A few months ago, I discussed how Marqeta, Inc. (NASDAQ: MQ ) stock would be stuck in another limbo as the company dealt with increased regulatory scrutiny that clouded its near-term outlook.My goal is to help you find the companies of tomorrow.I am a long-term growth investor in search of innovative companies that make the world a better place. My investment strategy revolves around finding what I call "divergent stocks" — disruptive companies that have strong fundamentals and long growth runways, but depr ...

Marqeta, Inc. (NASDAQ:MQ) Q4 2024 Earnings Conference Call February 26, 2025 4:30 PM ET Company Participants Stacey Finerman - Vice President of Investor Relations Mike Milotich - Interim Chief Executive Officer & Chief Financial Officer Conference Call Participants Tien-Tsin Huang - JPMorgan Timothy Chiodo - UBS Darrin Peller - Wolfe Research Andrew Bauch - Wells Fargo Sanjay Sakhrani - KBW Chris Kennedy - William Blair Operator Ladies and gentlemen, welcome to Marqeta, Inc.’s Fourth Quarter 2024 Earnings ...

Marqeta posted solid fourth-quarter results highlighting its growth in processing volume, but faced challenges due to changes in a key contract.Marqeta (MQ -6.65%), a financial services company known for its innovative credit and payment card issuing platform, reported solid fourth-quarter results on Feb. 26. Revenue increased 14% to $136 million, surpassing analyst predictions of $132 million. However, its annual revenue dropped 25% due to contract changes. The quarter was notable for the company's strong ...

