RISKIFIED LTD.

The company operates a business model that aligns its interests with those of its merchants. It primarily charges merchants using its Chargeback Guarantee product a percentage of every dollar of Gross Merchandise Volume (GMV) that it approves on their behalf. This fee is a risk-adjusted price, established at the start of the contract, and varies by merchant based on factors such as merchant type, order population, submission rates, historical fraud levels, the risk level of the end market (including industry and geographic region), and the guaranteed approval rates provided. For transactions from higher-risk end markets, the company may charge higher fees to offset the increased likelihood of a chargeback. If an approved and guaranteed transaction results in an eligible chargeback, the company reimburses the merchant for the lost sale amount, recording this as a chargeback expense in cost of revenue. Reimbursements are typically provided as credits on future invoices. The company has processes to manage its overall chargeback exposure and control realized chargeback expenses within predetermined parameters, primarily by controlling approved transactions and assessing the cost-benefit of approvals. In some cases, the company may charge a fixed fee per transaction for fraud and risk intelligence services that do not include the liability shift of the Chargeback Guarantee product. For other products, alternative pricing models may be used, such as a subscription fee or a fee per transaction.