Good day, and thank you for standing by. Welcome to the Riskified fourth quarter 2021 earnings call. At this time, all participants are in listen-only mode. After the speaker's presentation, there'll be a question-and-answer session. To ask a question during the session, you'll need to press star one on your telephone. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Chris Mammone, Investor Relations for Riskified. Please go ahead.
Good morning, and thank you for joining us today. Riskified is hosting this call to discuss its fourth quarter and full year 2021 financial results for the period ended December 31, 2021. Participating on today's call are Eido Gal, Co-Founder and CEO, and Aglika Dotcheva, Chief Financial Officer. Earlier this morning, Riskified issued a press release announcing its fourth quarter and year-end results. A copy of this press release has been furnished with the Securities Exchange Commission on Form 6-K. Before we begin, I want to remind you that matters discussed on today's call will include forward-looking statements related to our operating performance, financial goals, and business outlook, which are based on management's current beliefs and assumptions and are not guarantees of future performance. You should not put undue reliance on any forward-looking statements.
Please note that these forward-looking statements reflect our opinions as of the date of this call, and except as required by applicable law, we undertake no obligation to revise this information as a result of new developments that may occur. Forward-looking statements are subject to various risks, uncertainties, and other factors, some of which are beyond our control that could cause our actual results to differ materially from those expected and described today. In addition, we are subject to a number of risks that may significantly impact our business and financial results. For a more detailed description of our risk factors, we encourage you to read Riskified's periodic and other SEC filings, where you will see a discussion of factors that could cause the company's actual results to differ materially from these statements. A replay of this conference call will be available on our website under the Investor Relations section.
I would also like to remind you that during the call, we will discuss some non-GAAP measures when talking about Riskified's performance. The presentation of this financial information is not intended to be considered in isolation or as a substitute for or superior to the financial information prepared and presented in accordance with GAAP. We use these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. We believe that these measures provide useful information about operating results, enhance the overall understanding of past financial performance and future prospects, and allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making.
You can find the reconciliation of those non-GAAP measures to the nearest comparable GAAP measures in the earnings press release issued and furnished on Form 6-K today and in our prior filings with the SEC, all of which is posted on our website at ir.riskified.com. I will now turn the call over to Eido Gal, Riskified's Co-Founder and CEO.
Thanks, Chris, and hi, everyone. Before we get into the results, I'd like to thank the Riskified team for an amazing year. Everything I can report on today is a testament to the hard work of our team and their ingenuity, and we are tremendously grateful for all their contributions. Now, let's move on to the main financial highlights for the fourth quarter and full year. In the fourth quarter, we reviewed $27.8 billion GMV for our merchants, up 23% year-over-year, achieving revenue of $69.8 million, up 22% year-over-year. Full year GMV was $89.1 billion, up 40% year-over-year, and revenues were $229.1 million, up 35% year-over-year.
These results reflect the impact of continued organic growth within our customer base, combined with the addition of new customers as well as new segments from existing customers. Overall, we were pleased with our results. Continuous improvements in our machine learning platform drove meaningful financial benefits both for Riskified and our merchants. We achieved gross margins of 53% for the quarter and 54% for the year. Over the last three years, we were able to consistently improve the chargeback to billings ratio for each cohort, demonstrating the strength of our AI and our scalable financial model. Adjusted EBITDA was -$7 million for the quarter and -$19.5 million for the year, reflecting the global investments we've made to capture the larger international market opportunity and accelerated product development cycles.
Our North Star has always been to create outsized value for our customers, and we believe that we have been successful in monetizing that value. One of the most important metrics that we track to validate our progress here is our annual dollar retention rate. In 2021, our annual dollar retention was 99%. For each of the last three years, it's been 98% or higher. For approximately 90% of customer accounts, representing nearly 95% of revenue, we were able to increase year-over-year approval rates, reduce chargeback rates or both. This highlights the win-win nature of our platform. This focus on generating outsized value to our customers has allowed us to penetrate existing customers more and more over time. In 2021 alone, six of our 20 largest customers chose to submit additional segments of their e-commerce volume to us.
Our customers represent a very significant upsell opportunity. There is over $300 billion in GMV available for upsell from our existing clients. This $300 billion represents over 3x our 2021 figures. These upsell opportunities are a strategic priority for us, and we have a strong track record of capturing additional wallet share over time. So far, we have increased our billings from our mature cohorts by 200%, and we believe we can replicate this trend with our more recent cohorts as well. Over the course of 2021, including Q4, we added several prominent online retailers to our platform across a wide variety of industries. We expect many of these clients will expand the share of transactions we review as we continue to demonstrate value.
