Cover
Cover | 12 Months Ended |
Dec. 31, 2022 shares | |
Document Information [Line Items] | |
Document Type | 20-F |
Document Registration Statement | false |
Document Annual Report | true |
Document Period End Date | Dec. 31, 2022 |
Current Fiscal Year End Date | --12-31 |
Document Transition Report | false |
Document Shell Company Report | false |
Entity File Number | 001-40692 |
Entity Registrant Name | Riskified Ltd. |
Entity Incorporation, State or Country Code | L3 |
Entity Address, Address Line One | Sderot Sha’ul HaMelech 37 |
Entity Address, City or Town | Tel Aviv-Yafo |
Entity Address, Postal Zip Code | 6492806 |
Entity Address, Country | IL |
Title of 12(b) Security | Class A ordinary shares, no par value |
Trading Symbol | RSKD |
Security Exchange Name | NYSE |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Accelerated Filer |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
ICFR Auditor Attestation Flag | false |
Document Accounting Standard | U.S. GAAP |
Entity Shell Company | false |
Amendment Flag | false |
Entity Central Index Key | 0001851112 |
Document Fiscal Year Focus | 2022 |
Document Fiscal Period Focus | FY |
Common Class A | |
Document Information [Line Items] | |
Entity Common Stock, Shares Outstanding | 102,084,746 |
Common Class B | |
Document Information [Line Items] | |
Entity Common Stock, Shares Outstanding | 68,945,014 |
Business Contact | |
Document Information [Line Items] | |
Contact Personnel Name | Eido Gal |
Entity Address, Address Line One | 220 5th Avenue |
Entity Address, Address Line Two | 2nd Floor |
Entity Address, City or Town | New York |
Entity Address, State or Province | NY |
Entity Address, Postal Zip Code | 10001 |
Contact Personnel Email Address | ir@riskified.com |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2022 | |
Audit Information [Abstract] | |
Auditor Firm ID | 1281 |
Auditor Name | KOST FORER GABBAY & KASIERER |
Auditor Location | Tel-Aviv, Israel |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 188,670 | $ 418,143 |
Restricted cash | 2,347 | 6,984 |
Short-term deposits | 287,000 | 85,132 |
Accounts receivable, net | 37,547 | 35,477 |
Prepaid expenses and other current assets | 14,371 | 19,338 |
Total current assets | 529,935 | 565,074 |
Property and equipment, net | 18,586 | 16,968 |
Operating lease, right-of-use asset | 35,158 | 0 |
Deferred contract acquisition costs | 16,364 | 11,630 |
Other assets, noncurrent | 8,922 | 6,962 |
Total assets | 608,965 | 600,634 |
Current liabilities: | ||
Accounts payable | 2,110 | 228 |
Accrued compensation and benefits | 24,134 | 24,748 |
Guarantee obligations | 12,361 | 12,112 |
Provision for chargebacks, net | 11,980 | 12,020 |
Operating Lease, Liability, Current | 6,214 | 0 |
Accrued expenses and other current liabilities | 15,813 | 13,306 |
Total current liabilities | 72,612 | 62,414 |
Operating Lease, Liability, Noncurrent | 31,202 | 0 |
Other liabilities, noncurrent | 8,734 | 9,359 |
Total liabilities | 112,548 | 71,773 |
Commitments and Contingencies | ||
Temporary Equity, Carrying Amount, Attributable to Parent | 0 | 0 |
Shareholders’ equity: | ||
Additional paid-in capital | 848,609 | 775,249 |
Accumulated other comprehensive profit (loss) | (1,639) | 176 |
Accumulated deficit | (350,553) | (246,564) |
Total shareholders’ equity | 496,417 | 528,861 |
Total liabilities and shareholders’ equity | 608,965 | 600,634 |
Common Class A | ||
Shareholders’ equity: | ||
Common stock, value, issued | 0 | 0 |
Common Class B | ||
Shareholders’ equity: | ||
Common stock, value, issued | $ 0 | $ 0 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - ₪ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Common Class A | ||
Common stock, par value (in dollars per share) | ₪ 0 | |
Common stock, shares authorized (in dollars per share) | 900,000,000 | |
Common stock, shares, issued (in shares) | 102,084,746 | 75,909,531 |
Common stock, shares, outstanding (in shares) | 102,084,746 | 75,909,531 |
Common Class B | ||
Common stock, shares authorized (in dollars per share) | 232,500,000 | |
Common stock, shares, issued (in shares) | 68,945,014 | 88,055,520 |
Common stock, shares, outstanding (in shares) | 68,945,014 | 88,055,520 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue | $ 261,247 | $ 229,141 | $ 169,740 |
Cost of revenue | 126,150 | 106,170 | 76,916 |
Gross profit | 135,097 | 122,971 | 92,824 |
Operating expenses: | |||
Research and development | 72,014 | 55,301 | 36,642 |
Sales and marketing | 87,722 | 70,165 | 41,137 |
General and administrative | 83,993 | 52,903 | 21,853 |
Total operating expenses | 243,729 | 178,369 | 99,632 |
Operating profit (loss) | (108,632) | (55,398) | (6,808) |
Interest income (expense), net | 10,180 | 591 | 145 |
Other income (expense), net | 505 | (122,520) | (3,609) |
Profit (loss) before income taxes | (97,947) | (177,327) | (10,272) |
Provision for (benefit from) income taxes | 6,042 | 1,558 | 1,075 |
Net profit (loss) | $ (103,989) | $ (178,885) | $ (11,347) |
Weighted-average shares used in computing net profit (loss) per share attributable to ordinary shareholders, basic (in shares) | 167,667,374 | 76,459,625 | |
Weighted-average shares used in computing net profit (loss) per share attributable to ordinary shareholders, diluted (in shares) | 167,667,374 | 76,459,625 | |
Common Class A | |||
Operating expenses: | |||
Net profit (loss) per share attributable to ordinary shareholders, basic (in dollars per share) | $ (0.62) | $ (2.34) | $ (0.81) |
Net profit (loss) per share attributable to ordinary shareholders, diluted (in dollars per share) | $ (0.62) | $ (2.34) | $ (0.81) |
Weighted-average shares used in computing net profit (loss) per share attributable to ordinary shareholders, basic (in shares) | 38,757,558 | 14,022,788 | |
Weighted-average shares used in computing net profit (loss) per share attributable to ordinary shareholders, diluted (in shares) | 92,450,867 | 38,757,558 | 14,022,788 |
Common Class B | |||
Operating expenses: | |||
Net profit (loss) per share attributable to ordinary shareholders, basic (in dollars per share) | $ (0.62) | $ (2.34) | $ (0.81) |
Net profit (loss) per share attributable to ordinary shareholders, diluted (in dollars per share) | $ (0.62) | $ (2.34) | $ (0.81) |
Weighted-average shares used in computing net profit (loss) per share attributable to ordinary shareholders, basic (in shares) | 14,022,788 | ||
Weighted-average shares used in computing net profit (loss) per share attributable to ordinary shareholders, diluted (in shares) | 75,216,507 | 37,702,067 | 14,022,788 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE PROFIT (LOSS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | |||
Net profit (loss) | $ (103,989) | $ (178,885) | $ (11,347) |
Other comprehensive profit (loss), net of tax: | |||
Unrealized gain (loss) on derivative instruments, net | (1,883) | 176 | 0 |
Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Tax | 68 | 0 | 0 |
Other comprehensive profit (loss) | (1,815) | 176 | 0 |
Comprehensive profit (loss) | $ (105,804) | $ (178,709) | $ (11,347) |
CONSOLIDATED STATEMENTS OF CONV
CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED SHARES AND SHAREHOLDERS’ DEFICIT - USD ($) $ in Thousands | Total | Series E-1 Convertible Preferred Stock [Member] | Common Class A | Common Class B | Series E Convertible Preferred Stock [Member] | Common Stock Common Class A | Common Stock Common Class B | Additional Paid-in Capital | Accumulated Other Comprehensive Profit (Loss) | Accumulated Deficit |
Beginning balance (in shares) at Dec. 31, 2019 | 26,977,290 | |||||||||
Beginning balance at Dec. 31, 2019 | $ 105,354 | |||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||||||
Issuance of convertible preferred shares, net of issuance costs (in shares) | 2,900,826 | |||||||||
Issuance of convertible preferred shares, net of issuance costs | $ 54,210 | |||||||||
Ending balance (in shares) at Dec. 31, 2020 | 29,878,116 | |||||||||
Ending balance at Dec. 31, 2020 | $ 159,564 | |||||||||
Beginning balance (in shares) at Dec. 31, 2019 | 13,704,858 | 0 | ||||||||
Beginning balance at Dec. 31, 2019 | (40,601) | $ 4 | $ 0 | $ 15,727 | $ 0 | $ (56,332) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Elimination of ordinary share par value and issuance of Class B ordinary shares upon Recapitalization | 0 | |||||||||
Issuance of ordinary shares upon exercise of share options (in shares) | 605,694 | |||||||||
Issuance of ordinary shares upon exercise of share options | 642 | 642 | ||||||||
Share-based compensation expense | 7,997 | 7,997 | ||||||||
Other comprehensive profit (loss) | 0 | |||||||||
Net profit (loss) | (11,347) | (11,347) | ||||||||
Ending balance (in shares) at Dec. 31, 2020 | 14,310,552 | 0 | ||||||||
Ending balance at Dec. 31, 2020 | (43,309) | $ 4 | $ 0 | 24,366 | 0 | (67,679) | ||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||||||
Issuance of convertible preferred shares, net of issuance costs (in shares) | 962,940 | 1,450,414 | ||||||||
Issuance of convertible preferred shares, net of issuance costs | $ 6,489 | $ 50,519 | ||||||||
Reclassification of convertible preferred share warrants upon IPO | $ 74,724 | |||||||||
Conversion of Preferred Shares into Class A Ordinary Shares upon IPO (in shares) | (32,291,470) | |||||||||
Conversion of convertible preferred shares into Class A ordinary shares upon IPO | $ (291,296) | |||||||||
Ending balance (in shares) at Dec. 31, 2021 | 0 | |||||||||
Ending balance at Dec. 31, 2021 | $ 0 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Conversion of Preferred Shares into Ordinary Shares upon IPO (in shares) | 32,291,470 | |||||||||
Conversion of Preferred Shares into Ordinary Shares upon IPO | 291,296 | 291,296 | ||||||||
Reclassification of convertible preferred share warrants upon IPO | 35,778 | 35,778 | ||||||||
Issuance of Class A Ordinary Shares upon IPO, net of underwriting discounts and commissions and other issuance costs (in shares) | 19,925,000 | |||||||||
Issuance of Class A ordinary shares upon IPO, net of underwriting discounts and commissions and other issuance costs | 386,591 | 386,591 | ||||||||
Elimination of ordinary share par value and issuance of Class B ordinary shares upon Recapitalization | 4 | $ (4) | 4 | |||||||
Elimination of ordinary share par value and issuance of Class B ordinary shares upon Recapitalization (in shares) | 94,431,636 | |||||||||
Issuance of ordinary shares upon exercise of share options (in shares) | 2,381,269 | 625,124 | ||||||||
Issuance of ordinary shares upon exercise of share options | 2,948 | 2,948 | ||||||||
Exchange of Class B ordinary shares to Class A ordinary shares (in shares) | 7,001,240 | (7,001,240) | ||||||||
Share-based compensation expense | 33,489 | 33,489 | ||||||||
Ordinary share warrants issued to a customer | 777 | 777 | ||||||||
Other comprehensive profit (loss) | 176 | 176 | ||||||||
Net profit (loss) | (178,885) | (178,885) | ||||||||
Ending balance (in shares) at Dec. 31, 2021 | 75,909,531 | 88,055,520 | 75,909,531 | 88,055,520 | ||||||
Ending balance at Dec. 31, 2021 | $ 528,861 | $ 0 | $ 0 | 775,249 | 176 | (246,564) | ||||
Ending balance (in shares) at Dec. 31, 2022 | 0 | |||||||||
Ending balance at Dec. 31, 2022 | $ 0 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Elimination of ordinary share par value and issuance of Class B ordinary shares upon Recapitalization | $ 0 | |||||||||
Issuance of ordinary shares upon exercise of share options (in shares) | 3,919,606 | 3,919,606 | ||||||||
Issuance of ordinary shares upon exercise of share options | $ 4,059 | 4,059 | ||||||||
Exchange of Class B ordinary shares to Class A ordinary shares (in shares) | 19,110,506 | (19,110,506) | ||||||||
Share-based compensation expense | 67,766 | 67,766 | ||||||||
Ordinary share warrants issued to a customer | 1,535 | 1,535 | ||||||||
Other comprehensive profit (loss) | (1,815) | (1,815) | ||||||||
Net profit (loss) | (103,989) | (103,989) | ||||||||
Ending balance (in shares) at Dec. 31, 2022 | 102,084,746 | 68,945,014 | 102,084,746 | 68,945,014 | ||||||
Ending balance at Dec. 31, 2022 | $ 496,417 | $ 0 | $ 0 | $ 848,609 | $ (1,639) | $ (350,553) |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED SHARES AND SHAREHOLDERS’ DEFICIT (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Series E Convertible Preferred Stock [Member] | ||
Payments of temporary equity issuance costs | $ 819 | $ 1,540 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities: | |||
Net profit (loss) | $ (103,989) | $ (178,885) | $ (11,347) |
Adjustments to reconcile net profit (loss) to net cash provided by (used in) operating activities: | |||
Unrealized loss (gain) on foreign currency | (2,875) | 382 | 186 |
Provision for (benefit from) account receivable allowances | 3 | 268 | 12 |
Depreciation and amortization | 3,607 | 1,990 | 1,360 |
Amortization of capitalized internal-use software costs | 667 | 446 | 0 |
Amortization of deferred contract costs | 6,419 | 4,122 | 2,175 |
Remeasurement of convertible preferred share warrant liabilities | 0 | 101,413 | 3,850 |
Remeasurement of convertible preferred share tranche rights | 0 | 21,260 | 1,959 |
Share-based compensation expense | 67,467 | 33,358 | 7,945 |
Operating Lease, Right-of-Use Asset, Amortization Expense | 4,211 | 0 | 0 |
Interest Income, Deposit with Financial Institution, Increase (Decrease) | (4,613) | 0 | 0 |
Ordinary share warrants issued to a customer | 1,535 | 777 | 0 |
Other | 180 | (121) | (9) |
Changes in operating assets and liabilities: | |||
Accounts receivable | (1,715) | 1,440 | (12,568) |
Deferred contract acquisition costs | (9,707) | (7,744) | (6,462) |
Prepaid expenses and other assets | 4,026 | (15,079) | (3,235) |
Accounts payable | 1,931 | (832) | (3,707) |
Accrued compensation and benefits | 291 | 8,398 | 6,500 |
Guarantee obligations | 249 | (333) | 3,308 |
Provision for chargebacks, net | (40) | 1,438 | 4,126 |
Increase (Decrease) in Operating Lease Liability | (2,609) | 0 | 0 |
Accrued expenses and other liabilities | 8,710 | 7,424 | 2,787 |
Net cash provided by (used in) operating activities | (26,252) | (20,278) | (3,120) |
Cash flows from investing activities: | |||
Purchases of short-term deposits | (463,750) | (110,000) | (14,000) |
Maturities of short-term deposits | 261,750 | 39,063 | 0 |
Purchases of property and equipment | (6,126) | (12,254) | (1,507) |
Capitalized software development costs | (1,886) | (1,250) | (1,454) |
Net cash provided by (used in) investing activities | (210,012) | (84,441) | (16,961) |
Cash flows from financing activities: | |||
Proceeds from issuance of convertible preferred shares and warrants, net of issuance costs | 0 | 26,781 | 53,559 |
Proceeds from cash exercise of series E-1 convertible preferred share warrants | 0 | 6,489 | 0 |
Proceeds from exercise of share options | 4,059 | 2,948 | 642 |
Proceeds from initial public offering, net of underwriting discounts and commissions | 0 | 392,273 | 0 |
Payments of deferred offering costs | (204) | (5,302) | (176) |
Net cash provided by (used in) financing activities | 3,855 | 423,189 | 54,025 |
Effects of exchange rates on cash, cash equivalents, and restricted cash | (1,701) | 0 | 0 |
Net increase (decrease) in cash, cash equivalents, and restricted cash | (234,110) | 318,470 | 33,944 |
Cash, cash equivalents, and restricted cash—beginning of period | 425,127 | 106,657 | 72,713 |
Cash, cash equivalents, and restricted cash—end of period | 191,017 | 425,127 | 106,657 |
Supplemental disclosures of cash flow information: | |||
Cash paid for interest | 0 | 0 | 4 |
Cash paid for income taxes | 18 | 647 | 1,176 |
Payments for Rent | 4,357 | 0 | 0 |
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | 792 | 0 | 0 |
Supplemental disclosures of noncash investing and financing activities: | |||
Purchases of property and equipment during the period included in accounts payable and accrued expenses | 926 | 2,042 | 184 |
Share-based compensation capitalized for software development | 299 | 131 | 52 |
Software development costs, accrued but not paid | 0 | 485 | 172 |
Deferred offering costs accrued but not paid | 0 | 204 | 369 |
Conversion of convertible preferred shares into Class A ordinary shares upon IPO | 0 | 291,296 | 0 |
Reclassification of convertible preferred share warrants upon IPO | 0 | 110,502 | 0 |
Elimination of ordinary share par value and issuance of Class B ordinary shares upon Recapitalization | 0 | 4 | 0 |
Reconciliation of cash, cash equivalents, and restricted cash within the consolidated balance sheets to the amounts shown in the consolidated statements of cash flows above: | |||
Cash and cash equivalents | 188,670 | 418,143 | 103,609 |
Restricted cash | 2,347 | 6,984 | 3,048 |
Total cash, cash equivalents, and restricted cash | 191,017 | 425,127 | 106,657 |
Tranche Rights | |||
Supplemental disclosures of noncash investing and financing activities: | |||
Settlement of convertible preferred share tranche rights | $ 0 | $ 23,738 | $ 551 |
Organization and Description of
Organization and Description of Business | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | 1. Organization and Description of Business Riskified Ltd., together with its subsidiaries, “Riskified”, “we”, “us”, “our” or the “Company,” was incorporated under the laws of the State of Israel in 2012 and commenced operations in January 2013. We have built a next-generation eCommerce risk intelligence platform that allows our customers—online merchants—to create trusted relationships with their consumers. Our core product, the Chargeback Guarantee, is designed to ensure the legitimacy of our merchants’ online orders by approving or denying these orders with guaranteed performance levels that vary by merchant. We guarantee the outcome of our decisions by assuming the cost of fraud associated with each approval. We drive higher sales and reduce fraud and other operating costs for our merchants and strive to provide superior consumer experiences, as compared to our merchants’ performance prior to onboarding us. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States, or U.S. GAAP, and include the accounts of Riskified Ltd. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Certain amounts in prior periods have been reclassified to conform to the current period presentation. Initial Public Offering On August 2, 2021, we completed our initial public offering (“IPO”), in which we issued and sold 19,925,000 shares of our Class A ordinary shares at an offering price of $21.00 per share, including 2,625,000 shares of our Class A ordinary shares pursuant to the exercise in full of the underwriters’ option to purchase additional shares. We received net proceeds of $386.6 million after deducting underwriting discounts and commissions of $26.2 million, and other issuance costs of $5.7 million. Immediately prior to the closing of the IPO, 962,940 shares of Series E-1 convertible preferred shares were issued upon the exercise of the Series E-1 convertible preferred share warrants. In addition, all convertible preferred shares then outstanding automatically converted into 32,291,470 shares of our Class A ordinary shares. Prior to the IPO, deferred offering costs, which consist primarily of accounting, legal and other fees related to our IPO, were capitalized within other assets, noncurrent in the consolidated balance sheets. Upon the consummation of the IPO, $5.7 million of deferred offering costs were reclassified into shareholders’ equity as an offset against IPO proceeds. Recapitalization On July 28, 2021, we adopted new Articles of Association (“AoA”), in which, among other things, we implemented, upon the closing of the IPO: (i) a dual class ordinary share structure pursuant to which we have two classes of ordinary shares: Class A ordinary shares and Class B ordinary shares. The rights of the holders of our Class A ordinary shares and Class B ordinary shares are identical, except with respect to voting, conversion and transfer rights. Class A ordinary shareholders are entitled to one vote per share and Class B ordinary shareholders are entitled to ten votes per share. The dual class ordinary share structure concentrates voting power with our pre-IPO shareholders. Holders of Class A ordinary shares and Class B ordinary shares will vote together as a single class on all matters (including the election of directors) submitted to a vote of our shareholders, unless otherwise required by law or our amended and restated articles of association; (ii) the elimination of the par value per ordinary share; and (iii) a two-for-one reverse share split of our Class A ordinary shares (the “Reverse Share Split”). Immediately after the effectiveness of the Reverse Share Split, we issued and distributed Class B ordinary shares to holders of the Class A ordinary shares on a two-for-one ratio, such that each holder of Class A ordinary shares received two Class B ordinary shares for each Class A ordinary share (the “Additional Class B Issuance”). The historical financial statements have not been retroactively adjusted for the (i) dual class structure, (ii) elimination of par value, and (iii) Additional Class B Issuance. As a result, all information associated with these items related to our ordinary shares and their associated par value, convertible preferred shares and their associated par value, share options, restricted share units (“RSUs”), and warrants to purchase convertible preferred shares are being presented prospectively. All information related to our ordinary shares and their associated par value, convertible preferred shares and their associated par value, share options, RSUs, and warrants to purchase convertible preferred shares have been retroactively adjusted to give effect to the Reverse Share Split for all periods presented. