EX-99.1 2 mqearningsrelease-q2x2024.htm EX-99.1 Document

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MARQETA REPORTS SECOND QUARTER 2024 FINANCIAL RESULTS
The global modern card issuer reported Total Processing Volume of $71 billion
with Net Revenue of $125 million and Gross Profit of $79 million in the second quarter of 2024.
OAKLAND, Calif. – August 7, 2024 - Marqeta, Inc. (NASDAQ: MQ), the global modern card issuing platform, today reported financial results for the second quarter ended June 30, 2024.

The Company reported Total Processing Volume (TPV) of $71 billion, representing a year-over-year increase of 32% driven by volume growth across several use cases.
The Company reported Net Revenue of $125 million, a decrease of 46% year over year, which included a 60 percentage point negative growth impact due to the change in revenue presentation resulting from the new Cash App contract. The Company saw Gross Profit of $79 million for the quarter, down 6% year-over-year, primarily due to the new pricing for Cash App. Marqeta's second quarter earnings represent the last quarter where the Cash App contract renewal, effective as of July 2023, will impact our year-over-year comparisons.
GAAP Net Income for the quarter was $119 million, which includes a $158 million one-time benefit for the reversal of share-based compensation recognized in prior periods due to the forfeiture of the Executive Chairman Long-Term Performance Award. Adjusted EBITDA was negative $2 million.
"The second quarter demonstrates the great returns on our reinvigorated go-to-market approach combined with our ability to deliver innovation at scale. We signed a pioneering techbank, launched a new payment innovation that reimagines what a card can be, and deepened the array of services we can offer globally, all while continuing to grow our TPV and operate with focused efficiency,” said Simon Khalaf, CEO at Marqeta.
Marqeta highlighted several recent business updates that demonstrate its current business momentum:
•Marqeta announced it has signed a five year deal with Varo Bank, N.A., the first nationally-chartered consumer techbank in the U.S., to become its issuer processor. Varo selected Marqeta for its ability to combine sophisticated virtual, tokenized and physical card issuing technology for the more than five million cards it has in market, with faster speed to market, helping Varo achieve its goals of helping people save and manage their money more easily.
•We recently announced that we are the first US. issuer-processor certified by Visa to support Visa Flexible Credential, which will allow a single card product to toggle between payment methods on each transaction, bringing multiple funding sources to one card. Cardholders can choose whether to use debit, credit or “pay-in-four” with Buy Now Pay Later. Currently, we are partnering with Affirm, the first program announced in the US to offer Visa Flexible Credential, to enable this capability for their Affirm Card. This reinforces Marqeta’s commitment to innovation and provides us with further differentiation in the BNPL landscape.
•Marqeta signed Zoho, a global tech company serving over 700 thousand businesses, which transforms how SMBs and enterprises work with a comprehensive suite of more than 50 business management applications. Zoho selected Marqeta for its ability to deliver expense management and embedded finance expertise to launch a card solution that enables businesses to manage expenses efficiently while also supporting their long-term growth.
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Operating Highlights
In thousands, except percentages and per share data. % change is calculated over the comparable prior-year period (unaudited)Three Months Ended June 30,%
Change		Six Months Ended June 30,%
Change
2024202320242023
Financial metrics:
Net revenue$125,270 $231,115 (46%)$243,237 $448,456 (46%)
Gross profit$79,353 $84,609 (6%)$163,512 $173,771 (6%)
Gross margin63 %37 %26 ppts67 %39 %28 ppts
Total operating (benefit) expenses
($25,689)$154,030 (117%)$108,323 $330,624 (67%)
Net income (loss)$119,108 ($58,797)303%$83,048 ($127,598)165%
Net income (loss) margin95 %(25 %)120 ppts34 %(28 %)62 ppts
Net income (loss) per share - basic and diluted$0.23 ($0.11)309%$0.16 ($0.24)167%
Key operating metric and Non-GAAP financial measures:
Total Processing Volume (TPV)
(in millions) 1
$70,627 $53,615 32%$137,294 $103,635 32%
Adjusted EBITDA 2
($1,817)$824 (321%)$7,409 ($3,521)310%
Adjusted EBITDA margin 2
(1 %)0.4 %(2 ppts)3 %(1 %)4 ppts
Non-GAAP operating expenses 2
$81,170 $83,785 (3%)$156,103 $177,292 (12%)
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.
Second Quarter 2024 Financial Results:
Total Processing Volume increased by 32% year-over-year, rising to $71 billion from $54 billion in the second quarter of 2023.
Net Revenue of $125 million decreased by $106 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 $139 million, negatively impacting the growth rate by 60 percentage points. Prior to the third quarter of 2023, these costs were included within Costs of Revenue.
Gross Profit decreased by 6% year-over-year, declining to $79 million from $85 million in the second quarter of 2023 primarily due to reduced pricing from the Cash App renewal. Gross Margin was 63% in the second quarter of 2024.
Net Income increased by $178 million year-over-year to $119 million in the quarter due to the one-time reversal of share-based compensation stemming from the forfeiture of the Executive Chairman Long-Term Performance Award which included $158 million of expenses recognized in previous periods.
Adjusted EBITDA was negative $2 million in the second quarter of 2024, decreasing by $3 million year-over year. Adjusted EBITDA margin was (1%) in the second quarter of 2024, a decrease of 2 percentage points versus last year.



