RSKD - Why Riskified Stock Ran Higher Today
2023-05-17 11:28:30 ET
Shares of fraud-detection software company Riskified (NYSE: RSKD) ran higher on Wednesday after the company reported financial results for the first quarter of 2023. As of 10:30 a.m. ET, Riskified stock was up about 13%.
Riskified partners with merchants to get more good transactions approved while lowering fraudulent ones. It takes a cut of transactions, which makes gross merchandise volume (the dollar value of sales through the system) a good metric to track. In Q1, Riskified's gross merchandise volume was up 20% year over year, leading to a 17% jump in revenue.
Riskified has incentive to approve transactions for its partners, since its revenue is tied to this. However, the company pays partners back for fraudulent transactions, which lowers its gross profit . Therefore, it also has incentive to decline transactions as needed. And this is why tracking the company's gross margin is also important.
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Why Riskified Stock Ran Higher Today