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements and the accompanying notes. Actual results could differ materially from these estimates. On an ongoing basis, we evaluate our estimates, including those related to the estimated customer life on deferred contract costs, the allowance for doubtful accounts, the fair value of financial assets and liabilities including the fair value of derivatives, the useful lives of property and equipment, capitalization and estimated useful life of internal-use software, share-based compensation including the determination of the fair value of our ordinary shares (prior to IPO), the fair value of indemnification guarantees and the associated systematic and rational amortization method, provisions for chargebacks, the fair value of convertible preferred share warrant liabilities and convertible preferred share tranche rights (prior to IPO), incremental borrowing rate (“IBR”) used for operating lease right-of-use (“ROU”) assets and operating lease liabilities, and the valuation of deferred tax assets and uncertain tax positions. We base our estimates on assumptions, both historical and forward-looking, trends, and various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. As of the date of issuance of these consolidated financial statements, we are not aware of any specific event or circumstance related to COVID-19 that would require us to update our estimates or judgments or adjust the carrying value of our assets or liabilities. As events continue to evolve and additional information becomes available, our estimates and assumptions may change materially in future periods. Refer to “Operating and Financial Review and Prospects—Factors Affecting Our Performance” included elsewhere in this Annual Report for more information regarding the impact of COVID-19 on our business. Foreign Currency The U.S. dollar is our functional currency and the functional currency of a majority of our subsidiaries. For the subsidiaries where the U.S. dollar is the functional currency, monetary assets and liabilities denominated in currencies other than the U.S. dollar are remeasured into U.S. dollars at exchange rates in effect at the end of each period. Foreign currency transaction gains and losses from these remeasurements are recognized in other income (expense), net, within the consolidated statements of operations. Foreign currency transactions resulted in net gains of $2.5 million, $0.2 million, and $2.1 million, for the years ended December 31, 2022, 2021, and 2020, respectively. For subsidiaries where the functional currency is not the U.S. dollar, we use the period-end exchange rates to translate assets and liabilities, the average monthly exchange rates to translate revenue and expenses, and historical exchange rates to translate shareholders’ equity, into U.S. dollars. We record translation gains and losses in accumulated other comprehensive profit (loss) as a component of shareholders’ equity in the consolidated balance sheets. Concentration of Risks Our financial instruments that are exposed to concentrations of credit risk primarily consist of cash and cash equivalents, restricted cash, short-term deposits, accounts receivable and derivative financial instruments. We maintain our cash, cash equivalents, restricted cash, and short-term deposits with high-quality financial institutions mainly in the United States and Israel, the composition of which are regularly monitored by us. We have not experienced any material losses in such accounts. Our derivatives expose us to credit risk to the extent that the counterparties may be unable to meet the terms of the agreement. We seek to mitigate such risk by limiting our counterparties to major financial institutions and by spreading the risk across a number of major financial institutions. In addition, the potential risk of loss with any one counterparty resulting from this type of credit risk is monitored on an ongoing basis. Our customers are online merchants. For accounts receivable, we are exposed to credit risk in the event of nonpayment by online merchants to the extent the amounts are recorded in the consolidated balance sheets. We extend different levels of credit to online merchants and maintain reserves for potential credit losses based upon the expected collectability of accounts receivable. We manage credit risk related to our merchants by performing periodic evaluations of credit worthiness and consumer indebtedness and applying other credit risk monitoring procedures. The following table summarize our merchants that represented 10% or more of Accounts receivable, net and Revenue: Accounts Receivable, Net Revenue As of December 31, Year Ended December 31, 2022 2021 2022 2021 2020 Customer A 22 % 32 % 13 % 16 % 18 % Customer B * * * * 10 % Customer C * 11 % * * * ________________ * Represents less than 10% Cash, Cash Equivalents, and Restricted Cash Cash and cash equivalents consist of cash in banks and bank deposits. We consider all highly liquid investments, with an original maturity of three months or less at the date of purchase, to be cash equivalents. We maintain certain cash amounts restricted as to our withdrawal or use. Our restricted cash primarily consists of cash deposits to back letters of credit related to certain operating leases. Short-Term Deposits Short-term deposits consist of bank deposits with original maturities between 4 and 12 months and that mature within 12 months of the balance sheet date. Short-term deposits are reported at cost. Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. We measure financial assets and liabilities at fair value for each reporting period using a fair value hierarchy which requires us to maximize the use of observable inputs and minimize the use of unobservable inputs. A financial instrument’s classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Three levels of inputs may be used to measure fair value: Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Financial instruments consist of cash and cash equivalents, restricted cash, short-term deposits, accounts receivables, derivative financial instruments, accounts payables, accrued liabilities, indemnification guarantees. Cash and cash equivalents, short-term deposits, restricted cash, accounts receivable, accounts payable, and accrued liabilities are stated at their carrying value, which approximates fair value due to the short time to the expected receipt or payment date. Derivative financial instruments are stated at fair value on a recurring basis as disclosed in Note 4 below. We record indemnification guarantees that we issue upon approving a transaction at fair value when issued using the income approach. To measure this guarantee, we consider the premium that would have been received for the same guarantee if it were issued in a stand-alone transaction. The fair value of these indemnification guarantees is determined based on historical chargeback claims, a risk premium fee that would be required for a third party to assume this liability, and an appropriate discount rate due to time. Historical chargeback guarantee claims are not readily observable in the marketplace and are generally classified as Level 3 inputs. Indemnification guarantees are recorded at fair value when issued and not remeasured to fair value each period. Refer to Note 8 below for more information regarding indemnification guarantees. Because of the inherent uncertainty of valuation, the estimated fair value of our financial instruments, in particular our indemnification guarantees, may differ significantly from the values that would have been used had a ready market for the financial instruments existed, and the differences could be material to our consolidated financial statements. Refer to Item 5. “ Operating and Financial Review and Prospects — Critical Accounting Policies and Estimates .” Accounts Receivable, Net Accounts receivable are recorded at the invoiced amount, net of an allowance for doubtful accounts. The allowance for doubtful accounts is based on our assessment of the collectability of accounts. We regularly review the adequacy of the allowance for doubtful accounts based on a combination of factors, including an assessment of the current merchant’s credit worthiness, the age of the balance, the nature and size of the merchant, the financial condition of the merchant, and the amount of any receivables in dispute. Accounts receivable deemed uncollectible are charged against the allowance for doubtful accounts when identified. The allowance for doubtful accounts was $0.5 million and $0.6 million as of December 31, 2022 and 2021, respectively. Derivative Financial Instruments We enter into derivative instruments to manage risks relating to our ongoing business operations. We enter into foreign currency forward and option contracts with financial institutions to protect against foreign exchange risks attributable to our exposure to changes in the exchange rates of (a) the New Israeli Shekel (“NIS”) against the U.S. dollar and (b) the Euro against the U.S. dollar. Our primary objective in entering into these contracts is to reduce the volatility of forecasted earnings and cash flows associated with changes in foreign currency exchange rates. We do not use derivative instruments for trading or speculative purposes. We account for our derivative instruments as either assets or liabilities and carry them at fair value. The accounting for changes in the fair value of a derivative depends on the intended use of the derivative and the resulting designation. Derivative instruments are recorded as either prepaid expenses and other current assets or accrued expenses and other current liabilities in the consolidated balance sheets. We record changes in the fair value of derivative instruments that are designated as hedging instruments in accumulated other comprehensive profit (loss) in the consolidated balance sheets, until the forecasted transaction occurs upon which we reclassify the related gain or loss on the derivative to the same financial statement line item in the consolidated statements of operations to which the derivative relates. Other derivatives not designated as hedging instruments consist primarily of foreign currency forward contracts that we use to hedge monetary assets or liabilities denominated in currencies other than the functional currency of a subsidiary. Changes in the fair value on these contracts, as well as the related costs, are recognized in Other income (expense), net, along with the foreign currency gains and losses on the related monetary assets and liabilities. Refer to Note 5 for additional information. Property and Equipment, Net Property and equipment are stated at cost net of accumulated depreciation and amortization. Depreciation and amortization are calculated using the straight-line method over the estimated useful lives of the respective assets. Expenditures for maintenance and repairs are expensed as incurred. The estimated useful lives of our property and equipment are as follows: Computer equipment 3 years Furniture and office equipment 5 – 7 years Leasehold improvements Shorter of remaining lease term or estimated useful life Capitalized Software Costs Costs related to software acquired, developed, or modified solely to meet our internal requirements, with no substantive plans to market such software at the time of development are capitalized. Costs incurred during the preliminary project stage and during the post implementation operational stage are expensed as incurred. Eligible costs incurred during the application development stage of the project are capitalized. Capitalized software development costs are recorded as part of Other assets, noncurrent in the consolidated balance sheets. Maintenance costs are expensed as incurred. Capitalized software development costs are amortized on a straight-line basis over the software’s estimated useful life, which is four years and are recorded in cost of revenue in the consolidated statements of operations. As of December 31, 2022 and 2021, we have capitalized $5.0 million, net and $3.5 million, net, respectively, of qualifying software development costs. Amortization expenses related to capitalized software costs were $0.7 million, $0.4 million, and zero for the years ended December 31, 2022, 2021, and 2020, respectively. Cloud Computing Arrangement Implementation Costs We capitalize certain implementation costs incurred in a cloud computing arrangement during the application development stage pursuant to Accounting Standards Codification, or ASC, 350-40, Internal Use Software. These costs are amortized over the term of the hosting arrangement on a straight-line basis, and are included within operating expenses in the consolidated statements of operations. Costs incurred in the preliminary stages of development are analogous to research and development activities and are expensed as incurred. These capitalized costs are included in Other assets, noncurrent in the consolidated balance sheets. We have capitalized $0.2 million and $0.3 million of qualifying cloud computing arrangement implementation costs as of December 31, 2022 and 2021, respectively. Amortization expenses related to capitalized cloud computing arrangement implementation costs were $0.2 million, $0.2 million, and $0.1 million for the years ended December 31, 2022, 2021, and 2020, respectively. Leases Our lease accounting policy under ASC Topic 840, “ Leases ” until January 1, 2022, prior to the adoption of the new lease guidance was as follows: Leases are reviewed and classified as either capital or operating leases at their inception. In certain lease agreements, we may receive renewal or expansion options, rent holidays, and other incentives. For operating leases, we recognize lease costs on a straight-line basis once we take control of the space, without regard to deferred payment terms such as rent holidays that defer the commencement date of required payments. Additionally, incentives received are treated as a reduction of costs over the term of the agreement. On January 1, 2022, we adopted the new lease guidance for our operating lease agreements. Refer to Note 7 below for additional information. Our lease accounting policy under ASC Topic 842, “ ASC 842 ” from January 1, 2022, following the adoption of the new lease guidance is as follows: We determine if an arrangement meets the definition of a lease at the inception of the lease, and leases are classified at commencement as either operating or finance leases. We do not have any finance leases. Operating lease ROU assets represent the right to use an underlying asset for the lease term and operating lease liabilities represent our obligation to make lease payments arising from the lease agreement. Operating lease ROU assets are measured based on the discounted present value of the remaining lease payments, initial direct costs incurred and prepaid lease payments, excluding lease incentives received prior to lease commencement. Operating lease liabilities are measured based on the discounted present value of the remaining lease payments. The discounted present value of remaining lease payments is computed using our IBR based on the information available at the commencement date of the lease as our leases generally do not provide an implicit rate. Our IBR was estimated to approximate the interest rate for collateralized borrowing with similar terms and payments and in economic environments where the leased asset was located. The lease term may include options to extend or terminate the lease when it is reasonably certain that we would exercise that option. We made an accounting policy election for lease agreements with a term of 12 months or less and do not recognize operating lease ROU assets and operating lease liabilities in respect of those agreements. Payments under our lease agreements are primarily fixed; however, certain lease agreements contain variable payments, which are expensed as incurred and not included in the operating lease ROU assets and operating lease liabilities. Variable lease payments are mainly comprised of common area maintenance, utilities, real estate taxes, and payments affected by changes in indexes. We elected the practical expedient to not separate lease and non-lease components for our leases. We sublease certain office spaces to third parties. Operating sublease income is recognized on a straight-line basis over the term of the agreement. Impairment of Long-Lived Assets We evaluate the recoverability of long-lived assets, including property and equipment, for possible impairment whenever events or circumstances indicate that the carrying amount of such assets may not be fully recoverable. Such events and changes may include significant changes in performance relative to expected operating results, significant changes in asset use, significant negative industry or economic trends, and changes in our business strategy. Recoverability of these assets is measured by comparing the carrying amounts with the future undiscounted cash flows that the assets are expected to generate. If such review indicates that the carrying amount of long-lived assets is not recoverable, the carrying amount of such assets is reduced to fair value. During the current period, we impaired an immaterial amount of assets related to the Deco product due to the decision to wind-down the product. Other than as previously described, we determined that there were no material events or changes in circumstances that indicated that our long-lived assets were impaired during the periods presented. Indemnification Guarantees We provide contractual assurances around the accuracy of our approvals so that our merchants can confidently automate a transaction’s execution. Our contracts obligate us to stand ready to indemnify our merchants for any costs incurred from a chargeback due to fraud (i.e., the “guarantee obligation”). Accordingly, we account for the guarantee obligation as an indemnification under the general provisions of ASC 460, Guarantees , or ASC 460, and recognize a liability at fair value upon approving a transaction at an amount that represents what we would need to pay a third party to relieve ourselves from this obligation. This liability is presented as Guarantee obligations on the consolidated balance sheets and will be released to revenue in the consolidated statements of operations. We are relieved from our guarantee obligation at the earlier of (a) paying a chargeback or (b) expiration of the guarantee which is generally six months from the date of the transaction. We recognize the guarantee obligation as revenue through a systematic and rational amortization method over a six-month period that is representative of our historical pattern of being released from risk under the guarantee obligation. While no individual transaction is probable of a chargeback occurring, when we analyze a portfolio of transactions, if we believe a future chargeback is probable and reasonably estimated, we accrue a liability and an associated expense through cost of revenue in accordance with ASC 450, Contingencies , or ASC 450 . Inputs and assumptions used by management to calculate this provision are based on the transactions approved and the features of those transactions as well as historical information about chargebacks. It is possible that the estimate may change in the near term, and the effect of the change could be material. These liabilities are recorded within Provision for chargebacks, net on the consolidated balance sheets and will be reduced by credits issued or cash paid to merchants. Refer to Note 8 below or Item 5. “ Operating and Financial Review and Prospects — Critical Accounting Policies and Estimates” for additional information. Ordinary Share Warrants Prior to IPO, warrants to purchase our Series B/C and E-1 convertible preferred shares were recorded as a liability at fair value on our consolidated balance sheets as the underlying convertible preferred shares were contingently redeemable, upon a deemed liquidation event that is outside of our control, and therefore could have obligated us to transfer assets. The Series B/C convertible preferred share warrants were remeasured to fair value at the end of each reporting period with changes in fair value recognized as a gain or loss within Other income (expense), net in the consolidated statements of operations until the earlier of the exercise of the warrants, the expiration of the warrants, or upon the completion of a qualified IPO. Upon IPO, the Series B/C convertible preferred share warrants were converted to warrants to purchase ordinary shares, and the then outstanding liability was reclassified to additional paid-in capital in the consolidated balance sheets. The warrants to purchase ordinary shares may be exercised any time prior to, and shall expire upon, the earlier of (a) April 29, 2025 or (b) immediately prior to the consummation of certain deemed liquidation events. The Series E-1 convertible preferred share warrants were remeasured to fair value at the end of each reporting period with changes in fair value recognized as a gain or loss within Other income (expense), net in the consolidated statements of operations until the earlier of the exercise of the warrants, the expiration of the warrants, or the completion of a deemed liquidation event, including a qualified IPO. Upon IPO, the Series E-1 convertible preferred share warrants were automatically exercised. In conjunction with a SaaS Agreement entered into in 2021, we issued a warrant to a customer to purchase ordinary shares. The warrant vests annually, in equal amounts, over a five-year period commencing on the effective date of the SaaS Agreement. The warrant is accounted for as consideration payable to a customer under ASC 606 and will reduce revenue as we recognize revenue under the SaaS Agreement over a period of five years. Revenue Recognition We primarily generate revenue by granting merchants access to our eCommerce risk intelligence platform and reviewing and approving eCommerce transactions for legitimacy. Revenue is also generated from the issuance of indemnification guarantees as noted above within “Indemnification Guarantees”. For the majority of our revenue, merchants pay us a percentage of every dollar of the gross merchandise volume, or GMV, that we approve and guarantee on their behalf. Our fee, as determined by our risk-based pricing model, in these situations is a percentage of the GMV of our merchants’ orders that we approve, prior to taxes or other charges. These arrangements do not provide merchants with the right to take possession of our software platform. Rather, merchants are granted continuous access to our software platform under a hosting arrangement over the contractual period. As noted above within “Indemnification Guarantees”, our contracts with our merchants obligate us to review eCommerce transactions for legitimacy as well as to stand ready to indemnify merchants for costs incurred associated with an approved transaction in the event of a chargeback due to fraud. Our fee is allocated between the consideration owed to us for our fraud review service and the consideration owed to us for issuing indemnification guarantees which are recorded at fair value. Consideration allocated to fraud review is recognized as revenue over the contract period in the month that the transactions are approved while consideration allocated to the indemnification guarantee is recognized as we are released from risk under the guarantee, generally over a six-month period from the date of the transaction. We present revenue net of cancellations and adjustments for minimum service level agreements. In accordance with ASC 606, revenue is recognized when a customer obtains control of promised products. The amount of revenue recognized reflects the consideration that we expect to receive in exchange for these products. To achieve the core principle of this standard, we applied the following five steps: 1. Identification of the contract, or contracts, with the merchant We determine that we have a contract with a merchant when the contract is approved, each party’s rights and obligations regarding the products to be transferred can be identified, the payment terms for the products can be identified, we have determined the merchant has the ability and intent to pay, and the contract has commercial substance. At contract inception, we evaluate whether two or more contracts should be combined and accounted for as a single contract and whether the combined or single contract includes more than one performance obligation. Contracts with our merchants are typically for a period of one year. 2. Identification of the performance obligations in the contract Performance obligations promised in a contract are identified based on the products that will be transferred to the merchant that are both capable of being distinct, whereby the merchant can benefit from the products either on their own or together with other resources that are readily available from third parties or from us, and are distinct in the context of the contract, whereby the transfer of the products is separately identifiable from other promises in the contract. For SaaS arrangements, we provide access to our cloud-hosted software platform and reviewing and approving eCommerce transaction for legitimacy, without providing the merchant the right to take possession of our software, which we consider to be a single performance obligation. Revenue generated from the issuance of indemnification guarantees is accounted for under ASC 460. Refer to “Indemnification Guarantees” above and Note 8 below for additional information. 