Q4 2022 Riskified Ltd Earnings Call
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I would like to have the conference over it to your spirit today <unk>.
Mendell.
Please go ahead.
Good morning.
Thank you for joining US today my name is Chen Mendell risk if I'd heard of Investor Relations.
Today's call to discuss risk financial results for the fourth quarter and full year 2022.
Participating on today's call <unk>, <unk> co founder and Chief Executive Officer, and argued Yo Cheever risk about the Chief Financial Officer.
We released our results for the fourth quarter and full year of 2022 earlier today.
Earnings materials, including a replay of today's webcast are available on our Investor Relations website at <unk> at <unk> Dot com.
Certain statements made on the call today will be forward looking statements related to our operating performance financial goals and business outlook, which reflect management's best judgment based on currently available information.
Not guarantee of future performance.
And all forward looking statements to be covered by the Safe Harbor provisions contained in the private Securities Litigation Reform Act of 1995, and our including these statements for purposes of invoking the Safe Harbor provisions. Please note that these forward looking statements reflect our opinions as of the date of this call and except as required by a click.
The law, we undertake no obligation to revise this information as a result of new developments that may occur. After the time of this call. These.
These forward looking statements involve risks uncertainties and other factors some of which are beyond our control that could cause actual results to differ materially from our expectations.
You should not put undue reliance on any forward looking statements.
Please refer to our periodic and other SEC filings for more information on the specific factors that could cause the actual results to differ materially from our expectations. Additionally, non-GAAP financial measures and key performance indicators will be discussed on the call back.
Reconciliations to the most directly comparable GAAP financial measures are available in our earnings release issued and furnished with the SEC on form 6K today and our prior filings with the SEC and in the appendix of our Investor Relations presentation, all of which are posted on our Investor Relations website.
I will now turn the call over $3.
Hello, everyone 2022 is an important year for risk advice in terms of executing and longterm positioning.
The year, we thoughtfully expanded our global footprint grew our coverage and selective existing and emerging vertical enhanced our product bridge.
We achieved Daniel 2022 revenue growth 14%.
Let me unpack this growth we further detail.
Growth in full year, 2022 was driven primarily by new customer wins and upsells from existing customers and highlighted by strong performance in our tickets and travel vertical which grew approximately 150% year over year.
I am encouraged that our top line growth continues to outpace overall e-commerce growth despite headwinds inserted vertical such as home in general retail, resulting primarily from a more challenging macro environment compared to 2021.
While macroeconomic factors may impact certain parts of our business from time to time, we believe that the diversification of our portfolio across merchants industries and geographies positions us for growth regardless of the macro environment in which we are operating.
We believe that our financial results highlight the resilience of our business and underscore the value that we believe we are able to provide for as long as the world's largest online merchants. We believe that we remain the best at analyzing an e-commerce transaction in determining whether or not it's fraudulent.
This is a testament to differentiate it and proprietary technology that we have built.
The accuracy of our models and our positioning is one of the largest fraud related guarantors of e-commerce transactions in the World has created a distinct competitive advantage for us.
This is a key reason why we have disproportionately success during the competitive processes, and which we win more often than our competitors.
By helping to solve a fundamental need for our merchants. We believe we have become essentials Hogan the value that are charged Becker key product can deliver is particularly important and the slower growth environment, where merchants are increasingly focused on driving revenue growth while simultaneously reducing costs.
Or go to the market had a strong year in executing our strategy of landing the world's largest online merchant proving Roy and then expanding our relationships with these merchants.
Our top 10, you merchants added during the year represented five categories across three regions and we have strong success and executing ourselves to our existing merchant base.
Now combined with the ramp up of our policy protect the dispute resolved products each designed to solve additional high value use cases for our merchants. We believe we are positioning our business to capture an increased share the e-commerce landscape.
As a reminder policy protect uses the power of our global merchant network of billions of accounts behaviors and transactions to help detect and prevent policy of use in real time using.
