Good day, and thank you for standing by. Welcome to the Riskified Fourth Quarter 2021 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers presentation there will be a question and answer session. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Chris Mammone, Investor Relations for Riskified. Please go ahead.

Good morning, and thank you for joining us today. Riskified is hosting this call to discuss its fourth quarter and full year 2021 financial results for the period ended December 31, 2021. Participating on today's call are Eido Gal, Co-Founder and CEO; and Aglika Dotcheva, Chief Financial Officer. Earlier this morning, Riskified issued a press release announcing its fourth quarter and year-end results. A copy of this press release has been furnished with the Securities and Exchange Commission on Form 6-K. Before we begin, I want to remind you that matters discussed on today's call will include forward-looking statements related to our operating performance, financial goals and business outlook, which are based on management's current beliefs and assumptions and are not guarantees of future performance. You should not put undue reliance on any forward-looking statements. Please note that these forward-looking statements reflect our opinions as of the date of this call. And except as required by applicable law, we undertake no obligation to revise this information as a result of new developments that may occur. Forward-looking statements are subject to various risks, uncertainties and other factors, some of which are beyond our control, that could cause our actual results to differ materially from those expected and described today. In addition, we are subject to a number of risks that may significantly impact our business and financial results. For a more detailed description of our risk factors, we encourage you to read Riskified's periodic and other SEC filings where you will see a discussion of factors that could cause the company's actual results to differ materially from these statements. A replay of this conference call will be available on our website under the Investor Relations section. I would also like to remind you that during the call, we will discuss some non-GAAP measures when talking about Riskified's performance. The presentation of this financial information is not intended to be considered in isolation or as a substitute for or superior to the financial information prepared and presented in accordance with GAAP. We use these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. We believe that these measures provide useful information about operating results, enhance the overall understanding of past financial performance and future prospects and allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making. You can find the reconciliation of those non-GAAP measures to the nearest comparable GAAP measures in the earnings press release issued and furnished on Form 6-K today and in our prior filings with the SEC, all of which is posted on our website at ir.riskified.com. I will now turn the call over to Eido Gal, Riskified's Co-Founder and CEO.

Thanks, Chris, and hi, everyone. Before we get into the results, I'd like to thank the Riskified team for an amazing year. Everything I can report on today is a testament to the hard work of our team and their ingenuity, and we are tremendously grateful for all their contributions. Now let's move on to the main financial highlights for the fourth quarter and full year. In the fourth quarter, we reviewed $27.8 billion GMV for our merchants, up 23% year-over-year, achieving revenue of $69.8 million, up 22% year-over-year. Full year GMV was $89.1 billion, up 40% year-over-year and revenues were $229.1 million, up 35% year-over-year. These results reflect the impact of continued organic growth within our customer base, combined with the addition of new customers as well as new segments from existing customers. Overall, we were pleased with our results. Continuous improvements in our machine learning platform drove meaningful financial benefits both for Riskified and our merchants. We achieved gross margins of 53% for the quarter and 54% for the year. Over the last three years, we were able to consistently improve the chargeback-to-billings ratio for each cohort, demonstrating the strength of our AI and our scalable financial model. Adjusted EBITDA was negative $7 million for the quarter and negative $19.5 million for the year, reflecting the global investments we've made to capture the larger international market opportunity and accelerated product development cycles. Our North Star has always been to create outsized value for our customers, and we believe that we have been successful in monetizing that value. One of the most important metrics that we track to validate our progress here is our annual dollar retention rate. In 2021, our annual dollar retention was 99%. For each of the last three years, it's been 98% or higher. For…