3. Determination of the transaction price As our contracts include an unknown quantity of approved transactions at a fixed contractual rate per approved transaction value executed on a monthly basis, the contract price is deemed variable. We allocate the variable consideration to the month in which we have the contractual right to bill under the contract as this represents the amount of consideration to which we expect to be entitled for the transfer of products during that month. Certain of our contracts include additional forms of variable consideration such as service level commitments relating to uptime availability and minimum approval rates as well as provisions that provide for reimbursements should our merchant’s consumer cancel an approved order. If we fail to meet these commitments, merchants are generally permitted to receive a refund in the form of a credit on their invoice. Under certain arrangements, when the merchant’s consumer cancels an order that we have approved, we provide a refund of some or all of the fees owed by our merchant to us generally in the form of a credit on our merchant’s invoice. The transaction price is reduced to reflect our estimate of the amount of consideration to which we are entitled based on the terms of the contract. Payment terms and conditions vary by contract type, although terms generally include a requirement to pay within 30 days. In instances where the timing of revenue recognition differs from the timing of invoicing, we have determined that our contracts do not include a significant financing component. The primary purpose of our invoicing terms is to provide our merchants with simplified and predictable ways of purchasing our products; not to receive financing from our merchants or to provide merchants with financing. We applied the practical expedien |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | 3. Revenue Recognition Disaggregation of Revenue The following table summarizes revenue by region in which our merchant headquarters are located: Year Ended December 31, 2022 2021 2020 Amount Percentage of Revenue Amount Percentage of Revenue Amount Percentage of Revenue (in thousands, except where indicated) United States $ 163,920 63 % $ 163,681 71 % $ 125,458 74 % Europe, the Middle East and Africa (“EMEA”)* 71,443 27 44,850 20 31,821 19 Asia-Pacific (“APAC”) 12,005 5 7,416 3 3,142 2 Americas 13,879 5 13,194 6 9,319 5 Total revenue $ 261,247 100 % $ 229,141 100 % $ 169,740 100 % _________________ * Includes our country of domicile, Israel. Revenue recognized from Israel was $3.3 million, $2.4 million, and $0.9 million for the years ended December 31, 2022, 2021, and 2020, respectively. The following table summarizes revenue based on the nature and type of service provided to our merchants: Year Ended December 31, 2022 2021 2020 Amount Percentage of Revenue Amount Percentage of Revenue Amount Percentage of Revenue (in thousands, except where indicated) Fraud review service revenue (ASC 606) $ 156,040 60 % $ 132,261 58 % $ 96,774 57 % Indemnification guarantee service revenue (ASC 460) 105,207 40 96,880 42 72,966 43 Total revenue $ 261,247 100 % $ 229,141 100 % $ 169,740 100 % We primarily generate revenue from our Chargeback Guarantee offering. Revenue generated from other offerings are not material. The allocation of consideration between fraud review service revenue and indemnification guarantee service revenue is a function of the fair value of our chargeback guarantee which represents what we would need to pay a third party to relieve ourselves from our obligations under issued guarantees. The fair value of the chargeback guarantee is primarily determined by utilizing the historical percentage of guarantees issued that resulted in a chargeback plus a risk premium fee that we would have incurred from a third-party in order to relieve ourselves from our legal obligation under the guarantee. Refer to Item 5. “ Operating and Financial Review and Prospects — Critical Accounting Policies and Estimates .” Changes in the percentage of revenue that are recorded as fraud review service revenue and indemnification guarantee service revenue are a function of changes in the aforementioned fair value of the chargeback guarantee and changes in the speed in which we pay chargeback claims which impacts the systematic and rational approach that we utilize to record revenue associated with our guarantee obligation. Cost to Obtain a Contract The following table represents a rollforward of deferred contract acquisition costs: Year Ended December 31, 2022 2021 2020 (in thousands) Beginning balance $ 11,630 $ 6,983 $ 2,696 Additions to deferred contract acquisition costs 9,707 7,744 5,857 Amortization of deferred contract acquisition costs (4,973) (3,097) (1,570) Ending balance $ 16,364 $ 11,630 $ 6,983 Cost to Fulfill a Contract |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 4. Fair Value Measurements The following tables present information about our financial instruments that are measured at fair value on a recurring basis: As of December 31, 2022 Fair Value Level 1 Level 2 Level 3 (in thousands) Financial Liabilities: Derivative financial instruments included in accrued expenses and other current liabilities $ 2,397 $ — $ 2,397 $ — Total financial liabilities $ 2,397 $ — $ 2,397 $ — As of December 31, 2021 Fair Value Level 1 Level 2 Level 3 (in thousands) Financial Assets: Derivative financial instruments included in prepaid expenses and other current assets $ 244 $ — $ 244 $ — Total financial assets $ 244 $ — $ 244 $ — Financial Liabilities: Derivative financial instruments included in accrued expenses and other current liabilities $ 61 $ — $ 61 $ — Total financial liabilities $ 61 $ — $ 61 $ — As of December 31, 2022 and 2021, we did not have any Level 3 financial instruments that are measured at fair value on a recurring basis. The following table presents the summary of the changes in the fair value of our Level 3 financial instruments during 2021: Convertible Preferred Shares Warrant Liabilities Tranche Rights (in thousands) Balance as of December 31, 2020 $ 9,089 $ 2,478 Changes in fair value 101,413 21,260 Settlement of convertible preferred share tranche rights and Series E-1 convertible preferred share warrants (74,724) (23,738) Reclassification of Series B/C convertible preferred share warrant liability to equity (35,778) — Balance as of December 31, 2021 $ — $ — We classify our derivative financial instruments within Level 2 of the fair value hierarchy because they are valued using inputs other than quoted prices which are directly or indirectly observable in the market, including readily-available pricing sources for the identical underlying security which may not be actively traded. Refer to Note 5 for more information regarding our derivative financial instruments. Prior to conversion upon IPO, we classified our convertible preferred share warrant liabilities within Level 3 of the fair value hierarchy as the fair value measurement is based on significant inputs not observed in the market, such as the fair value of the underlying Series B/C and Series E convertible preferred shares. Prior to settlement, we classified our convertible preferred share tranche rights within Level 3 as the fair value measurement is based on significant inputs not observed in the market, such as the fair value of the underlying Series E convertible preferred shares. Refer to Note 8 below for more information regarding the fair value of our indemnification guarantees. |
Derivative Instruments and Hedg
Derivative Instruments and Hedging | 12 Months Ended |
Dec. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging | 5. Derivative Financial Instruments and Hedging Notional Amount of Foreign Currency Contracts Our foreign currency contracts are denominated in NIS and Euro. The gross notional amounts of outstanding foreign currency contracts in U.S. dollar were as follows: As of December 31, 2022 2021 (in thousands) Derivative Designated as Hedging Instruments: Foreign currency contracts $ 63,998 $ 21,865 Derivatives Not Designated as Hedging Instruments: Foreign currency contracts 13,814 1,286 Total derivative instruments $ 77,812 $ 23,151 Effect of Foreign Currency Contracts on the Consolidated Statements of Operations The effect of foreign currency contracts on the Consolidated Statements of Operations during the periods presented were as follows: Derivatives Designated as Hedging Instruments Derivatives Not Designated as Hedging Instruments Year Ended December 31, Year Ended December 31, 2022 2021 2020 2022 2021 2020 (in thousands) Statement of Operations Location: Cost of revenue $ (175) $ — $ — $ — $ — $ — Research and development (1,718) — — — — — Sales and marketing (732) — — — — — General and administrative (706) — — — — — Other income (expense), net — — — (1,659) 59 231 Total gain (loss) recognized in earnings $ (3,331) $ — $ — $ (1,659) $ 59 $ 231 Effect of Foreign Currency Contracts on Accumulated Other Comprehensive Profit (Loss) The following table represents the net unrealized gains (losses) of foreign currency contracts designated as hedging instruments, net of tax, that were recorded in accumulated other comprehensive profit (loss) during the periods presented, and their effect on other comprehensive profit (loss) for the periods presented: Net Unrealized Gains (Losses) on Derivatives Designated as Hedging Instruments (in thousands) Balance as of December 31, 2020 $ — Amount of net gains (loss) recorded in accumulated other comprehensive profit (loss) 176 Amount of net gains (loss) reclassified from accumulated other comprehensive profit (loss) to earnings — Other comprehensive profit (loss) 176 Balance as of December 31, 2021 176 Amount of net gains (loss) recorded in accumulated other comprehensive profit (loss) 1,448 Amount of net gains (loss) reclassified from accumulated other comprehensive profit (loss) to earnings (3,331) Other comprehensive profit (loss) (1,883) Balance as of December 31, 2022 $ (1,707) There were no foreign currency contracts designated as hedging instruments for the year ended December 31, 2020. As of December 31, 2021, net deferred gains totaled $0.2 million and were recognized during the year ended December 31, 2022 in the same financial statement line item as the hedged items. As of December 31, 2022, $1.7 million of net deferred losses were recorded in accumulated other comprehensive profit (loss) of which all are expected to be recognized as operating expenses in the same financial statement line item in the Consolidated Statements of Operations to which the derivative relates over the next twelve months. |
Consolidated Balance Sheet Comp
Consolidated Balance Sheet Components | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Consolidated Balance Sheet Components | 6. Consolidated Balance Sheet Components Property and Equipment, Net Property and equipment, net consisted of the following: As of December 31, 2022 2021 (in thousands) Computer equipment $ 6,912 $ 6,104 Furniture and office equipment 2,531 2,216 Leasehold improvements 16,576 12,825 Property and equipment, gross 26,019 21,145 Less: accumulated depreciation and amortization (7,433) (4,177) Property and equipment, net $ 18,586 $ 16,968 Depreciation and amortization expenses were $3.4 million, $1.8 million, and $1.3 million for the years ended December 31, 2022, 2021, and 2020, respectively. The following table presents our property and equipment, net of depreciation and amortization, by geographic region: As of December 31, 2022 2021 (in thousands) Israel $ 16,671 $ 14,868 United States 1,796 1,997 Rest of world 119 103 Total property and equipment, net $ 18,586 $ 16,968 Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following: As of December 31, 2022 2021 (in thousands) Accrued expenses $ 6,175 $ 7,557 Customer credits 5,388 3,462 Derivative financial instruments 2,397 61 Other 1,853 2,226 Accrued expenses and other current liabilities $ 15,813 $ 13,306 Other Liabilities, Noncurrent Other liabilities, noncurrent consisted of the following: As of December 31, 2022 2021 (in thousands) Other tax liabilities $ 8,734 $ 2,721 Deferred rent — 6,580 Other — 58 Other liabilities, noncurrent $ 8,734 $ 9,359 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Leases | 7. Leases We have non-cancelable operating leases for our corporate offices in Tel Aviv, Israel and in New York, New York in the United States. The leases for these facilities in Tel Aviv and New York expire in 2031 and 2029, respectively and we have options to renew these leases through 2036 and 2034, respectively. These renewal options are excluded from the calculation of operating lease ROU assets and operating lease liabilities. We sublease a portion of our office space in Tel Aviv. The components of operating lease cost for the year ended December 31, 2022 were as follows: Year Ended Operating lease cost $ 6,140 Variable lease cost 1,257 Short-term lease cost 304 Sublease income (786) Total operating lease cost $ 6,915 Our lease costs prior to the adoption of ASC 842 were $5.9 million and $4.2 million for the years ended December 31, 2021 and 2020, respectively. Sublease income was $0.1 million and $0.9 million for the years ended December 31, 2021 and 2020, respectively. As of December 31, 2022, the weighted average remaining lease term and the weighted average discount rate for our operating leases were 7.4 years and 4.6%, respectively. The future minimum lease payments included in the measurement of our operating lease liabilities as of December 31, 2022, were as follows: Amount Year Ending December 31, 2023 $ 6,353 2024 5,976 2025 5,941 2026 5,986 2027 6,031 Thereafter 13,738 Total undiscounted lease payments 44,025 Less: imputed interest (6,609) Present value of operating lease liabilities $ 37,416 The following table presents our operating lease ROU assets by geographic region: As of December 31, 2022 2021 (in thousands) Israel $ 22,560 $ — United States 12,598 — Total operating lease right-of-use assets $ 35,158 $ — The minimum rental payments under operating leases as of December 31, 2021 were as follows: Amount (in thousands) Year Ending December 31, 2022 $ 6,975 2023 6,853 2024 6,648 2025 6,403 2026 6,448 Thereafter 22,631 Total $ 55,958 Excluded from the tables above is an unsecured and undated promissory note issued in December 2020 in connection with the execution of a lease agreement for an amount of $3.0 million and $3.3 million as of December 31, 2022 and 2021, respectively. The promissory note may only be withdrawn in the event of a material and fundamental breach of the lease agreement. The promissory note expires three months after the lease termination date. As of December 31, 2022 and 2021, we were in full compliance of the terms and conditions of the promissory note, and the promissory note has not been withdrawn. |
Guarantees, Commitments, and Co
Guarantees, Commitments, and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Guarantees, Commitments, and Contingencies | 8. Guarantees, Commitments, and Contingencies Indemnification Guarantees We provide contractual assurances around the accuracy of our approvals so that our merchants can confidently automate a transaction’s execution. Our contracts obligate us to stand ready to indemnify our merchants for any costs incurred from a chargeback due to fraud. Accordingly, we account for the guarantee obligation as an indemnification under the general provisions of ASC 460 and recognize a liability at fair value upon approving a transaction at an amount that represents what we would need to pay a third party to relieve ourselves from this obligation. This liability is presented as Guarantee obligations on the consolidated balance sheets and was $12.4 million and $12.1 million as of December 31, 2022 and 2021, respectively, and will be released to revenue in the consolidated statements of operations. We are relieved from our guarantee obligation at the earlier of (a) paying a chargeback or (b) expiration of the guarantee which is generally six months from the date of the transaction. We recognize the guarantee obligation as revenue through a systematic and rational amortization method over a six-month period that is representative of our historical pattern of being released from risk under the guarantee obligation. Our provision for chargebacks includes amounts associated with chargebacks that have been submitted and accepted but not yet paid by us as of the balance sheet date as well as estimates of chargebacks that have not yet been submitted and accepted relating to approved transactions that are accounted for under ASC 450, Contingencies . While no individual transaction is probable of a chargeback occurring, when we analyze a portfolio of transactions, if we believe a future chargeback is probable and reasonably estimated, we accrue a liability and an associated expense through cost of revenue. Inputs and assumptions used by management to calculate the provision are based on the transactions approved and the features of those transactions as well as historical information about chargebacks. It is possible that the estimate may change in the near term, and the effect of the change could be material. Provision for chargebacks, net on the consolidated balance sheets were $12.0 million and $12.0 million as of December 31, 2022 and 2021, respectively, and will be reduced by credits issued or cash paid to merchants. As of December 31, 2022, our portfolio of potential chargeback liabilities was diversified across numerous industries, hundreds of merchants, and millions of individual transactions. The maximum potential payment to our merchants for these guarantees at a point in time, if every order we approved was fraudulent, is generally the aggregate approved transaction amount excluding cancelled orders, orders that have expired guarantees, and orders for which guarantees have already been paid. As of December 31, 2022, there was $50.1 billion in outstanding indemnification guarantees. Historically, we have had to pay approximately 0.1% of guarantees that we have issued and net chargeback expenses for the years ended December 31, 2022, 2021, and 2020, were $103.2 million, $85.5 million, and $63.1 million, respectively, which was in line with our budgets for the associated periods. Non-Cancelable Purchase Obligations In the normal course of business, we enter into non-cancelable purchase commitments with various parties primarily for hosting and software services. As of December 31, 2022, we had outstanding non-cancelable purchase obligations with a term of 12 months or longer as follows: Amount (in thousands) Year Ending December 31, 2023 $ 11,448 2024 10,452 2025 127 Total $ 22,027 Other Indemnifications and Contingencies In the ordinary course of business, we agree to indemnify certain parties. In our merchant agreements, we have agreed to indemnify, defend, and hold harmless the indemnified party for third-party claims and related losses suffered or incurred by the indemnified party from actual or threatened third-party intellectual property infringement claims. For certain large or strategic merchants, we have agreed to indemnify, defend and hold harmless the indemnified party for non-compliance with certain additional representations and warranties made by us. In addition, we have entered into indemnification agreements with our officers and directors. As we have a limited history of prior indemnification claims and the payments we have made under such agreements have not had a material adverse effect on our results of operations, cash flows, or financial position, we are unable to reasonably estimate the maximum potential amount of future payments related to these indemnification agreements. However, to the extent that valid indemnification claims arise in the future, future payments by us could be significant and could have a material adverse effect on our results of operations or cash flows in a particular period. As of December 31, 2022 and 2021, we did not have any material indemnification claims that were probable or reasonably possible. Legal Proceedings Occasionally we may be subject to various proceedings, lawsuits, disputes, or claims. We investigate these claims as they arise and accrue liabilities when losses are probable and reasonably estimated. In May 2022, a putative securities class action complaint was filed in federal court in the United States by certain of our shareholders against us, certain of our current and former officers and directors, and our underwriters alleging violations of the Securities Act in connection with our IPO-related disclosures, and seeking unspecified damages. The lawsuit is captioned In re Riskified Ltd. Securities Litigation , 22 Civ. 3545 (DLC) (S.D.N.Y.). Plaintiffs filed an amended complaint on September 15, 2022. We moved to dismiss the amended complaint on October 28, 2022, and in response, on November 28, 2022, plaintiffs filed a second amended complaint. We moved to dismiss the second amended complaint on January 20, 2023. Plaintiffs filed a brief opposing our motion to dismiss on February 21, 2023, and briefing on the motion remains ongoing. We believe the lawsuit is without merit and intend to defend the case vigorously. As of the date hereof, we are unable to estimate a range of loss, if any, that could result were there to be an adverse final decision in this case and an estimated liability has not been recorded in our financial statements. Although claims are inherently unpredictable, except as noted above, we are currently not aware of any matters that, if determined adversely to us, would individually or taken together, have a material adverse effect on our business, financial position, results of operations, or cash flows. |
Temporary Equity
Temporary Equity | 12 Months Ended |
Dec. 31, 2022 | |
Temporary Equity Disclosure [Abstract] | |
Convertible Preferred Shares | 9. Ordinary Share Warrants As of December 31, 2022, and 2021, the following warrants were issued and outstanding, after giving effect to the Recapitalization: As of December 31, 2022 and 2021 Issued and Outstanding Share Warrants Weighted-Average Exercise Price Expiration Date Class A Ordinary Shares Class B Ordinary Shares Class A Ordinary Shares Class B Ordinary Shares Warrants to purchase ordinary shares 425,325 850,650 $ 0.28 $ 0.28 April 2025 Warrants issued to customers 499,500 — $ 0.01 $ — June 2028 Total 924,825 850,650 |
Ordinary Shares and Equity Ince