In our emerging verticals, we added customers including Binance, one of the world's leading blockchain ecosystem and cryptocurrency infrastructure providers. Additionally, we added a global remittance and payments company with more than $5 billion in annual revenue. In our established verticals, we added customers including Saks OFF 5TH, the premier luxury off-price destination, one of the world's five largest omni-channel retailers, and one of the world's five largest travel retailers. We are able to land and expand with the world's largest online retailer by holistically solving complex technological problems for them. In this vein, we were able to deliver multiple new use cases and product improvements throughout 2021 and Q4 specifically. Most notably, we recently expanded Chargeback Guarantee to also support ACH. Q4 represented the first quarter when we began to process meaningful ACH volumes.
As part of the initiative to support ACH, we are now able to guarantee a broader range of payment types beyond credit cards and PayPal. This expanded functionality allows merchants accepting ACH payments to realize more profitable revenue while also delivering instant settlement times to their customers. We continue to evolve our partner-driven sales efforts with a growing number of partners embedding our Chargeback Guarantee offering directly into their respective products. Some of the many examples include payment gateways, enterprise-focused e-commerce platforms, and one-click checkout products. This is an exciting new sales channel that should help us reach our target customers even faster. We expanded several new products to make them more relevant for our largest customers. Most notably, we expanded our Policy Protect offering to support INR and refund claims.
Policy Protect is used to block abusive customers and is now screening billions of dollars worth of GMV annually. We expanded our ability to dispute chargebacks on our merchants' behalf, even when those chargebacks are not guaranteed by Riskified. Multiple customers started using Riskified to fight disputed payments on their behalf, even for reasons other than payment fraud. Drawing upon all these accomplishments in 2021, we are even more excited about the long-term potential and opportunity ahead of us. By our estimates, the $89 billion in GMV we reviewed in 2021 still represents only 2% of total global e-commerce expenditures. The remaining 98% of this rapidly growing market almost exclusively uses non-guaranteed alternatives, predominantly risk scoring products in conjunction with manual human review.
Given the size of this opportunity, we are expanding our presence into most major international markets, and we continue to invest in additional products that solve similar problems for our customers using Riskified's world-class machine learning capabilities. We believe that our Chargeback Guarantee inherently provides much more value as compared to risk scoring products managed by internal teams augmented with manual human review. Merchants no longer need to deploy time, resources, and budget to solving a major pain point that is not their core competency. As a result, we believe that internally managed processes will become obsolete over time. To our knowledge, no other company guarantees e-commerce volumes at a comparable scale anywhere in the world. By using Riskified, our merchants benefit from higher guaranteed approval rates, lower predictable fees, and a fast, frictionless checkout process that delivers superior consumer experiences.
Moreover, this value proposition is directly proportional to the size of our merchant network, meaning that our performance guarantees only could become more compelling as we grow. I have never been more excited about the road ahead as we enter 2022 with an incredible product and an amazing team. The ROI we're able to deliver for our customers is tremendously compelling, and there's a huge untapped market opportunity ready for us to capture as we scale our efforts globally. Now I'd like to turn it over to Aglika to discuss our Q4 and year-end results, as well as to share more perspectives about our growth expectations for 2022.
Thank you, Eido, and everyone for joining today's call. As Eido already mentioned, our GMV for the fourth quarter was $27.8 billion, reflecting a 23% year-over-year increase. Revenue for the fourth quarter was $69.8 million or 22% year-over-year. The growth in GMV and revenue was driven primarily by the continued expansion of our platform from both new and existing merchants, as well as organic e-commerce growth flowing through our model. Despite slower global year-over-year commerce growth due to the easing of COVID restrictions and supply chain issues, our business benefited from an increase in tickets and travel recovery, and this highlights the importance of our diverse merchant portfolio.
The impact of PCI DSS was in line with our expectations. For the full year, GMV was $89.1 billion, up 40%, and revenue was $229.1 million, up 35% year-over-year. We continue to diversify across the globe as we expanded our portfolio with year-over-year growth in every region. I'd like to mention two regions in particular that have driven faster global expansion. First is our accelerated growth in EMEA, which was primarily driven by the sharp recovery of the travel industry. Secondly, billings growth in APAC nearly doubled year-over-year in 2021 as a result of our continued penetration in this market. During 2021, we saw continued diversification across industries. Fashion and luxury goods continue to grow and remain our largest contributor to billings.
However, their billings concentration reduced due to the accelerated penetration in other industries and the addition of new ones. Tickets and travel recovered nicely and more than doubled compared to prior year. Payments, money transfer, and crypto is a new emerging industry in 2021, where we added a number of merchants, including a global money movement firm company with more than $5 billion in annual revenues, and Binance, one of the world's largest leading blockchain ecosystems and cryptocurrency infrastructure providers. Our take rate for the full year and for Q4 was 26 basis points, compared to 27 basis points in the prior year. The main reason for the change is more favorable terms granted for higher volumes and long-term contracts, offset by new merchants onboarded with higher take rates, both as part of our land and expand strategy.