Using policy per tucked, leading retailers have saved millions of dollars fucking policy related abuses and have been able to Brazil prevent up to 15 times more abusive returns and refund claims than they were previously able to.
And electronics merchant currently utilizing charge about guarantee recently began also using policy protected this merchant generates over $800 million in total GMB and represents a great new wind for US. We are excited to utilize our robust identity data to tailor their interactions and policies in order to deepen relationships with their loyal customers.
We believe that we have an opportunity to do this for many more of our fantastic merchants.
In addition was skewed resolve we are able to fully automate elements of the dispute process for fraud and non-profit related charge back abuse through a process known as chargeback resentment the visibility automation and speed that we are able to provided the chargeback representing process is an important functionality, but arguments are charged.
About guarantee offer.
This product is opening doors for our core charge back guarantee product as an example of 5 billion dollar online sales merchant is currently utilizing our dispute resolved product as a result of the trust that we have built and the results were delivered in managing their chargeback represented in process in the fourth quarter.
We were able to have a substantial crossover overcharged backyard key product taking volume that was previously with a competitor.
And while it is still early days for our policy for tax and dispute resolved products from a revenue perspective, we are firmly entering a new product cycle and have a solid pipeline of debate.
R. 2022 goal was to continue to grow our top line will making meaningful reductions to our permanent cost base with a focused towards accelerating our timeline to profitability.
We executed on the skull and we're able to deliver a full year adjusted EBITDA figure of negative $36.4 million. This exceeded our initial full year guidance of negative 67 $5 million to the midpoint by nearly 50%.
This was driven by reducing permanent costs from the business through a thorough expensive analysis and hiring fund modification.
Partly resulting from these initiatives we have made significant progress towards our goal is accelerating our path to profitability and in fact nearly achieved that goal this quarter on and adjusted EBITDA basis.
I am pleased with the progress that we've made in this area, but our work is nowhere near done.
We recently celebrated the 10th year anniversary of our founding our company has grown from a small operation based in Israel to now becoming one of the largest fraud related guarantors of e-commerce transactions globally, having analysed nearly 2.5 billion transactions since our founding.
We are able to deliver outsized Roy for some of the world's largest and most prestigious online merchants and believes that we have developed deep rooted relationships of trust and confidence that we plan to nurture for years to come.
Trust that we have built with our merchants is evident in our annual dollars retention rates of 99% in 2022 consistent with prior years in fact for each of the last four years, our retention rate has been 98% or higher.
Testament to our low churn rates and I want to thank the entire risk if I'd team for their tireless commitment to our merchants in further contribution in achieving this important goal.
Looking ahead to 2023, I believe our business is well positioned to continue to improve despite the current challenging economic environment. We are organizing our sales and product teams to prioritize areas that have the greatest returns for our business merchants and shareholders were also enhancing our customer advocacy.
The better leverage our work to drive stronger pipeline.
We expect that our growth in 2023, while continuing to be powered by key go through Margaret winds ongoing returns on our geographic investments improvements within some of our existing vertical and by capturing more market share through adoption of our newer products.
While the underlying performance of our merchant is not in our control I am optimistic that over time, the broader E. Commerce landscape will improve from current levels, which we believe should positively impact our organic growth and.
In the meantime, we will continue to focus on the areas of our business that are within our control in order to deliver rois, our merchants and drive value for our shareholders.
Now I would like to turn it over to August to discuss our financial results in more detail and share our initial growth outlook for 2023.
Thank you a team and everyone for joining today's call.
We achieved fourth quarter revenue of $79.3 million and $261.2 million for the full year bulk up 14% year over year.
R J J for the fourth quarter was $32.2 billion up 16%.
For the full ear or a game vehicle at the 100 billion milestones for the first time to be hundred $5.6 billion, reflecting an 18% increase year over year.
Our full year growth in <unk> revenue was primarily driven by strong tickets and travel performance, you merchants and ourselves and revenue growth across all geography.
