Marqeta(MQ) - 2025 Q1 - Quarterly Results

Q1 2025 Financial Highlights and Business Updates Q1 2025 Key Financial Results Marqeta reported strong financial performance for Q1 2025, with significant year-over-year growth in Total Processing Volume (TPV), Net Revenue, and Gross Profit, alongside a substantial improvement in Net Loss and Adjusted EBITDA | Metric | Q1 2025 Value | YoY Change | Source | | :----------------------- | :------------ | :--------- | :----- | | Total Processing Volume (TPV) | $84 billion | +27% | [2] | | Net Revenue | $139 million | +18% | [2] | | Gross Profit | $99 million | +17% | [2] | | GAAP Net Loss | ($8 million) | -77% | [2] | | Adjusted EBITDA | $20 million | N/A | [2] | - Interim CEO and CFO, Mike Milotich, highlighted the company's ability to execute growth plans while increasing profitability[3] Recent Business Momentum Marqeta demonstrated continued business momentum through new customer program migrations and launches, expanding its portfolio across diverse use cases and geographies - Marqeta is migrating the Perpay Credit Card, an unsecured credit card designed to help users build credit by automating payments from paychecks, chosen for speed, flexibility, and scale[3] - Marqeta launched the Bitpanda Card, a debit card supporting cryptocurrencies and fiat currencies, across 26 European countries and 10 currencies, marking Marqeta's first live program in 2025 providing program management services in Europe[3] Detailed First Quarter 2025 Financial Performance Operating Highlights Summary The operating highlights table provides a detailed comparison of key financial and operating metrics for Q1 2025 versus Q1 2024, showing strong growth in revenue and profitability while reducing net loss | Metric | Q1 2025 | Q1 2024 | % Change | | :----------------------------- | :-------- | :-------- | :------- | | Net revenue (in thousands) | $139,073 | $117,968 | 18% | | Gross profit (in thousands) | $98,679 | $84,161 | 17% | | Gross margin | 71% | 71% | — ppts | | Total operating expenses (in thousands) | $117,217 | $134,013 | (13%) | | Net loss (in thousands) | ($8,260) | ($36,060) | (77%) | | Net loss margin | (6%) | (31%) | 25 ppts | | Net loss per share - basic | ($0.02) | ($0.07) | (71%) | | Total Processing Volume (TPV) (in millions) | $84,472 | $66,666 | 27% | | Adjusted EBITDA (in thousands) | $20,081 | $9,228 | 118% | | Adjusted EBITDA margin | 14% | 8% | 6 ppts | | Non-GAAP operating expenses (in thousands) | $78,598 | $74,933 | 5% | Financial Results Analysis Marqeta's Q1 2025 financial results were characterized by robust TPV growth driving revenue and gross profit increases, coupled with lower operating expenses, leading to a significant reduction in net loss and a substantial rise in Adjusted EBITDA - Total Processing Volume (TPV) increased by 27% year-over-year to $84 billion, up from $67 billion in Q1 2024[5] - Net Revenue grew by 18% year-over-year to $139 million, primarily due to increased volumes, partially offset by an unfavorable mix from faster growth in processing-only card programs[5] - Gross Profit rose by 17% year-over-year to $99 million, driven by TPV growth, maintaining a 71% Gross Margin[6] - Net Loss improved by $28 million year-over-year to $8 million, with Net Loss margin improving by 25 percentage points to (6)%, attributed to gross profit growth and reduced operating expenses[6] - Adjusted EBITDA increased by $11 million year-over-year to $20 million, with Adjusted EBITDA margin rising by 6 percentage points to 14%[7] Financial Guidance and Outlook Q2 and FY 2025 Guidance Marqeta provided financial guidance for the second quarter and full fiscal year 2025, projecting continued growth in Net Revenue and Gross Profit, along with positive Adjusted EBITDA margins | Metric | Second Quarter 2025 | Fiscal Year 2025 | | :------------------ | :------------------ | :--------------- | | Net Revenue Growth | 11 - 13% | 13 - 15% | | Gross Profit Growth | 23 - 25% | 14 - 16% | | Adjusted EBITDA Margin | 10 - 11% | 10 - 11% | - The Net Revenue guidance reflects the accounting impact of a renegotiated platform partner agreement, which does not affect Gross Profit[8] Conference Call Information Marqeta scheduled a live conference call to discuss its Q1 2025 financial results, with details provided for dial-in and webcast access, along with replay information - Marqeta hosted a live conference call on May 7, 2025, at 1:30 p.m. Pacific time (4:30 p.m. Eastern time)[9] - Conference call details included toll-free and direct dial-in numbers, and a live webcast available at http://investors.marqeta.com[9](index=9&type=chunk) - A telephone replay was available until May 14, 2025, with specified dial-in numbers