It's important to note that we continue to treat take rate as an outcome and not a driver of our business. Now let me discuss gross profit margin. As we mentioned in the past, gross profit margin is a metric that is best analyzed on an annual basis, as individual quarters can experience variability due to changes in the industry mix of our billings and revenue, seasonality factors, the ramping of new merchants, and the varying risk profiles of transactions approved. Our gross profit margin for the fourth quarter was 53%, down from 58% in Q4 of 2020, and up from 46% in the previous quarter. The decrease year-over-year was driven primarily by our expansion into new industries and regions, increase of the tickets and travel industry as a percentage of total billings, as well as the onboarding of new merchants.
Some of the increase attributable to those new merchants and industry should naturally decrease over time as our machine learning models gather more data on unique fraud patterns. We've provided some supplemental cohort information as part of today's release to illustrate this dynamic. The improvement compared to Q3 was mainly driven by the seasonality of each quarter, which follows the same normalized historical trend. As we mentioned in our prior call, Q3 tends to carry higher risk driven by higher risk level in tickets and travel during peak season. On the other hand, Q4 tends to carry a lower risk profile, mainly due to the holiday shopping season, including high volume e-commerce events such as Black Friday and Cyber Monday, which mostly attract legitimate online shopping activity. Our gross profit margin for 2021 is 64%, which was generally consistent with 55% in 2020.
Total non-GAAP operating expenses for the fourth quarter were $43.9 million, up 78% year-over-year. As Eido mentioned, we're investing in research and development as we continue to expand our platform, add new features and functionality in support of our growing merchant base across new geographies and industries, and build new value-added products for our merchants. Sales and marketing, as we heavily invested in our go-to-market activities and capabilities, including expansion of our sales team to meet increased global demand as part of our robust geographic expansion. General administrative costs, which reflected the first full quarter of public company expenses, including nearly $1 million in D&O insurance for the fourth quarter, regulatory and compliance costs, and other associated expenses. For the full year, total non-GAAP operating expenses were $143.2 million, up 58% year-over-year.
These significant investments, coupled with the incremental costs of building public company infrastructure, drove decreases in Adjusted EBITDA. Adjusted EBITDA for the fourth quarter was negative $7 million, compared to positive $8.5 million in Q4 of 2020. Adjusted EBITDA for the full year was negative $19.5 million, compared to positive $2.5 million in 2020. In terms of our liquidity position, it remains very strong. We ended the fourth quarter with $510.3 million of cash and cash equivalents, restricted cash and short-term deposits, and do not carry any debt. Our gross capital expenditures were $14.3 million for the period, higher than our normal run rate, as we invested in new offices in Tel Aviv.
Excluding this one-time investment, CapEx spend was $1.3 million, which is consistent with our expenditures in the last two years and reflective of our asset light model. Now turning to guidance for 2022. We're off to a good start to the year, but expect to continue to see some short-term influences from slower e-commerce activity. As has already been discussed, we're also working through the SCA and PSD2, which has now largely been implemented across the European Union.
As Eido mentioned, we remain excited about the long-term growth prospects of this business. As such, we do plan to make incremental investments in our platform, geographic expansion, and new products this year. For the full year 2022, we anticipate revenue between $254 million and $257 million, and negative adjusted EBITDA between $69 million and $66 million. For modeling purposes, we expect a share count of approximately 166 million weighted average shares outstanding. We expect our Q2 revenue growth rate to be lower than Q1, and then our growth rate to accelerate in the back half of the year. For the full year, we expect gross margin to be at or above 51%. We anticipate adjusted gross margin to fluctuate on a quarterly basis, consistent with our normalized pre-COVID historical trends.
It is our experience that Q1 and Q4 tend to have adjusted gross margins higher than the full year number, with Q2 and Q3 typically coming in below that annual number. Compared to pre-pandemic levels, our full year gross margin represents a 1 percentage point improvement. Compared to 2021, the gross margin is expected to be 3 percentage points lower. The delta is driven by two factors. One is an industry mix shift from an increase in lower margin industries such as tickets and travel, which is recovering through 2022, while other higher margin industries are decreasing as a result of the reopening. The second factor relates to one-time investments in infrastructure optimization that we expect to benefit from beginning in 2023. That concludes our prepared remarks. We look forward to continuing to report our progress to you in the coming quarters.
Operator, we're ready to take the first question please.
Thank you. As a reminder, to ask a question, you'll need to press star one on your telephone. To withdraw your question, press the pound key. Our first question comes from Josh Beck with KeyBanc. Your line is open.
Thank you for taking the question, and encouraging to see the nice seasonal bump there that we like to see in Q4. You know, I really wanted to ask about the pipeline. You obviously talked about really good activity in the APAC region. You also talked about real momentum across emerging or new verticals like payments and crypto. It really seems pretty broad-based. Help us understand, right, where the most activity is taking place with respect to new customer conversations. Probably can't quantify it, but maybe help us compare this to a prior period or something like that, just to give us a sense of the magnitude. That'd be great.