How about organic or same conference calls, which is a reminder doesn't include upsell activity from existing margins remained while the Royals historical norms and declined by mid single digits during the year.
Looking at our overall crowd during the year, we continue to benefit from sustained growth in our largest industry fashion and luxury goods, which alone contributed over $100 million in annual billings.
As expected tickets and travel was the most meaningful area.
In 2022 is that benefited from the addition of large new customers as well as the return to in person events and increased travel following call.
We more than doubled our billing wading tickets and travel and it is now larger than our home vertical at almost 30% of federal buildings.
One of our newer vertical money transfer experienced triple digit pro and we saw stable year over year performance in our foot vertical.
The combination of this for vertical represented approximately 75% of our billings for 2022, and I'm encouraged that a substantial portion of our portfolio performed strongly and growth during the year.
This was a fed by a significant decline primarily related to the macroeconomic environment in our home electronics in general right now on Friday.
From a geographic standpoint, we experienced across all our regions in 2022.
The U S remained our biggest region in EMEA in APAC <unk> more than 50% during the year.
We recently I want to cancel a first time clients in Japan and are excited by the early win.
As we continued to strategically build our footprint in APAC, we anticipate further upsides as we benefit from more established presence on the ground.
Overall, our <unk> contribution by region with more evenly distributed than in previous years is the continued to build a global and diversified company.
Moving onto gross margin or non-GAAP gross profit margin for the fourth quarter of 2022, 53% consistent with the fourth quarter of 2021 anything program from 52% in the third quarter of 2022.
Or non-GAAP crossed profit margin for 2022, 52%, which exceeded our target floor a 51%.
The improvements in our non-GAAP Cross profit margin from the initial far is primarily attributable to improvements in our core machine learning model and optimizing of our cost of goods salt that are others in charge backs.
Set by the impact of cramping, a significant new margins and a shift in our portfolio mix door tickets and travel which has historically been a lower gross margin vertical.
The portfolio.
As it relates to the 2023 for the full year targeting a non-GAAP gross margin between 50, 152%.
They are accidentally our first quarter margin may be at the high end of this range Q2 at the lower end Q3 below the target range with Q for being higher than the range. Once again pressed profit margin is fast satellites on an annual basis as margin may fluctuate on a quarterly basis.
Moving to expenses.
Total non-GAAP operating expenses or 42 million for the fourth quarter of 2022 fled sequentially and a slight improvement from the fourth quarter of the prior year.
As expected or non-GAAP operating expenses as a percentage of revenue decline both from the fourth quarter of 2021 and sequentially from 67% in the third quarter to 53% in the fourth quarter of 2022, reflecting leverage in the business model.
For modeling purposes, we anticipate our 2023 expenses to be in the range of approximately $45 million per quarter, and we expect that our expense levels will be relatively flat throughout the year.
We have operated the company in a profitable minority prior periods and we remained focused on the lever simple and the processes to prioritize in order to return there.
We made strategic investments in 2021, and 2022 in order to help out with crawling merchant base manage a broader range of high value of cases.
And enhance our ability to support our merchants and your geography.
We're already recognizing some of the benefits of this environment and we will continue to diligently manage our hiring plan and optimize our expense face to meet our goals.
Adjusted EBITDA for the fourth quarter was nearly breakeven is negative hundred 6000 and represents a 98% a year over year improvement.
For the full year, alright, adjusted EBITDA was negative $36 $4 million.
And did I mention we exceeded the original guidance range that in February of 2022 by nearly 50%.
Overall I'm pleased with how we executed on this important companywide called.
In addition, we continue to maintain a healthy cash flow model.
Our free cash outflow for approximately $34 million in 2022.
Which was essentially flat, which 2021.
Our outflow meaningfully cloud in the back half of the year and we feel great about our ability to manage our capital in 2023 based on our current strategy.
Moving to the balance sheet, we maintain a very strong liquidity position with substantial access to capital we.