Ordinary Shares and Equity Incentive Plan | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Ordinary Shares and Equity Incentive Plan | 10. Ordinary Shares and Equity Incentive Plan Ordinary Shares Upon the completion of the IPO, our amended and restated AoA became effective, which authorized the issuance of up to 900,000,000 Class A ordinary shares with no par value and 232,500,000 Class B ordinary shares with no par value, respectively. We have the following ordinary shares reserved for future issuance: As of December 31, 2022 2021 Warrants to purchase ordinary shares (1) 1,775,475 1,775,475 Share options and RSUs issued and outstanding under the 2013 Plan 20,062,824 26,460,287 Share options and RSUs issued and outstanding under the 2021 Plan 13,134,652 803,556 Remaining shares available for future issuance under the 2021 Plan 8,674,132 13,474,214 Total ordinary shares reserved 43,647,083 42,513,532 _________________ (1) Includes the warrants to purchase ordinary shares and warrants issued to customers. Equity Incentive Plan The 2013 Equity Incentive Plan, or the 2013 Plan, was adopted by our board of directors on July 13, 2013 and amended and restated on February 23, 2021. The U.S. Sub-Plan to the 2013 Plan, or the U.S. Sub-Plan, was adopted by our board of directors on May 10, 2015 and amended and restated on February 23, 2021. The 2013 Plan and U.S. Sub-Plan provide for the grant of equity-based incentive awards to our employees, directors, office holders, and consultants in order to incentivize them to increase their efforts on behalf of us and to promote the success of our business. Immediately prior to the completion of the IPO, we adopted the 2021 Share Incentive Plan, or the 2021 Plan. Following the effectiveness of the 2021 Plan, we no longer grant any awards under the 2013 Plan, though previously granted share-based awards under the 2013 Plan remain outstanding and governed by the 2013 Plan. The 2021 Plan provides for the grant of stock options (including incentive stock options and non-qualified stock options), Class A ordinary shares, restricted shares, RSUs, stock appreciation rights and other share-based awards. The maximum number of Class A ordinary shares available for issuance under the 2021 Plan is equal to the sum of (i) 13,951,037 Class A ordinary shares, (ii) any shares subject to awards under the 2013 Plan which have expired, or were cancelled, terminated, forfeited or settled in cash in lieu of issuance of shares or became unexercisable without having been exercised and (iii) an annual increase on the first day of each year beginning in 2022 and on January 1st of each calendar year thereafter during the term of the 2021 Plan, equal to the lesser of (A) 5% of the outstanding Class A ordinary shares of the Company on the last day of the immediately preceding calendar year, on a fully diluted, as converted basis; and (B) such amount as determined by our board of directors if so determined prior to January 1 of a calendar year, provided that no more than 13,951,037 Class A ordinary shares may be issued upon the exercise of incentive share options. Share Options and Shares Available for Grant Share options generally vest over four years and expire ten years after the date of grant. We issue Class A ordinary shares upon exercise of share options. A summary of share options under our equity incentive plan and related information is as follows: Share Options Outstanding Outstanding Share Options Weighted-Average Exercise Weighted-Average Remaining Contractual Life (Years) Aggregate Intrinsic (in thousands, except share, life and per share data) Balance as of December 31, 2021 18,834,740 $ 2.05 7.0 $ 109,397 Options exercised (3,919,606) $ 1.07 Options forfeited (1,129,920) $ 3.88 Balance as of December 31, 2022 13,785,214 $ 2.17 6.1 $ 34,326 Exercisable as of December 31, 2022 10,244,620 $ 1.65 5.5 $ 30,632 There were no share options granted during the year ended December 31, 2022. The weighted-average grant date fair value of share options granted during the years ended December 31, 2021 and 2020 were $16.63, and $4.40, respectively. The aggregate grant date fair value of share options vested during the years ended December 31, 2022, 2021, and 2020 were $12.0 million, $3.2 million, and $2.6 million, respectively. The total intrinsic value of share options exercised during the years ended December 31, 2022, 2021, and 2020 were $17.4 million, $68.6 million, and $4.3 million, respectively. As of December 31, 2022, unrecognized share-based compensation cost related to unvested share options was $14.2 million, which is expected to be recognized over a weighted-average period of 2.0 years. The Black-Scholes assumptions used to value the employee share options at the grant dates are as follows: Year Ended December 31, 2021 2020 Expected term (years) 5.44 - 6.60 5.75 - 6.11 Expected volatility 67.26% - 68.52% 55.00% - 65.00% Risk-free interest rate 0.99% - 1.12% 0.52% - 1.73% Expected dividend yield 0.00% 0.00% These assumptions and estimates were determined as follows: • Fair Value of Ordinary Shares - Prior to IPO, the fair value was determined by our board of directors, with input from management and valuation reports prepared by third-party valuation specialists. Post IPO, the fair value of each ordinary share was based on the closing price of our publicly traded ordinary shares as reported on the date of the grant. • Expected Term - The expected term represents the period that the share options are expected to be outstanding. For share option grants that are considered to be “plain vanilla,” we determine the expected term using the simplified method. The simplified method deems the term to be the average of the time-to-vesting and the contractual life of the share options. • Expected Volatility - As we have a short trading history for our ordinary shares, the expected volatility is derived from the average historical share volatilities of several unrelated public companies within our industry that we consider to be comparable to our own business over a period equivalent to the option’s expected term. • Risk-Free Interest Rate - The risk-free rate for the expected term of the share options are based on the yields of U.S. Treasury securities with maturities appropriate for the expected term of employee share option awards. • Expected Dividend Yield. - We have never declared or paid any cash dividends and do not presently plan to pay cash dividends in the foreseeable future. As a result, an expected dividend yield of zero percent was used. Restricted Share Units RSUs vest either upon the satisfaction of service-based vesting conditions, the satisfaction of both service-based and performance-based vesting conditions, or the satisfaction of service-based, performance-based, and market-based vesting conditions. Refer to Note 2 for more information regarding the vesting conditions of our RSUs. RSUs granted under the 2013 Plan can only vest prior to the expiration date of the award which is seven years from the date of grant. Any RSUs that have not vested will automatically terminate on their expiration date. RSUs granted under the 2021 Plan do not have an expiration date. A summary of RSU activity, including activity under our equity incentive plan, and related information is as follows: Number of Shares Weighted-Average Unvested as of December 31, 2021 8,429,103 $ 15.01 Granted 15,873,386 $ 6.04 Vested (3,145,103) $ 10.46 Forfeited (1,745,124) $ 7.81 Unvested as of December 31, 2022 19,412,262 $ 9.06 As of December 31, 2022, total unrecognized share-based compensation expense related to unvested RSUs was approximately $123.1 million, which is expected to be recognized over a weighted-average period of 3.3 years. 2021 Employee Share Purchase Plan We adopted the 2021 Employee Share Purchase Plan, or ESPP, immediately prior to our IPO. A total of 3,742,961 Class A ordinary shares are available for sale under the ESPP, subject to adjustment as provided for in the ESPP. In addition, on the first day of each fiscal year beginning on January 1, 2022 and ending on and including January 1, 2031, such pool of Class A ordinary shares shall be increased by that number of our Class A ordinary shares equal to the lesser of: (i) 1% of the outstanding Class A ordinary shares as of the last day of the immediately preceding fiscal year, determined on a fully diluted as-converted basis; or (ii) such other amount as our board of directors may determine. In accordance with the above, our board of directors determined not to increase the number of Class A ordinary shares available for sale under the ESPP as of January 1, 2022 or January 1, 2023. Generally, all of our employees are eligible to participate if they are employed by us. However, an employee may not be granted rights to purchase our ordinary shares under the ESPP if such employee (i) immediately after the grant would own capital shares or hold outstanding share options to purchase such shares possessing 5% or more of the total combined voting power or value of all classes of our shares or any of our subsidiaries. As of December 31, 2022, we have not effected any offering under the ESPP. Secondary Transaction In April 2020, in conjunction with the Series E convertible preferred shares financing, certain of our employees and shareholders sold 1,120,809 ordinary shares, of which 521,473 shares were sold by our employees to existing investors at a per share price of $18.08. As the purchases were made by economic interest holders in our acquired shares from our employees, we assessed the impact of this transaction at a price in excess of fair value of such shares. Accordingly, we recognized $5.5 million of such excess value as share-based compensation expense during the year ended December 31, 2020. CEO Multi-Year Equity Award In July 2021, our board of directors and shareholders granted our chief executive officer, Mr. Gal, a multi-year equity award, comprising 3,993,440 RSUs (the “Multi-Year Award”). The grant date fair value of the Multi-Year Award, which is the amount of share-based compensation expense that we recognize, is primarily determined based on the share price on the date the award is granted and is not based on our current share price. This amount will be expensed utilizing the accelerated attribution method over the requisite service period of ten years which attributes higher expenses to the earlier periods of the requisite service period. The Multi-Year Award is structured so that meaningful value may only be realized upon the achievement of sustained and significant high performance levels. The award is divided into ten tranches that are eligible to vest based on the achievement of stock price goals, which range from $26.67 to $106.67, measured based on the average of our stock price over a 60 trading day trailing average during predefined performance periods, subject to Mr. Gal’s continued employment as our Chief Executive Officer through each such period. In order to earn all of the tranches, the stock price will have to be over 5x the price at IPO. No tranches of the Multi-Year Award were earned or vested in 2022. In addition to the service-based vesting condition, and market-based vesting condition, each described above, the Multi-Year Award is also subject to a performance-based vesting condition. The performance-based vesting condition underlying the Multi-Year Award was satisfied upon the occurrence of our IPO. We recognized $13.0 million and $6.0 million in share-based compensation expense related to the Multi-Year Award during the years ended December 31, 2022 and December 31, 2021, respectively. Share-Based Compensation Share-based compensation expense by line item in the consolidated statements of operations is summarized as follows: Year Ended December 31, 2022 2021 2020 (in thousands) Cost of revenue $ 621 $ 216 $ 38 Research and development 10,005 4,246 3,621 Sales and marketing 18,253 10,710 2,814 General and administrative 38,588 18,186 1,472 Total share-based compensation expense $ 67,467 $ 33,358 $ 7,945 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 11. Income Taxes Ordinary taxable income in Israel is subject to a corporate tax rate of 23%. However, the effective tax rate payable by a company that derives income from a Preferred Technological Enterprise (as discussed below) may be considerably less. Capital gains (which are not ‘Inflationary Surplus’, as described below) derived by an Israeli company are generally subject to the prevailing corporate tax rate. Law for the Encouragement of Capital Investments, 1959 The Law for the Encouragement of Capital Investments, 1959, generally referred to as the Investment Law, provides certain incentives for capital investments in production facilities (or other eligible assets). The Investment Law was significantly amended effective on April 1, 2005, January 1, 2011, and on January 1, 2017, or the 2017 Amendment. The 2017 Amendment introduces new benefits for Technological Enterprises, alongside the existing tax benefits. The 2017 Amendment was enacted as part of the Economic Efficiency Law that was published on December 29, 2016, and is effective as of January 1, 2017. The 2017 Amendment included new tax benefits for “Technological Enterprises,” as described below, and is in addition to the other existing tax beneficial programs under the Investment Law. The 2017 Amendment provides that a technology company satisfying certain conditions should qualify as a “Preferred Technology Enterprises,” or PTE, granting a 12% tax rate in central Israel on income deriving from Benefited Intangible Assets, subject to a number of conditions being fulfilled, including a minimal amount or ratio of annual R&D expenditure and R&D employees, as well as having at least 25% of annual income derived from exports to large markets. PTE is defined as an enterprise which meets the aforementioned conditions and for which total consolidated revenues of its parent company and all subsidiaries are less than NIS 10 billion. We have not adopted the PTE status currently, but believe we are eligible for the PTE status in future tax years and have tax-effected our Israel deferred tax assets and liabilities at the appropriate PTE rates. Our subsidiaries are separately taxed under the domestic tax laws of the jurisdiction of incorporation of each entity. Profit (loss) before the provision for income taxes consisted of the following for the years ended December 31, 2022, 2021, and 2020: Year Ended December 31, 2022 2021 2020 (in thousands) Israel $ (55,054) $ (154,339) $ (13,479) International (42,893) (22,988) 3,207 Total $ (97,947) $ (177,327) $ (10,272) The provision for income taxes was as follows: Year Ended December 31, 2022 2021 2020 (in thousands) Current: Israel $ 4 $ 4 $ 4 International 8,715 121 32 Total current income tax expense 8,719 125 36 Deferred: Israel — — — International (2,677) 1,433 1,039 Total deferred income tax expense (2,677) 1,433 1,039 Total provision for income taxes $ 6,042 $ 1,558 $ 1,075 A reconciliation of our statutory income tax expense to our effective income tax provision is as follows: Year Ended December 31, 2022 2021 2020 (in thousands) Israel tax benefit at statutory rate $ (22,528) $ (40,784) $ (2,362) Preferred enterprise 10,573 3,052 169 Foreign rate differential (1,050) 912 332 Share-based compensation 9,717 1,753 1,328 Warrant revaluation — 23,325 1,336 Tranche right revaluation — 4,890 — Prior year tax income/(expense) (6,675) 84 — Permanent differences (3,351) 98 83 ASC 606 — — — Uncertain tax position 7,233 3,784 5 Change in valuation allowance 12,123 4,444 184 Total $ 6,042 $ 1,558 $ 1,075 Our effective tax rate was (6.17)% for the year ended December 31, 2022, compared to an effective tax rate of (0.88)% for the year ended December 31, 2021 and (10)% for the year ended December 31, 2020. The effective tax rates for the periods presented are primarily comprised of Israel statutory taxes, warrant revaluation, share-based compensation expense, uncertain tax positions, and changes in valuation allowance position. The difference in the effective tax rate of (6.17)% for the year ended December 31, 2022 as compared to the effective tax rate of (0.88)% for the year ended December 31, 2021 and (10)% for the year ended December 31, 2020 was related to non-deductible share-based compensation, prior period adjustments, and uncertain tax positions, and change in valuation allowance position in Israel and in our U.S. subsidiary. The provision for income taxes was $6.0 million, $1.6 million, and $1.1 million for the years ended December 31, 2022, 2021, and 2020, respectively. The provision for income taxes for the year ended December 31, 2022 consisted primarily of income taxes related to the United States and other foreign jurisdictions in which we conduct business. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The following table presents the significant components of our deferred tax assets and liabilities: Year Ended December 31, 2022 2021 2020 (in thousands) Deferred tax assets: Research and development expenses $ 7,374 $ 1,436 $ 1,742 Stat to GAAP adjustments — — 1,493 Net operating loss 9,059 5,212 941 Deferred Compensation 5,214 1,009 — Operating lease liabilities 6,456 — — Vacation and convalescence 730 799 364 Bad debts 78 93 100 Other 2,166 466 374 Gross deferred tax assets 31,077 9,015 5,014 Valuation allowance (20,822) (8,699) (4,255) Total deferred tax assets 10,255 316 759 Deferred tax liabilities: Operating lease right-of-use assets (6,387) — — Deferred contract acquisition costs (3,009) (2,324) (1,543) Property and equipment (279) (283) (439) Capitalized Software (591) (397) — Other — — (34) Gross deferred tax liabilities (10,266) (3,004) (2,016) Net deferred tax liabilities $ (11) $ (2,688) $ (1,257) As of December 31, 2022 and 2021, we had Israel net operating loss, or NOL, carryforwards of approximately $68.9 million and $37.4 million, respectively, which do not expire. As of December 31, 2022 and 2021, we had U.S. Federal NOL carryforwards of approximately $11.2 million and $9.8 million, respectively, which do not expire. As of December 31, 2022, we had U.S. State NOL carryforwards of approximately $16.6 million, of which $15.4 million expire between 2027 and 2042, and the remaining $1.2 million do not expire. As of December 31, 2021, we had U.S. State NOL carryforwards of approximately 27.4 million, of which 26.3 million expire between 2027 and 2041, and the remaining 1.1 million do not expire. During the years ended December 31, 2022, 2021, and 2020 the net change in the valuation allowance against deferred tax assets amounted to an increase of $12.1 million, an increase of $4.4 million, and an increase of $0.2 million, respectively. The increase in the valuation allowance during the years ended December 31, 2022, December 31, 2021 and December 31, 2020 was largely attributable to the generation of Israel NOLs, and certain US state NOLs. In establishing deferred income tax assets and liabilities, management makes judgments based on the enacted tax laws and published tax guidance applicable to us as well as the amount and jurisdiction of future taxable income. Deferred tax assets and liabilities are recorded and the need for valuation allowances is evaluated to reduce the deferred tax assets to amounts expected to be realized. As of December 31, 2022 and 2021, we maintained a full valuation allowance on Israel and U.S. net deferred tax assets as we believe, after weighing both the positive and negative evidence, that it is more likely than not that these deferred tax assets will not be realized. The Internal Revenue Code of 1986, as amended, imposes restrictions on the utilization of NOLs in the event of an “ownership change” of a corporation. Accordingly, a company’s ability to use NOLs may be limited as prescribed under Internal Revenue Code Section 382, or IRC Section 382. Events which may cause limitations in the amount of the NOLs that we may use in any one year include, but are not limited to, a cumulative ownership change of more than 50% over a three-year period. Utilization of the U.S. federal and state NOLs may be subject to substantial annual limitation due to the ownership change limitations provided by the IRC Section 382 and similar state provisions. We have completed our evaluation of NOL utilization limitations under Internal Revenue Code, as amended, or the Code, Section 382, change of ownership rules, and have found that the NOLs would not be limited as to the amount that could be used in the current tax year. We have identified unrecognized tax benefits or uncertain tax positions. There has been a liability on uncertain tax positions recorded on our audited consolidated financial statements as of December 31, 2022 and 2021. We do not expect that our assessment regarding unrecognized tax benefits and uncertain tax positions will materially change over the following 12 months. A reconciliation of the beginning and ending balance of total unrecognized tax position is as follows: Unrecognized Tax Benefits (in thousands) Balance – January 1, 2020 $ 234 Additions based on tax positions related to current year — Reductions for tax positions of prior years — Balance – December 31, 2020 234 Additions based on tax positions related to current year 3,885 Reductions for tax positions of prior years — Balance – December 31, 2021 4,119 Additions based on tax positions related to current year 7,187 Reductions for tax positions of prior years (54) Balance – December 31, 2022 $ 11,252 As of December 31, 2022 and 2021, the total amount of gross unrecognized tax benefits was $11.3 million and $4.1 million, respectively, which, if recognized, would affect our effective tax rate. We have elected to include interest and penalties as a component of tax expense. As of December 31, 2022 and 2021, we have accumulated $320 thousand and $10 thousand, respectively, in both interest and penalties associated with uncertain tax positions. We do not expect unrecognized tax benefits to change significantly within the next twelve months. We are not currently under audit for income taxes. As of December 31, 2022, tax years beginning with the year ended December 31, 2018 remain subject to examination by the Israel tax authorities and tax years beginning with the year ended December 31, 2019 remain subject to examination by the Internal Revenue Service and certain U.S. state jurisdictions. |
Net Profit (Loss) Per Share Att
Net Profit (Loss) Per Share Attributable to Ordinary Shareholders | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Net Profit (Loss) Per Share Attributable to Ordinary Shareholders | 12. Net Profit (Loss) Per Share Attributable to Ordinary Shareholders The following table sets forth the computation of basic and diluted net profit (loss) per share attributable to ordinary shareholders for the periods presented: Year Ended December 31, 2022 2021 2020 Class A Class B Class A Class B Ordinary Shares (in thousands, except share and per share data) Numerator: Net profit (loss) attributable to ordinary shareholders, basic and diluted $ (57,339) $ (46,650) $ (90,677) $ (88,208) $ (11,347) Denominator: Weighted-average shares used in computing net profit (loss) per share attributable to ordinary shareholders, basic and diluted 92,450,867 75,216,507 38,757,558 37,702,067 14,022,788 Net profit (loss) per share attributable to ordinary shareholders, basic and diluted $ (0.62) $ (0.62) $ (2.34) $ (2.34) $ (0.81) Basic and diluted net profit (loss) per share attributable to ordinary shareholders are the same for each class of ordinary shares as they are entitled to the same liquidation and dividend rights. The weighted-average potential ordinary shares that were excluded from the computation of diluted net profit (loss) per share attributable to ordinary shareholders for the periods presented because including them would have been anti-dilutive, or whose issuance is contingent upon the satisfaction of certain market conditions, are as follows: Year Ended December 31, 2022 2021 2020 Class A Class B Class A Class B Ordinary Shares Convertible preferred shares — — 17,817,201 35,634,404 28,217,680 Warrants to purchase ordinary shares (1)(2) 873,370 850,650 1,488,819 354,243 1,858,467 Outstanding share options 16,067,720 — 12,239,441 — 5,985,236 Unvested RSUs 16,176,275 2,131,015 1,562,388 1,965,604 — Total 33,117,365 2,981,665 33,107,849 37,954,251 36,061,383 _________________ (1) Prior to IPO, assumes the Series B/C convertible preferred share warrants are exercised into Series B convertible preferred shares. Prior to May 4, 2021, should the holder elect to exercise into Series C convertible preferred shares, total weighted-average potential ordinary shares that were excluded from the computation of diluted net profit (loss) per share attributable to ordinary shareholders were 70,110,425 and 35,744,158 for the years ended December 31, 2021 and 2020, respectively. On May 4, 2021, the Series B/C convertible preferred share warrants were amended and restated to, among other things, remove |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2022 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | 13. Employee Benefit Plans We have a defined-contribution plan in the United States intended to qualify under Section 401 of the Internal Revenue Code, or the 401(k) Plan. The 401(k) Plan covers substantially all employees who meet minimum age and service requirements and allows participants to defer a portion of their annual compensation on a pre-tax basis. We offer a safe harbor matching contribution in an amount equal to 100% of participating employee contributions to the plan up to 4% of the employee’s eligible compensation. During the years ended December 31, 2022, 2021, and 2020, we recorded $1.1 million $0.8 million, and $0.6 million, respectively, of expenses related to the 401(k) plan. Israeli Severance Pay Pursuant to Israel’s Severance Pay Law, Israeli employees are entitled to severance pay equal to one month’s salary for each year of employment, or a portion thereof. We have elected to include our employees in Israel under Section 14 of the Severance Pay Law, under which these employees are entitled only to monthly deposits made in their name with insurance companies, at a rate of 8.33% of their monthly salary. These payments release us from any future obligation under the Israeli Severance Pay Law to make severance payments in respect of those employees; therefore, any liability for severance pay due to these employees, and the deposits under Section 14 are not recorded as an asset in the consolidated balance sheets. During the years ended December 31, 2022, 2021, and 2020, we recorded $4.5 million, $3.8 million, and $2.7 million, respectively, in severance expenses related to these employees. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 14. Related Party Transactions For a description of related party transactions, refer to Note 10 “ Ordinary Shares and Equity Incentive Plan—Secondary Transaction.” |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of PresentationThe accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States, or U.S. GAAP, and include the accounts of Riskified Ltd. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Certain amounts in prior periods have been reclassified to conform to the current period presentation. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements and the accompanying notes. Actual results could differ materially from these estimates. On an ongoing basis, we evaluate our estimates, including those related to the estimated customer life on deferred contract costs, the allowance for doubtful accounts, the fair value of financial assets and liabilities including the fair value of derivatives, the useful lives of property and equipment, capitalization and estimated useful life of internal-use software, share-based compensation including the determination of the fair value of our ordinary shares (prior to IPO), the fair value of indemnification guarantees and the associated systematic and rational amortization method, provisions for chargebacks, the fair value of convertible preferred share warrant liabilities and convertible preferred share tranche rights (prior to IPO), incremental borrowing rate (“IBR”) used for operating lease right-of-use (“ROU”) assets and operating lease liabilities, and the valuation of deferred tax assets and uncertain tax positions. We base our estimates on assumptions, both historical and forward-looking, trends, and various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. As of the date of issuance of these consolidated financial statements, we are not aware of any specific event or circumstance related to COVID-19 that would require us to update our estimates or judgments or adjust the carrying value of our assets or liabilities. As events continue to evolve and additional information becomes available, our estimates and assumptions may change materially in future periods. Refer to “Operating and Financial Review and Prospects—Factors Affecting Our Performance” included elsewhere in this Annual Report for more information regarding the impact of COVID-19 on our business. |