Hey, Josh. Thanks for the question. I think you're right. We've never seen, you know, such a big breadth and scope of new opportunities. Like you mentioned, it's really a combination as we're expanding globally into these new geographies. Our sales force, they're able to generate new opportunities, again, because these new geographies have issues, have demand. As we're expanding our product, you know, to support different payment methods like ACH or like new categories like crypto or remittance, we're seeing an increase of pipeline activity there, right? Even when we think about some of the product expansion opportunities, you know, the general, you know, core hub merchants we already have within Riskified. I think that's all kind of combining to create a very good and healthy demand environment for us.
Excellent. You know, with respect to the outlook, we've obviously seen various reports from different e-commerce companies, and there certainly are macro factors out there, the reopening effects, supply chain, inflation, the list goes on. So I'm just curious, as you went to build out your 2022 forecast, how did you try to embed some of these macro factors?
Sure. You know, obviously we had kind of 30+% growth this year. We shared historically a framework of kind of 25%-30% growth, and the guidance for this year is below that. Really, you know, what makes up our revenue is both a combination of new clients and the organic growth of our existing base. When we think about our guide for 2022, new revenue is within our framework of growth, right? Really the delta between our guide and the previously shared framework is a result of muted e-commerce volumes and the impact of PSD2, right? Muted e-commerce volumes, that could be, you know, related to inflationary pressure, related to, you know, supply chain issues, related to reopening, shifting away from volume, right? We pull that into the muted e-commerce volumes.
The second impact is PSD2, right? That European directive that's impacting us because of the, you know, liability shift. You know, to weigh between both of these, we believe that one-third of the delta between our guide and kind of the framework growth is related to the softer e-com, muted e-com environment, and two-thirds is related to PSD2. Right? That's kind of how we build our guide.
Very helpful. Thank you, Eido.
Thank you. Our next question comes from Ramsey El-Assal with Barclays. Your line is open.
Hey, good morning, team. It's Damian on for Ramsey. Thanks for taking the questions. I guess I want to drill in a little bit more on the EBITDA guidance. Just came in a little bit below our model. Again, you know, I heard, Agi, you were talking about the gross profit expectations for 2022. Maybe you can just talk a little bit more about what's driving those. I know you talked about going into new industries, new geographies, but, you know, should we expect that 51% becomes more of a normalized rate going forward? Or are we gonna see the benefits of those in the out years, and then, you know, how that plays into your adjusted EBITDA guidance for the full year?
Hi, Damian, and thank you for the question. If I think about our gross margin and where we are planning to be next year, we provided a guidance of 51% and above. The way I think about the decrease from last year is really around two main factors. The first factor is driven by the different mix of our merchants, the expectations for the mix of our merchants for next year. As we've seen this year, tickets and travel is continuing to recover, is continuing to grow, while some of the, kind of the, lower chargeback merchants around the different industries have experienced more muted e-commerce growth. The total weight of the portfolio has decreased for them.
In a way, I just really see this as an industry mix and not as a performance mix. We actually provided supplemental material. I think it's gonna be available shortly on our website if it's not already there. We can see there that we've improved our performance in every single cohort over a period of time. When I think about long term, I'm confident that when we reach this type of maturity, when we have diversified portfolio and across a variety of industries, we'll be able to move to and to increase across the board.
All right, that's good to hear. Broadly, maybe this is for both of you. I'm curious, wanna pick up on the commentary in the press release about the new partner channels. Just curious, I know it's probably early days, and you just got into it, but curious what kind of partners you think could be interesting and how that could contribute to growth going forward. Thanks.
Sure. Long term, we really view ourselves as, you know, just part of the infrastructure of commerce. We think we're the best in the world at looking at a transaction and understanding if it's fraudulent or not. We think that, you know, just part of the stack of wider offerings, whether it's one-click checkouts, whether it's standard payment gateways, whether it's enterprise-focused e-commerce platforms. You know, we really think this is a great distribution channel for us, when we think about, you know, expanding outside of our, you know, strategic key accounts. It's definitely an avenue that we're really excited to continue to grow.
All right. Thank you.
Thank you. Our next question comes from Terry Tillman with Truist Securities. Your line is open.
Yeah, thanks for taking my questions as well, and good morning, everyone. Or good afternoon or whatever. I wanna build on the prior question in terms of partner-driven selling. It seems like it is a nice incremental opportunity. What I'm curious about, is this a more notable kinda shift in your go-to-market activities and, you know, maybe an update on direct sales channel and how that's going? I'm just trying to understand how evolutionary this is as opposed to direct selling with your hunters and farmers. I had a follow-up. Thank you.
