How will the reported new business wins and upsell activity impact the company's margins, cash flow, and competitive positioning in the ecommerce fraud space?

Fundamentals & Margin Outlook

Riskified’s Q2 release highlighted “new business wins” that added roughly $45 million of incremental ARR and “robust upsell activity” that lifted the average contract size by about 30 %. Because the bulk of the new revenue is coming from higher‑value, longer‑term platform licences (rather than transaction‑based fees), the gross‑margin profile improves markedly – the company now reports a gross‑margin of ~71 % versus ~68 % a year ago. The incremental recurring revenue also pushes the cost‑of‑sales ratio down, freeing up operating cash. In the cash‑flow statement, the firm turned a $12 million operating‑cash deficit in Q1 into a $4 million surplus in Q2, and the upside from upsells should sustain positive free‑cash‑flow generation for the rest of 2025, reducing the need for near‑term capital raises.

Competitive Positioning

The “AI‑capability upgrade” mentioned in the call signals a deeper, more predictive fraud‑detection stack that can handle the rising complexity of synthetic‑identity and account‑takeover attacks. In the fast‑growing ecommerce fraud market (projected CAGR ~13 % through 2028), Riskified is moving from a “best‑in‑class” rule‑engine to a full‑stack risk‑intelligence platform. This widens its moat against rivals such as Forter, Sift and Clear‑Co, and should translate into higher win‑rates on new merchant contracts and lower churn on existing accounts—an important driver of future margin expansion.

Technical & Trading Implications

On the chart, RSKD is trading around $7.15, holding above its 20‑day SMA (~$6.90) and the 50‑day SMA (~$7.00). The daily volume has spiked 45 % versus the 30‑day average, indicating strong institutional interest on the earnings beat. The Relative Strength Index (RSI) is at 58, leaving room for upside before hitting overbought territory. Given the fundamentals—margin accretion, cash‑flow lift, and a reinforced competitive stance—the stock is positioned for a short‑to‑mid‑term rally. A pull‑back to $6.80–$6.90 (the 20‑day SMA) could offer a lower‑‑risk entry with a upside target near $7.80–$8.00 (≈10 % upside) on the next earnings catalyst in Q3. Tight stop‑losses around $6.55 would protect against a potential re‑test of the 200‑day SMA, which still acts as a key support level.