Foreign Currency | Foreign Currency The U.S. dollar is our functional currency and the functional currency of a majority of our subsidiaries. For the subsidiaries where the U.S. dollar is the functional currency, monetary assets and liabilities denominated in currencies other than the U.S. dollar are remeasured into U.S. dollars at exchange rates in effect at the end of each period. Foreign currency transaction gains and losses from these remeasurements are recognized in other income (expense), net, within the consolidated statements of operations. Foreign currency transactions resulted in net gains of $2.5 million, $0.2 million, and $2.1 million, for the years ended December 31, 2022, 2021, and 2020, respectively. |
Concentration of Risks | Concentration of Risks Our financial instruments that are exposed to concentrations of credit risk primarily consist of cash and cash equivalents, restricted cash, short-term deposits, accounts receivable and derivative financial instruments. We maintain our cash, cash equivalents, restricted cash, and short-term deposits with high-quality financial institutions mainly in the United States and Israel, the composition of which are regularly monitored by us. We have not experienced any material losses in such accounts. Our derivatives expose us to credit risk to the extent that the counterparties may be unable to meet the terms of the agreement. We seek to mitigate such risk by limiting our counterparties to major financial institutions and by spreading the risk across a number of major financial institutions. In addition, the potential risk of loss with any one counterparty resulting from this type of credit risk is monitored on an ongoing basis. Our customers are online merchants. For accounts receivable, we are exposed to credit risk in the event of nonpayment by online merchants to the extent the amounts are recorded in the consolidated balance sheets. We extend different levels of credit to online merchants and maintain reserves for potential credit losses based upon the expected collectability of accounts receivable. We manage credit risk related to our merchants by performing periodic evaluations of credit worthiness and consumer indebtedness and applying other credit risk monitoring procedures. The following table summarize our merchants that represented 10% or more of Accounts receivable, net and Revenue: Accounts Receivable, Net Revenue As of December 31, Year Ended December 31, 2022 2021 2022 2021 2020 Customer A 22 % 32 % 13 % 16 % 18 % Customer B * * * * 10 % Customer C * 11 % * * * ________________ * Represents less than 10% |
Cash, Cash Equivalents, and Restricted Cash | Cash, Cash Equivalents, and Restricted Cash Cash and cash equivalents consist of cash in banks and bank deposits. We consider all highly liquid investments, with an original maturity of three months or less at the date of purchase, to be cash equivalents. We maintain certain cash amounts restricted as to our withdrawal or use. Our restricted cash primarily consists of cash deposits to back letters of credit related to certain operating leases. |
Short-Term Deposits | Short-Term Deposits Short-term deposits consist of bank deposits with original maturities between 4 and 12 months and that mature within 12 months of the balance sheet date. Short-term deposits are reported at cost. |
Fair Value Measurements | Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. We measure financial assets and liabilities at fair value for each reporting period using a fair value hierarchy which requires us to maximize the use of observable inputs and minimize the use of unobservable inputs. A financial instrument’s classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Three levels of inputs may be used to measure fair value: Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Financial instruments consist of cash and cash equivalents, restricted cash, short-term deposits, accounts receivables, derivative financial instruments, accounts payables, accrued liabilities, indemnification guarantees. Cash and cash equivalents, short-term deposits, restricted cash, accounts receivable, accounts payable, and accrued liabilities are stated at their carrying value, which approximates fair value due to the short time to the expected receipt or payment date. Derivative financial instruments are stated at fair value on a recurring basis as disclosed in Note 4 below. We record indemnification guarantees that we issue upon approving a transaction at fair value when issued using the income approach. To measure this guarantee, we consider the premium that would have been received for the same guarantee if it were issued in a stand-alone transaction. The fair value of these indemnification guarantees is determined based on historical chargeback claims, a risk premium fee that would be required for a third party to assume this liability, and an appropriate discount rate due to time. Historical chargeback guarantee claims are not readily observable in the marketplace and are generally classified as Level 3 inputs. Indemnification guarantees are recorded at fair value when issued and not remeasured to fair value each period. Refer to Note 8 below for more information regarding indemnification guarantees. Because of the inherent uncertainty of valuation, the estimated fair value of our financial instruments, in particular our indemnification guarantees, may differ significantly from the values that would have been used had a ready market for the financial instruments existed, and the differences could be material to our consolidated financial statements. Refer to Item 5. “ Operating and Financial Review and Prospects — Critical Accounting Policies and Estimates .” |
Accounts Receivable, Net | Accounts Receivable, NetAccounts receivable are recorded at the invoiced amount, net of an allowance for doubtful accounts. The allowance for doubtful accounts is based on our assessment of the collectability of accounts. We regularly review the adequacy of the allowance for doubtful accounts based on a combination of factors, including an assessment of the current merchant’s credit worthiness, the age of the balance, the nature and size of the merchant, the financial condition of the merchant, and the amount of any receivables in dispute. Accounts receivable deemed uncollectible are charged against the allowance for doubtful accounts when identified. |
Derivative Financial Instruments | Derivative Financial Instruments We enter into derivative instruments to manage risks relating to our ongoing business operations. We enter into foreign currency forward and option contracts with financial institutions to protect against foreign exchange risks attributable to our exposure to changes in the exchange rates of (a) the New Israeli Shekel (“NIS”) against the U.S. dollar and (b) the Euro against the U.S. dollar. Our primary objective in entering into these contracts is to reduce the volatility of forecasted earnings and cash flows associated with changes in foreign currency exchange rates. We do not use derivative instruments for trading or speculative purposes. We account for our derivative instruments as either assets or liabilities and carry them at fair value. The accounting for changes in the fair value of a derivative depends on the intended use of the derivative and the resulting designation. Derivative instruments are recorded as either prepaid expenses and other current assets or accrued expenses and other current liabilities in the consolidated balance sheets. We record changes in the fair value of derivative instruments that are designated as hedging instruments in accumulated other comprehensive profit (loss) in the consolidated balance sheets, until the forecasted transaction occurs upon which we reclassify the related gain or loss on the derivative to the same financial statement line item in the consolidated statements of operations to which the derivative relates. Other derivatives not designated as hedging instruments consist primarily of foreign currency forward contracts that we use to hedge monetary assets or liabilities denominated in currencies other than the functional currency of a subsidiary. Changes in the fair value on these contracts, as well as the related costs, are recognized in Other income (expense), net, along with the foreign currency gains and losses on the related monetary assets and liabilities. Refer to Note 5 for additional information. |
Property and Equipment, Net | Property and Equipment, Net Property and equipment are stated at cost net of accumulated depreciation and amortization. Depreciation and amortization are calculated using the straight-line method over the estimated useful lives of the respective assets. Expenditures for maintenance and repairs are expensed as incurred. The estimated useful lives of our property and equipment are as follows: Computer equipment 3 years Furniture and office equipment 5 – 7 years Leasehold improvements Shorter of remaining lease term or estimated useful life |
Capitalized Software Costs and Cloud Computing Arrangement Implementation Costs | Capitalized Software CostsCosts related to software acquired, developed, or modified solely to meet our internal requirements, with no substantive plans to market such software at the time of development are capitalized. Costs incurred during the preliminary project stage and during the post implementation operational stage are expensed as incurred. Eligible costs incurred during the application development stage of the project are capitalized. Capitalized software development costs are recorded as part of Other assets, noncurrent in the consolidated balance sheets. Maintenance costs are expensed as incurred. Capitalized software development costs are amortized on a straight-line basis over the software’s estimated useful life, which is four years and are recorded in cost of revenue in the consolidated statements of operations.Cloud Computing Arrangement Implementation Costs We capitalize certain implementation costs incurred in a cloud computing arrangement during the application development stage pursuant to Accounting Standards Codification, or ASC, 350-40, Internal Use Software. |
Leases | Leases Our lease accounting policy under ASC Topic 840, “ Leases ” until January 1, 2022, prior to the adoption of the new lease guidance was as follows: Leases are reviewed and classified as either capital or operating leases at their inception. In certain lease agreements, we may receive renewal or expansion options, rent holidays, and other incentives. For operating leases, we recognize lease costs on a straight-line basis once we take control of the space, without regard to deferred payment terms such as rent holidays that defer the commencement date of required payments. Additionally, incentives received are treated as a reduction of costs over the term of the agreement. On January 1, 2022, we adopted the new lease guidance for our operating lease agreements. Refer to Note 7 below for additional information. Our lease accounting policy under ASC Topic 842, “ ASC 842 ” from January 1, 2022, following the adoption of the new lease guidance is as follows: We determine if an arrangement meets the definition of a lease at the inception of the lease, and leases are classified at commencement as either operating or finance leases. We do not have any finance leases. Operating lease ROU assets represent the right to use an underlying asset for the lease term and operating lease liabilities represent our obligation to make lease payments arising from the lease agreement. Operating lease ROU assets are measured based on the discounted present value of the remaining lease payments, initial direct costs incurred and prepaid lease payments, excluding lease incentives received prior to lease commencement. Operating lease liabilities are measured based on the discounted present value of the remaining lease payments. The discounted present value of remaining lease payments is computed using our IBR based on the information available at the commencement date of the lease as our leases generally do not provide an implicit rate. Our IBR was estimated to approximate the interest rate for collateralized borrowing with similar terms and payments and in economic environments where the leased asset was located. The lease term may include options to extend or terminate the lease when it is reasonably certain that we would exercise that option. We made an accounting policy election for lease agreements with a term of 12 months or less and do not recognize operating lease ROU assets and operating lease liabilities in respect of those agreements. Payments under our lease agreements are primarily fixed; however, certain lease agreements contain variable payments, which are expensed as incurred and not included in the operating lease ROU assets and operating lease liabilities. Variable lease payments are mainly comprised of common area maintenance, utilities, real estate taxes, and payments affected by changes in indexes. We elected the practical expedient to not separate lease and non-lease components for our leases. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets We evaluate the recoverability of long-lived assets, including property and equipment, for possible impairment whenever events or circumstances indicate that the carrying amount of such assets may not be fully recoverable. Such events and changes may include significant changes in performance relative to expected operating results, significant changes in asset use, significant negative industry or economic trends, and changes in our business strategy. Recoverability of these assets is measured by comparing the carrying amounts with the future undiscounted cash flows that the assets are expected to generate. If such review indicates that the carrying amount of long-lived assets is not recoverable, the carrying amount of such assets is reduced to fair value. During the current period, we impaired an immaterial |
Indemnifications Guarantees | Indemnification Guarantees We provide contractual assurances around the accuracy of our approvals so that our merchants can confidently automate a transaction’s execution. Our contracts obligate us to stand ready to indemnify our merchants for any costs incurred from a chargeback due to fraud (i.e., the “guarantee obligation”). Accordingly, we account for the guarantee obligation as an indemnification under the general provisions of ASC 460, Guarantees , or ASC 460, and recognize a liability at fair value upon approving a transaction at an amount that represents what we would need to pay a third party to relieve ourselves from this obligation. This liability is presented as Guarantee obligations on the consolidated balance sheets and will be released to revenue in the consolidated statements of operations. We are relieved from our guarantee obligation at the earlier of (a) paying a chargeback or (b) expiration of the guarantee which is generally six months from the date of the transaction. We recognize the guarantee obligation as revenue through a systematic and rational amortization method over a six-month period that is representative of our historical pattern of being released from risk under the guarantee obligation. While no individual transaction is probable of a chargeback occurring, when we analyze a portfolio of transactions, if we believe a future chargeback is probable and reasonably estimated, we accrue a liability and an associated expense through cost of revenue in accordance with ASC 450, Contingencies , or ASC 450 . Inputs and assumptions used by management to calculate this provision are based on the transactions approved and the features of those transactions as well as historical information about chargebacks. It is possible that the estimate may change in the near term, and the effect of the change could be material. These liabilities are recorded within Provision for chargebacks, net on the consolidated balance sheets and will be reduced by credits issued or cash paid to merchants. Refer to Note 8 below or Item 5. “ Operating and Financial Review and Prospects — Critical Accounting Policies and Estimates” for additional information. |
Convertible Preferred Share Warrants and Convertible Preferred Share Tranche Rights | Ordinary Share Warrants Prior to IPO, warrants to purchase our Series B/C and E-1 convertible preferred shares were recorded as a liability at fair value on our consolidated balance sheets as the underlying convertible preferred shares were contingently redeemable, upon a deemed liquidation event that is outside of our control, and therefore could have obligated us to transfer assets. The Series B/C convertible preferred share warrants were remeasured to fair value at the end of each reporting period with changes in fair value recognized as a gain or loss within Other income (expense), net in the consolidated statements of operations until the earlier of the exercise of the warrants, the expiration of the warrants, or upon the completion of a qualified IPO. Upon IPO, the Series B/C convertible preferred share warrants were converted to warrants to purchase ordinary shares, and the then outstanding liability was reclassified to additional paid-in capital in the consolidated balance sheets. The warrants to purchase ordinary shares may be exercised any time prior to, and shall expire upon, the earlier of (a) April 29, 2025 or (b) immediately prior to the consummation of certain deemed liquidation events. The Series E-1 convertible preferred share warrants were remeasured to fair value at the end of each reporting period with changes in fair value recognized as a gain or loss within Other income (expense), net in the consolidated statements of operations until the earlier of the exercise of the warrants, the expiration of the warrants, or the completion of a deemed liquidation event, including a qualified IPO. Upon IPO, the Series E-1 convertible preferred share warrants were automatically exercised. |
Revenue Recognition | Revenue Recognition We primarily generate revenue by granting merchants access to our eCommerce risk intelligence platform and reviewing and approving eCommerce transactions for legitimacy. Revenue is also generated from the issuance of indemnification guarantees as noted above within “Indemnification Guarantees”. For the majority of our revenue, merchants pay us a percentage of every dollar of the gross merchandise volume, or GMV, that we approve and guarantee on their behalf. Our fee, as determined by our risk-based pricing model, in these situations is a percentage of the GMV of our merchants’ orders that we approve, prior to taxes or other charges. These arrangements do not provide merchants with the right to take possession of our software platform. Rather, merchants are granted continuous access to our software platform under a hosting arrangement over the contractual period. As noted above within “Indemnification Guarantees”, our contracts with our merchants obligate us to review eCommerce transactions for legitimacy as well as to stand ready to indemnify merchants for costs incurred associated with an approved transaction in the event of a chargeback due to fraud. Our fee is allocated between the consideration owed to us for our fraud review service and the consideration owed to us for issuing indemnification guarantees which are recorded at fair value. Consideration allocated to fraud review is recognized as revenue over the contract period in the month that the transactions are approved while consideration allocated to the indemnification guarantee is recognized as we are released from risk under the guarantee, generally over a six-month period from the date of the transaction. We present revenue net of cancellations and adjustments for minimum service level agreements. In accordance with ASC 606, revenue is recognized when a customer obtains control of promised products. The amount of revenue recognized reflects the consideration that we expect to receive in exchange for these products. To achieve the core principle of this standard, we applied the following five steps: 1. Identification of the contract, or contracts, with the merchant We determine that we have a contract with a merchant when the contract is approved, each party’s rights and obligations regarding the products to be transferred can be identified, the payment terms for the products can be identified, we have determined the merchant has the ability and intent to pay, and the contract has commercial substance. At contract inception, we evaluate whether two or more contracts should be combined and accounted for as a single contract and whether the combined or single contract includes more than one performance obligation. Contracts with our merchants are typically for a period of one year. 2. Identification of the performance obligations in the contract Performance obligations promised in a contract are identified based on the products that will be transferred to the merchant that are both capable of being distinct, whereby the merchant can benefit from the products either on their own or together with other resources that are readily available from third parties or from us, and are distinct in the context of the contract, whereby the transfer of the products is separately identifiable from other promises in the contract. For SaaS arrangements, we provide access to our cloud-hosted software platform and reviewing and approving eCommerce transaction for legitimacy, without providing the merchant the right to take possession of our software, which we consider to be a single performance obligation. Revenue generated from the issuance of indemnification guarantees is accounted for under ASC 460. Refer to “Indemnification Guarantees” above and Note 8 below for additional information. 3. Determination of the transaction price As our contracts include an unknown quantity of approved transactions at a fixed contractual rate per approved transaction value executed on a monthly basis, the contract price is deemed variable. We allocate the variable consideration to the month in which we have the contractual right to bill under the contract as this represents the amount of consideration to which we expect to be entitled for the transfer of products during that month. Certain of our contracts include additional forms of variable consideration such as service level commitments relating to uptime availability and minimum approval rates as well as provisions that provide for reimbursements should our merchant’s consumer cancel an approved order. If we fail to meet these commitments, merchants are generally permitted to receive a refund in the form of a credit on their invoice. Under certain arrangements, when the merchant’s consumer cancels an order that we have approved, we provide a refund of some or all of the fees owed by our merchant to us generally in the form of a credit on our merchant’s invoice. The transaction price is reduced to reflect our estimate of the amount of consideration to which we are entitled based on the terms of the contract. Payment terms and conditions vary by contract type, although terms generally include a requirement to pay within 30 days. In instances where the timing of revenue recognition differs from the timing of invoicing, we have determined that our contracts do not include a significant financing component. The primary purpose of our invoicing terms is to provide our merchants with simplified and predictable ways of purchasing our products; not to receive financing from our merchants or to provide merchants with financing. We applied the practical expedient in ASC 606 and did not evaluate payment terms of one year or less for the existence of a significant financing component. Revenue is recognized net of any taxes collected from merchants (e.g., sales tax and other indirect taxes), which are subsequently remitted to governmental entities. We generally do not offer a right of refund in our contracts. 