Marqeta 'still on track' despite post-earnings stock dip: CEO
Marqeta (MQ) shares fell Thursday despite beating revenue estimates in their fourth quarter earnings. CEO Simon Khalaf joins Yahoo Finance Live to discuss why he believes the company is "still on track."
Khalaf explains Marqeta's core business –– card issuing and processing and dispute management services –– comprise the bulk of their client offerings. He adds that Marqeta works beyond financial services alone, with "embedded finance customers" also a component of the company's sales.
As the industry expands and competition increases, Khalaf says Marqeta aims to move into a space in the market where there are "only the new players, not the established players." He sees a key opportunity to focus the company's efforts on the "issuing side" of the embedded finance space –– an area with little competition currently.
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Editor's note: This article was written by Angel Smith
Video Transcript
JOSH LIPTON: Marqeta reporting fourth-quarter earnings that were in line with estimates and beating, though, on revenue. The stock is down in today's trade though. That's after a strong recent run. To talk more about the earnings report and what's next for the payments platform, we're joined now by Marqeta's CEO Simon Khalaf.
Simon, thank you so much for joining us today. I want to get front and center, Simon, right away to an issue I know investors are thinking about, which is, how quickly, Simon, are you going to be able to show GAAP profitability? What's kind of the pace there, Simon? Especially, as they'll note, your volumes continue to grow here at a healthy rate.
SIMON KHALAF: Absolutely. Thanks for having me. It's so good to be on Yahoo Finance. I was part of your team about five years ago. Anyway, yes, I mean, GAAP profitability, as we have spoken to investors on investor day, we're aiming for 2026. But we did achieve the EBITDA positive milestone that we put in front of our shareholders. So, we're still on track and we're very excited about the opportunity.
JULIE HYMAN: Something that I'm trying to understand-- full disclosure here, Simon-- is kind of where you guys sit, right? And the companies that are your clients, the likes of Square, a.k.a. Block, et cetera, what they're outsourcing to you versus what they're doing in-house, if you can sort of walk our viewers through that.
SIMON KHALAF: Sure, absolutely. So, we have a lot of customers that use us for many things. And at the core of the Marqeta offering is issuing and processing. So if you want to issue a payment card, Marqeta is the issuer and the entity that process that transaction. So whenever a consumer goes out and taps their card, we see the transaction and we authorize it and fund it, so on and so forth.
So, most of our customers-- I say all of our customers use basic processing. But we have many other services, such as banking and money movement services, risk, dispute management, and chargeback, all of these are called program management. So, we have other customers who are not in the financial services, that we call embedded finance customers, that use our entire suite. So it ranges, basically, on the type of customer we have.
JOSH LIPTON: I'm also interested, Simon. I want to talk briefly about the kind of competitive landscape here because there is competition for you already. You've got Fiserv and you've got newer entrants like Stripe. How, Simon, do you see the competitive environment sort of shifting? And how are you evolving with it?
SIMON KHALAF: Absolutely. I mean, the market is expanding. So where we have focused is on the fintech industry. And more recently, we're expanding into the embedded finance, which is the brands that are not in financial services that are going to offer financial services products. In that space, there is effectively only the new players, not the established players like Fiserv, TSYS, and others.
So, it's between ourselves and I'd say Stripe. But Stripe is more focused on the acquiring side, on the merchant side. We're on the issuing side. So we're kind of like the two companies that are approaching the market, the neo market, but from two sides of it. In terms of the competitive landscape, it's favorable to us.
I mean, we do things in milliseconds that others do not do fast. So, if you look at where we're going with the market and all the digital brands that a millisecond matters, that they only have a few choices, and we're one of the very few.
