What happened

Week to date, shares of Riskified (RSKD 1.12%) were up 16.5% as of 10:15 a.m. ET on Friday, according to data provided by S&P Global Market Intelligence. After falling 87% from its high in 2021, the e-commerce fraud protection provider reported a strong earnings report

The company showed progress in reining in costs and moving toward a profit, which got investors' attention. The stock is now up 16% year to date. 

So what

Riskified has attractive growth prospects as an e-commerce fraud prevention partner for merchants. Revenue doubled between 2019 and 2022 to reach $261 million. But the company hasn't been profitable yet, which is the main reason the stock fell last year.

Revenue continues to grow consistent with the company's previous history. The top line advanced 17% year over year in the first quarter. That represented an acceleration over the fourth quarter's 14% increase, so the business has some momentum and is seeing healthy demand for its risk intelligence platform.

What got investors' attention is the 62% year-over-year improvement in non-GAAP (adjusted) earnings before interest, taxes, depreciation, and amortization (EBITDA) that narrowed to a loss of $5.2 million.  

Now what

Guidance calls for full-year adjusted EBITDA to still be in the red, or between negative $17 million and $12 million, but that cuts last year's loss in roughly half. 

Using the traditional "land-and-expand" strategy common to software-as-a-service companies, Riskified sees further room to penetrate and capture more sales from existing customers.  

Meanwhile, the company is also continuing to win new customers across different industries. Management noted customer wins in travel, gaming, and retail recently. 

With the company's progress on shoring up the bottom line and continued momentum in growing revenue, Riskified could be an under-the-radar stock to play the recovery in e-commerce.