4. Allocation of the transaction price to the performance obligations in the contract Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on each performance obligation’s relative standalone selling price. Access to our cloud-hosted software is considered one performance obligation in the context of the contract and accordingly the transaction price is allocated to this single performance obligation. 5. Recognition of the revenue when, or as, a performance obligation is satisfied Revenue is recognized at the time the related performance obligation is satisfied by transferring control of the promised service to the customer. Revenue is recognized in an amount that reflects the consideration that we expect to receive in exchange for those products. For SaaS arrangements, we have determined that these arrangements meet the variable consideration allocation exception and revenue is recognized over the contract period in the month that the transactions are approved. Contract Balances Contract assets consist of unbilled accounts receivable. The terms of our agreements are monthly, annual, or multi-year, and we typically invoice our merchants based on monthly usage. In some arrangements, a right to consideration for our performance under the merchant contract may occur before invoicing to the merchant, resulting in an unbilled accounts receivable. The amount of unbilled accounts receivable included within accounts receivable, net on the consolidated balance sheets was immaterial for the periods presented. Cost to Obtain a Contract We capitalize sales commissions and associated payroll taxes paid that are incremental to the acquisition of merchant contracts. These costs are recorded as Deferred contract acquisition costs on the consolidated balance sheets. We determine whether costs should be deferred based on our sales compensation plans and if the commissions are incremental and would not have occurred absent the merchant contract. Determining whether such costs are incremental to obtaining the online merchant contract requires a certain degree of judgment. Sales commissions are amortized over an estimated period of benefit of four years. We determine the period of benefit for sales commissions by taking into consideration the estimated customer life, technological life of our software, and other factors. These factors involved in the determination of the period of benefit include inherent uncertainties and the application of significant judgment. Sales commissions are amortized on a straight-line basis and are included in sales and marketing expense in the consolidated statements of operations. We periodically review these deferred contract acquisition costs to determine whether events or changes in circumstances have occurred that could impact the period of benefit. There were no impairment losses recorded during the periods presented. Cost to Fulfill a Contract We capitalize payroll related costs of certain integration services required in order to be able to fulfill the obligation to provide our products to our merchants. Integration services are promises that are not capable of being distinct. These costs are capitalized to the extent they are directly related to a contract, are recoverable, and generate or enhance resources that will be used in delivering our SaaS products. These costs are recorded as deferred contract fulfillment costs in Other assets, noncurrent on the consolidated balance sheets. Capitalized costs to fulfill a contract are amortized on a straight-line basis over the expected period of benefit of four years and are included in cost of revenue in the consolidated statements of operations. We determine the period of benefit by taking into consideration the estimated customer life, technological life of our software, and other factors. These factors involved in the determination of period of benefit involve inherent uncertainties and the application of significant judgment. We periodically review these deferred contract fulfillment costs to determine whether events or changes in circumstances have occurred that could impact the period of benefit. There were no impairment losses recorded during the periods presented. |
Cost of Revenue | Cost of Revenue Cost of revenue primarily consist of chargeback expenses, net of chargebacks won, and other expenses related to providing our products to our merchants. These other expenses include compensation and benefits related costs, including share-based compensation expense associated with teams integral in providing our service, hosting fees and software costs, payment processing fees, amortization of capitalized software development costs and deferred contract fulfillment costs, depreciation expense, and allocated overhead. |
Research and Development | Research and Development Research and development costs primarily consist of compensation and benefits related costs, including share-based compensation expense associated with research and development teams that are responsible for the design, development, and testing of our eCommerce risk intelligence platform infrastructure including expenses associated with adding new features, increasing the functionality, and enhancing the usability of our platform. Research and development costs also consist of third-party |
Sales and Marketing | Sales and Marketing Sales and marketing costs primarily consist of compensation and benefits related costs, including share-based compensation expense directly associated with our sales and marketing teams. Sales and marketing costs also consists of costs associated with conferences, events, digital marketing and advertising programs, amortization of deferred contract acquisition costs, commissions, depreciation expense, and allocated overhead. Sales and marketing costs are expensed as incurred. Digital marketing programs include advertising, promotional events, and brand-building activities. Advertising costs are expensed as incurred and were $6.0 million, $5.2 million, and $2.1 million for the years ended December 31, 2022, 2021, and 2020, respectively. |
General and Administrative | General and Administrative General and administrative costs primarily consist of compensation and benefits related costs, including share-based compensation expense associated with our finance, legal, human resources, information technology and administrative functions. General and administrative costs also consist of third-party professional service fees for external legal, accounting and other consulting services, depreciation expense, and allocated overhead. General and administrative costs are expensed as incurred. |
Share-Based Compensation | Share-Based Compensation Share-based compensation expense related to share-based awards is recognized based on the fair value of the awards granted. The fair value of each share option award is estimated on the grant date using the Black-Scholes option-pricing model. The Black-Scholes option-pricing model requires the input of highly subjective assumptions, including the fair value of the underlying ordinary shares, the expected term of the share option, the expected volatility of the price of our ordinary shares, risk-free interest rates, and the expected dividend yield of ordinary shares. The assumptions used to determine the fair value of the option awards represent management’s best estimates. These estimates involve inherent uncertainties and the application of management’s judgment. The related share-based compensation expense is recognized on a straight-line basis over the requisite service period of the awards, including awards with graded vesting and no additional conditions for vesting other than service conditions. Forfeitures are accounted for as they occur. We have granted to employees, RSUs, that vest either upon the (a) satisfaction of service-based vesting conditions only and (b) satisfaction of both service-based and performance-based vesting conditions. The fair value of each RSU award is based on the fair value of the underlying ordinary shares as of the grant date. We have also granted to our Chief Executive Officer (“CEO”), RSUs, that vest upon the satisfaction of service-based, performance-based, and market-based vesting conditions. A Monte-Carlo simulation model was used to determine the grant date fair value by simulating a range of scenarios with each outcome resulting in a determined value. The grant date fair value of this award is the average of the values determined by each simulation. The simulation was also used to derive the requisite service period. For RSU awards with both service-based and performance-based vesting conditions, the service-based vesting condition has varying terms, but is generally satisfied over four |
Income Taxes | Income Taxes We are subject to income taxes in Israel, the United States, and other jurisdictions. These other jurisdictions may have different statutory rates than in Israel. Income taxes are accounted for in accordance with ASC 740, Income Taxes . Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statements carrying amounts of existing assets and liabilities and their respective tax basis as well as operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Valuation allowances are provided when necessary to reduce deferred tax assets to an amount that is more likely than not to be realized. We recognize income tax benefits from uncertain tax positions only if we believe that it is more likely than not that the tax position will be sustained upon examination by the taxing authorities based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such uncertain tax positions are then measured based on the largest benefit that is more likely than not to be realized upon the ultimate settlement. |
Net Profit (Loss) Per Share Attributable to Ordinary Shareholders | Net Profit (Loss) Per Share Attributable to Ordinary Shareholders We compute net profit (loss) per share using the two-class method required for participating securities. The two-class method requires income available to ordinary shareholders for the period to be allocated between ordinary shares and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. Under the two-class method, we allocate earnings proportionately to Class A and B ordinary shares outstanding for the period. Prior to IPO, we considered our convertible preferred shares to be participating securities as the holders of the convertible preferred shares would be entitled to dividends in preference to ordinary shareholders. These participating securities do not contractually require the holders of such shares to participate in our losses. As such, net loss for the periods presented was not allocated to our participating securities. Our basic net profit (loss) per share is calculated by dividing net profit (loss) attributable to ordinary shareholders by the weighted-average number of ordinary shares outstanding for the period, without consideration of potentially dilutive securities. The diluted net profit (loss) per share is calculated by giving effect to all potentially dilutive securities outstanding for the period using the treasury stock method or the if-converted method based on the nature of such securities. Diluted net profit (loss) per share is the same as basic net profit (loss) per share in periods when the effects of potentially dilutive shares of ordinary shares are anti-dilutive. |
Segment Information | Segment Information We operate our business in one operating segment and therefore have one reportable segment. Operating segments are defined as components of an entity that engage in business activities for which discrete financial information is available and regularly reviewed by the chief operating decision maker, who is our CEO, in deciding how to allocate resources and assess performance. Our chief operating decision maker allocates resources and assesses performance based upon discrete financial information at the consolidated level. |
Recently Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements | Recently Adopted Accounting Pronouncements As an emerging growth company, or EGC, the Jumpstart Our Business Startups Act, or the JOBS Act, allows us to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. The JOBS Act does not preclude an EGC from early adopting new or revised accounting standards. We have elected to use extended transition periods permissible under the JOBS Act while also early adopting certain accounting pronouncements. The adoption dates discussed below reflect these elections. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842 codified as ASC 842), including subsequent amendments thereafter, which would require lessees to put all leases on their balance sheets, whether operating or financing, while continuing to recognize the expenses on their income statements in a manner similar to current practice. The guidance states that a lessee would recognize a lease liability for the obligation to make lease payments and a right-to-use asset for the right to use the underlying asset for the lease term. In June 2020, the FASB issued ASU No. 2020-05, Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842): Effective Dates for Certain Entities , which defers the effective date of ASU 2016-02 for non-public entities to fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. The guidance is effective for us beginning January 1, 2022, and interim periods in fiscal years beginning January 1, 2023. We adopted this guidance as of January 1, 2022 using the modified retrospective method of applying the new standard at the adoption date. Under this approach, we will continue to report comparative periods presented in the period of adoption under ASC 840. We elected the package of practical expedients permitted under the transition guidance, which allows us to not reassess our historical conclusions relating to lease identification, initial direct costs, and classification for existing leases upon adoption. As an accounting policy, we elected to keep leases with an initial term of 12 months or less off of our consolidated balance sheets and will not separate lease and non-lease components by class of underlying asset. The guidance had a material impact on our consolidated balance sheet which resulted in the recognition of operating lease ROU assets and operating lease liabilities of $42.2 million on January 1, 2022. The adoption of Topic 842 did not have a material impact on our consolidated statements of operations or cash flows. Recently Issued Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, including subsequent amendments thereafter, which established ASC 326. ASC 326 replaces the existing incurred loss impairment model with a current expected credit loss model that requires more timely recognition of estimated expected credit losses over the life of certain financial instruments. Our accounts receivable are in the scope of ASC 326. We will adopt ASC 326 when it becomes effective for us on January 1, 2023. The adoption of ASC 326 will not have a material impact on our financial condition and results of operations within our consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedules of Concentration of Risk, by Risk Factor | The following table summarize our merchants that represented 10% or more of Accounts receivable, net and Revenue: Accounts Receivable, Net Revenue As of December 31, Year Ended December 31, 2022 2021 2022 2021 2020 Customer A 22 % 32 % 13 % 16 % 18 % Customer B * * * * 10 % Customer C * 11 % * * * ________________ * Represents less than 10% |
Property, Plant and Equipment | The estimated useful lives of our property and equipment are as follows: Computer equipment 3 years Furniture and office equipment 5 – 7 years Leasehold improvements Shorter of remaining lease term or estimated useful life Property and Equipment, Net Property and equipment, net consisted of the following: As of December 31, 2022 2021 (in thousands) Computer equipment $ 6,912 $ 6,104 Furniture and office equipment 2,531 2,216 Leasehold improvements 16,576 12,825 Property and equipment, gross 26,019 21,145 Less: accumulated depreciation and amortization (7,433) (4,177) Property and equipment, net $ 18,586 $ 16,968 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from External Customers by Geographic Areas | The following table summarizes revenue by region in which our merchant headquarters are located: Year Ended December 31, 2022 2021 2020 Amount Percentage of Revenue Amount Percentage of Revenue Amount Percentage of Revenue (in thousands, except where indicated) United States $ 163,920 63 % $ 163,681 71 % $ 125,458 74 % Europe, the Middle East and Africa (“EMEA”)* 71,443 27 44,850 20 31,821 19 Asia-Pacific (“APAC”) 12,005 5 7,416 3 3,142 2 Americas 13,879 5 13,194 6 9,319 5 Total revenue $ 261,247 100 % $ 229,141 100 % $ 169,740 100 % _________________ * Includes our country of domicile, Israel. Revenue recognized from Israel was $3.3 million, $2.4 million, and $0.9 million for the years ended December 31, 2022, 2021, and 2020, respectively. |
Disaggregation of Revenue | The following table summarizes revenue based on the nature and type of service provided to our merchants: Year Ended December 31, 2022 2021 2020 Amount Percentage of Revenue Amount Percentage of Revenue Amount Percentage of Revenue (in thousands, except where indicated) Fraud review service revenue (ASC 606) $ 156,040 60 % $ 132,261 58 % $ 96,774 57 % Indemnification guarantee service revenue (ASC 460) 105,207 40 96,880 42 72,966 43 Total revenue $ 261,247 100 % $ 229,141 100 % $ 169,740 100 % |
Deferred Policy Acquisition Costs | The following table represents a rollforward of deferred contract acquisition costs: Year Ended December 31, 2022 2021 2020 (in thousands) Beginning balance $ 11,630 $ 6,983 $ 2,696 Additions to deferred contract acquisition costs 9,707 7,744 5,857 Amortization of deferred contract acquisition costs (4,973) (3,097) (1,570) Ending balance $ 16,364 $ 11,630 $ 6,983 |
Deferred Contract Fulfillment Costs | The following table represents a rollforward of deferred contract fulfillment costs: Year Ended December 31, 2022 2021 2020 (in thousands) Beginning balance $ 2,930 $ 2,166 $ 1,213 Additions to deferred contract fulfillment costs 2,189 1,789 1,558 Amortization of deferred contract fulfillment costs (1,446) (1,025) (605) Ending balance $ 3,673 $ 2,930 $ 2,166 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | ||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | As of December 31, 2021 Fair Value Level 1 Level 2 Level 3 (in thousands) Financial Assets: Derivative financial instruments included in prepaid expenses and other current assets $ 244 $ — $ 244 $ — Total financial assets $ 244 $ — $ 244 $ — Financial Liabilities: Derivative financial instruments included in accrued expenses and other current liabilities $ 61 $ — $ 61 $ — Total financial liabilities $ 61 $ — $ 61 $ — | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | The following table presents the summary of the changes in the fair value of our Level 3 financial instruments during 2021: Convertible Preferred Shares Warrant Liabilities Tranche Rights (in thousands) Balance as of December 31, 2020 $ 9,089 $ 2,478 Changes in fair value 101,413 21,260 Settlement of convertible preferred share tranche rights and Series E-1 convertible preferred share warrants (74,724) (23,738) Reclassification of Series B/C convertible preferred share warrant liability to equity (35,778) — Balance as of December 31, 2021 $ — $ — |
Derivative Instruments and He_2
Derivative Instruments and Hedging (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments | Our foreign currency contracts are denominated in NIS and Euro. The gross notional amounts of outstanding foreign currency contracts in U.S. dollar were as follows: As of December 31, 2022 2021 (in thousands) Derivative Designated as Hedging Instruments: Foreign currency contracts $ 63,998 $ 21,865 Derivatives Not Designated as Hedging Instruments: Foreign currency contracts 13,814 1,286 Total derivative instruments $ 77,812 $ 23,151 |
Derivative Instruments, Gain (Loss) | The effect of foreign currency contracts on the Consolidated Statements of Operations during the periods presented were as follows: Derivatives Designated as Hedging Instruments Derivatives Not Designated as Hedging Instruments Year Ended December 31, Year Ended December 31, 2022 2021 2020 2022 2021 2020 (in thousands) Statement of Operations Location: Cost of revenue $ (175) $ — $ — $ — $ — $ — Research and development (1,718) — — — — — Sales and marketing (732) — — — — — General and administrative (706) — — — — — Other income (expense), net — — — (1,659) 59 231 Total gain (loss) recognized in earnings $ (3,331) $ — $ — $ (1,659) $ 59 $ 231 |
Schedule of Accumulated Other Comprehensive Income (Loss) | The following table represents the net unrealized gains (losses) of foreign currency contracts designated as hedging instruments, net of tax, that were recorded in accumulated other comprehensive profit (loss) during the periods presented, and their effect on other comprehensive profit (loss) for the periods presented: Net Unrealized Gains (Losses) on Derivatives Designated as Hedging Instruments (in thousands) Balance as of December 31, 2020 $ — Amount of net gains (loss) recorded in accumulated other comprehensive profit (loss) 176 Amount of net gains (loss) reclassified from accumulated other comprehensive profit (loss) to earnings — Other comprehensive profit (loss) 176 Balance as of December 31, 2021 176 Amount of net gains (loss) recorded in accumulated other comprehensive profit (loss) 1,448 Amount of net gains (loss) reclassified from accumulated other comprehensive profit (loss) to earnings (3,331) Other comprehensive profit (loss) (1,883) Balance as of December 31, 2022 $ (1,707) |
Consolidated Balance Sheet Co_2
Consolidated Balance Sheet Components (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Property, Plant and Equipment | The estimated useful lives of our property and equipment are as follows: Computer equipment 3 years Furniture and office equipment 5 – 7 years Leasehold improvements Shorter of remaining lease term or estimated useful life Property and Equipment, Net Property and equipment, net consisted of the following: As of December 31, 2022 2021 (in thousands) Computer equipment $ 6,912 $ 6,104 Furniture and office equipment 2,531 2,216 Leasehold improvements 16,576 12,825 Property and equipment, gross 26,019 21,145 Less: accumulated depreciation and amortization (7,433) (4,177) Property and equipment, net $ 18,586 $ 16,968 |
Schedule of Accrued Liabilities | Accrued expenses and other current liabilities consisted of the following: As of December 31, 2022 2021 (in thousands) Accrued expenses $ 6,175 $ 7,557 Customer credits 5,388 3,462 Derivative financial instruments 2,397 61 Other 1,853 2,226 Accrued expenses and other current liabilities $ 15,813 $ 13,306 |
Other Noncurrent Liabilities | Other liabilities, noncurrent consisted of the following: As of December 31, 2022 2021 (in thousands) Other tax liabilities $ 8,734 $ 2,721 Deferred rent — 6,580 Other — 58 Other liabilities, noncurrent $ 8,734 $ 9,359 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Lease, Cost | The components of operating lease cost for the year ended December 31, 2022 were as follows: Year Ended Operating lease cost $ 6,140 Variable lease cost 1,257 Short-term lease cost 304 Sublease income (786) Total operating lease cost $ 6,915 |