Thank you, Eido, and everyone, for joining today's call. As Eido already mentioned, our GMV for the fourth quarter was $27.8 billion, reflecting a 23% year-over-year increase. Revenue for the fourth quarter was $69.8 million or 22% year-over-year. The growth in GMV and revenue was driven primarily by the continued expansion of our platform from both new and existing merchants as well as organic eCommerce growth flowing through our model. Despite slower global year-over-year -- commerce growth due to the easing of COVID restrictions and supply chain issues, our business benefited from an increase in pick up in travel recovery, and this highlights the importance of our diverse merchant portfolio. The impact of GMV was in line with our expectations. For the full year, GMV was $89.1 billion, up 40%, and revenue of $229.1 million, up 35% year-over-year. We continue to diversify across the globe as we expanded our portfolio with year-over-year growth in every region. I'd like to mention two regions in particular that have driven faster global expansion. First is our accelerated growth in EMEA, which was primarily driven by the sharp recovery of the travel industry. Secondly, billings growth in APAC nearly doubled year-over-year in 2021 as a result of our continued penetration in this market. During 2021, we saw continued diversification across the industries. Fashion and luxury goods continue to grow and remain our largest contributor to billings. However, their billings concentration reduced due to the accelerated penetration in other industries and the additions nuance. Tickets in travel recovered and more than double compared to prior year. Payments, money transfer in crypto is a new emerging industry in 2021, where we added a number of merchants, including a global money movement remittance and payments company with more than $5 billion in annual revenues; and Binance, one…

[Operator Instructions] Our first question comes from Josh Beck with KeyBanc. Your line is open.

Encouraging to see the nice seasonal bump there that we like to see in Q4. I really wanted to ask about the pipeline. You obviously talked about really good activity in the APAC region. You also talked about, really, momentum across emerging or new verticals like payments and crypto. So it really seems pretty broad-based. But help us understand where the most activity is taking place with respect to new customer conversations. You probably can't quantify it, but maybe help us compare this to prior period or something like that just to give us a sense of the magnitude. That would be great.

Josh, thanks for the question. So I think you're right. We've never seen such a big breadth and scope of new opportunities. And like you mentioned, it's really a combination as we're expanding globally into these new geographies, our sales force, they're able to generate new opportunities, again, because these new geographies have issues have demand. As we're expanding our product to support different payment methods like ACH or like new categories, like crypto or remittance, we're seeing an increase of pipeline activity there, right? And even when we think about some of the product expansion opportunities, the general core merchants we already have within Riskified. So I think that's all kind of combining to create a very good and healthy demand environment for us.

Excellent. And with respect to the outlook, we've obviously seen various reports from different e-commerce companies. And there certainly are macro factors out there, the reopening effects, supply chain inflation, the list goes on. So I'm just curious, as you went to build out your 2022 forecast, how did you try to embed some of these macro factors?

Sure. So obviously, we had kind of 30-plus percent growth this year. We shared historically a framework of kind of 25% to 30% growth, and the guidance for this year is below that. So really, what makes up our revenue is both a combination of new clients and the organic growth of our existing base. So when we think about our guide for 2022, new revenue is within our framework of growth, right? And really, the delta between our guide and the previously shared framework is a result of muted e-commerce volumes and the impact of PSD2, right? And even that e-commerce volumes that could be related to inflationary pressure, related to supply chain issues, related to reopening, shifting away from volume, right? So we pulled that into the muted e-commerce volume. And the second impact is PSD2, right? That European directive that's impacting us because of the liability shift. The weight between both of these, we believe that one-third of the delta between our guide and kind of the framework growth is related to the softer e-com unit -- e-com environment, and two-third is related to PSD2, right? So that's kind of how we built our guide.

Our next question comes from Ramsey El-Assal with Barclays. Your line is open.

It's Damian on for Ramsey. I guess I wanted to drill in a little bit more on the EBITDA guidance. Just came in a little bit below our model. And again, I heard, Aggie, you were talking about the gross profit expectations for 2022. Maybe you can just talk a little bit more about what's driving those. I know you talked about going into new industries, new geographies. But should we expect that, that 51% becomes more of a normalized rate going forward? Or are we going to see the benefits of those in the out years? And then how that plays into your adjusted EBITDA guidance for the full year.