No, when we think about our key accounts or strategic accounts on a global basis, we continue to believe that, you know, direct enterprise sales is the best way to onboard them. It's kind of a consultative process. They have unique needs, and we think that's best served by a direct sales force. Really, as we're thinking about adding, you know, additional revenue streams and making sure that we're able to support, you know, tiers below that, let's call it even mid-market and below, we definitely think this is kind of a new avenue for us to make sure we're attacking as broad as possible the market.
Okay. Maybe a follow-up question for Aglika. I think in your prepared remarks, you were talking about just the dynamics of mix shift of your different customer cohorts and their GMV in 2022 as being impactful to gross margins. I think you also did share something about a one-time innovation investment. If you could double-click on that a little bit more, and will that reverse itself, and be a reason why gross margins could actually lift into 2023? Thank you.
Thank you for the question. The other part of the gross margin, as I mentioned, it's a 1% decrease due to some work we're doing around hosting infrastructure and the way we optimize using our servers. This creates like a temporary overlap, but we expect to roll out of this and to benefit from this work in 2023.
Thank you. Our next question comes from Bob Napoli with William Blair. Your line is open.
Thank you, and good morning. Thank you, Eido and Aglika. Just long term, you have targeted 20%+ EBITDA margins. Can you give you know how confident are you that the unit economics that you're driving today will be able to deliver that type of EBITDA over the long term? How can you help you know investors see the you know get visibility around you know that target and how you're progressing towards that target?
Hey, Bob. Thanks for the question. We're incredibly confident. We feel we have full visibility into our spend, the expected output of that spend, and very rigorous in how we invest in what we expect to see from those investments. When we think back to some of the earlier cohorts, geographies, you know, we think they're incredibly profitable, and we're certain that they can lead to, you know, kind of 20% EBITDA margins longer term as we shared. We're balancing that, you know, with the opportunity and the growth that we see ahead of us.
You know, having said that, we're obviously mindful of kind of spend and burn, and we do anticipate that this would be the largest investment year, you know, in terms of EBITDA loss that we would have, and then we would kinda transition into some of those longer-term targets that we mentioned.
Thank you. Yeah, I mean, just some color around those cohorts. I mean, I'm not sure how you maybe think about that for the future would be really helpful to investors. I think there was a new metric you gave out at the beginning of this call. This is obviously a massive market and opportunity, growing market. $300 billion of upsell potential, GMV upsell, that would be three times what you delivered this year. I know a lot of your clients, you know, land and expand. Just any color on how you attack that $300 billion and how much of that is, you know, do you feel is truly available to you?
Sure. When we mention that $300 billion, that's the white space or, you know, wallet share opportunity ahead of us. That's the volume of our integrated existing clients that we're not processing today, right? You know, we mentioned that we added one of the top five travel companies, one of the top five omni-channel retailers, one of the top five remittance companies. They all actually started on, you know, significant multi-million-dollar deals, but there's still significant opportunity ahead. When I think about some of the more mature cohorts, you know, we've been able to expand billings by over 200%.
We think this combination of, you know, proving value, showing building a trusted relationship, showing the ROI in a partnership with Riskified, historically, that's led to significant wallet share increases, and we anticipate these cohorts to behave in a similar way. That $300 billion is just to kind of help frame the immediate integrated opportunity we have with our existing clients.
Thanks. If I could just sneak one last one in. How confident are you in getting back to that 25%-30% revenue growth in the back half as you lap PSD2? I mean, is that really it lapping PSD2 primarily? I know there's some macro and some supply chain here and there. With the opportunities, how confident are you in getting back to that growth in the back half of 2022 and then in 2023?
I'm very confident, and I think the numbers are clear, right? I think once you look at the numbers, it's easy to understand, and we've been communicating them for a while. Again, PSD2, we see no additional impact in 2023, and we see a close to zero chance of this happening in other geographies. Really, when you think about the value of PSD2 in our world, it's minimal. Already today, consumers are not impacted by fraud, right? If a consumer receives a chargeback, they call their bank, they're refunded the money. When you think about merchants who bear the liability, in fact, merchants today can turn on strong customer authentication, 3D Secure. En masse, they choose not to do it because it's a terrible experience. It's bad friction. It causes a conversion impact drop off.
In fact, what merchants do proactively is they use a frictionless experience like Riskified, right? That's much better than 3D Secure. When you think about, you know, the entire card issuing banks, they obviously hate something like PSD2 because suddenly they're liable. Really we think there's no value, there's no consumer impact. When you think of even, you know, passing a law like this in the U.S., it's probably like a congressional level act. We feel very, very confident that it's not happening. We see no indication that it's happening elsewhere in the world. We view this as a one-time reset, right? That's kind of accounts for two-thirds of the delta between our framework, between our guidance and, you know, that kind of 25%-30% growth that you mentioned.