We ended the year with approximately $483 million of cash deposit and across interest on the balance sheet and we carry zero debt.
This amount represents a slight decline from $484 million in the third quarter.
We entered 2023 with a strong liquidity position that will provide us the flexibility to focus on using it strategically sort of opportunities presented themselves.
Now turning to our outlook.
As we look forward to 2023, we remain excited about the opportunities ahead.
We expect that the macro uncertainty we face last year will remain and don't expect the macro environment that change materially in the near term, which is factors in our initial guidance for 2023.
We currently anticipate revenue of between $297 million and $303 million or 14% to 16% year over year growth.
Allow me to provide more context.
First similar to 2022, we anticipate that our growth will be driven primarily by new end of selectivity offset by continued headwinds for some of our industry verticals associated with a challenging macro environment.
Second we anticipate tickets and travel to continue to grow.
As we have now less favourable comp related to the coveted recovery in 2022, we expect to see more normalized.
Versus the triple digits <unk> across we saw in this vertical throughout 2022.
This normalization, maybe more pronounced in the back half of the year, especially as we left the onboarding of a large margins from the third quarter of 2022.
Third we feel great about the activity levels and ability to onboard new merchant, but given the uncertainty and the environment. We have lost disabilities, a normal as to the timing of when new merchants will go lives in the second half of this year.
Now, let me provide some direction of our revenue on a quarterly a six month basis.
Our first costs, a demonstrator stronger <unk> pulse rate than the second half.
Dynamics that I have previously mentioned.
We expect to care for it to be the strongest quarter of the year on an absolute basis.
Consistent with typical holiday shopping seasonality and to reflect the similar percentage of total revenue as in 2022.
Q Q3 should be relatively evenly spread with Q unexpected to be lighter than Q2 on an absolute basis and kisses will be slightly stronger than Q3.
We have approached our initial guidance responsibly, just with the macroeconomic environment.
We'll continue to monitor the performance and health of our merchants consumer spending and the broader e-commerce landscape and the impact on our results.
Now, let me discuss our adjusted EBITDA outlook.
We anticipate to continue making significant improvements to adjusted EBITDA in 2023, as we near profitability.
We currently expect adjusted EBITDA to be between negative $27 million in negative $22 million. Please.
This represents a 32% year over year.
Improvements of the meat points and meaningfully outpaces are anticipated 2023 revenue growth.
Demonstrating leverage in the business model and the commitments to managing the business in a disciplined manner.
Overall, we are pleased with our 2022 results and remain excited about positioning of the business. The continued prospects for long term growth and our ability to deliver value to shareholders.
Operator, we're ready to take the first question faced.
Thank you so much for centuries, so as a reminder to ask a question. Please press star one one on your telephone and weight training to be announced so is there a question. Please press star one one again and please stand by while we compile the Q&A roster.
Our first question comes from the line of Terry Tilman of Trust Securities. Please ask you a question.
Hi, good morning at all.
Thanks for taking my questions at a question and then.
Follow up question.
Maybe just a little bit more argued in terms of the macro and how that's impacting the business in the puts and takes in informing the guidance so whether it's a parking more around or.
Organic business in further declines.
The.
Some of your traditional industry as being more impacted or just slower news logo activity falling into the model just would love to learn a little bit more about this concept of the macro and performing the guidance and then how to follow up thank you.
So look overall, when we think about our revenue growth and the guy that really comes down to two main categories right number one within our control and that the new the off so the cross-sell and we feel really good about that were coming in with a great.
Pipelines a team is executed very well and we think that's going to contribute most of the growth in 23, when I think about the other categories dumped more outside our control, mostly organic or kind of same store sales. We think that there is going to be macro and firm and that's going to be a head wound of mid single digits throughout 23.
Now, obviously e-commerce reverse and more historical normalized growth rates, that's gonna move from becoming a headwinds hotel room.
We don't know exactly when that's going to happen. So the guide assumes that the macro challenge remains for all of 23.
