The global modern card issuer reported $67
billion in Total Processing Volume with Net Revenue of $118 million
in the first quarter of 2024.
Marqeta, Inc. (NASDAQ: MQ), the global modern card
issuing platform, today reported financial results for the first
quarter ended March 31, 2024.
The Company reported Total Processing Volume (TPV) of $67
billion, representing a year-over-year increase of 33% driven by
volume growth across several use cases.
Marqeta reported Net Revenue of $118 million, a decrease of 46%
year over year, which included a 58 percentage point negative
growth impact due to the change in revenue presentation resulting
from the new Cash App contract effective as of July 2023. The
Company saw Gross Profit of $84 million for the quarter, down 6%
year-over-year, primarily due to the new pricing for Cash App.
GAAP Net Loss for the quarter was $36 million. Adjusted EBITDA
was positive $9 million, representing an Adjusted EBITDA margin of
8%.
"Our business once again showed itself to be on a solid
trajectory this quarter," said Simon Khalaf, CEO of Marqeta.
"Alongside continued scale and operational efficiencies, we saw
growth from both major fintech customers expanding into new use
cases and geographies, as well as growth from newer customers and
embedded finance use cases. All put together, it speaks volumes to
the breadth and depth of the Marqeta platform."
Marqeta highlighted several recent business updates that
demonstrate its current business momentum:
- Marqeta announced the global expansion of its U.S. partnership
with Uber Eats into eight additional markets: Canada, Australia,
Mexico, Brazil, Colombia, Peru, Chile and Costa Rica. Marqeta’s
platform allows Uber Eats to reduce effort and time-to-market for
each subsequent new market launch, showcasing the global reach of
Marqeta’s platform and the strong partnership with Uber since
2020.
- Marqeta supported the launch of a new and improved Klarna Card,
open to all U.S. Klarna users, which is built into the Klarna app
and provides flexible payment options with no revolving credit,
allowing users to either pay a monthly statement in full with no
interest, or pay over time. The card comes with personalized
spending and budgeting recommendations and up to 10% cashback when
used inside the Klarna app. Marqeta has supported Klarna's business
since 2016, across multiple card projects in North America, Europe
and Australia and New Zealand.
- Marqeta announced that it will power the Rain Card, a branded
debit card that will enable Rain's customers, such as McDonald’s,
Taco Bell, Hilton and Marriott, to disburse earned wages onto cards
seamlessly. In addition, through its strategic partnership with
Rain, Marqeta can expand the scope of its early wage access
offerings to add more value for employers across diverse sectors of
the economy.
Marqeta announced that its Board of Directors has authorized a
new share repurchase program for up to $200 million of its Class A
common stock, demonstrating the Board's continued confidence in
Marqeta's business and market opportunity not currently reflected
in the company's market valuation.
Operating Highlights
In thousands, except percentages and
per share data. % change is calculated over the
comparable prior-year period
(unaudited)
Three Months Ended March
31,
2024
2023
%
Change
Financial metrics:
Net revenue
$
117,968
$
217,343
(46
%)
Gross profit
$
84,161
$
89,164
(6
%)
Gross margin
71
%
41
%
30 ppts
Total operating expenses
$
134,013
$
176,597
(24
%)
Net loss
($36,060
)
($68,801
)
48
%
Net loss margin
(31
%)
(32
%)
1 ppts
Net loss per share - basic and
diluted
($0.07
)
($0.13
)
46
%
Key operating metric and
Non-GAAP financial measures:
Total Processing Volume (TPV) (in
millions) 1
$
66,666
$
50,020
33
%
Adjusted EBITDA 2
$
9,228
($4,346
)
312
%
Adjusted EBITDA margin 2
8
%
(2
%)
10 ppts
Non-GAAP operating expenses 2
$
74,933
$
93,510
(20
%)
1 TPV represents the total dollar amount
of payments processed through our platform, net of returns and
chargebacks. We believe that TPV is a key indicator of the market
adoption of our platform, growth of our brand, growth of our
customers' businesses and scale of our business.
2 See "Information Regarding Non-GAAP Measures" for definitions of
Adjusted EBITDA, Adjusted EBITDA margin, and Non-GAAP operating
expenses and the reconciliations of the net loss to Adjusted
EBITDA, and of the total operating expenses to Non-GAAP operating
expenses.
First Quarter 2024 Financial
Results:
Total Processing Volume increased by 33% year-over-year,
rising to $67 billion from $50 billion in the first quarter of
2023.