Lessee, Operating Lease, Liability, Maturity | The future minimum lease payments included in the measurement of our operating lease liabilities as of December 31, 2022, were as follows: Amount Year Ending December 31, 2023 $ 6,353 2024 5,976 2025 5,941 2026 5,986 2027 6,031 Thereafter 13,738 Total undiscounted lease payments 44,025 Less: imputed interest (6,609) Present value of operating lease liabilities $ 37,416 The following table presents our operating lease ROU assets by geographic region: As of December 31, 2022 2021 (in thousands) Israel $ 22,560 $ — United States 12,598 — Total operating lease right-of-use assets $ 35,158 $ — |
Schedule of Future Minimum Rental Payments for Operating Leases | The minimum rental payments under operating leases as of December 31, 2021 were as follows: Amount (in thousands) Year Ending December 31, 2022 $ 6,975 2023 6,853 2024 6,648 2025 6,403 2026 6,448 Thereafter 22,631 Total $ 55,958 |
Guarantees, Commitments, and _2
Guarantees, Commitments, and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Recorded Unconditional Purchase Obligations | As of December 31, 2022, we had outstanding non-cancelable purchase obligations with a term of 12 months or longer as follows: Amount (in thousands) Year Ending December 31, 2023 $ 11,448 2024 10,452 2025 127 Total $ 22,027 |
Temporary Equity (Tables)
Temporary Equity (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Temporary Equity Disclosure [Abstract] | |
Schedule of Stockholders' Equity Note, Warrants or Rights | As of December 31, 2022, and 2021, the following warrants were issued and outstanding, after giving effect to the Recapitalization: As of December 31, 2022 and 2021 Issued and Outstanding Share Warrants Weighted-Average Exercise Price Expiration Date Class A Ordinary Shares Class B Ordinary Shares Class A Ordinary Shares Class B Ordinary Shares Warrants to purchase ordinary shares 425,325 850,650 $ 0.28 $ 0.28 April 2025 Warrants issued to customers 499,500 — $ 0.01 $ — June 2028 Total 924,825 850,650 |
Ordinary Shares and Equity In_2
Ordinary Shares and Equity Incentive Plan (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Stock by Class | We have the following ordinary shares reserved for future issuance: As of December 31, 2022 2021 Warrants to purchase ordinary shares (1) 1,775,475 1,775,475 Share options and RSUs issued and outstanding under the 2013 Plan 20,062,824 26,460,287 Share options and RSUs issued and outstanding under the 2021 Plan 13,134,652 803,556 Remaining shares available for future issuance under the 2021 Plan 8,674,132 13,474,214 Total ordinary shares reserved 43,647,083 42,513,532 _________________ |
Share-based Payment Arrangement, Option, Activity | A summary of share options under our equity incentive plan and related information is as follows: Share Options Outstanding Outstanding Share Options Weighted-Average Exercise Weighted-Average Remaining Contractual Life (Years) Aggregate Intrinsic (in thousands, except share, life and per share data) Balance as of December 31, 2021 18,834,740 $ 2.05 7.0 $ 109,397 Options exercised (3,919,606) $ 1.07 Options forfeited (1,129,920) $ 3.88 Balance as of December 31, 2022 13,785,214 $ 2.17 6.1 $ 34,326 Exercisable as of December 31, 2022 10,244,620 $ 1.65 5.5 $ 30,632 |
Fair Value Measurement Inputs and Valuation Techniques | The Black-Scholes assumptions used to value the employee share options at the grant dates are as follows: Year Ended December 31, 2021 2020 Expected term (years) 5.44 - 6.60 5.75 - 6.11 Expected volatility 67.26% - 68.52% 55.00% - 65.00% Risk-free interest rate 0.99% - 1.12% 0.52% - 1.73% Expected dividend yield 0.00% 0.00% |
Schedule of Unvested Restricted Stock Units Roll Forward | A summary of RSU activity, including activity under our equity incentive plan, and related information is as follows: Number of Shares Weighted-Average Unvested as of December 31, 2021 8,429,103 $ 15.01 Granted 15,873,386 $ 6.04 Vested (3,145,103) $ 10.46 Forfeited (1,745,124) $ 7.81 Unvested as of December 31, 2022 19,412,262 $ 9.06 |
Disclosure of Share-based Compensation Arrangements by Share-based Payment Award | Share-based compensation expense by line item in the consolidated statements of operations is summarized as follows: Year Ended December 31, 2022 2021 2020 (in thousands) Cost of revenue $ 621 $ 216 $ 38 Research and development 10,005 4,246 3,621 Sales and marketing 18,253 10,710 2,814 General and administrative 38,588 18,186 1,472 Total share-based compensation expense $ 67,467 $ 33,358 $ 7,945 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income before Income Tax, Domestic and Foreign | Profit (loss) before the provision for income taxes consisted of the following for the years ended December 31, 2022, 2021, and 2020: Year Ended December 31, 2022 2021 2020 (in thousands) Israel $ (55,054) $ (154,339) $ (13,479) International (42,893) (22,988) 3,207 Total $ (97,947) $ (177,327) $ (10,272) |
Schedule of Components of Income Tax Expense (Benefit) | The provision for income taxes was as follows: Year Ended December 31, 2022 2021 2020 (in thousands) Current: Israel $ 4 $ 4 $ 4 International 8,715 121 32 Total current income tax expense 8,719 125 36 Deferred: Israel — — — International (2,677) 1,433 1,039 Total deferred income tax expense (2,677) 1,433 1,039 Total provision for income taxes $ 6,042 $ 1,558 $ 1,075 |
Schedule of Effective Income Tax Rate Reconciliation | A reconciliation of our statutory income tax expense to our effective income tax provision is as follows: Year Ended December 31, 2022 2021 2020 (in thousands) Israel tax benefit at statutory rate $ (22,528) $ (40,784) $ (2,362) Preferred enterprise 10,573 3,052 169 Foreign rate differential (1,050) 912 332 Share-based compensation 9,717 1,753 1,328 Warrant revaluation — 23,325 1,336 Tranche right revaluation — 4,890 — Prior year tax income/(expense) (6,675) 84 — Permanent differences (3,351) 98 83 ASC 606 — — — Uncertain tax position 7,233 3,784 5 Change in valuation allowance 12,123 4,444 184 Total $ 6,042 $ 1,558 $ 1,075 |
Schedule of Deferred Tax Assets and Liabilities | The following table presents the significant components of our deferred tax assets and liabilities: Year Ended December 31, 2022 2021 2020 (in thousands) Deferred tax assets: Research and development expenses $ 7,374 $ 1,436 $ 1,742 Stat to GAAP adjustments — — 1,493 Net operating loss 9,059 5,212 941 Deferred Compensation 5,214 1,009 — Operating lease liabilities 6,456 — — Vacation and convalescence 730 799 364 Bad debts 78 93 100 Other 2,166 466 374 Gross deferred tax assets 31,077 9,015 5,014 Valuation allowance (20,822) (8,699) (4,255) Total deferred tax assets 10,255 316 759 Deferred tax liabilities: Operating lease right-of-use assets (6,387) — — Deferred contract acquisition costs (3,009) (2,324) (1,543) Property and equipment (279) (283) (439) Capitalized Software (591) (397) — Other — — (34) Gross deferred tax liabilities (10,266) (3,004) (2,016) Net deferred tax liabilities $ (11) $ (2,688) $ (1,257) |
Schedule of Unrecognized Tax Benefits Roll Forward | A reconciliation of the beginning and ending balance of total unrecognized tax position is as follows: Unrecognized Tax Benefits (in thousands) Balance – January 1, 2020 $ 234 Additions based on tax positions related to current year — Reductions for tax positions of prior years — Balance – December 31, 2020 234 Additions based on tax positions related to current year 3,885 Reductions for tax positions of prior years — Balance – December 31, 2021 4,119 Additions based on tax positions related to current year 7,187 Reductions for tax positions of prior years (54) Balance – December 31, 2022 $ 11,252 |
Net Profit (Loss) Per Share A_2
Net Profit (Loss) Per Share Attributable to Ordinary Shareholders (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth the computation of basic and diluted net profit (loss) per share attributable to ordinary shareholders for the periods presented: Year Ended December 31, 2022 2021 2020 Class A Class B Class A Class B Ordinary Shares (in thousands, except share and per share data) Numerator: Net profit (loss) attributable to ordinary shareholders, basic and diluted $ (57,339) $ (46,650) $ (90,677) $ (88,208) $ (11,347) Denominator: Weighted-average shares used in computing net profit (loss) per share attributable to ordinary shareholders, basic and diluted 92,450,867 75,216,507 38,757,558 37,702,067 14,022,788 Net profit (loss) per share attributable to ordinary shareholders, basic and diluted $ (0.62) $ (0.62) $ (2.34) $ (2.34) $ (0.81) |
Schedule of Weighted Average Number of Shares | The weighted-average potential ordinary shares that were excluded from the computation of diluted net profit (loss) per share attributable to ordinary shareholders for the periods presented because including them would have been anti-dilutive, or whose issuance is contingent upon the satisfaction of certain market conditions, are as follows: Year Ended December 31, 2022 2021 2020 Class A Class B Class A Class B Ordinary Shares Convertible preferred shares — — 17,817,201 35,634,404 28,217,680 Warrants to purchase ordinary shares (1)(2) 873,370 850,650 1,488,819 354,243 1,858,467 Outstanding share options 16,067,720 — 12,239,441 — 5,985,236 Unvested RSUs 16,176,275 2,131,015 1,562,388 1,965,604 — Total 33,117,365 2,981,665 33,107,849 37,954,251 36,061,383 _________________ (1) Prior to IPO, assumes the Series B/C convertible preferred share warrants are exercised into Series B convertible preferred shares. Prior to May 4, 2021, should the holder elect to exercise into Series C convertible preferred shares, total weighted-average potential ordinary shares that were excluded from the computation of diluted net profit (loss) per share attributable to ordinary shareholders were 70,110,425 and 35,744,158 for the years ended December 31, 2021 and 2020, respectively. On May 4, 2021, the Series B/C convertible preferred share warrants were amended and restated to, among other things, remove |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Narrative (Details) | 3 Months Ended | 12 Months Ended | ||||
Jul. 28, 2021 USD ($) $ / shares shares | Sep. 30, 2022 shares | Dec. 31, 2022 USD ($) vote segment | Dec. 31, 2021 USD ($) shares | Dec. 31, 2020 USD ($) | Jan. 01, 2022 USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Stock split conversion ratio | 0.5 | |||||
Sale of stock, consideration received on transaction | $ 386,600,000 | |||||
Payments of stock issuance costs | $ 204,000 | $ 5,302,000 | $ 176,000 | |||
Payments of other stock issuance costs | $ 5,700,000 | |||||
Foreign currency transaction gain (loss) | 2,500,000 | 200,000 | 2,100,000 | |||
Accounts receivable, allowance for credit loss | $ 500,000 | 600,000 | ||||
Guarantee obligations, term | six | |||||
Accumulated deficit | $ 350,553,000 | 246,564,000 | ||||
Contract term with merchant | 1 year | |||||
Capitalized contract cost, amortization period | 4 years | |||||
Capitalized contract cost, impairment loss | $ 0 | 0 | 0 | |||
Chargeback expense | 20,300,000 | 14,300,000 | 8,200,000 | |||
Advertising expense | 6,000,000 | 5,200,000 | 2,100,000 | |||
Total share-based compensation expense | $ 67,467,000 | 33,358,000 | 7,945,000 | |||
Number of operating segments | segment | 1 | |||||
Number of reportable segments | segment | 1 | |||||
Operating lease, right-of-use asset | $ 35,158,000 | $ 0 | ||||
Present value of operating lease liabilities | $ 37,416,000 | |||||
Accounting Standards Update 2016-02 | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Operating lease, right-of-use asset | $ 42,200,000 | |||||
Present value of operating lease liabilities | $ 42,200,000 | |||||
Series E-1 Convertible Preferred Stock [Member] | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Issuance of convertible preferred stock (in shares) | shares | 962,940 | 962,940 | ||||
Common Class A | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Votes per common share | vote | 1 | |||||
Common Class B | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Votes per common share | vote | 10 | |||||
Software Development | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Capitalized software costs | $ 5,000,000 | $ 3,500,000 | ||||
Amortization of intangible assets | 700,000 | 400,000 | 0 | |||
Cloud Computing Arrangement Implementation Costs | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Capitalized software costs | 200,000 | 300,000 | ||||
Amortization of intangible assets | $ 200,000 | $ 200,000 | $ 100,000 | |||
Software and Software Development Costs | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Property and equipment, useful life | 4 years | |||||
IPO | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Sale of stock, number of shares issued in transaction (in shares) | shares | 19,925,000 | |||||
Sale of stock, price per share (in dollars per share) | $ / shares | $ 21 | |||||
Payments of stock issuance costs | $ 26,200,000 | |||||
Stock issued, conversion of convertible securities (in shares) | shares | 32,291,470 | |||||
Over-Allotment Option | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Sale of stock, number of shares issued in transaction (in shares) | shares | 2,625,000 | |||||
Restricted Stock Units (RSUs) | Minimum | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Award vesting period | 4 years | |||||
Restricted Stock Units (RSUs) | Maximum | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Award vesting period | 5 years | |||||
Restricted Stock Units (RSUs) | Share-based Payment Arrangement, Tranche Two | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Award vesting period | 6 months |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Concentration Risks (Details) - Customer Concentration Risk | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Accounts Receivable, Net | Customer A | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 22% | 32% | |
Accounts Receivable, Net | Customer C | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 11% | ||
Revenue Benchmark | Customer A | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 13% | 16% | 18% |
Revenue Benchmark | Customer B | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 10% |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Property and Equipment (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Computer equipment | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 3 years |
Furniture and office equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 5 years |
Furniture and office equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 7 years |
Revenue Recognition - Revenue b
Revenue Recognition - Revenue by Geographic Areas (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | |||
Revenues | $ 261,247 | $ 229,141 | $ 169,740 |
Revenue Benchmark | Geographic Concentration Risk | |||
Disaggregation of Revenue [Line Items] | |||
Concentration risk, percentage | 100% | 100% | 100% |
UNITED STATES | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | $ 163,920 | $ 163,681 | $ 125,458 |
UNITED STATES | Revenue Benchmark | Geographic Concentration Risk | |||
Disaggregation of Revenue [Line Items] | |||
Concentration risk, percentage | 63% | 71% | 74% |
EMEA | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | $ 71,443 | $ 44,850 | $ 31,821 |
EMEA | Revenue Benchmark | Geographic Concentration Risk | |||
Disaggregation of Revenue [Line Items] | |||
Concentration risk, percentage | 27% | 20% | 19% |
Asia Pacific | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | $ 12,005 | $ 7,416 | $ 3,142 |
Asia Pacific | Revenue Benchmark | Geographic Concentration Risk | |||
Disaggregation of Revenue [Line Items] | |||
Concentration risk, percentage | 5% | 3% | 2% |
Israel | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | $ 3,300 | $ 2,400 | $ 900 |
Americas | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | $ 13,879 | $ 13,194 | $ 9,319 |
Americas | Revenue Benchmark | Geographic Concentration Risk | |||
Disaggregation of Revenue [Line Items] | |||
Concentration risk, percentage | 5% | 6% | 5% |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | |||
Revenues, Total | $ 261,247 | $ 229,141 | $ 169,740 |
Fraud Service Revenue | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 156,040 | 132,261 | 96,774 |
Indemnification Service Revenue | |||
Disaggregation of Revenue [Line Items] | |||
Revenue Not from Contract with Customer | $ 105,207 | $ 96,880 | $ 72,966 |
Revenue Benchmark | Product Concentration Risk | |||
Disaggregation of Revenue [Line Items] | |||
Concentration risk, percentage | 100% | 100% | 100% |
Revenue Benchmark | Product Concentration Risk | Fraud Service Revenue | |||
Disaggregation of Revenue [Line Items] | |||
Concentration risk, percentage | 60% | 58% | 57% |
Revenue Benchmark | Product Concentration Risk | Indemnification Service Revenue | |||
Disaggregation of Revenue [Line Items] | |||
Concentration risk, percentage | 40% | 42% | 43% |
Revenue Recognition - Deferred
Revenue Recognition - Deferred Contract Acquisition Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Movement In Deferred Contract Acquisition Costs [Roll Forward] | |||
Capitalized Contract Cost, Net, Noncurrent | $ 11,630 | $ 6,983 | $ 2,696 |
Increase (Decrease) To Deferred Contract Acquisition Costs | 9,707 | 7,744 | 5,857 |
Capitalized Deferred Contract Acquisition Cost, Amortization | (4,973) | (3,097) | (1,570) |
Capitalized Contract Cost, Net, Noncurrent | $ 16,364 | $ 11,630 | $ 6,983 |
Revenue Recognition - Deferre_2
Revenue Recognition - Deferred Contract Fulfillment Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Movement In Deferred Contract Fulfillment Costs [Roll Forward] | |||
Deferred Contract Fulfillment Costs, Noncurrent | $ 2,930 | $ 2,166 | $ 1,213 |
Increase (Decrease) To Deferred Contract Fulfillment Costs | 2,189 | 1,789 | 1,558 |
Deferred Contract Fulfillment Costs, Amortization Expense | (1,446) | (1,025) | (605) |
Deferred Contract Fulfillment Costs, Noncurrent | $ 3,673 | $ 2,930 | $ 2,166 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Financial Instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Financial Instruments, Financial Liabilities, Balance Sheet Groupings [Abstract] | ||
Derivative Asset, Statement of Financial Position [Extensible Enumeration] | Prepaid expenses and other current assets | |
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Accrued expenses and other current liabilities | Accrued expenses and other current liabilities |
Fair Value, Recurring | ||
Financial Instruments, Financial Assets, Balance Sheet Groupings [Abstract] | ||
Derivative financial instruments included in prepaid expenses and other current assets | $ 244 | |
Assets, Fair Value Disclosure, Total | 244 | |
Financial Instruments, Financial Liabilities, Balance Sheet Groupings [Abstract] | ||
Derivative financial instruments included in accrued expenses and other current liabilities | $ 2,397 | 61 |
Liabilities, Fair Value Disclosure, Total | 2,397 | 61 |
Fair Value, Recurring | Fair Value, Inputs, Level 1 | ||
Financial Instruments, Financial Assets, Balance Sheet Groupings [Abstract] | ||
Derivative financial instruments included in prepaid expenses and other current assets | 0 | |
Assets, Fair Value Disclosure, Total | 0 | |
Financial Instruments, Financial Liabilities, Balance Sheet Groupings [Abstract] | ||
Derivative financial instruments included in accrued expenses and other current liabilities | 0 | 0 |
Liabilities, Fair Value Disclosure, Total | 0 | 0 |
Fair Value, Recurring | Fair Value, Inputs, Level 2 | ||
Financial Instruments, Financial Assets, Balance Sheet Groupings [Abstract] | ||
Derivative financial instruments included in prepaid expenses and other current assets | 244 | |
Assets, Fair Value Disclosure, Total | 244 | |
Financial Instruments, Financial Liabilities, Balance Sheet Groupings [Abstract] | ||
Derivative financial instruments included in accrued expenses and other current liabilities | 2,397 | 61 |
Liabilities, Fair Value Disclosure, Total | 2,397 | 61 |
Fair Value, Recurring | Fair Value, Inputs, Level 3 | ||
Financial Instruments, Financial Assets, Balance Sheet Groupings [Abstract] | ||
Derivative financial instruments included in prepaid expenses and other current assets | 0 | |
Assets, Fair Value Disclosure, Total | 0 | |
Financial Instruments, Financial Liabilities, Balance Sheet Groupings [Abstract] | ||
Derivative financial instruments included in accrued expenses and other current liabilities | 0 | 0 |
Liabilities, Fair Value Disclosure, Total | $ 0 | $ 0 |
Fair Value Measurements - Level
Fair Value Measurements - Level 3 Financial Instruments (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2021 USD ($) | |
Warrant Liabilities | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Beginning balance | $ 9,089 |
Changes in fair value | 101,413 |
Settlement of convertible preferred share | 74,724 |
Reclassification of Series B/C convertible preferred share warrant liability to equity | (35,778) |
Ending balance | 0 |
Tranche Rights | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Beginning balance | 2,478 |
Changes in fair value | 21,260 |
Settlement of convertible preferred share | (23,738) |
Reclassification of Series B/C convertible preferred share warrant liability to equity | 0 |
Ending balance | $ 0 |
Derivative Instruments and He_3
Derivative Instruments and Hedging - Derivative Instruments (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Total derivative instruments | $ 77,812,000 | $ 23,151,000 | |
Foreign Exchange Forward | Designated as Hedging Instrument | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Total derivative instruments | 63,998,000 | 21,865,000 | $ 0 |
Foreign Exchange Forward | Not Designated as Hedging Instrument | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Total derivative instruments | $ 13,814,000 | $ 1,286,000 |
Derivative Instruments and He_4
Derivative Instruments and Hedging - Effect of Foreign Currency Contracts on the Consolidated Statement of Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Designated as Hedging Instrument | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Total gain (loss) recognized in earnings | $ (3,331) | $ 0 | $ 0 |
Designated as Hedging Instrument | Cost of revenue | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Total gain (loss) recognized in earnings | (175) | 0 | 0 |
Designated as Hedging Instrument | Research and development | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Total gain (loss) recognized in earnings | (1,718) | 0 | 0 |
Designated as Hedging Instrument | Sales and marketing | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Total gain (loss) recognized in earnings | (732) | 0 | 0 |
Designated as Hedging Instrument | General and administrative | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Total gain (loss) recognized in earnings | (706) | 0 | 0 |
Designated as Hedging Instrument | Other income (expense), net | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Total gain (loss) recognized in earnings | 0 | 0 | 0 |
Not Designated as Hedging Instrument | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Total gain (loss) recognized in earnings | (1,659) | 59 | 231 |
Not Designated as Hedging Instrument | Cost of revenue | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Total gain (loss) recognized in earnings | 0 | 0 | 0 |
Not Designated as Hedging Instrument | Research and development | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Total gain (loss) recognized in earnings | 0 | 0 | 0 |
Not Designated as Hedging Instrument | Sales and marketing | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Total gain (loss) recognized in earnings | 0 | 0 | 0 |
Not Designated as Hedging Instrument | General and administrative | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Total gain (loss) recognized in earnings | 0 | 0 | 0 |
Not Designated as Hedging Instrument | Other income (expense), net | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Total gain (loss) recognized in earnings | $ (1,659) | $ 59 | $ 231 |
Derivative Instruments and He_5
Derivative Instruments and Hedging - Effect of Foreign Currency Contracts on Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Derivatives used in Net Investment Hedge, Net of Tax [Roll Forward] | |||
Beginning balance | $ 528,861 | $ (43,309) | $ (40,601) |
Other comprehensive profit (loss) | (1,883) | 176 | 0 |
Ending balance | 496,417 | 528,861 | (43,309) |
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent | |||
