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Marqeta First Quarter Net Revenue Jumps 54 Percent Year Over Year, Highlighting Strong, Continued Growth

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The global modern card issuing platform generated net revenue of $166 million in the first quarter of 2022, up 54 percent year-over-year, with a 53 percent growth in first quarter total processing volume and a 50 percent increase in gross profit

OAKLAND, Calif., May 11, 2022--(BUSINESS WIRE)--Marqeta, Inc. (NASDAQ: MQ), the global modern card issuing platform, today reported financial results for the first quarter ended March 31, 2022.

Total processing volume (TPV) was $37 billion for the quarter, with net revenue of $166 million. This represented an increase of 53% and 54%, respectively, from the same quarter of 2021. Gross profit of $75 million during the quarter grew 50% year over year, resulting in a margin of 45%. GAAP net loss was $61 million and Adjusted EBITDA loss was $10 million for the quarter ended March 31, 2022.

"Our results for the first quarter of 2022 put the fundamentals of Marqeta’s modern card issuing platform on strong display, as we powered our customers to new milestones of scale and enabled their global expansion, while launching new products and partners that further enrich the value we provide them," said Jason Gardner, Founder and CEO of Marqeta.

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, 2022

USD

% Change

Financial metrics:

Net revenue

$

166,102

54

%

Gross profit

$

74,726

50

%

Gross margin

45

%

Net loss

$

(60,598

)

372

%

Net loss margin

(36

) %

Net loss per share - basic and diluted

$

(0.11

)

10

%

Key operating metric and Non-GAAP financial measures:

Total Processing Volume (TPV) (in millions) 1

$

36,626

53

%

Adjusted EBITDA 2

$

(10,453

)

(735

)%

Adjusted EBITDA margin 2

(6

) %

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 and Adjusted EBITDA margin and a reconciliation of the net loss to Adjusted EBITDA.

Recent Business Updates:

Marqeta highlighted several recent business updates that demonstrate its current business momentum:

  • Marqeta announced its new RiskControl solution, an end-to-end risk management product suite for card issuers to combat payment fraud. RiskControl is designed to provide Marqeta’s customers with comprehensive risk, compliance, and fraud management capabilities across the cardholder lifecycle, allowing them to focus on their business growth. This product suite is anchored by Marqeta's new custom built Real-Time Decisioning tool.

  • Marqeta signed a new bank partnership with Evolve Bank & Trust, that will support the full range of Marqeta’s program management capabilities. Evolve is the fourth U.S. bank partner on the Marqeta platform, allowing the company to better match each new customer with the most suitable banking partner.

First Quarter 2022 Financial Results:

Net revenue increased by $58 million, or 54% year-over-year, rising to $166 million from $108 million in the first quarter of 2021 resulting from a 53% increase in TPV year-over-year.

Gross profit increased by 50% year-over-year, rising to $75 million, from $50 million in the first quarter of 2021 primarily due to our TPV growth. Gross margin was 45% in the first quarter of 2022.

Net loss increased by $48 million to $61 million in the quarter. Our increase in gross profit was offset by an increase in compensation, benefits and technology expenses as we continued our investment in our people and platform.

Total Processing Volume increased by 53% year-over-year, rising to $37 billion from $24 billion in the first quarter of 2021.

Adjusted EBITDA in the first quarter of 2022 was $(10) million, a decrease of $(12) million year-over-year. Adjusted EBITDA margin was (6%) in the first quarter of 2022.

Financial Guidance

The following summarizes Marqeta's guidance for the second quarter of 2022:

Second Quarter 2022

Net Revenue Growth

46 - 48%

Gross Profit Margin

40 - 41%

Adjusted EBITDA Margin (1)

Negative 10-11%

(1) See "Information Regarding Non-GAAP Measures" for the definition of Adjusted EBITDA and for information regarding non-availability of a forward reconciliation.

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 25, 2022, 8:59 p.m. Pacific time (11:59 p.m. Eastern time). The confirmation code for the replay is 13729086.