Damian, thank you for the question. So if I think about our gross margin and where we are planning to be next year, we provided a guidance of 51% and above. And the way I think about the decrease from last year is really around two main factors. And the first factor is driven by the different mix of our merchants -- the expectations for the mix of our merchants for next year. And as we've seen this year, tickets and travel is continuing to recover, it continue to grow, while some of the kind of the lower chargeback merchants around the different industries have experienced more muted eCommerce growth. So the total weight of the portfolio should decrease for them. So in a way, I just really see this as a mix -- as an industry mix and not as a performance mix. We actually provided supplemental material. I think it's going to be available shortly on our website, if it's not already there. But we can see there that we've improved our performance in every single cohort over a period of time. And when I think about long term, I'm confident that when we reach this type of maturity, when we have diversified portfolio and across a variety of industries, will be able to move to -- and to increase across the board.

And then broadly, maybe this is for both of you. I'm curious, I want to pick up on the commentary in the press release about the new partner channels, Just curious, I know it's probably early days and you just got into it, but curious what kind of partners you think could be interesting and how that could contribute to growth going forward.

Sure. So long term, we really view ourselves as just part of the infrastructure of commerce. We think we're the best in the world at looking at a transaction and understanding if it's fraudulent or not. And we think that's just part of the stack of wider offerings, whether it's one-click checkout, whether it's standard payment gateways, whether it's enterprise-focused e-commerce platforms. So we really think this is a great distribution channel for us when we think about expanding outside of our strategic key accounts, and it's definitely an avenue that we're really excited to continue to grow.

And our next question comes from Terry Tillman with Truist Securities. Your line is open.

I want to build on the prior question in terms of partner-driven selling. It seems like it is a nice incremental opportunity. But what I'm curious about, is this a more notable kind of shift in your go-to-market activities? And maybe an update on direct sales channel and how that's going. I'm just trying to understand how evolutionary this is as opposed to direct selling with your hunters and farmers. And then I have a follow-up.

No. When we think about our key accounts or strategic accounts on a global basis, we continue to believe that direct enterprise sales is the best way to onboard them. It's kind of a consultative process. They have unique needs and we think that's best served by a direct sales force. But really, as we're thinking about adding additional revenue streams and making sure that we're able to support tiers below that, let's call it, even mid-market and below, we definitely think this is kind of a new avenue for us to make sure we're attacking a broad as possible the market. That's my response.

And maybe a follow-up question for Aggie. I think in your prepared remarks, you were talking about just the dynamics of mix shift of your different customer cohorts and their GMV in '22 as being impactful to gross margins. But I think you also did share something about a onetime innovation investment. So if you could double-click on that a little bit more. And will that reverse itself and be a reason why gross margins could actually lift into '23?

Thank you for the question. So the other part of the gross margin, as I mentioned, it's a 1% decrease due to some work we're doing around hosting infrastructure and the way we optimize using our servers. This creates like a temporary overlap, but we can -- we expect to roll out of this and to benefit from this work in 2023.

Our next question comes from Bob Napoli with William Blair. Your line is open.

Just long term, you've targeted 20%-plus EBITDA margins. Can you give -- yes, how confident are you that the unit economics that you're driving today will be able to deliver that type of EBITDA over the long term? And how can you help investors see that -- get visibility around that target and how you're progressing towards that target?

Bob, thanks for the question. We're incredibly confident. We feel we have full visibility into our spend, the expected output of that spend, and very rigorous in how we invest and what we expect to see from those investments. When we think back to some of the earlier cohorts, geographies, we think they're incredibly profitable and we're certain that they can lead to kind of a 20% EBITDA margins longer term, as we shared. We're balancing that with the opportunity and the growth that we see ahead of us. Having said that, we're obviously mindful of kind of spend and burn, and we do anticipate that this would be the largest investment year in terms of EBITDA loss that we would have. And then we would kind of transition into some of those longer-term targets that we mentioned.