Net Revenue of $118 million decreased by $99 million, or
(46)% year-over-year, primarily due to a contract renewal with Cash
App, which resulted in a change in revenue presentation in addition
to reduced pricing. The revenue presentation change involves the
fees owed to Issuing Banks and Card Networks related to the Cash
App primary Card Network volume, which are netted against revenue
earned from the Cash App program within Net Revenue, resulting in a
reduction of $126 million, negatively impacting the growth rate by
58 percentage points. In prior periods, these costs were included
within Costs of Revenue.
Gross Profit decreased by 6% year-over-year, declining to
$84 million from $89 million in the first quarter of 2023 primarily
due to reduced pricing from the Cash App renewal. Gross Margin was
71% in the first quarter of 2024.
Net Loss decreased by $33 million year-over-year to $36
million in the quarter due to decreased operating expenses
partially offset by the decrease in gross profit.
Adjusted EBITDA was $9 million in the first quarter of
2024, increasing by $14 million year-over year. Adjusted EBITDA
margin was 8% in the first quarter of 2024, an increase of 10
percentage points versus last year.
Conference Call
Marqeta will host a live conference call today at 1:30 p.m.
Pacific time (4:30 p.m. Eastern time). To join the call, please
dial-in 10 minutes in advance: toll-free at 1-877-407-4018 or
direct at 1-201-689-8471. The conference call will also be
available live via webcast online at
http://investors.marqeta.com.
The telephone replay dial-in numbers are 1-844-512-2921 and
1-412-317-6671 and will be available until May 14, 2024, 8:59 p.m.
Pacific time (11:59 p.m. Eastern time). The confirmation code for
the replay is 13745411.
Forward-Looking Statements
This press release contains "forward-looking statements" within
the meaning of the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements expressed or implied in this press release include, but
are not limited to, statements relating to Marqeta’s quarterly
guidance; statements regarding expected accounting treatment and
changes to revenue and gross profit; statements regarding Marqeta’s
business plans, business strategy and the continued success and
growth of our customers; statements and expectations regarding
Marqeta's partnerships, new product introductions, and product
capabilities, including credit card issuing; and statements made by
Marqeta’s CEO and CFO. Actual results may differ materially from
the expectations contained in these statements due to risks and
uncertainties, including, but not limited to, the following: the
effect of uncertainties related to global economies, our business,
results of operations, financial condition, and demand for our
platform; the risk that Marqeta’s anticipated accounting treatment
may be subject to further changes or developments; the risk that
Marqeta is unable to further attract, retain, diversify, and expand
its customer base; the risk that Marqeta is unable to drive
increased profitable transactions on its platform; the risk that
consumers and customers will not perceive the benefits of Marqeta’s
products, including credit card issuing, as Marqeta expects; the
risk that Marqeta's platform does not operate as intended resulting
in system outages; the risk that Marqeta will not be able to
achieve the cost structure that Marqeta currently expects; the risk
that Marqeta’s solution will not achieve the expected market
acceptance; the risk that competition could reduce expected demand
for Marqeta’s services, including credit card issuing; the risk
that changes in the regulatory landscape could adversely affect
Marqeta's operations and revenues; the risk that Marqeta may be
unable to maintain relationships with Issuing Banks and Card
Networks; the risk that Marqeta is not able to identify and
recognize the anticipated benefits of any acquisition; the risk
that Marqeta is unable to successfully integrate any acquisition to
businesses and related operations; the risk of financial services
and banking sector instability and follow on effects to fintech
companies; the risk of general economic conditions in either
domestic or international markets, including inflation and
recessionary fears, conditions resulting from geopolitical
uncertainty and instability or war; and the risk that Marqeta may
be subject to additional risks due to its international business
activities. Detailed information about these risks and other
factors that could potentially affect Marqeta’s business, financial
condition and results of operations are included in the “Risk
Factors” disclosed in Marqeta's Annual Report on Form 10-K for the
year ended December 31, 2023 and subsequent Quarterly Reports on
Form 10-Q, as such risk factors may be updated from time to time in
Marqeta’s periodic filings with the SEC, available at www.sec.gov
and Marqeta’s website at http://investors.marqeta.com.
The forward-looking statements in this press release are based
on information available to Marqeta as of the date hereof. Marqeta
disclaims any obligation to update any forward-looking statements,
except as required by law.