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 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; and statements made by Marqeta’ Founder and CEO. 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 the global COVID-19 pandemic on U.S. and global economies, our business, results of operations, financial condition, demand for our platform, sales cycles and customer retention; 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 TPV on its platform; the risk that consumers and customers will not perceive the benefits of Marqeta’s products as Marqeta expects; the risk that Marqeta's technology platform, including hosted solutions, do 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; the risk that changes in the regulatory landscape adversely affects the gross interchange or other revenue Marqeta earns or adversely affects the bank and network costs Marqeta incurs; the risk that Marqeta may be unable to maintain relationships with Issuing Banks and Card Networks; the direct and indirect effects of the significant military action against Ukraine launched by Russia on U.S. and global economies, our business, results of operations, financial condition, and demand for our platform; and the risk that Marqeta may be subject to additional risks such as inflation or currency fluctuations 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, 2021, 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 39 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,

2022

2021

Net revenue

$

166,102

$

107,983

Costs of revenue

91,376

58,126

Gross profit

74,726

49,857

Operating expenses:

Compensation and benefits

100,348

46,904

Technology

11,384

5,626

Professional services

4,770

4,196

Occupancy

1,115

1,086

Depreciation and amortization

979

907

Marketing and advertising

559

495

Other operating expenses

4,843

1,295

Total operating expenses

123,998

60,509

Loss from operations

(49,272

)

(10,652

)

Other income (expense), net

(11,677

)

(2,167

)

Loss before income tax expense

(60,949

)

(12,819

)

Income tax expense (benefit)

(351

)

19

Net loss

$

(60,598

)

$

(12,838

)

Net loss per share attributable to common stockholders, basic and diluted

$

(0.11

)

$

(0.10

)

Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted

542,565,992

130,841,306

Marqeta, Inc.

Condensed Consolidated Balance Sheets

(in thousands)

March 31,
2022

December 31,
2021

(unaudited)

Assets

Current assets:

Cash and cash equivalents

$

1,197,257

$

1,247,581

Restricted cash

7,800

7,800

Marketable securities

447,046

452,875

Accounts receivable, net

9,017

13,187

Settlements receivable, net

9,093

11,266

Network incentives receivable

45,721

30,399

Prepaid expenses and other current assets

43,789

35,617

Total current assets

1,759,723

1,798,725

Property and equipment, net

9,120

9,687

Operating lease right-of-use assets, net

10,748

11,296

Equity method investment

8,036

8,384

Other assets

5,856

2,286

Total assets

$

1,793,483

$

1,830,378

Liabilities and stockholders' equity

Current liabilities

Accounts payable

$

1,698

$

2,693

Revenue share payable

130,045

121,179

Accrued expenses and other current liabilities

102,146

114,096

Total current liabilities

233,889

237,968

Operating lease liabilities, net of current portion

11,618

12,427

Other liabilities

4,344

6,557

Total liabilities

249,851

256,952

Stockholders' equity :

Preferred stock

Common stock

54

54

Additional paid-in capital

2,029,745

1,993,055

Accumulated other comprehensive loss

(8,116

)

(2,230

)

Accumulated deficit

(478,051

)

(417,453

)

Total stockholders’ equity

1,543,632

1,573,426

Total liabilities and stockholders' equity

$

1,793,483

$

1,830,378

Marqeta, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

Three Months Ended March 31,

2022

2021

Cash flows from operating activities:

Net loss

$

(60,598

)

$

(12,838

)

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation and amortization

979

907

Share-based compensation expense

37,005

11,392

Non-cash operating leases expense

548

522

Amortization of premium on marketable securities

184

360

Impairment of other financial instruments

11,616

Other

282

2,324

Changes in operating assets and liabilities:

Accounts receivable

4,223

5,032

Settlements receivable

2,173

1,509

Network incentives receivable

(15,322

)

(12,055

)

Prepaid expenses and other assets

(21,256

)

(426

)

Accounts payable

(801

)

(43

)

Revenue share payable

8,866

14,122

Accrued expenses and other liabilities

(13,937

)

7,750

Operating lease liabilities

(721

)

(686

)

Net cash (used in) provided by operating activities

(46,759

)

17,870

Cash flows from investing activities:

Purchases of property and equipment

(612

)

(604

)

Purchases of marketable securities

(10,022

)

(7,002

)

Maturities of marketable securities

9,800

16,366

Net cash (used in) provided by investing activities

(834

)

8,760

Cash flows from financing activities:

Proceeds from exercise of stock options, including early exercised stock options

1,971

1,711

Taxes paid related to net share settlement of restricted stock units

(4,702

)

Payment of deferred offering costs

(1,144

)

Net cash (used in) provided by financing activities

(2,731

)

567

Net (decrease) increase in cash, cash equivalents, and restricted cash

(50,324

)

27,197

Cash, cash equivalents, and restricted cash- Beginning of period

1,255,381

228,233

Cash, cash equivalents, and restricted cash - End of period

$

1,205,057

$

255,430

Marqeta, Inc.

