(13,455

)

 

$

(36,810

)

 

$

(13,066

)

 

 

 

 

 

 

 

 

Net profit (loss) per share attributable to Class A and B ordinary shareholders, basic and diluted

$

(0.15

)

 

$

(0.82

)

 

$

(0.55

)

 

$

(3.31

)

Non-GAAP net profit (loss) per share attributable to Class A and B ordinary shareholders, basic and diluted

$

(0.05

)

 

$

(0.08

)

 

$

(0.22

)

 

$

(0.08

)

 

 

 

 

 

 

 

 

Weighted-average shares used in computing net profit (loss) per share attributable to Class A and B ordinary shareholders, basic and diluted

 

168,798,761

 

 

 

111,164,396

 

 

 

166,598,745

 

 

 

47,073,853

 

Add: Non-GAAP weighting adjustment for Class A and B ordinary shares issued in connection with IPO

 

 

 

 

50,788,044

 

 

 

 

 

 

113,924,282

 

Weighted-average shares used in computing non-GAAP net profit (loss) per share attributable to Class A and B ordinary shareholders, basic and diluted(1)

 

168,798,761

 

 

 

161,952,440

 

 

 

166,598,745

 

 

 

160,998,135

 

 

(1) Weighted-average shares used in computing non-GAAP net profit (loss) per share reflect the Class A and B ordinary shares issued in connection with the IPO that are outstanding as of the end of the period as if they were outstanding as of the beginning of the earliest period presented for comparability.

 

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