Riskified (RSKD) Q3 2026 earnings review
Riskified's sales rise 41%, but its fraud costs grow faster
Riskified, which checks online orders for fraud, sold far more than planned, but kept a smaller share of each sale. Sales rose 41%, against the roughly 27% it had pointed to. Riskified repays merchants for approved orders that prove fraudulent, and those costs climbed faster than sales.
| Revenue | $115.2M +41% from a year ago; the company had pointed to about +27% |
|---|---|
| Gross profit, excluding one-offs | $49.7M +20% from a year ago |
| Gross margin, excluding one-offs | 43% 51% a year ago |
| Full-year revenue outlook | Raised $25M middle of the range: $430M, about 25% growth |
⚖️ Verdict: 🟢 Bullish
The story got better, because the outlook improved along with the quarter. Chief executive Eido Gal lifted the yearly sales plan again. By our math, it now has fourth-quarter sales about 29% above last year's. One caution: the new merchants behind the growth carry higher fraud risk.
The question now is whether those merchants become cheaper to protect as Riskified learns their patterns. If they do, gross profit will keep pace with sales; if not, fraud costs will absorb much of the extra revenue. Gross margin in the fourth quarter, reported early next year, will show.
🐂 Bull Case
Yearly Sales Plan Rises by $25 Million
Chief executive Eido Gal said Riskified is "raising our outlook for the third time this year". By our math, the middle of the new range puts 2026 sales about 25% above last year's.
The raise has two parts. Third-quarter sales came in about $11 million above the roughly 27% growth Riskified had pointed to. The group kept that gain and added about $14 million to its fourth-quarter plan.
- Fourth-quarter sales implied by the new plan: about $128 million, 29% above a year earlier, by our math
- Same figure under the plan of three months ago: about $114 million, a 15% rise
- Top ten new customers: eight based outside the US, against five in each of the first two quarters
This matters because the fourth quarter compares with a record holiday quarter in 2025, so the old plan had growth slowing sharply into year-end. The new plan shows Riskified expects most of the third-quarter gain to last, though Gal has given no view of 2027.
What to watch: fourth-quarter revenue, due early next year, against the roughly $128 million the plan implies. A result near that figure would show the new merchants keep their volumes after their first months.
Order Volume Picked Up as the Plan Needed
Riskified earns a fee on each online order it approves, so its revenue depends on the value of orders it reviews and the fee it charges. By our math, the third-quarter plan needed order value to grow well above the second quarter's 13%.
Order value did pick up. The orders Riskified reviewed were worth 18% more than a year earlier, against 9% in the first quarter. The raised full-year plan also assumes strong growth into year-end, so the doubt about volume has eased.
What to watch: order value growth in the fourth quarter, the busiest season, against a strong holiday quarter in 2025. Holding the current pace would show that volume, not only higher fees, is carrying the growth.
Overhead Fell to 36% of Sales From 44%
Operating spending covers research, sales and administration. Finance chief Aglika Dotcheva said Riskified is "continuing to drive operating leverage", and the numbers agree: revenue grew far faster than this spending.
- Research and development: 12.8% of revenue, down 3.4 percentage points from a year ago
- Sales and marketing: 14.3% of revenue, down 2.9 points
- General and administrative: 9.0% of revenue, down 1.7 points
This matters because lower overhead offset the fall in gross margin. Ebitda excluding one-offs, a profit measure before interest, tax and depreciation, rose 47% to $8.1 million. Its share of revenue held near 7%, so the savings kept margins level.
What to watch: fourth-quarter spending against the $42–43 million quarterly range Dotcheva set three months ago. Staying inside it while sales climb would let more of each new dollar reach profit.
Positives this quarter didn't test
Three drivers from earlier quarters got no new figures in the release or the slides, so this quarter neither helped nor hurt them.
- Bank-transfer payments (ACH): last reported at about 19 times the prior-year value; a new multiple would show whether that growth holds
- Merchants using more than one product: last up about 50%; Gal said merchants are "adopting more of our products" but gave no count
- US billings, the amounts invoiced to US merchants: up about 38% in the second quarter; a regional breakdown would show whether the rebound continues
🐻 Bear Case
Riskified Keeps Less of Each Dollar of Sales
Riskified approves online orders for merchants and repays them when an approved order turns out to be fraud. Those repayments go into its cost of revenue, so gross margin shows how well it prices risk. Riskified headlined its results "Accelerating Revenue and Gross Profit Growth".
Gross profit did grow faster, by 20% after 13% last quarter. But revenue rose about twice as fast, because cost of revenue jumped 62%.
- Cost of revenue excluding one-offs: 56.9% of revenue, up 7.6 percentage points from a year ago
- Gross margin excluding one-offs: 43%, against 51% a year ago
- Gap between revenue growth and gross profit growth: 21 percentage points, against 9 last quarter
This cuts against the fraud-screening firm's framing. Last quarter, finance chief Aglika Dotcheva said new merchants begin at lower margins and improve over time. Since then the margin has dropped further, and the release gave no reason for the decline.
What to watch: fourth-quarter gross margin, set against 58% in the 2025 holiday quarter. Another drop from a year earlier would mean the newest merchants are not yet getting cheaper to protect.