With respect to the muted e-commerce volumes, which is another, you know, third of the delta, I mean, I think most people would agree that, you know, this is a tough comp for the next few quarters, and everyone anticipates cycling out and returning to normalized e-commerce growth. So really just that is leading us to have full conviction that we'll return to our framework growth. Just thinking about the behavior throughout this year, you know, we started Q1 stronger than anticipated. We think that there is gonna be a sequential, you know, a year-over-year growth rate decline as we head into Q2, before we start ramping up in the back half of the year.
Thank you. Appreciate your answers.
Thank you. Our next question comes from William Nance with Goldman Sachs. Your line is open.
Hey, guys. Thanks for taking my questions. I wanted to follow up on Bob's question on the $300 billion opportunity. Appreciate you guys giving that disclosure. Think it's super helpful. You know, so if I look at that, if I understand the disclosure correctly, it seems like you're roughly 25% penetrated with your merchant base. I was wondering if you could help us understand what that penetration looks like for some of your older cohorts. I think you mentioned you were able to increase the older cohorts by 200%. Could you give us a sense for what that implies for penetration on your older cohorts, just to give us a sense for, you know, where we could be, where that 25% could go longer term?
Yeah. When we look at some of our more mature cohorts, they're definitely significantly more increased on an absolute basis than 25%. Another way to think about it is that, you know, a year like this, we incrementally added more TPV to that kind of white space opportunity than ever before, right? On an overall basis, it looks like the penetration is lower. We definitely see 50%+, you know, penetration in some of the earlier cohorts. I think we share that in the mature ones, billings have increased by 200%, so I think that's a great proxy there. Yeah, I think that's the overall scope of it.
Got it. That's helpful. I just wanted to follow up on the assumptions around travel. It sounded like travel on the margin reduces the gross margin profile, but I would assume that with a riskier volume comes higher take rates in general. Just could you help us understand what's baked into the guidance in terms of the recovery of travel spending over the course of 2022? Just maybe help us frame how that might impact optically some of the metrics in terms of take rate and gross margin.
Yeah, definitely. When I think about travel, there's two main factors impacting it. One is just the increase of the overall population. The other factor as well is just the changing of the risk in the population that we're seeing post-COVID as well. I can say that while over time, we're confident this will continue to improve our performance in that industry as well. The fact that things are rapidly changing has also created some of the higher overall chargebacks in that specific industry.
Got it. Appreciate you taking my question.
Thank you. Our next question comes from Timothy Chiodo with Credit Suisse. Your line is open.
Great. Good morning. Thanks for taking the question. My main question is around the ACH business, and I have a quick follow-up on the guidance. For the ACH offering that you mentioned started to ramp more meaningfully in this most recent quarter, maybe you could just talk about the types of merchants that are using ACH payments, what they're using them for, what verticals they're in, and some additional context there on just how big and meaningful that is, either within your existing base or potentially new customers that are processing ACH payments.
Hey, Tim. Thanks for the question. You know, just to start, it's still early days for us with ACH, but we think there's definitely a longer term strategic opportunity. When you think about the overall payment volume going through ACH, it could be, you know, obviously remittance companies, and that's our direct focus day one. But obviously, you know, more and more e-commerce companies are trying to use ACH for larger ticket items. We see ACH in different forms of, you know, bill pay and B2B transactions in the banking world. We think longer term, it's, you know, a very strategic and interesting opportunity. You know, we're starting to ramp significant volumes, but it's still kind of a smaller part of our overall subset, right? We think it has great growth potential, and we're very happy with the start.
Okay. Excellent. Thank you. The follow-up on the guidance. It's pretty clear from your comments that the expectation or intended in the guidance is that gross profit will grow at a slightly lower rate than revenue during 2022 for the factors that you outlined. I apologize if I missed it. I was trying to keep up. Did you make any comments on the GMV growth? In other words, should the GMV growth this year be faster or slower than the guided revenue growth?
Yeah, we didn't specifically mention GMV. The way we build our analysis internally, it's bottom-up. When I think about it can be definitely around the same type of growth and kind of assumptions around a very stable take rate as well.
Excellent. Okay. That's really helpful. Thank you for that clarification.
Thank you. Our next question comes from Tien-Tsin Huang with JP Morgan. Your line is open.
Hey, good morning. Thanks for taking the question. This is actually Reggie dialing in for Tien-Tsin. I have kind of questions, I guess it's more big picture. Trying to understand, is there any seasonality to, I guess, deal signings? Like are there certain times of year where conversations are richer, or you're more likely to sign customers? That's part one. Part two of that would be, could you talk a little bit about, I guess your bookings for 2021, and how they maybe compare to 2020 and 2019, in terms of the business that you signed last year? Just trying to get a sense of the sales channel and how that's kind of ramping. I have a follow-up. Thank you. Yeah.
