NEW YORK, June 05, 2022 (GLOBE NEWSWIRE) — Pomerantz LLP is investigating claims on behalf of investors from Riskified Ltd. (“Riskified” or the “Company”) (:RSKD). Such investors are advised to contact Robert S. Willoughby at [email protected] or 888-476-6529 ext. 7980.
The investigation focuses on whether Riskified and certain of its officers and/or directors have engaged in securities fraud or other illegal business practices.
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In July 2021, Riskified completed its initial public offering (“IPO”), selling 20.125 million shares of Class A common stock at a price of $21.00 per share. On September 9, 2021, Riskified issued a press release announcing the Company’s financial results for the second quarter ended June 30, 2021—that’s to say, the quarter preceding the IPO. In a conference call to discuss the results, the company said Riskified tends “to experience higher chargebacks when we enter a new industry.”
On November 16, 2021, Riskified issued a press release announcing the Company’s financial results for the third quarter ended September 30, 2021—that’s to say, the quarter in which the IPO was completed. The statement said Riskified’s revenue growth fell to 26% year-over-year, compared to revenue growth of 55% and 47% year-over-year for the first and second quarters. of 2021 respectively. Similarly, Riskified’s GMV growth had fallen to 28% year-over-year, from 77% and 55% respectively for the first two quarters of 2021. Additionally, the company’s gross earnings had not increased only 10% year over year, well below the company’s already decelerating revenue growth trajectory. The company’s gross profit margins fell to just 46% in the quarter, from 56% and 60% in the first and second quarters of 2021 respectively, with gross margin falling sequentially to $24.3 million, from 28, $6 million and $33.3 million in the first quarter. and second quarters of 2021 respectively. Additionally, Riskified’s cost of revenue jumped to $28.3 million in the third quarter of 2021, primarily due to a sharp increase in chargeback expenses, representing a 50% year-over-year increase. the other and nearly 30% above the company’s cost of revenue. for the first and second quarters of 2021.
On February 23, 2022, Riskified issued a press release announcing the company’s financial results for the fourth quarter and fiscal year ended December 31, 2021. The release indicated that Riskified’s revenue growth and GMV growth continued to slow in the quarter to just 22% and 23%, respectively, year over year. Additionally, Riskified’s gross profit growth remained subdued at just 10.7% year-over-year growth in the quarter, and the company’s cost of revenue continued to climb to more than $33 million in the quarter, compared to just $23.9 million in the fourth quarter of 2020. In addition, the release stated that Riskified only expects to generate between $254 million and $257 million in revenue in 2022 (which would represent only 11.5% year-over-year growth) and 2022 Adjusted EBITDA between minus $69 million and $66 million (which would more than triple losses suffered by the Company in 2021), indicating that the adverse business trends experienced by the Company were in fact accelerating.
Since the IPO, shares of Riskified have closed as low as $5.23 per share, representing a decline of more than 75% from the offering price.
Pomerantz LLP, with offices in New York, Chicago, Los Angeles, Paris and Tel Aviv, is recognized as one of the leading law firms in the areas of corporate litigation, securities and antitrust. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, Pomerantz pioneered the field of securities class actions. Today, more than 85 years later, Pomerantz continues the tradition he established, fighting for the rights of victims of securities fraud, breaches of fiduciary duty and corporate misconduct. The firm recovered numerous multimillion-dollar damages on behalf of class members. See www.pomlaw.com.
Robert S. Willoughby
888-476-6529 ext. 7980