Growth Leans on One Riskier Merchant Category
Digital Finance is Riskified's category for payment, money-transfer and crypto apps. Last quarter, finance chief Aglika Dotcheva tied its growth to new event-contract and gaming merchants, which carry higher fraud risk. Chief executive Eido Gal argues that merchants facing "faster, more sophisticated fraud" are turning to Riskified.
Billings in the category, the amounts Riskified invoices, rose more than 300% from a year ago. Electronics, General and Home together grew 12%.
This matters because Riskified repays merchants for fraud on orders it approves, so losses in one fast-growing category go straight to gross profit. Regulators could also target event contracts.
What to watch: Digital Finance's share of billings, which Riskified has not disclosed. A rising share with no recovery in gross margin would mean growth keeps adding risk.
A Stronger Shekel Raised Riskified's Costs
Riskified employs many engineers and data scientists in Israel, so a stronger shekel raises its dollar costs. The company uses hedges, contracts that fix exchange rates in advance, to soften the effect.
Spending excluding one-offs rose 16% from a year ago. At last year's exchange rates and without hedges, Riskified calculates the rise at only 5%. By our math, currency and smaller hedging gains explain about $3.5 million of the $5.6 million increase. So exchange rates, not hiring, drove most of the extra cost.
What to watch: the currency-neutral spending figure in the fourth-quarter release. If the shekel stays strong, the gap with reported spending will keep taking part of the savings from cost discipline.
Risks this quarter didn't answer
Three standing risks got no new evidence in the release or the slides, so they stand where they stood three months ago.
- One-time events: no 2027 outlook yet, though next year will be compared with this year's World Cup and event-contract volumes; the first 2027 plan will show the effect
- AI shopping agents that bypass merchant checkouts: Riskified launched tools to identify such agents but reported no usage; any usage figure would move this risk
- Spending at existing fashion and luxury merchants: the release did not mention the category; its billings growth on the next call will show whether the weakness persists
👓 Other Themes
Riskified Launched Tools to Spot AI Shopping Agents
Riskified launched Agent Identity Risk Intelligence to "identify the AI agent behind an order or customer service request" and tie it to a real shopper. Through a new Zendesk partnership, "both human and AI service agents can assess the customer behind a refund, return or exchange request". Neither product has a revenue figure yet.
💲 Other KPIs
Free cash flow reached a record, 13% above a year earlier, though well behind revenue growth. It has climbed for two straight quarters, from $9.0 million in the first quarter. Over the last twelve months the fraud-screening firm generated $47.8 million, against $32.9 million a year before.
Cash rose this quarter after three quarters of decline, because buybacks nearly stopped. Riskified spent $2.3 million on its own shares, against $64.2 million in the second quarter. The balance remains below December's $297.6 million, and it carries no debt. Interest income fell to $1.9 million from $3.3 million, because the cash pile is smaller.
The share count used for profit per share fell 13.5% from a year ago, the steepest cut in five quarters. Buybacks over the past year drove it. The pace of reduction will now slow, because buying nearly stopped in the third quarter.
🔮 Guidance
Raised. The plan now has sales about 25% above last year's at the middle of the range. By our math, that leaves about $128 million for the fourth quarter, 29% above a year earlier. Riskified said the change passes on the third-quarter gain plus "an incremental raise to our outlook". Third raise this year: +$2M, +$25M, +$25M at the middle.
Raised. Ebitda is profit before interest, tax, depreciation and amortisation. The middle of the range sits about 53% above 2025, a margin near 10% of sales. By our math, the fourth quarter then needs about $22.8 million. That is a margin near 18%, in line with the 2025 holiday quarter. Third raise this year: +$1M, +$5M, +$5M at the middle.
Raised, on the slides rather than in the release. The group now plans about 36% more free cash flow than in 2025. By our math, that leaves only about $7.9 million for the fourth quarter. That would be 27% below last year's fourth quarter, and Riskified did not explain the gap.
Unchanged, at the top of the earlier range. By our math, a full-year average of 145 million implies about 146 million shares in the fourth quarter. That sits above the third quarter's 140 million, so the plan assumes no large buybacks for the rest of the year.
❓ Key Questions
How much of Digital Finance is event contracts and gaming?
Billings in the category rose more than 300%, and these merchants carry higher fraud and regulatory risk. Their share of billings would show how much of the growth rests on one type of customer.
How fast do the newest merchants become cheaper to protect?
Riskified has said new merchants start at lower margins and improve. Fraud repayments as a share of billings for the merchants added in 2025 and 2026 would show whether that is happening.
What is the gross profit outlook for 2026 now?
Three months ago Dotcheva set gross profit growth at 11–14% for the year. The release did not repeat it, and by our math growth over the first nine months already reached 15%.
Why did share buybacks almost stop in the third quarter?
Buyback spending fell to a small fraction of the second quarter's. Riskified has not disclosed how much of its authorisation remains, or how much cash it wants to hold behind its guarantees.
Is there a new date for a 15% profit margin?
Riskified once aimed for an Ebitda margin of 15–20% by the end of 2026, then pushed the goal back without a new date. This year's plan points to about 10%.