Financial Performance - Total net revenue for the year ended December 31, 2024, was $507.0 million, a decrease of 25% from $676.2 million in 2023 and a decrease of 10% from $748.2 million in 2022[117]. - Total Payment Volume (TPV) for the year ended December 31, 2024, was $291.1 billion, an increase of 31% from $222.3 billion in 2023 and an increase of 34% from $166.3 billion in 2022[118]. - The company has experienced significant growth in the number of customers and card programs managed, but future net revenue growth depends on attracting new customers and retaining existing ones[121]. - The company relies heavily on a small number of significant customers, including Block, and any loss or decline in revenue from these relationships could adversely affect financial results[115]. - The company has a history of net losses and may not achieve or sustain profitability in the future[115]. - Block accounted for 47%, 68%, and 71% of the company's net revenue for the years ended December 31, 2024, 2023, and 2022, respectively[126]. - The company reported a net income of $27.3 million for the year ended December 31, 2024, primarily due to the forfeiture of the Executive Chairman Long-Term Incentive Award, while net losses were $223.0 million and $184.8 million for 2023 and 2022, respectively[129]. - As of December 31, 2024, the accumulated deficit was approximately $797.9 million, down from $825.2 million as of December 31, 2023[129]. - The company expects to continue incurring net losses for the foreseeable future due to increasing operating expenses related to personnel and platform enhancements[129]. Platform and Product Development - Total processing volume (TPV) on the Marqeta Platform reached $291.1 billion in 2024, reflecting a year-over-year growth of 31% from $222.3 billion in 2023[18]. - The platform supports a combined offering of debit, prepaid, and credit cards, allowing customers to create multiple card programs on a single platform[25]. - Marqeta introduced the UX Toolkit in 2024, enabling customers to create branded front-end experiences with pre-built UI components, optimizing development resources[40]. - The company launched Portfolio Migration in 2024, simplifying the upgrade of existing card programs onto its platform with an automated migration tool[44]. - Marqeta Flex, announced in 2024 and expected to release in 2025, aims to transform buy now, pay later (BNPL) options within payment apps, enhancing consumer access to personalized BNPL options[45]. - Marqeta's platform enables dynamic spend controls and Just-in-Time Funding (JIT Funding), enhancing transaction processing control for customers[32]. - Marqeta's RiskControl product mitigates risk and compliance concerns while providing real-time decisioning capabilities to customers[36]. - The company is incorporating AI solutions into its platform, which may increase cybersecurity risks[148]. - The company announced new technologies in fiscal 2024, including portfolio migration, UX Toolkit, and Marqeta Flex, with net revenue growth dependent on increasing customer adoption[157]. - The company acquired Power Finance in Q1 2023 and publicly launched its credit card issuing capabilities in October 2023, with revenue growth reliant on customer usage of these capabilities[159]. Customer and Market Dynamics - The company serves customers across various industries, including financial services, on-demand services, and e-commerce enablement, with a focus on embedded finance as a growth driver[52]. - The company competes in a large and evolving market, focusing on factors such as pricing, program types, and industry expertise to differentiate from competitors[74]. - The company acknowledges the need for high-quality customer support to retain existing customers and attract new ones, as failure in this area could harm its reputation[155]. - The company may experience high attrition and turnover rates, which could adversely affect its business and strategic objectives[186]. Regulatory and Compliance Risks - The company is subject to various laws and regulations, including those related to consumer protection, privacy, and data security, which may increase compliance costs[85][87]. - The company is subject to various regulations and compliance requirements, which could result in additional costs and impact business operations[115]. - The company has implemented an Anti-Money Laundering (AML) program to comply with regulations and manage risks associated with illicit activities[96]. - The Retail Payment Activities Act (RPAA) will require payment service providers, including a subsidiary of the company, to comply with new regulations by September 8, 2025[212]. - Regulatory scrutiny over banks sponsoring financial technology programs increased in fiscal 2024, leading to fewer program launches than projected, adversely affecting operational results[213]. - The Federal Banking Agencies have issued enforcement actions regarding partnerships between banks and financial technology companies, which may affect the company's operations[215]. - New laws or regulations could lead to significant compliance costs and management attention, potentially altering relationships with Issuing Banks[216]. - The regulation of cryptocurrency is rapidly evolving, which may impact the net revenue associated with cryptocurrency business customers[217]. Strategic Relationships and Agreements - Marqeta's contracts with Issuing Banks entitle the company to 100% of the Interchange Fees generated from customer card programs, which are shared with customers through Revenue Share payments[65]. - The fees paid to Issuing Banks are typically structured based on volume tiers, with fees as a percentage of processing volume declining as processing volumes grow[63]. - Marqeta has strategic agreements with major Card Networks, including Mastercard and Visa, which provide tiered incentives based on processing volumes routed through their networks[70][71]. - The current term of the strategic relationship agreement with Mastercard expires in 2028, with potential early termination if certain processing volume milestones are achieved[70]. - As of February 2023, the card partner agreement with Visa has been extended for an additional five years[71]. - The current term of the contract with PULSE Network expires in 2028 and automatically renews annually unless either party provides notice of intent not to renew[72]. - The company relies on relationships with Issuing Banks and Card Networks, with potential risks if these relationships are not maintained[136]. Operational Challenges - The company has experienced performance issues and system failures that could adversely affect business operations and financial condition[140]. - The company relies on third-party vendors for certain services, and any disruptions could significantly impact its platform performance[197]. - The company may incur losses from payment transaction settlements due to errors in processing, chargebacks, or insufficient customer pre-funding[174]. - The company is expanding internationally, with offices in the U.S., Poland, and the U.K., but faces increased business, economic, and regulatory risks in new markets[171]. - The company may experience difficulties in hiring and retaining qualified personnel, which could impact its operational efficiency and future growth[181]. - The company anticipates potential impacts on foreign national employees' ability to travel and obtain visas, which could affect workforce retention[183]. - The company has $1.1 billion in cash and highly liquid short-term investments on its balance sheet, but may seek additional funds for product development and operational expansion[187]. - The company may require additional capital to support business growth, and disruptions in credit markets could affect funding availability[188]. - The company faces risks related to regulatory compliance, which could result in additional costs and operational challenges[207]. - The company has indemnification provisions in various agreements that could expose it to substantial liability[201]. - The company may not successfully integrate acquired businesses or technologies, which could dilute stockholder value[192]. - The company’s liability insurance may not cover all potential claims, leading to unanticipated costs[196].

MARQETA REPORTS FOURTH QUARTER AND FULL YEAR 2024 FINANCIAL RESULTS The global modern card issuing platform's fourth quarter total processing volume grew 29 percent year-over-year, generating 18% growth in Gross Profit. OAKLAND, Calif. – February 26, 2025 - Marqeta, Inc. (NASDAQ: MQ), the global modern card issuing platform, today reported financial results for the fourth quarter and full year ended December 31, 2024. Total processing volume (TPV) was $80 billion for the quarter, representing a 29% year-ove ...