With that said I'm still happy hour outpacing overall E com growth.
And when I just look around some of the numbers from our peers said, whether that's become enablement or just straight ecommerce companies I think are macro perspective kind of makes sense.
Okay, I'll give you a little bit.
Sorry about the artist.
Thank you. Thanks, So just to give you a little bit more detail on the organic from.
Most of the categories that beside it as being like an app tougher environment in 2022, so and to expand that we should hopefully see any improvement in 2023.
But still the way I see it it's just the positives are noticed <unk> and <unk>.
Categories like common general rebuild the negatives are now going to be as well. So that's how we are resulting in the same range.
Obviously held hostage, taking some travels a continuous of relevance triple digits.
By this we're going Shaw.
<unk> I think that.
And just kind of be like Ah.
Facts and ultimately the vertical that will be created a strong and provide some end of what remains strong.
And one more thing I think that it is kind of new 580 in our guide.
In fact, there are multiple bankruptcy from.
Clients of Iris in them and if it doesn't materialize that can potentially be an upside but started to pay right now.
Okay. Thanks for that.
Both of you and then just for my follow up question just relates to this concept of the charge about guarantee kind of being the words historically and religious synonymous with your business you were talking about some other modules when I do get lots of questions about.
Become a platform business, so but loved to learn a little bit more even though it's early days.
Like the impact of take right from these newer products and do you have the go to market kind of DNA to be more of a platform sale. Thank you.
Sure. There is so 20th year was definitely a build airport these products and large review the Roy is plentiful a handful of merchants and we do have significantly higher expectations for them from 23, Ravi who we previously sure joins us US President of the field organization has a lot of experience building these types of kind of platform.
The market motion.
And I think maybe the best indicators that when we think about the targets for the sales team for this year.
10, plus percent is coming from some of these newer products. So we definitely think we're seeing a significant increase there.
Great. Thank you.
Thank you so much. Please one moment for the next question and your next question comes from the line of <unk> of Barclays. Please go ahead.
<unk> line is now open you can ask a question.
Hi, guys. This is owing on for Ramsey I appreciate you taking a question.
To ask a little bit more about what you're seeing in tickets and travel I was wondering if you could give us any more color on the sustainability of the growth in this vertical and if we might see any strengths sort of such subside at all.
And in addition is there any new vertical as you guys are seeing with any more growth potential.
Any color there would be super helpful. Thank you.
Hello, and thank you further questions.
The first plan Ah regarding tickets and travel it's been a very strong industry.
August growing growing industry 2022, and I do expect that will continue to be strong in 2023, probably not.
<unk> <unk> <unk>.
They did that we saw in 2022, silver, but still relatively strong.
As the more in U S.
It's early in the year, but will have seen like some of the positive impact updates on travel was tongue in safari, continuing to be strong and <unk> and.
And we're just kind of flattering.
To persist.
And Ah more normalized manner throughout 2023.
And for the categories. There, we've seen the highest growth rates and your categories would be money transfer and food, but we still have significant wide space and all other categories Inconsiderate history strength, there as well.
Got it thank you guys.
He's so much.
And our next question comes from the line of <unk> of Goldman Sachs. Please go ahead.
Hey, guys. All good morning, I appreciate you taking the question.
I wanted to ask some of the commentary on new vehicles that you won't.
How about you.
So I'm pretty positive on the new product cycle I'm, just wondering if you could kind of talk around your expectations for how meaningful new products could be overcall multiple percentage of revlon, what's kind of a reasonable timeframe for investors to think about that thanks.
Yeah, I mean, I think the start for this here is definitely making sure that as a percentage of the new revenue is becoming an increasing share is everything going from basically zero last year at the 10 plus percent now it's a great first step we're certainly happy that these products have a higher margin profile than our traditional chargeback product.
Will help over the long term.
And we will definitely kind of update on progress of course.
Got it that's helpful. And then just maybe a call from them all up particularly and the second offer you I think you mentioned, having a little bit lower visibility than normal around client go laws.