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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 1-844-826-3035 or direct at 1-412-317-5195. 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 August 14, 2024, 8:59 p.m. Pacific time (11:59 p.m. Eastern time). The confirmation code for the replay is 10190091.
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 politics and 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 or incorporated by reference 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.

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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.
IR Contact: Marqeta Investor Relations, IR@marqeta.com
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Marqeta, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
(unaudited)
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Net revenue$125,270 $231,115 $243,237 $448,456 
Costs of revenue45,917 146,506 79,725 274,685 
Gross profit79,353 84,609 163,512 173,771 
Operating (benefit) expenses:
Compensation and benefits103,166 113,521 198,156 248,159 
Technology14,769 13,154 27,887 27,744 
Professional services4,808 4,873 8,678 10,310 
Occupancy1,204 1,057 2,298 2,211 
Depreciation and amortization3,956 2,494 7,493 4,474 
Marketing and advertising728 561 1,106 1,002 
Other operating expenses3,418 5,103 7,322 10,336 
Executive chairman long-term performance award(157,738)13,267 (144,617)26,388 
Total operating (benefit) expenses
(25,689)154,030 108,323 330,624 
Income (loss) from operations105,042 (69,421)55,189 (156,853)
Other income, net14,216 10,762 28,143 22,434 
Income (loss) before income tax expense119,258 (58,659)83,332 (134,419)
Income tax expense (benefit)150 138 284 (6,821)
Net income (loss)$119,108 $(58,797)$83,048 $(127,598)
Net income (loss) per share attributable to Class A and Class B common stockholders
Basic
$0.23 $(0.11)$0.16 $(0.24)
Diluted
$0.23 $(0.11)$0.16 $(0.24)
Weighted-average shares used in computing net income (loss) per share attributable to Class A and Class B common stockholders
Basic
515,959 538,267 516,973 538,989 
Diluted
524,401 538,267 525,415 538,989 