I would say with regards to seasonality, we see that, you know, Q1 through Q3 are definitely equal in the sense that merchants are as open and committed to kind of integrate in bringing on new solutions. Historically, Q4, because of the, you know, the holiday season, there's usually a code freeze. We see that as, you know, probably more oriented towards growth within existing clients and adding segments from existing clients that already have an integration, right? Because of that holiday dynamic. I think the second part was more around the new revenue growth in 2021 and how that relates to 2020. Yeah, I think it's within kind of our, the framework that we previously shared, you know, across all those years.
What does that mean? I'm sorry. What have you previously shared there?
We shared a 15% growth framework for kinda new business and 10%-15% from kind of organic. I'm saying in both of these kind of previous years, it was within that framework.
Understood. Perfect. Then if I could dig into the comment, you know, the $300 billion in kinda total volume among your partners, like what explains that gap? Is it geography? Is it that those remaining transactions are viewed as lower risk by the customer? Like, what's the delta there and kinda how do you attack that, those different pockets?
Sure. If I understood, it's more like why do you only have that $300 billion with us today? Really, when you think about the process of integrating Riskified into some of these large strategic complex merchants, right? They have a lot of internal systems, teams, tools, doing what we do. The way we affect change is usually we start on a sub-segment, right? Whether it's a geography, a specific use case. Then as we build a trusted relationship and prove the value of our technology over time, we're able to expand the relationship and capture more wallet share. The pricing we take is risk-adjusted, right? Even though we may start with a higher risk segment, there's preferential pricing for giving us a wider swath of transactions, even if they have a lower risk profile.
Really the ROI for the merchant is kinda pretty much guaranteed. All right? That's why we've seen expansion within our cohorts over time, and we feel confident that we'll continue to see that with the recent cohorts as well.
No, that makes sense. I definitely appreciate the pricing dynamic as you pick up more payment volume. Well, good. That's all I have for you guys. Thank you for taking the questions.
Thanks.
Our next question comes from Brent Bracelin with Piper Sandler. Your line is open.
Thank you for taking my question here. I'm gonna start with Aglika, and I'll finish with Eido. Aggie, as we just think about modeling revenue from a quarterly seasonality perspective, if I go back, it does look like Q3 historically is kinda down from Q2. Is there anything different this year where we should think about a different type of seasonality, or is that the right way we should think about seasonal trends, Q3 being slower than Q2, and the bulk of the increase in the second half would come in Q4?
Historically, and Brent, thank you for the question. Historically, we've seen Q4 having a bigger proportion of the total revenue for the year, and we continue to expect this to kind of follow last year's trend. When I think this year about the rest of the quarters, there's just a lot of different dynamics impacting them related to, as we mentioned earlier, to the fallout of PSD2 and e-commerce and different seasonality. I definitely think that they're gonna be much more kind of less pronounced and less different in a way from each other.
Okay.
That's more specific for this year.
Okay. Helpful color there. My second question for you is just really thinking through what sounds like a very strong net new customer add quarter, top five travel, top five retailer, top five remittances. What's the impact to gross margins? Is there, as you think about onboarding some of these larger new customers, as you think about you know initial volumes and a long runway to grab additional penetration, a short-term kinda drag or investment that needs to be made here on the gross margins temporarily? Is that the right way to think about onboarding new customers or not?
Yeah, I mean, as we go into new geographies and brand new categories, there can be a drag on margins, but that's already reflected in the guide that we shared of 51 or above, right? Some of the things that are offsetting that drag is continued improvement in some of the other cohorts, right? Obviously, as we gain more experience with the new cohorts, they improve as well. So really, for this year, we anticipate that to be kind of pretty much a wash. Really the main factor impacting that kinda 2% sequential decrease is more around the mix shift that's a one-off event related to, you know, the post-COVID change.
Helpful color there. Eido, just as we think about the big opportunity ahead of you here, $300 billion just with existing customers, it feels like there is a disconnect here, right? You have some really strong new customer momentum and obviously growth that's declining because of PSD2 and some headwinds. I guess my question for you as you think about the new wins that you've talked about, you know, pretty high profile new wins. What's resonating and why now? Obviously it's hard outside looking in, you're seeing growth decel, but it clearly seems like something is resonating more now than it was before. Help us understand what is resonating as you talk to customers, particularly these large top five customers that are coming on board.
What's resonating today that more so than, let's say, a year ago?
Yeah. I think the number one thing that's resonating is the ROI, right? We're guaranteeing higher performance for a lower cost structure. You know, when we started the company in 2013, obviously this was a brand new paradigm. It was challenging to get the initial first few enterprise clients. Now, as we're able to have more and more of these brand names, right, and build that trusted relationship and deepen our engagement with them, right, we think it's becoming much easier and much more prevalent. We think that just from the competitive environment, it's becoming more clear that, you know, a merchant is faced with two decisions. Do I manage this process internally with a scoring solution, an internal team, a manual review, and update this on a continuous basis? Then you have, you know, a host of solutions that you can choose.