I'm just wondering if you could maybe homework local mall or what do you think what do you think it's driving now.
Kind of making more conservative assumptions around go lives embedded in the outlook. Thanks.
I don't think there is just one element to kind of.
Create a conservative assumption I, just thinking about the macro environment. That's why I have right now and what's our merchants are reporting and just the general kind of full activity that we've seen it's more prudent to.
So we will continue to think about the people of data processing.
And we must service collectors across all of the kind of like the possible opportunities in the second half of the year and all of our optimistic.
However, it is early on.
There are opportunities later on we continue to progress will continue to update.
I'll tell you that.
There's just more uncertainty so as we got further outside of uncertainty creates a wider and about them. So we need to tell you that into account within their guide.
And we are definitely much more in June involved there around the first of which we have better visibility too.
Initially I appreciate you taking the question to ask yourself this morning.
Thank you so much.
Alright next question comes from the line of fire Nepali <unk>. Please go ahead.
Good morning, everybody.
Question just on the.
The long term target operating model.
<unk> your confidence.
Having been public now for for well over a year.
Just could you break review those targets and are you still confident targets that you had when you went public.
Hopefully the long term.
Nothing has changed in any way around those targets refill think we are on track.
Yeah, nothing has changed the way, we think about the business in general.
There are different.
<unk> and if we think about our adjusted EBITDA that using our control and we're continuing so.
Two more storage profitability. Obviously, there are some areas that are now not in our control, but I'm confident that the e-commerce environment at some point.
Therefore positively impact us as well.
Thank you and then just I guess to me it seems like the fraud market itself is not slowing down and I know E. Commerce is volatile and a big part of your business, but what is.
What are you seeing from the.
The competitive environment.
Your charge back model versus other models, just maybe are you competing more with.
Chargeback models or other models or an internal.
Are you seeing more.
Competitors in Rsp's than you have in the past or different types of competitors such as some some thoughts around the the.
The competitive environment, and what should still since still seems like a massive.
Market opportunity well above your growth rates should be well above ecommerce.
I would think.
Hey, Bob So Q4 was definitely the best performance from the sales team on the competitive set that we've had historically so we absolutely love that trend and we think it is becoming clear at the enterprise about the charge Becker K, which we believe provide more value than an uncovered decision and a better overall lower cause.
The foreigners alright, we're seeing predominantly rosko sideways. So we're very happy with that positioning and I think your point, there's definitely a lot of white space and opportunity what flavors do we have to call. How do we accelerated bank grow with incentives within our control or definitely thinking and focusing on that.
Great. Thank you.
[noise].
Thank you so much.
Our next question comes from the line of Tim Ciano of Credit Suisse. Please go ahead.
Great. Thank you. So similar question to what Bob was just mentioning there, but I wanted to get digging a little bit more to the specific new ones that you mentioned in a strong sales team result during Q for the Rfps that you are going into our these customers coming in definitively deciding that they want to go to the charge back guarantee.
Route or are they coming in more open minded, meaning they would consider chargeback is a survey or decision as a service and charge back guarantee in other words. When you are winning these rfps is it up against someone else also offering chargeback guarantee or is it against a number of different alternatives and services.
No one offers charge back guarantee at the scale, but we provide okay. So it's much harder for any other companies to compete in that category within the enterprise because there's clearly an inherent advantage.
And are the rfps coming in advancing charge Burger King RSA. It's a mixed race some of our women are non RFP all would just come and help with a smaller segment and then expand over time. Some of them are more general Hey, I have an issue within my fraud, and abuse and fraud and abuse no not just fraud.
Hey, what model can help provide me the best guarantee Roy.
Great.
That's in line with what we were expecting there it's kind of a mix of the two okay. Great. That's really helpful. I appreciate that the brief out would be on the travel and take it as a vertical clearly the growth was very strong during 2022 could you disclose what the growth for GMB was on an X tickets and travel vertically basis for 2022.