Derivatives used in Net Investment Hedge, Net of Tax [Roll Forward] | |||
Beginning balance | 176 | 0 | |
Amount of net gains (loss) recorded in accumulated other comprehensive profit (loss) | 1,448 | 176 | |
Amount of net gains (loss) reclassified from accumulated other comprehensive profit (loss) to earnings | 0 | ||
Other comprehensive profit (loss) | (1,883) | 176 | |
Ending balance | $ (1,707) | $ 176 | $ 0 |
Consolidated Balance Sheet Co_3
Consolidated Balance Sheet Components - Property and Equipment, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 26,019 | $ 21,145 |
Less: accumulated depreciation and amortization | (7,433) | (4,177) |
Property and equipment, net | 18,586 | 16,968 |
Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 6,912 | 6,104 |
Furniture and office equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 2,531 | 2,216 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 16,576 | $ 12,825 |
Consolidated Balance Sheet Co_4
Consolidated Balance Sheet Components - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Depreciation | $ 3.4 | $ 1.8 | $ 1.3 |
Consolidated Balance Sheet Co_5
Consolidated Balance Sheet Components - Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Customer credits | $ 5,388 | $ 3,462 |
Accrued expenses | 6,175 | 7,557 |
Derivative Instruments and Hedges, Liabilities | 2,397 | 61 |
Other | 1,853 | 2,226 |
Accrued expenses and other current liabilities | $ 15,813 | $ 13,306 |
Consolidated Balance Sheet Co_6
Consolidated Balance Sheet Components - Other Liabilities, Noncurrent (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Deferred rent | $ 0 | $ 6,580 |
Deferred Tax and Other Liabilities, Noncurrent | 8,734 | 2,721 |
Other | 0 | 58 |
Other liabilities, noncurrent | $ 8,734 | $ 9,359 |
Consolidated Balance Sheet Co_7
Consolidated Balance Sheet Components - Property, Plant and Equipment (by Geographic Region) (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, net | $ 18,586 | $ 16,968 |
UNITED STATES | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, net | 1,796 | 1,997 |
Israel | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, net | 16,671 | 14,868 |
Rest of world | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, net | $ 119 | $ 103 |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Leases [Abstract] | |
Operating lease cost | $ 6,140 |
Variable lease cost | 1,257 |
Short-term lease cost | 304 |
Sublease income | (786) |
Total operating lease cost | $ 6,915 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Leases [Abstract] | |||
Lease cost | $ 5,900 | $ 4,200 | |
Sublease income | 100 | $ 900 | |
Weighted average remaining lease term | 7 years 4 months 24 days | ||
Weighted average discount rate | 4.60% | ||
Contractual obligation | $ 3,000 | $ 3,300 | |
Contractual obligation, term | 3 months |
Leases - Maturity Lease Schedul
Leases - Maturity Lease Schedule (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Leases [Abstract] | |
2023 | $ 6,353 |
2024 | 5,976 |
2025 | 5,941 |
2026 | 5,986 |
2027 | 6,031 |
Thereafter | 13,738 |
Total undiscounted lease payments | 44,025 |
Less: imputed interest | (6,609) |
Present value of operating lease liabilities | $ 37,416 |
Leases - Minimum Rental Payment
Leases - Minimum Rental Payments (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Leases [Abstract] | |
2022 | $ 6,975 |
2023 | 6,853 |
2024 | 6,648 |
2025 | 6,403 |
2026 | 6,448 |
Thereafter | 22,631 |
Total | $ 55,958 |
Leases (By Geographic Region) (
Leases (By Geographic Region) (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Leases [Abstract] | ||
Operating lease, right-of-use asset | $ 35,158 | $ 0 |
Lessee, Lease, Description [Line Items] | ||
Operating lease, right-of-use asset | 35,158 | 0 |
UNITED STATES | ||
Leases [Abstract] | ||
Operating lease, right-of-use asset | 12,598 | 0 |
Lessee, Lease, Description [Line Items] | ||
Operating lease, right-of-use asset | 12,598 | 0 |
Israel | ||
Leases [Abstract] | ||
Operating lease, right-of-use asset | 22,560 | 0 |
Lessee, Lease, Description [Line Items] | ||
Operating lease, right-of-use asset | $ 22,560 | $ 0 |
Guarantees, Commitments, and _3
Guarantees, Commitments, and Contingencies - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |||
Guarantee obligations | $ 12,361 | $ 12,112 | |
Guarantee obligations, term | six | ||
Provision for chargebacks, net | $ 11,980 | $ 12,020 | |
Percentage of guarantees paid | 0.10% | ||
Chargeback expense | 103,200 | $ 85,500 | $ 63,100 |
Lease cost | 5,900 | 4,200 | |
Sublease income | 100 | $ 900 | |
Contractual obligation | $ 3,000 | $ 3,300 | |
Contractual obligation, term | 3 months | ||
Indemnification Agreement | |||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |||
Guarantor obligations, maximum exposure | $ 50,100,000 |
Guarantees, Commitments, and _4
Guarantees, Commitments, and Contingencies - Non-Cancelable Purchase Obligations Maturity Schedule (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Purchase Obligation, to be Paid, Year One | $ 11,448 |
Purchase Obligation, to be Paid, Year Two | 10,452 |
Purchase Obligation, to be Paid, Year Three | 127 |
Purchase Obligation, Total | $ 22,027 |
Ordinary Share Warrants (Detail
Ordinary Share Warrants (Details) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Temporary Equity [Line Items] | ||
Total ordinary shares reserved (in shares) | 43,647,083 | 42,513,532 |
Options and RSUs | 2013 Equity Incentive Plan | ||
Temporary Equity [Line Items] | ||
Total ordinary shares reserved (in shares) | 20,062,824 | 26,460,287 |
Common Class A | ||
Temporary Equity [Line Items] | ||
Issued and Outstanding Share Warrants (in shares) | 924,825 | |
Common Class B | ||
Temporary Equity [Line Items] | ||
Issued and Outstanding Share Warrants (in shares) | 850,650 | |
Warrants to purchase ordinary shares | Common Class A | ||
Temporary Equity [Line Items] | ||
Issued and Outstanding Share Warrants (in shares) | 425,325 | |
Weighted-Average Exercise Price (in dollars per share) | $ 0.28 | |
Warrants to purchase ordinary shares | Common Class B | ||
Temporary Equity [Line Items] | ||
Issued and Outstanding Share Warrants (in shares) | 850,650 | |
Weighted-Average Exercise Price (in dollars per share) | $ 0.28 | |
Warrants issued to customers | Common Class A | ||
Temporary Equity [Line Items] | ||
Issued and Outstanding Share Warrants (in shares) | 499,500 | |
Weighted-Average Exercise Price (in dollars per share) | $ 0.01 | |
Warrants issued to customers | Common Class B | ||
Temporary Equity [Line Items] | ||
Issued and Outstanding Share Warrants (in shares) | 0 | |
Weighted-Average Exercise Price (in dollars per share) | $ 0 |
Ordinary Shares and Equity In_3
Ordinary Shares and Equity Incentive Plan - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Apr. 30, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Jul. 31, 2021 | Jul. 27, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Total ordinary shares reserved (in shares) | 43,647,083 | 42,513,532 | ||||
Granted (in shares) | 15,873,386 | |||||
Total share-based compensation expense | $ 67,467 | $ 33,358 | $ 7,945 | |||
2021 Employee Share Purchase Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Total ordinary shares reserved (in shares) | 3,742,961 | |||||
Ordinary shares reserved for future issuance, annual increase percentage | 1% | |||||
Maximum ownership of shares | 5% | |||||
Common Class A | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Common stock, shares authorized (in dollars per share) | 900,000,000 | 900,000,000 | ||||
Common Class B | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Common stock, shares authorized (in dollars per share) | 232,500,000 | 232,500,000 | ||||
Public Stock Offering | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Total share-based compensation expense | $ 5,500 | |||||
Sale of stock, number of shares issued in transaction (in shares) | 1,120,809 | |||||
Public Stock Offering - Shares From Existing Shareholders | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Sale of stock, number of shares issued in transaction (in shares) | 521,473 | |||||
Sale of stock, price per share (in dollars per share) | $ 18.08 | |||||
Restricted Stock Units (RSUs) | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based payment arrangement, nonvested award, cost not yet recognized, period for recognition | 3 years 3 months 18 days | |||||
Share-based compensation expense not yet recognized | $ 123,100 | |||||
Restricted Stock Units (RSUs) | Chief Executive Officer | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Total share-based compensation expense | $ 13,000 | $ 6,000 | ||||
Restricted Stock Units (RSUs) | Share-based Payment Arrangement, Tranche Two | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Award vesting period | 6 months | |||||
Restricted Stock Units (RSUs) | Share-based Payment Arrangement, Tranche Three | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Award vesting period | 7 years | |||||
Share-based Payment Arrangement, Option | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Award vesting period | 4 years | |||||
Award expiration period | 10 years | |||||
Weighted average grant date fair value of options granted in period (in dollars per share) | $ 16.63 | $ 4.40 | ||||
Aggregate grant date fair value of options vested during the period | $ 12,000 | $ 3,200 | $ 2,600 | |||
Share-based payment arrangement, nonvested award, cost not yet recognized amount | $ 14,200 | |||||
Share-based payment arrangement, nonvested award, cost not yet recognized, period for recognition | 2 years | |||||
Expected dividend yield | 0% | 0% | 0% | |||
2021 Equity Incentive Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Total ordinary shares reserved (in shares) | 8,674,132 | 13,474,214 | 13,951,037 | |||
Ordinary shares reserved for future issuance, annual increase percentage | 5% |
Ordinary Shares and Equity In_4
Ordinary Shares and Equity Incentive Plan - Schedule of Ordinary Shares Reserved for Issuance (Details) - shares | Dec. 31, 2022 | Dec. 31, 2021 | Jul. 31, 2021 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total ordinary shares reserved (in shares) | 43,647,083 | 42,513,532 | |
2013 Equity Incentive Plan | Options and RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total ordinary shares reserved (in shares) | 20,062,824 | 26,460,287 | |
2021 Equity Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total ordinary shares reserved (in shares) | 8,674,132 | 13,474,214 | 13,951,037 |
2021 Equity Incentive Plan | Options and RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total ordinary shares reserved (in shares) | 13,134,652 | 803,556 | |
Warrants To Purchase Ordinary Shares | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total ordinary shares reserved (in shares) | 1,775,475 | 1,775,475 |
Ordinary Shares and Equity In_5
Ordinary Shares and Equity Incentive Plan - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding [Roll Forward] | |||
Outstanding Share Options, beginning balance (in shares) | 18,834,740 | ||
Outstanding Share Options, Options exercised (in shares) | (3,919,606) | ||
Outstanding Share Options, Options forfeited (in shares) | (1,129,920) | ||
Outstanding Share Options, ending balance (in shares) | 13,785,214 | 18,834,740 | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | |||
Weighted-Average Exercise Price, beginning balance (in dollars per share) | $ 2.05 | ||
Weighted-Average Exercise Price, Options exercised (in dollars per share) | 1.07 | ||
Weighted-Average Exercise Price, Options forfeited (in dollars per share) | 3.88 | ||
Weighted-Average Exercise Price, ending balance (in dollars per share) | $ 2.17 | $ 2.05 | |
Stock Options Additional Disclosures | |||
Weighted-Average Remaining Contractual Life, Options outstanding | 6 years 1 month 6 days | 7 years | |
Aggregate Intrinsic Value, Options outstanding | $ 34,326 | $ 109,397 | |
Aggregate Intrinsic Value, Options exercised | $ 17,400 | $ 68,600 | $ 4,300 |
Outstanding Share Options, Options exercisable (in shares) | 10,244,620 | ||
Weighted-Average Exercise Price, Options exercisable (in dollars per share) | $ 1.65 | ||
Weighted-Average Remaining Contractual Life, Options exercisable | 5 years 6 months | ||
Aggregate Intrinsic Value, Options exercisable | $ 30,632 | ||
Share-based Payment Arrangement, Option | |||
Stock Options Additional Disclosures | |||
Share-based payment arrangement, nonvested award, cost not yet recognized amount | $ 14,200 |
Ordinary Shares and Equity In_6
Ordinary Shares and Equity Incentive Plan - Black-Scholes Assumptions (Details) - Share-based Payment Arrangement, Option | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected volatility | 67.26% | ||
Expected dividend yield | 0% | 0% | 0% |
Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (years) | 5 years 5 months 8 days | 5 years 9 months | |
Expected volatility | 55% | ||
Risk-free interest rate | 0.99% | 0.52% | |
Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (years) | 6 years 7 months 6 days | 6 years 1 month 9 days | |
Expected volatility | 68.52% | 65% | |
Risk-free interest rate | 1.12% | 1.73% |
Ordinary Shares and Equity In_7
Ordinary Shares and Equity Incentive Plan - RSU Activity (Details) | 12 Months Ended |
Dec. 31, 2022 $ / shares shares | |
Number of Shares | |
Unvested as of December 31, 2020 (in shares) | shares | 8,429,103 |
Granted (in shares) | shares | 15,873,386 |
Vested (in shares) | shares | (3,145,103) |
Forfeited (in shares) | shares | (1,745,124) |
Unvested as of December 31, 2021 (in shares) | shares | 19,412,262 |
Weighted-Average Grant-Date Fair Value Per Share | |
Unvested beginning balance, Weighted-Average Grant-Date Fair Value Per Share (in dollars per share) | $ / shares | $ 15.01 |
Granted, Weighted-Average Grant-Date Fair Value Per Share (in dollars per share) | $ / shares | 6.04 |
Vested, Weighted-Average Grant-Date Fair Value Per Share (in dollars per share) | $ / shares | 10.46 |
Forfeited, Weighted-Average Grant-Date Fair Value Per Share (in dollars per share) | $ / shares | 7.81 |
Unvested ending balance, Weighted-Average Grant-Date Fair Value Per Share (in dollars per share) | $ / shares | $ 9.06 |
Ordinary Shares and Equity In_8
Ordinary Shares and Equity Incentive Plan - Share-based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total share-based compensation expense | $ 67,467 | $ 33,358 | $ 7,945 |
Cost of revenue | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total share-based compensation expense | 621 | 216 | 38 |
Research and development | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total share-based compensation expense | 10,005 | 4,246 | 3,621 |
Sales and marketing | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total share-based compensation expense | 18,253 | 10,710 | 2,814 |
General and administrative | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total share-based compensation expense | $ 38,588 | $ 18,186 | $ 1,472 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Contingency [Line Items] | ||||
Increase (decrease) in valuation allowance for deferred tax asset | $ 12,100 | $ 4,400 | ||
Unrecognized tax benefits | 11,252 | 4,119 | $ 234 | $ 234 |
Unrecognized tax benefits, income tax penalties and interest expense | 320 | 10 | ||
Domestic Tax Authority | ||||
Income Tax Contingency [Line Items] | ||||
Operating loss carryforwards | 68,900 | 37,400 | ||
Foreign Tax Authority | ||||
Income Tax Contingency [Line Items] | ||||
Operating loss carryforwards | 11,200 | 9,800 | ||
State and Local Jurisdiction | ||||
Income Tax Contingency [Line Items] | ||||
Operating loss carryforwards | $ 27,400 | |||
State and Local Jurisdiction | Tax Year 2027 | ||||
Income Tax Contingency [Line Items] | ||||
Operating loss carryforwards | 26,300 | |||
State and Local Jurisdiction | Latest Tax Year | ||||
Income Tax Contingency [Line Items] | ||||
Operating loss carryforwards | 1,100 | |||
State and Local Jurisdiction | Tax Year 2041 | ||||
Income Tax Contingency [Line Items] | ||||
Operating loss carryforwards | $ 26,300 |
Income Taxes - Schedule of Prof
Income Taxes - Schedule of Profit (Loss) before Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Contingency [Line Items] | |||
Total profit (loss) before income taxes | $ (97,947) | $ (177,327) | $ (10,272) |
Israel | |||
Income Tax Contingency [Line Items] | |||
Total profit (loss) before income taxes | (55,054) | (154,339) | (13,479) |
International | |||
Income Tax Contingency [Line Items] | |||
Total profit (loss) before income taxes | $ (42,893) | $ (22,988) | $ 3,207 |
Income Taxes - Schedule of Prov
Income Taxes - Schedule of Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Examination [Line Items] | |||
Total current income tax expense | $ 8,719 | $ 125 | $ 36 |
Total deferred income tax expense | (2,677) | 1,433 | 1,039 |
Total provision for income taxes | 6,042 | 1,558 | 1,075 |
Israel | |||
Income Tax Examination [Line Items] | |||
Total current income tax expense | 4 | 4 | 4 |
Total deferred income tax expense | 0 | 0 | 0 |
International | |||
Income Tax Examination [Line Items] | |||
Total current income tax expense | 8,715 | 121 | 32 |
Total deferred income tax expense | $ (2,677) | $ 1,433 | $ 1,039 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Effective Income Tax Provision (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Contingency [Line Items] | |||
Israel tax benefit at statutory rate | $ (22,528) | $ (40,784) | $ (2,362) |
Preferred enterprise | 10,573 | 3,052 | 169 |
Foreign rate differential | (1,050) | 912 | 332 |
Share-based compensation | 9,717 | 1,753 | 1,328 |
Prior year tax income/(expense) | (6,675) | 84 | 0 |
Permanent differences | (3,351) | 98 | 83 |
ASC 606 | 0 | 0 | 0 |
Uncertain tax position | 7,233 | 3,784 | 5 |
Change in valuation allowance | 12,123 | 4,444 | 184 |
Total provision for income taxes | $ 6,042 | $ 1,558 | $ 1,075 |
Corporates tax rate | 6.17% | 0.88% | 10% |
Warrants to purchase ordinary shares | |||
Income Tax Contingency [Line Items] | |||
Warrant revaluation | $ 0 | $ 23,325 | $ 1,336 |
Tranche Rights | |||
Income Tax Contingency [Line Items] | |||
Warrant revaluation | $ 0 | $ 4,890 | $ 0 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Deferred tax assets: | |||
Research and development expenses | $ 7,374 | $ 1,436 | $ 1,742 |
Stat to GAAP adjustments | 0 | 0 | 1,493 |
Net operating loss | 9,059 | 5,212 | 941 |
Deferred Compensation | 5,214 | 1,009 | 0 |
Operating lease liabilities | 6,456 | 0 | 0 |
Vacation and convalescence | 730 | 799 | 364 |
Bad debts | 78 | 93 | 100 |
Other | 2,166 | 466 | 374 |
Gross deferred tax assets | 31,077 | 9,015 | 5,014 |
Valuation allowance | (20,822) | (8,699) | (4,255) |
Total deferred tax assets | 10,255 | 316 | 759 |
Deferred tax liabilities: | |||
Operating lease right-of-use assets | (6,387) | 0 | 0 |
Deferred contract acquisition costs | (3,009) | (2,324) | (1,543) |
Property and equipment | (279) | (283) | (439) |
Capitalized Software | (591) | (397) | 0 |
Other | 0 | 0 | (34) |
Gross deferred tax liabilities | (10,266) | (3,004) | (2,016) |
Net deferred tax liabilities | (11) | (2,688) | $ (1,257) |
Increase (decrease) in valuation allowance for deferred tax asset | $ 12,100 | $ 4,400 |
Income Taxes - Reconciliation_2
Income Taxes - Reconciliation of Unrecognized Tax Position (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Beginning balance | $ 4,119 | $ 234 | $ 234 |
Additions based on tax positions related to current year | 7,187 | 3,885 | 0 |
Reductions for tax positions of prior years | (54) | 0 | 0 |
Ending balance | 11,252 | 4,119 | $ 234 |
Unrecognized tax benefits, income tax penalties and interest expense | $ 320 | $ 10 |
Net Profit (Loss) Per Share A_3
Net Profit (Loss) Per Share Attributable to Ordinary Shareholders - Schedule of Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||
Weighted-average shares used in computing net profit (loss) per share attributable to ordinary shareholders, basic (in shares) | 167,667,374 | 76,459,625 | |
Weighted-average shares used in computing net profit (loss) per share attributable to ordinary shareholders, diluted (in shares) | 167,667,374 | 76,459,625 | |
Common Class A | |||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||
Net profit (loss) attributable to ordinary shareholders, basic | $ (90,677) | $ (11,347) | |
Net profit (loss) attributable to ordinary shareholders, diluted | $ (57,339) | $ (90,677) | $ (11,347) |
Weighted-average shares used in computing net profit (loss) per share attributable to ordinary shareholders, basic (in shares) | 38,757,558 | 14,022,788 | |
Weighted-average shares used in computing net profit (loss) per share attributable to ordinary shareholders, diluted (in shares) | 92,450,867 | 38,757,558 | 14,022,788 |
Net profit (loss) per share attributable to ordinary shareholders, basic (in dollars per share) | $ (0.62) | $ (2.34) | $ (0.81) |
Net profit (loss) per share attributable to ordinary shareholders, diluted (in dollars per share) | $ (0.62) | $ (2.34) | $ (0.81) |
Common Class B | |||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||
Net profit (loss) attributable to ordinary shareholders, basic | $ (46,650) | $ (88,208) | |
Net profit (loss) attributable to ordinary shareholders, diluted | $ (88,208) | ||
Weighted-average shares used in computing net profit (loss) per share attributable to ordinary shareholders, basic (in shares) | 14,022,788 | ||
Weighted-average shares used in computing net profit (loss) per share attributable to ordinary shareholders, diluted (in shares) | 75,216,507 | 37,702,067 | 14,022,788 |
Net profit (loss) per share attributable to ordinary shareholders, basic (in dollars per share) | $ (0.62) | $ (2.34) | $ (0.81) |
Net profit (loss) per share attributable to ordinary shareholders, diluted (in dollars per share) | $ (0.62) | $ (2.34) | $ (0.81) |
Net Profit (Loss) Per Share A_4
Net Profit (Loss) Per Share Attributable to Ordinary Shareholders - Schedule of Anti-Dilutive Securities (Details) - shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||
Weighted-average shares used in computing net profit (loss) per share attributable to ordinary shareholders, diluted (in shares) | 167,667,374 | 76,459,625 | |
Common Class A | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 33,117,365 | 33,107,849 | 36,061,383 |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||
Weighted-average shares used in computing net profit (loss) per share attributable to ordinary shareholders, diluted (in shares) | 92,450,867 | 38,757,558 | 14,022,788 |
Common Class B | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 2,981,665 | 37,954,251 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||
Weighted-average shares used in computing net profit (loss) per share attributable to ordinary shareholders, diluted (in shares) | 75,216,507 | 37,702,067 | 14,022,788 |
Convertible Preferred Stock | Common Class A | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 0 | 17,817,201 | 28,217,680 |
Convertible Preferred Stock | Common Class B | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 0 | 35,634,404 | |
Warrants to purchase ordinary shares | Common Class A | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 873,370 | 1,488,819 | 1,858,467 |
Warrants to purchase ordinary shares | Common Class B | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 850,650 | 354,243 | |
Warrants to purchase ordinary shares | Series C Convertible Preferred Stock [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 70,110,425 | 35,744,158 | |
Share-based Payment Arrangement | Common Class A | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 16,067,720 | 12,239,441 | 5,985,236 |
Share-based Payment Arrangement | Common Class B | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 0 | 0 | |
Restricted Stock Units (RSUs) | Common Class A | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 16,176,275 | 1,562,388 | 0 |
Restricted Stock Units (RSUs) | Common Class B | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 2,131,015 | 1,965,604 |
Employee Benefit Plans - Narrat
Employee Benefit Plans - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Retirement Benefits [Abstract] | |||
Employer matching contribution, percent of match | 100% | ||
Employer matching contribution, percent of employees' pay | 4% | ||
Defined contribution plan, cost | $ 1.1 | $ 0.8 | $ 0.6 |
Severance pay rate | 8,330% | ||
Severance costs | $ 4.5 | $ 3.8 | $ 2.7 |