Do I wanna offload this to a chargeback guarantee vendor? That's pretty much Riskified in the enterprise space, right? We think that kind of wallet share or mind share in that area is really helping us, okay? It's a combination of more and more merchants being open to the idea of chargeback guarantee. Again, we believe because the ROI is clearly superior in this model, that over time, more and more merchants will move in that direction, together with us cementing, you know, kind of, being the front runners in this space.
Helpful color. That's all I had. Thank you.
Thank you. We have a follow-up from Terry Tillman with Truist Securities. Your line is open.
Yeah, thanks. I figured not let you out of this other 10 minutes for the call, so I did have two follows, and thanks for taking them. You know, one question just kind of related to the new business success. I'm curious whether it's qualitative or quantitative. You can say anything about win rates, you know, in the business as opposed to somebody going with risk scoring or just a no decision or status quo. You know, what are you seeing in terms of win rates? I wanted to ask another question about partner-driven selling.
Yeah, we definitely feel that we're the preferred choice within Chargeback Guarantee, and we're continuing to generate momentum there. We feel very pleased, you know, with our performance and some of the names that we were able to add. We think it's great.
Okay. On partner-driven selling, I mean, it does sound interesting. It seems like it's an incremental way to go to market. Is there anything more you can share with what kind of resources these third parties, whether it's payment gateways or one-click technology providers or e-commerce platforms, what kind of skin in the game is there from them? You know, are they, you know, are they building—do they have quota? Just I would love to learn more about what's the motivation for them to sell. Is there any concept of, you know, billings contribution from this newer channel in 2022 or not much? Thank you.
Yeah. I think the value for them is creating the best end customer experience, right? If I'm offering a one-click checkout, you know, it's a competitive advantage for me to be able to offer a service like Riskified to my merchants, right? I think it's just a similar story with the e-commerce platforms and gateways. If this is a superior way to manage e-commerce risk that creates better performance, then it's better for them to offer it to their merchants. You know, there's obviously some product adaptations and ways to integrate and data and modeling on our end that we need to do in order to support this, which is why, you know, we've taken our time to really introduce this channel. We wanted to make sure that we have it down right. It is kind of a unique proposition.
No one else does it right now. To your second question, there's nothing meaningful baked into the guidance because again, when we think about our guidance, we wanna have much more experience and a higher degree of conviction. Like you mentioned, this is kind of an earlier growth opportunity for us. It's not reflected.
Okay, thank you. Good luck.
Thank you. We have another follow-up from Bob Napoli with William Blair. Your line is open.
Thank you. Thank you very much. Just on the competitive environment, what are you seeing? Has there been any significant change in the competitive environment, and how do you view it, and who are you typically seeing in your RFPs? Has that changed at all?
Yeah. I think if anything, we've seen that we've become the dominant and clear favorite in Chargeback Guarantee. If there have been other companies that offer this historically, they've moved away from the model because it's more challenging to execute, and we're the front runners there. Really what we're seeing on a competitive set is that the decision at the merchant level is do I want to continue to manage and build this process internally? Then it could be any one of a dozen solutions, right? If the decision is, and we think that's where the ROI is, and more and more merchants are heading in that way to do a Chargeback Guarantee solution, it's clearer than before that Riskified is that solution, and that has us very excited.
Thank you. On international, I mean, it seems to me like, you know, the authorization rates around the globe are very different in different markets, and so the need for your services could be greater in different areas of the world. What percentage of your business is international? How do you view the international markets? Are the returns there similar? Is the white space larger? Sorry, a lot of questions around international.
Yeah, thank you for the question. When I think about where we are today, the U.S. is still the biggest market for us today in terms of our presence. But in terms of growth, the international market is growing much faster. We'll see APAC, we see EMEA, and these are very, very strong growth regions for us. This dynamic kind of sales mix is really the reduction of the, you know, of the U.S. as a percentage of the overall billings in 2021. I expect this trend to continue.
Thank you. If I could just sneak one in on crypto, your relationship with Binance, but there's a lot going on. How is your product being used in the crypto space, and is that a very large opportunity, and are the economics there similar or better than your core product?
Yeah. The main usage for us is when someone converts using a credit card or different forms of payment and purchases the digital asset. That's where we kinda look at the transaction to verify if it's legitimate or not. It's still in, you know, a minor part of our overall revenues, and we just see it as, you know, a possible bet on future growth in this category and industry. We're excited to be part of, you know, the infrastructure of it. That's where it stands today.
Thank you.
Thank you. That's all the questions we have for today. This concludes today's conference call. Thank you for participating. You may now disconnect. Everyone, have a great day.