Yes. I mean just some color around those cohorts? I mean, I'm not sure how you maybe think about that for the future, might -- would be really helpful to investors. I think there was a new metric you gave out at the beginning of this call. This is obviously a massive market in opportunity growing market. But the $300 billion of upsell potential -- GMV upsell that would be 3 times what you delivered this year. And I know a lot of your clients, land and expand. Just any color on how you attack that $300 billion? And how much of that is -- do you feel is truly available to you?

Sure. So when we mentioned that $300 billion, that's the white space or wallet or opportunity ahead of us. So that's the volume of our integrated existing clients that we're not processing today, right? So we mentioned that we added one of the top five travel companies, one of the top five omnichannel retailers, one of the top five remittance companies. So they all actually started on significant multimillion dollar deals, but there's still significant opportunity ahead. And when I think about some of the more mature cohorts, we've been able to expand billings by over 200%. And we think this combination of proving value, showing -- building a trusted relationship, showing the ROI in a partnership with Riskified, historically, that's led to significant wallet share increases. And we anticipate these cohorts to behave in a similar way. And that $300 billion is just to kind of help frame the immediate integrated opportunity we have with our existing clients.

If I could just sneak one last one in. Do you -- how confident are you in getting back to that 25% to 30% revenue growth in the back half as you lap PSD2? Is that really it, lapping PSD2 primarily? I know there's some macro and some supply chain here and there. But with the opportunities, how confident are you in getting back to that growth in the back half of '22 and then in 2023?

I'm very confident. And I think the numbers are clear, right? I think once you look at the numbers, it's easy to understand. And we've been communicating them for a while. Again, PSD2, we see no additional impact in 2023, and we see a close to zero chance of this happening in other geographies. Really, when you think about the value of PSD2 in our world, it's minimal. Already today, consumers are not impacted by fraud, right? If a consumer receives a chargeback, they call their bank, they're refunded the money. When you think about merchants who bear the liability -- in fact, merchants today can turn on strong customer authentication, really secure. On math, they choose not to do it because it's a terrible experience. It's bad friction. It causes a conversion impact drop-off. So in fact, what merchants do proactively is they use a frictionless experience like Riskified, right? That's much better than 3D Secure. And when you think about the entire card issuing banks, they obviously hate something like PSD2 because suddenly they're liable. So really, we think there's no value. There's no consumer impact. And when you think of even passing a law like this in the U.S., probably like a congressional level act. So we feel very, very confident that it's not happening. We see no indication that it's happening elsewhere in the world. So we view this as a onetime reset, right? And that's kind of in charge of two-thirds of the delta between our framework -- between our guidance and that kind of 25% to 30% growth that you mentioned. With respect to the muted eCommerce volumes, which is another one-third of the delta, I mean, I think most people would agree that this is a tough comp for the next few quarters and everyone anticipates cycling out and returning to normalized eCommerce growth. So really just that is leading us to have full conviction that we'll return to our framework growth. And just thinking about the behavior, throughout this year, we started Q1 stronger than anticipated. We think that there is going to be a sequential -- a year-over-year growth rate decline as we head into before we start ramping up in the back half of the year.

Our next question comes from Will Nance with Goldman Sachs. Your line is open.

I wanted to follow up on Bob's question on the $300 billion opportunity. I appreciate you guys giving that disclosure. I think it's super helpful. So if I look at that, if I understand the disclosure correctly, it seems like you're roughly 25% penetrated with your merchant base. I was wondering if you could help us understand what that penetration looks like for some of your older cohorts. I think you mentioned you were able to increase older cohorts by 200%. Could you give us a sense for what that implies for penetration on your older cohorts? Just to give us a sense for where we could be -- where that 25% could go longer term?

Yes. When we look at some of our more mature cohorts, they're definitely significantly more increased on an absolute basis than 25%. Another way to think about it is that a year like this, we incrementally added more TPV to that kind of white space opportunity than ever before, right? So on an overall basis, it looks that the penetration is lower, but we definitely see 50-plus percent penetration in some of the earlier cohorts. I think we shared that in the mature ones, billings have increased by 200%. So I think that's a great proxy there. So I think that's the overall scope of it.