Financial and Operating Highlights

(in thousands, except per share data or as noted)

2022

2021

Year over
Year Change
Q1'22 vs
Q1'21

First Quarter

Fourth
Quarter

Third
Quarter

Second
Quarter

First Quarter

Operating performance:

Net revenue

$

166,102

$

155,414

$

131,511

$

122,266

$

107,983

54

%

Costs of revenue

91,376

79,615

72,438

75,291

58,126

57

%

Gross profit

74,726

75,799

59,073

46,975

49,857

50

%

Gross margin

45

%

49

%

45

%

38

%

46

%

(1) pps

Operating expenses:

Compensation and benefits

100,348

88,995

84,462

97,755

46,904

114

%

Technology

11,384

11,143

9,299

7,569

5,626

102

%

Professional services

4,770

5,712

4,703

3,831

4,196

14

%

Occupancy and equipment

1,115

1,097

1,091

907

1,086

3

%

Depreciation and amortization

979

967

786

874

907

8

%

Marketing and advertising

559

804

490

495

495

13

%

Other operating expenses

4,843

4,811

3,880

3,530

1,295

274

%

Total operating expenses

123,998

113,529

104,711

114,961

60,509

105

%

Loss from operations

(49,272

)

(37,730

)

(45,638

)

(67,986

)

(10,652

)

363

%

Other income (expense), net

(11,677

)

142

(57

)

(481

)

(2,167

)

439

%

Loss before income tax expense

(60,949

)

(37,588

)

(45,695

)

(68,467

)

(12,819

)

375

%

Income tax expense (benefit)

(351

)

(781

)

35

87

19

(1947

) %

Net loss

$

(60,598

)

$

(36,807

)

$

(45,730

)

$

(68,554

)

$

(12,838

)

372

%

Loss per share - basic and diluted

$

(0.11

)

$

(0.07

)

$

(0.08

)

$

(0.29

)

$

(0.10

)

10

%

TPV (in millions)

$

36,626

$

33,046

$

27,569

$

26,520

$

23,998

53

%

Adjusted EBITDA

$

(10,453

)

$

1,162

$

(4,939

)

$

(10,637

)

$

1,647

(735

) %

Adjusted EBITDA margin

(6

) %

1

%

(4

) %

(9

) %

2

%

(8) pps

Financial condition:

Cash and cash equivalents

$

1,197,257

$

1,247,581

$

1,260,220

$

1,579,287

$

247,630

383

%

Restricted cash

$

7,800

$

7,800

$

7,800

$

7,800

$

7,800

%

Marketable securities

$

447,046

$

452,875

$

408,954

$

105,053

$

140,145

219

%

Total assets

$

1,793,483

$

1,830,378

$

1,783,142

$

1,780,324

$

481,803

272

%

Total liabilities

$

249,851

$

256,952

$

209,802

$

194,338

$

193,497

29

%

Redeemable preferred stock

$

$

$

$

$

501,881

(100

) %

Stockholders' equity (deficit)

$

1,543,632

$

1,573,426

$

1,573,340

$

1,585,986

$

(213,575

)

(823

) %

pps = percentage points

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 and Adjusted EBITDA Margin 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; payroll tax related to share-based compensation; legal, financial, and tax due diligence costs related to potential acquisitions; income tax expense (benefit); and other expense (income) net, which consists of changes in the fair value of redeemable convertible preferred stock warrant liabilities (for periods prior to the IPO), realized foreign currency gains and losses, interest income from our marketable securities, our share of equity method investments’ profit or loss, and impairment of equity method investments or other financial instruments. 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 certain 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.

Adjusted EBITDA and Adjusted EBITDA Margin 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,

2022

2021

GAAP net revenue

$

166,102

$

107,983

GAAP net loss

$

(60,598

)

$

(12,838

)

GAAP net loss margin

(36

) %

(12

) %

GAAP net loss

$

(60,598

)

$

(12,838

)

Depreciation and amortization expense

979

907

Share-based compensation expense

37,005

11,392

Payroll tax expense related to share-based compensation

835

Other expense (income), net

11,677

2,167

Income tax expense (benefit)

(351

)

19

Adjusted EBITDA

$

(10,453

)

$

1,647

Adjusted EBITDA Margin

(6

) %

2

%

A reconciliation of Adjusted EBITDA to the comparable GAAP measure for the second quarter of 2022 is not available due to the challenges and impracticability with estimating some of the items as such items cannot be reasonably predicted and could be significant. Because of those challenges, reconciliations of such forward-looking non-GAAP financial measures are not available without unreasonable effort.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220511005845/en/

Contacts

IR Contact: Marqeta Investor Relations, IR@marqeta.com