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Marqeta, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
June 30,
2024		December 31,
2023
(unaudited)
Assets
Current assets:
Cash and cash equivalents$924,730 $980,972 
Restricted cash8,500 8,500 
Short-term investments228,833 268,724 
Accounts receivable, net25,956 19,540 
Settlements receivable, net27,765 29,922 
Network incentives receivable34,168 53,807 
Prepaid expenses and other current assets22,949 27,233 
Total current assets1,272,901 1,388,698 
Operating lease right-of-use assets, net5,653 6,488 
Property and equipment, net33,011 18,764 
Intangible assets, net32,702 35,631 
Goodwill123,523 123,523 
Other assets20,493 16,587 
Total assets$1,488,283 $1,589,691 
Liabilities and stockholders' equity
Current liabilities
Accounts payable$3,685 $1,420 
Revenue share payable176,425 173,645 
Accrued expenses and other current liabilities157,736 161,514 
Total current liabilities337,846 336,579 
Operating lease liabilities, net of current portion3,254 5,126 
Other liabilities4,808 4,591 
Total liabilities345,908 346,296 
Stockholders' equity :
Preferred stock— — 
Common stock51 52 
Additional paid-in capital1,885,744 2,067,776 
Accumulated other comprehensive (loss) income(1,273)762 
Accumulated deficit(742,147)(825,195)
Total stockholders’ equity1,142,375 1,243,395 
Total liabilities and stockholders' equity$1,488,283 $1,589,691 

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Marqeta, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Six Months Ended June 30,
20242023
Cash flows from operating activities:
Net income (loss)$83,048 $(127,598)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization7,493 4,474 
Share-based compensation expense67,604 63,776 
Executive chairman long-term performance award
(144,617)26,388 
Non-cash postcombination compensation expense— 32,430 
Non-cash operating leases expense258 1,231 
Amortization of premium (accretion of discount) on short-term investments(1,823)(2,311)
Other(45)499 
Changes in operating assets and liabilities:
Accounts receivable(6,692)63 
Settlements receivable2,157 7,513 
Network incentives receivable19,639 (24,402)
Prepaid expenses and other assets2,478 14,467 
Accounts payable1,413 (3,239)
Revenue share payable2,780 (16,341)
Accrued expenses and other liabilities(6,484)(11,828)
Operating lease liabilities(1,075)(1,642)
Net cash provided by (used in) operating activities
26,134 (36,520)
Cash flows from investing activities:
Purchases of property and equipment(2,193)(668)
Capitalization of internal-use software(10,471)(6,395)
Business combination, net of cash acquired— (131,914)
Purchases of short-term investments— (279,548)
Maturities of short-term investments40,000 296,000 
Net cash provided by (used in) investing activities
27,336 (122,525)
Cash flows from financing activities:
Proceeds from exercise of stock options, including early exercised stock options, net of repurchase of early exercised unvested options108 2,299 
Proceeds from shares issued in connection with employee stock purchase plan1,629 1,775 
Taxes paid related to net share settlement of restricted stock units(20,287)(10,070)
Repurchase of common stock(91,162)(67,073)
Net cash used in financing activities(109,712)(73,069)
Net decrease in cash, cash equivalents, and restricted cash(56,242)(232,114)
Cash, cash equivalents, and restricted cash- Beginning of period989,472 1,191,646 
Cash, cash equivalents, and restricted cash - End of period$933,230 $959,532 