And then I just wanted to follow up on the assumptions around travel. It sounds like -- it sounded like travel on the margin reduces the gross margin profile. But I would assume that with the riskier volume comes higher take rates in general. So just -- could you help us understand what's baked into the guidance in terms of the recovery of travel spending over the course of 2022? And just maybe help us frame how that might impact optically some of the metrics in terms of take rate and gross margin.

Yes, definitely. So when I think about travel, there's two main factors impacting it. One is just the increase of the overall population. But the other factor as well is just the changing of the risk in the population that we've seen post-COVID as well. So I can say that while over time, we're confident that we'll continue to improve our performance in that industry as well, the fact that things are rapidly changing also has created some of the kind of the higher overall chargebacks in that specific industry.

Our next question comes from Timothy Chiodo with Credit Suisse. Your line is open.

My main question is around the ACH business, then I have a quick follow-up on the guidance. For the ACH offering that you mentioned started to ramp more meaningfully in this most recent quarter, maybe you could just talk about the types of merchants that are using ACH payments, what they're using them for, what verticals they're in and some additional context there. And just how big and meaningful that is, either within your existing base or potentially new customers that are processing ACH payments.

Tim, thanks for the question. So just to start, it's still early days for us with ACH, but we think there's very -- there's definitely a longer-term strategic opportunity. So when you think about the overall payment volume going through ACH, it could be obviously remittance companies. And that's our direct focus day 1. But obviously, more and more eCommerce companies are trying to use ACH for larger ticket items. We see ACH in different forms of bill pay and B2B transactions in the banking world. So we think longer term, it's a very strategic and interesting opportunity. We're starting to ramp significant volumes, but it's still kind of a smaller part of our overall subset, right? So we think it has great growth potential, and we're very happy with the start.

And then the follow-up on the guidance. So it's pretty clear from your comments that the expectation embedded in the guidance is that gross profit will grow at a slightly lower rate than revenue during 2022 for the factors that you outlined. And I apologize if I missed it, I was trying to keep up. Did you make any comments on the GMV growth? In other words, should the GMV growth this year be faster or slower than the guided revenue growth?

Yes. We didn't specifically mention GMV. The way we build our analysis internally, it's bottom up. But when I think about, it can be definitely around the same type of growth and kind of assumptions around a very stable take rate as well.

Our next question comes from Tien-Tsin Huang with JPMorgan. Your line is open.

This is actually Reggie dialing in for Tien Tsin. Kind of questions, I guess it's more big picture. Trying to understand, is there any seasonality to, I guess, deal signs like at certain times a year where conversations are richer, you're more likely to sign customers? That's part one. Part two of that would be, could you talk a little bit about, I guess, your bookings for 2021 and how they may be compared to 2020 and 2019 in terms of the business that you signed last year? Just trying to get a sense of the sales channel and how that's kind of ramping. And I have a follow-up.

Yes. I would say with regards to seasonality, we see that Q1, Q3 are definitely equal in the sense that merchants are as open and committed to kind of integrate and bringing on new solutions. Historically, Q4 because of the holiday season, there's usually a code freeze. So we see that as probably more oriented towards growth within existing clients and adding segments from existing clients that already have an integration, right, because of that holiday dynamic. And I think the second part was more around the new revenue growth in 2021 and how that relates to 2020, yes. And I think it's within kind of the framework that we previously shared across all those years.

What does that mean? I'm sorry. What you previously shared there?

We showed a 15% growth framework for kind of a new business and 10% to 15% from kind of organic. I'm saying in both of these kind of previous years, it was within that framework.

And then if I could dig into the comment, the $300 billion in kind of total volume amongst your partners. Like what explains that gap? Is it geography? Is it that those remaining transactions are viewed as lower risk by the customer? Like what's -- why -- what was the delta there? And kind of how do you attack that -- those different pockets?

