Riskified Ltd. (RSKD) Cash Flow Statement

The persistent gap between negative net income and positive operating cash flow is primarily driven by substantial non-cash add-backs, most notably stock-based compensation which averaged over $12M per quarter. This indicates the core transactional business is cash-generative on an operating basis, but the GAAP profitability is heavily obscured by the equity-based compensation structure common in Israeli tech firms. Investors should monitor whether this conversion quality holds as revenue growth decelerates.

The company's ability to generate positive FCF despite GAAP losses is a structural positive, but the margin volatility underscores the operational complexity of its liability model. The highest FCF margins (17.6% in 2024Q3, 16.4% in 2025Q3) coincided with favorable working capital movements, while the lowest (4.4% in 2025Q1) followed a period of negative WC changes. This trajectory suggests FCF is not yet a stable, predictable output of the business model.

The erratic working capital pattern, particularly the large negative swings in 2025Q4 (-$12.4M) and 2024Q2 (-$7.8M), suggests that cash flow is heavily influenced by the lag between processing transactions and settling liabilities. This is not typical for a pure SaaS business and introduces a layer of unpredictability. The positive WC change in 2026Q2 (+$4.6M) provided a tailwind, but investors should not assume this is a recurring trend.

The sustained buyback program, which accelerated in 2026Q2 with a $66M repurchase, is a notable capital allocation choice for a company with negative operating margins and decelerating revenue growth. This suggests management may view the stock as undervalued or is attempting to offset dilution from SBC. However, it raises questions about the opportunity cost of not deploying this cash toward product diversification or M&A to address the core growth and margin challenges.