Disclosure Information
Investors and others should note that Marqeta announces material
financial information to its investors using its investor relations
website, SEC filings, press releases, public conference calls and
webcasts. Marqeta also uses social media to communicate with its
customers and the public about Marqeta, its products and services
and other matters relating to its business and market. It is
possible that the information Marqeta posts on social media could
be deemed to be material information. Therefore, Marqeta encourages
investors, the media, and others interested in Marqeta to review
the information we post on social media channels including the
Marqeta Twitter feed (@Marqeta), the Marqeta Instagram page
(@lifeatmarqeta), the Marqeta Facebook page, and the Marqeta
LinkedIn page. These social media channels may be updated from time
to time.
Use of Non-GAAP Financial Measures
Reconciliations of non-GAAP financial measures to the most
directly comparable financial results as determined in accordance
with GAAP are included at the end of this press release following
the accompanying financial data. For a description of these
non-GAAP financial measures, including the reasons management uses
each measure, please see the section of the tables titled
"Information Regarding Non-GAAP Financial Measures".
About Marqeta, Inc.
Marqeta’s modern card issuing platform empowers its customers to
create customized and innovative payment cards. Marqeta’s modern
architecture gives its customers the ability to build more
configurable and flexible payment experiences, accelerating
time-to-market and democratizing access to card issuing technology.
Marqeta’s open APIs provide instant access to highly scalable,
cloud-based payment infrastructure that enables customers to launch
and manage their own card programs, issue cards and authorize and
settle payment transactions. Marqeta is headquartered in Oakland,
California and is certified to operate in more than 40 countries
globally.
Marqeta® is a registered trademark of Marqeta, Inc.
Marqeta, Inc.
Condensed Consolidated
Statements of Operations
(in thousands, except share
and per share amounts)
(unaudited)
Three Months Ended March
31,
2024
2023
Net revenue
$
117,968
$
217,343
Costs of revenue
33,807
128,179
Gross profit
84,161
89,164
Operating expenses:
Compensation and benefits
108,111
147,759
Technology
13,118
14,590
Professional services
3,870
5,437
Occupancy
1,094
1,154
Depreciation and amortization
3,537
1,980
Marketing and advertising
378
441
Other operating expenses
3,905
5,236
Total operating expenses
134,013
176,597
Loss from operations
(49,852
)
(87,433
)
Other income, net
13,926
11,672
Loss before income tax
expense
(35,926
)
(75,761
)
Income tax expense (benefit)
134
(6,960
)
Net loss
$
(36,060
)
$
(68,801
)
Net loss per share attributable
to common stockholders, basic and diluted
$
(0.07
)
$
(0.13
)
Weighted-average shares used in
computing net loss per share attributable to common stockholders,
basic and diluted
517,987,361
539,744,130
Marqeta, Inc.
Condensed Consolidated Balance
Sheets
(in thousands)
March 31,
December 31,
2024
2023
(unaudited)
Assets
Current assets:
Cash and cash equivalents
$
970,357
$
980,972
Restricted cash
8,500
8,500
Short-term investments
228,324
268,724
Accounts receivable, net
23,422
19,540
Settlements receivable, net
36,511
29,922
Network incentives receivable
54,223
53,807
Prepaid expenses and other
current assets
26,830
27,233
Total current assets
1,348,167
1,388,698
Operating lease right-of-use
assets, net
5,814
6,488
Property and equipment, net
28,138
18,764
Intangible assets, net
34,167
35,631
Goodwill
123,523
123,523
Other assets
18,552
16,587
Total assets
$
1,558,361
$
1,589,691
Liabilities and stockholders'
equity
Current liabilities
Accounts payable
$
916
$
1,420
Revenue share payable
189,864
173,645
Accrued expenses and other
current liabilities
147,802
161,514
Total current liabilities
338,582
336,579
Operating lease liabilities, net
of current portion
4,080
5,126
Other liabilities
5,034
4,591
Total liabilities
347,696
346,296
Stockholders' equity :
Preferred stock
—
—
Common stock
52
52
Additional paid-in capital
2,072,692
2,067,776
Accumulated other comprehensive
(loss) income
(824
)
762
Accumulated deficit
(861,255
)
(825,195
)
Total stockholders’ equity
1,210,665
1,243,395
Total liabilities and
stockholders' equity
$
1,558,361
$
1,589,691
Marqeta, Inc.