Sure. So if I understood, it's more like why don't we have that $300 billion with us today? And really, when you think about the process of integrating Riskified into some of these large strategic complex merchants, they have a lot of internal systems, teams, tools doing what we do. And the way we effect change is usually we start on a subsegment, right, whether it's a geography or specific use case. And then as we build a trusted relationship, improve the value of our technology over time, we're able to expand the relationship and capture more wallet share. The pricing we take is risk-adjusted, right? So even though we may start with a higher risk segment, there's preferential pricing for giving us a wider swath of transactions even if they have a lower risk profile. And really, the ROI for the merchant is kind of pretty much guaranteed, right? So that's why we've seen expansion within our cohorts over time. And we feel confident that we'll continue to see that with the recent cohorts as well.

I definitely appreciate the pricing dynamics as you pick up more payment volume.

Our next question comes from Brent Bracelin with Piper Sandler. Your line is open.

I'm going to start with Aggie and I'll finish with Eido. Aggie, as we just think about modeling revenue from a quarterly seasonality perspective, if I go back, it does look like Q3 historically is kind of down from Q2. Is there anything different this year where we should think about a different type of seasonality? Or is that the right way we should think about seasonal trends, Q3 being slower than Q2 and the bulk of the increase in the second half would come in Q4?

So historically -- and Brent, thank you for the question. Historically, we've seen Q4 having a bigger proportion of the total revenue for the year, and we continue to expect this to and to follow last year's trend. When I think this year about the rest of the quarters, there's just a lot of different dynamics impacting them related to, as we mentioned earlier, to the flow out of PSD2 and eCommerce and different seasonality. So I definitely think that they're going to be much more kind of less pronounced and less different in a way from each other. And that's more of a specific for this year.

And then my second question for you is just really thinking through what sounds like a very strong net new customer add quarter, top five travel, top five retailer, top five remittance. What's the impact to gross margins? Is there a -- as you think about onboarding some of these larger new customers, as you think about initial volumes and a long runway to grab additional penetration, is there a short-term kind of drag or investment that needs to be made here on the gross margins temporarily? Is that the right way to think about onboarding new customers or not?

Yes. I mean, as we go into new geographies and brand-new categories, there can be a drag on margins. But that's already reflected in the guide that we shared of the 51 or above, right? So some of the things that are offsetting that drag is continued improvement in some of the other cohorts, right? And obviously, as we gain more experience with the new cohorts, they improve as well. So really, that tends -- or not tends, for this year, we anticipate that to be kind of pretty much of a wash. And really, the main factor impacting that kind of 2% sequential decrease is more around the mix shift. That's a one-off event related to the post-COVID change.

And then, Eido, just as we think about the big opportunity ahead of you here, $300 billion just with existing customers. It feels like there is a disconnect here, right? You have some really strong new customer momentum and obviously growth that's declining because of PSD2 and some headwinds. But I guess, my question for you as you think about the new wins that you've talked about, pretty high-profile new wins. What's resonating? And why now? Obviously, it's hard outside looking in. You're seeing growth decel, but it clearly seems like something is resonating more now than it was before. So help us understand what is resonating as you talk to customers, particularly these large top five customers that are coming onboard? What's resonating today that -- more so than, let's say, a year ago?

Yes. I think the number one thing that's resonating is the ROI, right? We're guaranteeing higher performance for a lower cost structure. So when we started the company in 2013, obviously, this was a brand-new paradigm. So it was challenging to get the initial first few enterprise clients. But now as we're able to have more and more of these brand names, right, and build our trusted relationship and deepen our engagement with them, right, we think it's becoming much easier and much more prevalent. We think that just from the competitive environment, it's becoming more clear that -- emergent is faced with two decisions. Do I manage this process internally with the scoring solution, an internal team, a manual review and update this on a continuous basis? And then you have a host of solutions that you can choose. Or do I want to offload this to a chargeback guarantee vendor? And that's pretty much Riskified in the enterprise space, right? And we think that kind of wallet share or mindshare in that area is really helping us, okay? So it's a combination of more and more merchants being open to the idea of charge-back guarantee. And again, we believe because the ROI is clearly superior in this model that, over time, more and more merchants will move in that direction, together with us cementing kind of being the front runners in this space.