Yeah, I don't think we kind of properties down, but if I think about.
Was ripped off contributor saw Robert tickets to travel bulk of the nila and just on the organic sites.
Also just continuing to expand with existing merchants and slides.
New new levels, and we also mentioned tennis, China My name a few are in the strength.
75% of our business.
Grow in 2000 financial I'm very optimistic about the continuing Joan happened in 2023.
Okay, great. Thank you for the context I appreciate you taking the question.
Thank you so much and last question comes from the lineup Frank pressing.
<unk>. Please go ahead and ask a question.
Good morning, Idaho question for you here I'm curious to hear more about the economics of the new policy to protect.
For returns why does this product have higher gross margin profile than fraud are you using the same data just re training the algorithm for a different use case and then could you maybe talk a little bit about not only the higher gross margin, but also.
What it does to uplift an existing customer could it expand your revenue an existing customer by 10% by 30% any Colorado.
What the revenue uplift might be when you actually go in and and self fraud and policy protection merchant banks.
Third grade question.
So.
Let's start with the gross margin future, obviously, a significant portion of the growth of our cost of course would be the charge backs. When we think about the policy product. It's not guaranteeing anything. So we don't have that line items. So in that sense of just how the more traditional cost structure like any other SaaS components.
Right that policy works on the billions of transactions that we have in our network and the network effect and the value of that it can provide merchant and are just the highlights some of the use cases.
When a customer creates a return request a refund require both but they never received the package, we can actually use that amazing network give.
Give our merger and smarter decisions is that a legitimate claiming that a false claim and merchants are understanding more and more of that within this kind of return policy bucket. There's a lot of room for optimization in the wrong. There is exceedingly significant.
Definitely feel that it's something that we can cross-sell and we'd have crossover. Good luck a lot of that goes to market motion to our existing clients.
It is also very top of mind for merchants in your conversations as well right.
It's definitely China can be a significant portion relative to charge back road.
And then what's the revenue potential uplift if you think about cross selling policy protect into the installed base could.
Lift the revenue per customer by 10%, 20% flex any color on.
The cross shell uplift bye bye.
Policy and fraud.
<unk> right now we definitely want upgrade more use cases that would help pricing over the long term, but that's within the zone.
Okay, Perfect and then and then argue just for you here is we think about the outlook.
Yeah, we can get to close to 20% growth in the first half of the year and then obviously that gross moderates in the second half is that just a function of you'd have really strong visibility you got good merchant momentum going into the first half and and you're you're factoring in just less visibility in the second half.
What is that.
A tale of two halves kind of imply he or is it just tough compare is just trying to think through what what's baked into that.
Second half.
Growth assumption, which is a little slower than the first half.
Yeah.
That'll be one of the reasons visibility as one of the reasons, but we also have a few hours as I mentioned the tickets on trial.
Have a different kind of laughing environment prices last year or seeing QR to be strong but itself a stronger pop up Q on from last year, which was relatively small.
So I think its disproportionate kind of effect on the yoga across race and.
That will be shown in the numbers.
And then general categories as I said January sale.
I'm, hoping that their their overall are probing compared to 2022, but they will continue to kind of.
For safety and some of the declines of what's being more recently.
And as you have seasonality and some of the choir, especially <unk> being the largest economy something retail holiday season that can be more pronounced there.
Okay, great. Thank you if I had.
Thank you so much and we have a question from the line of Josh back off Keybanc capital markets. Your line is now open.
Hello, Josh.
Hi, how are you able to hear or are you able to hear me yes.
Yes.
I I apologize for that.
Yeah.
Hello.
Okay.
Oh.
Hey, Jennifer we can't hear you.
Both.
Okay.
Six.
Alright.
For that so we don't have any more questions I would now like to turn the conference back.
<unk>. Please go ahead.
Thanks, everyone for participating we look forward to updating you on our progress in 2023.
And thank you so much for centers.
This call. Thank you.
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