Condensed Consolidated
Statements of Cash Flows
(in thousands)
(unaudited)
Three Months Ended March
31,
2024
2023
Cash flows from operating
activities:
Net loss
$
(36,060
)
$
(68,801
)
Adjustments to reconcile net loss
to net cash provided by operating activities:
Depreciation and amortization
3,537
1,980
Share-based compensation
expense
44,434
45,999
Non-cash postcombination
compensation expense
—
32,430
Non-cash operating leases
expense
674
607
Amortization of premium
(accretion of discount) on short-term investments
(978
)
(975
)
Other
181
209
Changes in operating assets and
liabilities:
Accounts receivable
(4,271
)
1,554
Settlements receivable
(6,589
)
6,768
Network incentives receivable
(416
)
(16,702
)
Prepaid expenses and other
assets
538
7,203
Accounts payable
115
224
Revenue share payable
16,219
4,674
Accrued expenses and other
liabilities
(16,020
)
(24,907
)
Operating lease liabilities
(938
)
(809
)
Net cash provided by (used in)
operating activities
426
(10,546
)
Cash flows from investing
activities:
Purchases of property and
equipment
(1,191
)
(577
)
Capitalization of internal-use
software
(5,307
)
(3,032
)
Business combination, net of cash
acquired
—
(131,914
)
Purchases of short-term
investments
—
(70,807
)
Maturities of short-term
investments
40,000
108,000
Net cash provided by (used in)
investing activities
33,502
(98,330
)
Cash flows from financing
activities:
Proceeds from exercise of stock
options, including early exercised stock options, net of repurchase
of early exercised unvested options
49
1,016
Taxes paid related to net share
settlement of restricted stock units
(10,917
)
(3,746
)
Repurchase of common stock
(33,675
)
(21,826
)
Net cash used in financing
activities
(44,543
)
(24,556
)
Net decrease in cash, cash
equivalents, and restricted cash
(10,615
)
(133,432
)
Cash, cash equivalents, and
restricted cash- Beginning of period
989,472
1,191,646
Cash, cash equivalents, and
restricted cash - End of period
$
978,857
$
1,058,214
Marqeta, Inc.
Financial and Operating
Highlights
(in thousands, except per
share data or as noted)
(unaudited)
2024
2023
First Quarter
Fourth Quarter
Third Quarter
Second Quarter
First Quarter
Year over Year Change Q1'24
vs
Q1'23
Operating performance:
Net revenue
$
117,968
$
118,822
$
108,891
$
231,115
$
217,343
(46
%)
Costs of revenue
33,807
35,589
36,383
146,506
128,179
(74
%)
Gross profit
84,161
83,233
72,508
84,609
89,164
(6
%)
Gross margin
71
%
70
%
67
%
37
%
41
%
30 ppts
Operating expenses:
Compensation and benefits
108,111
109,203
115,846
126,788
147,759
(27
%)
Technology
13,118
13,938
13,930
13,154
14,590
(10
%)
Professional services
3,870
7,172
4,197
4,873
5,437
(29
%)
Occupancy and equipment
1,094
1,076
1,074
1,057
1,154
(5
%)
Depreciation and amortization
3,537
3,159
3,108
2,494
1,980
79
%
Marketing and advertising
378
1,219
346
561
441
(14
%)
Other operating expenses
3,905
3,804
3,833
5,103
5,236
(25
%)
Total operating expenses
134,013
139,571
142,334
154,030
176,597
(24
%)
Loss from operations
(49,852
)
(56,338
)
(69,826
)
(69,421
)
(87,433
)
43
%
Other income (expense), net
13,926
14,932
15,074
10,762
11,672
19
%
Loss before income tax
expense
(35,926
)
(41,406
)
(54,752
)
(58,659
)
(75,761
)
53
%
Income tax expense (benefit)
134
(1,030
)
238
138
(6,960
)
(102
%)
Net loss
$
(36,060
)
$
(40,376
)
$
(54,990
)
$
(58,797
)
$
(68,801
)
48
%
Loss per share - basic and
diluted
$
(0.07
)
$
(0.08
)
$
(0.10
)
$
(0.11
)
$
(0.13
)
46
%
TPV (in millions)
$
66,666
$
61,979
$
56,650
$
53,615
$
50,020
33
%
Adjusted EBITDA
$
9,228
$
3,292
$
(2,062
)
$
824
$
(4,346
)
312
%
Adjusted EBITDA margin
8
%
3
%
(2
%)
—
%
(2
%)
10 ppts
Financial condition:
Cash and cash equivalents
$
970,357
$
980,972
$
947,749
$
950,157
$
1,050,414
(8
%)
Restricted cash
$
8,500
$
8,500
$
7,800
$
9,375
$
7,800
9
%
Short-term investments
$
228,324
$
268,724
$
349,395
$
432,354
$
408,675
(44
%)
Total assets
$
1,558,361
$
1,589,691
$
1,603,249
$
1,704,143
$
1,774,183
(12
%)
Total liabilities
$
347,696
$
346,296
$
308,166
$
331,528
$
340,533
2
%
Stockholders' equity
$
1,210,665
$
1,243,395
$
1,295,083
$
1,372,615
$
1,433,650
(16
%)
ppts = percentage points
Reconciliation of GAAP to NON-GAAP
Measures (in thousands) (unaudited)
Information Regarding Non-GAAP Measures
In addition to the financial measures prepared in accordance
with generally accepted accounting principles in the United States
(“GAAP”), this press release contains certain non-GAAP financial
measures. Marqeta considers Adjusted EBITDA, Adjusted EBITDA
Margin, and Non-GAAP operating expenses as supplemental measures of
the company’s performance that are not required by, nor presented
in accordance with GAAP.