And we have a follow-up from Terry Tillman with Truist Securities. Your line is open.

I figured not to let you out of this other 10 minutes for the call. So I did have two follow-ups. One question, just kind of related to the new business success. I'm curious whether it's qualitative or quantitative, you can say anything about win rates in the business as opposed to somebody going with risk-scoring or just a no decision or status quo? What are you seeing in terms of win rates? And then I wanted to ask another question about partner-driven selling.

Yes. We definitely feel that we're the preferred choice within chargeback guarantee, and we're continuing to generate momentum there. And we feel very pleased with our performance and some of the names that we were able to add. We think it's great.

And then on partner-driven selling. I mean, it does sound interesting. It seems like it's an incremental way to go to market. But is there anything more you can share with what kind of resources these third parties, whether it's payment gateways or one-click technology providers or eCommerce platforms, what kind of skin in the game is there from them? Are they building -- do they have quota? Just I would love to learn more about what's the motivation for them to sell? And is there any concept of billings contribution from this newer channel in '22 or not much?

Yes. I think the value for them is creating the best end customer experience, right? So if I'm offering a one-click checkout, it's a competitive advantage for me to be able to offer a service like Riskified to my merchants, right? And I think it's just a similar story with the eCommerce platforms and gateways. If this is a superior way to manage eCommerce risk that creates better performance, then it's better for them to offer it to their merchants. And there's obviously some product adaptations and ways to integrate and data and modeling on our end that we need to do in order to support this, which is why we've taken our time to really introduce this channel. We wanted to make sure that we have it down right. And it is kind of a unique proposition. No one else does it right now. And to your second question, there's nothing meaningful baked into the guidance. Because, again, when we think about our guidance, we want to have much more experience and a higher degree of conviction. And like you mentioned, this is kind of an earlier growth opportunity for us. So it's not reflected.

And we have another follow-up from Bob Napoli with William Blair. Your line is open.

Just on the competitive environment, have -- what are you seeing? Has there been any significant change in the competitive environment? And how do you view it? And who are you typically seeing in your RFPs? Has that changed at all?

Yes. I think if anything, we've seen that we've become the dominant and clear favorite and charge-back guarantee. If there have been other companies that offer this historically, they've moved away from the model because it's more challenging to execute and we're the front runners there. So really, what we're seeing on a competitive set is that the decision at the merchant level is, do I want to continue to manage and build this process internally? And then it could be any one of a dozen solutions, right? If the decision is, and we think that's where the ROI is, and more and more merchants are heading in that way, to do a chargeback guarantee solution, it's clearer than before that Riskified is that solution. And that has us very excited.

And then on international, I mean, it seems to me like the authorization rates around the globe are very different in different markets. And so the need for your services could be greater in different areas of the world. What are your -- what percentage of your business is international? How do you view the international markets? Are the returns there similar? Is the demand -- or is the white space larger? Sorry, a lot of questions around international.

Yes. Thank you for the question. So when I think about where we are today, the U.S. is still the biggest market for us today in terms of our presence. But in terms of growth, the international market is growing much faster. So we see APAC, we see EMEA, and these are very, very strong growth regions for us. And this dynamic, I kind of call this really the reduction of the U.S. as a percentage of the overall billings in 2021, I expect this trend to continue.

If I could just sneak one in on crypto, your relationship with Binance, there's a lot of -- a lot going on. How is your product being used in the crypto space? And is that a very large opportunity? And are the economics there similar or better than your core product?

Yes. The main usage for us is when someone converts using a credit card or different forms of payment and purchases the digital asset. So that's where we kind of look at the transaction to verify if it's legitimate or not. It's still a minor part of our overall revenues, and we just see it as a possible bet on future growth in this category and industry. We're excited to be part of the infrastructure of it. But that's where it stands today.

Thank you. And that's all the questions we have for today. This concludes today's conference call. Thank you for participating. You may now disconnect. Everyone, have a great day. Goodbye.