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Marqeta, Inc.
Financial and Operating Highlights
(in thousands, except per share data or as noted)
(unaudited)
20242023Year over Year Change Q2'24 vs Q2'23
Second QuarterFirst QuarterFourth QuarterThird QuarterSecond Quarter
Operating performance:
Net revenue$125,270 $117,968 $118,822 $108,891 $231,115 (46 %)
Costs of revenue45,917 33,807 35,589 36,383 146,506 (69 %)
Gross profit79,353 84,161 83,233 72,508 84,609 (6 %)
Gross margin63 %71 %70 %67 %37 %26  ppts
Operating (benefit) expenses:
Compensation and benefits103,166 94,990 95,790 102,433 113,521 (9 %)
Technology14,769 13,118 13,938 13,930 13,154 12 %
Professional services4,808 3,870 7,172 4,197 4,873 (1 %)
Occupancy and equipment1,204 1,094 1,076 1,074 1,057 14 %
Depreciation and amortization3,956 3,537 3,159 3,108 2,494 59 %
Marketing and advertising728 378 1,219 346 561 30 %
Other operating expenses3,418 3,905 3,804 3,833 5,103 (33 %)
Executive chairman long-term performance award(157,738)13,121 13,413 13,413 13,267 (1289 %)
Total operating (benefit) expenses
(25,689)134,013 139,571 142,334 154,030 (117 %)
Income (loss) from operations105,042 (49,852)(56,338)(69,826)(69,421)251 %
Other income (expense), net14,216 13,926 14,932 15,074 10,762 32 %
Income (loss) before income tax expense119,258 (35,926)(41,406)(54,752)(58,659)303 %
Income tax expense (benefit)150 134 (1,030)238 138 9 %
  Net income (loss)$119,108 $(36,060)$(40,376)$(54,990)$(58,797)303 %
Income (loss) per share - basic$0.23 $(0.07)$(0.08)$(0.10)$(0.11)309 %
Income (loss) per share - diluted$0.23 $(0.07)$(0.08)$(0.10)$(0.11)309 %
TPV (in millions)$70,627 $66,666 $61,979 $56,650 $53,615 32 %
Adjusted EBITDA$(1,817)$9,228 $3,292 $(2,062)$824 321 %
Adjusted EBITDA margin(1 %)8 %3 %(2 %)0.4 %(2  ppts)
Financial condition:
Cash and cash equivalents$924,730 $970,357 $980,972 $947,749 $950,157 (3 %)
Restricted cash$8,500 $8,500 $8,500 $7,800 $9,375 (9 %)
Short-term investments$228,833 $228,324 $268,724 $349,395 $432,354 (47 %)
Total assets$1,488,283 $1,558,361 $1,589,691 $1,603,249 $1,704,143 (13 %)
Total liabilities$345,908 $347,696 $346,296 $308,166 $331,528 4 %
Stockholders' equity$1,142,375 $1,210,665 $1,243,395 $1,295,083 $1,372,615 (17 %)
ppts = percentage points


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Marqeta, Inc.
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; share-based compensation expense; executive chairman long-term performance award; 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 and performance-based restricted stock units.
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; executive chairman long-term performance award; 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.


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The following table shows Marqeta's GAAP results reconciled to non-GAAP results included in this release:
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
GAAP net revenue$125,270 $231,115 $243,237 $448,456 
GAAP net income (loss)$119,108 $(58,797)$83,048 $(127,598)
GAAP net income (loss) margin95 %(25 %)34 %(28 %)
GAAP total operating (benefit) expenses$(25,689)$154,030 $108,323 $330,624 
GAAP net income (loss)$119,108 $(58,797)$83,048 $(127,598)
Depreciation and amortization expense3,956 2,494 7,493 4,474 
Share-based compensation expense(1)
36,291 33,789 67,604 66,667 
Executive chairman long-term performance award(1)
(157,738)13,267 (144,617)26,388 
Payroll tax expense related to share-based compensation702 638 1,867 1,278 
Acquisition-related expenses (2)
9,930 11,684 19,873 46,152 
Restructuring— 8,373 — 8,373 
Other income, net
(14,216)(10,762)(28,143)(22,434)
Income tax expense (benefit)150 138 284 (6,821)
Adjusted EBITDA$(1,817)$824 $7,409 $(3,521)
Adjusted EBITDA Margin(1 %)0.4 %3 %(1 %)
GAAP Total operating (benefit) expenses$(25,689)$154,030 $108,323 $330,624 
Depreciation and amortization expense(3,956)(2,494)(7,493)(4,474)
Share-based compensation expense(1)
(36,291)(33,789)(67,604)(66,667)
Executive chairman long-term performance award(1)
157,738 (13,267)144,617 (26,388)
Payroll tax expense related to share-based compensation(702)(638)(1,867)(1,278)
Restructuring— (8,373)— (8,373)
Acquisition-related expenses (2)
(9,930)(11,684)(19,873)(46,152)
Non-GAAP operating expenses$81,170 $83,785 $156,103 $177,292 
(1) Prior period amounts related to the Executive Chairman Long-Term Performance Award have been reclassified to conform to the current period presentation.
(2) 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.
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