We define Adjusted EBITDA as net income (loss) adjusted to
exclude depreciation and amortization; sharebased compensation
expense; payroll tax related to share-based compensation;
restructuring charges; acquisition-related expenses which consist
of due diligence costs, transaction costs and integration costs
related to potential or successful acquisitions, and cash and
non-cash postcombination compensation expenses; income tax expense
(benefit); and other income (expense), net, which consists of
interest income from our short-term investments, realized foreign
currency gains and losses, our share of equity method investments’
profit or loss, impairment of equity method investments or other
financial instruments, and gain from sale of equity method
investments. We believe that Adjusted EBITDA is an important
measure of operating performance because it allows management and
our board of directors to evaluate and compare our core operating
results, including our operating efficiencies, from period to
period. Additionally, we utilize Adjusted EBITDA as an input into
our calculation of our annual employee bonus plans.
Adjusted EBITDA Margin is calculated as Adjusted EBITDA divided
by net revenue. This measure is used by management and our board of
directors to evaluate our operating efficiency.
We define Non-GAAP operating expenses as total operating
expenses adjusted to exclude depreciation and amortization;
share-based compensation expense; payroll tax related to
share-based compensation; restructuring charges; and
acquisition-related expenses which consists of due diligence costs,
transaction costs and integration costs related to potential or
successful acquisitions, and cash and non-cash postcombination
compensation expenses. We believe that Non-GAAP operating expenses
is an important measure of operating performance because it allows
management and our board of directors to evaluate and compare our
core operating results, including our operating efficiencies, from
period to period. Adjusted EBITDA, Adjusted EBITDA Margin, and
Non-GAAP operating expenses should not be considered in isolation,
or construed as an alternative to net loss, or any other
performance measures derived in accordance with GAAP, or as an
alternative to cash flow from operating activities or as a measure
of the company's liquidity. In addition, other companies may
calculate Adjusted EBITDA differently than Marqeta does, which
limits its usefulness in comparing Marqeta’s financial results with
those of other companies.
The following table shows Marqeta's GAAP results reconciled to
non-GAAP results included in this release:
Three Months Ended March
31,
2024
2023
GAAP net revenue
$
117,968
$
217,343
GAAP net loss
$
(36,060
)
$
(68,801
)
GAAP net loss margin
(31
%)
(32
%)
GAAP total operating expenses
$
134,013
$
176,597
GAAP net loss
$
(36,060
)
$
(68,801
)
Depreciation and amortization
expense
3,537
1,980
Share-based compensation
expense
44,434
45,999
Payroll tax expense related to
share-based compensation
1,165
640
Acquisition-related expenses
(1)
9,944
34,468
Other (income) expense, net
(13,926
)
(11,672
)
Income tax expense (benefit)
134
(6,960
)
Adjusted EBITDA
$
9,228
$
(4,346
)
Adjusted EBITDA Margin
8
%
(2
%)
GAAP Total operating
expenses
$
134,013
$
176,597
Depreciation and amortization
expense
(3,537
)
(1,980
)
Share-based compensation
expense
(44,434
)
(45,999
)
Payroll tax expense related to
share-based compensation
(1,165
)
(640
)
Acquisition-related expenses
(9,944
)
(34,468
)
Non-GAAP operating
expenses
$
74,933
$
93,510
_______________
(1) Acquisition-related expenses, which
include transaction costs, integration costs and cash and non-cash
postcombination compensation expense, have been excluded from
Adjusted EBITDA as such expenses are not reflective of our ongoing
core operations and are not representative of the ongoing costs
necessary to operate our business; instead, these are costs
specifically associated with a discrete transaction.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240507162923/en/
IR Contact: Marqeta Investor Relations, IR@marqeta.com
Media Contact: James Robinson 530-913-0844
jrobinson@marqeta.com
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