Core Insights - Analysts project that Marqeta (MQ) will report a quarterly loss of $0.06 per share, reflecting a 25% increase year over year [1] - Revenue estimates for Marqeta are set at $131.75 million, indicating a 10.9% increase from the same quarter last year [1] - The consensus EPS estimate has remained unchanged over the past 30 days, suggesting a reassessment of projections by covering analysts [1] Revenue Estimates - Total platform services, net revenue is expected to reach $125.73 million, showing a year-over-year change of +10.6% [4] - Other services revenue is projected at $5.96 million, indicating a year-over-year increase of +16.2% [4] Processing Volume - Total Processing Volume (TPV) is anticipated to be $77.32 billion, compared to $61.98 billion reported in the same quarter of the previous year [5] Stock Performance - Marqeta shares have decreased by -3.4% over the past month, while the Zacks S&P 500 composite has declined by -1.8% [6] - Marqeta holds a Zacks Rank 3 (Hold), suggesting it is expected to closely follow overall market performance in the near term [6]

Group 1 - The article introduces FutureRich Investing as a new contributing analyst to Seeking Alpha, encouraging readers to share their investment ideas for publication and potential earnings [1] - The author identifies as a value dividend investor focused on long-term compounding, emphasizing the strategy of investing in heavily undervalued companies with significant upside potential [2] - The author has a long-term investment approach, specializing in growth dividend companies to eventually rely on dividends for income [2] Group 2 - The article includes a disclosure stating that past performance does not guarantee future results and that no specific investment recommendations are provided [3] - It clarifies that Seeking Alpha's analysts are third-party authors, which may include both professional and individual investors who might not be licensed or certified [3]

Core Viewpoint - Bragar Eagel & Squire, P.C. is investigating potential claims against Marqeta, Inc. due to a class action complaint alleging breaches of fiduciary duties by the board of directors during a specified class period [1][2] Summary by Relevant Sections Legal Investigation - The investigation is focused on whether Marqeta's board of directors breached their fiduciary duties to the company [1] - A class action complaint was filed on December 9, 2024, covering a class period from May 7, 2024, to November 4, 2024 [1] Allegations in the Lawsuit - The lawsuit claims that Marqeta made false and misleading statements regarding its business outlook, specifically underestimating regulatory challenges [2] - It is alleged that Marqeta would need to cut its guidance for the fourth quarter of 2024 as a result of these challenges [2] - The lawsuit asserts that the public statements made by the defendants were materially false and misleading throughout the relevant period [2] Contact Information for Stakeholders - Long-term stockholders of Marqeta are encouraged to reach out for more information regarding the claims or their rights [3]

Core Viewpoint - A lawsuit has been filed against Marqeta, Inc. and its senior executives for potential violations of federal securities laws, specifically under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 [1][2]. Group 1: Lawsuit Details - The lawsuit is pending in the U.S. District Court for the Northern District of California, captioned Wai v. Marqeta, Inc., et al., No. 24-cv-8874 [2]. - Investors have until February 7, 2025, to request to be appointed to lead the case [2]. Group 2: Company Background - Marqeta is a financial technology company that provides a card issuing platform, allowing businesses to create and manage customized payment cards [3]. - The company claimed to attract and retain customers while achieving operational efficiencies due to investments in its compliance infrastructure [3]. Group 3: Allegations - It is alleged that Marqeta faced longer customer onboarding timelines due to increased regulatory scrutiny and insufficient investments in its compliance apparatus at the time of its statements [4]. Group 4: Stock Performance - Following the disclosure of increased regulatory scrutiny and a cut in the full year 2025 growth outlook on November 4, 2024, Marqeta's stock price fell over 42%, from $5.95 per share to $3.42 per share [5].

Core Viewpoint - A class action lawsuit has been filed against Marqeta, Inc. concerning allegations of securities fraud and unlawful business practices [2][3]. Group 1: Lawsuit Details - The lawsuit involves Marqeta and certain officers and/or directors, with a deadline of February 7, 2025, for shareholders to apply as Lead Plaintiff [2]. - Investors are encouraged to contact Pomerantz LLP for more information regarding the lawsuit [1]. Group 2: Financial Performance - On November 4, 2024, Marqeta reported weaker-than-expected financial results for Q3 2024 and provided a fourth quarter guidance that indicated changes due to increased scrutiny in the banking environment [3]. - Following the announcement, Marqeta's stock price dropped by $2.53, or 42.52%, closing at $3.42 per share on November 5, 2024 [3].