and a confirmation code[10] Forward-Looking Statements Disclaimer This section outlines the nature of forward-looking statements within the press release, emphasizing that actual results may differ due to various risks and uncertainties detailed in SEC filings - The press release contains forward-looking statements regarding guidance, business plans, customer growth, partnerships, and product capabilities, subject to risks and uncertainties[11] - Risks include uncertainties related to business, accounting treatment changes, inability to attract/retain customers, platform operation issues, competition, regulatory changes, and macroeconomic factors[11] - Detailed risk factors are available in Marqeta's Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q filed with the SEC[11] Company Information and Disclosures Disclosure Information Marqeta informs investors and the public about its various channels for disclosing material financial and business information, including SEC filings, press releases, and social media - Marqeta uses its investor relations website, SEC filings, press releases, public conference calls, and webcasts to announce material financial information[13] - The company also uses social media channels (Marqeta X feed, Instagram, Facebook, LinkedIn) to communicate with customers and the public, noting that information posted there could be deemed material[13] Use of Non-GAAP Financial Measures Introduction This section introduces the use of non-GAAP financial measures, stating that reconciliations to GAAP are provided and explaining their purpose for management's evaluation of performance - Reconciliations of non-GAAP financial measures to the most directly comparable GAAP results are included at the end of the press release[14] - A description of these non-GAAP measures, including management's reasons for using them, is provided in the 'Information Regarding Non-GAAP Financial Measures' section[14] About Marqeta, Inc. Marqeta is a global modern card issuing platform that enables companies to embed financial services into their branded experiences, offering flexible, real-time data-driven solutions with built-in compliance and security - Marqeta's platform allows businesses to build and embed financial services, unlocking new growth opportunities and user experiences[15] - The platform provides control over financial solution building, enabling real-time data utilization for personalized solutions, from consumer loyalty to capital efficiency[15] - Marqeta's platform processed nearly $300 billion in annual payments volume in 2024 and is certified to operate in over 40 countries worldwide[15] Condensed Consolidated Financial Statements Statements of Operations The Condensed Consolidated Statements of Operations present Marqeta's revenue, costs, operating expenses, and net loss for the three months ended March 31, 2025, compared to the prior year, highlighting a significant reduction in net loss | Metric | Q1 2025 (in thousands) | Q1 2024 (in thousands) | | :-------------------------- | :--------------------- | :--------------------- | | Net revenue | $139,073 | $117,968 | | Costs of revenue | $40,394 | $33,807 | | Gross profit | $98,679 | $84,161 | | Total operating expenses | $117,217 | $134,013 | | Loss from operations | ($18,538) | ($49,852) | | Other income, net | $10,513 | $13,926 | | Net loss | ($8,260) | ($36,060) | | Net loss per share - Basic | ($0.02) | ($0.07) | - Compensation and benefits decreased from $94,990 thousand in Q1 2024 to $86,050 thousand in Q1 2025, contributing to lower total operating expenses[18] - The Executive chairman long-term performance award expense was $0 in Q1 2025, down from $13,121 thousand in Q1 2024[18] Balance Sheets The Condensed Consolidated Balance Sheets provide a snapshot of Marqeta's financial position as of March 31, 2025, compared to December 31, 2024, showing changes in assets, liabilities, and stockholders' equity | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------- | :---------------------------- | :------------------------------- | | Cash and cash equivalents | $830,897 | $923,016 | | Total current assets | $1,134,657 | $1,249,297 | | Total assets | $1,349,627 | $1,463,204 | | Revenue share payable | $209,415 | $193,399 | | Total current liabilities | $356,973 | $370,985 | | Total liabilities | $362,367 | $378,186 | | Total stockholders' equity | $987,260 | $1,085,018 | - Cash and cash equivalents decreased from $923,016 thousand at year-end 2024 to $830,897 thousand by Q1 2025[21] - Revenue share payable increased from $193,399 thousand to $209,415 thousand, indicating higher revenue-related obligations[21] Statements of Cash Flows The Condensed Consolidated Statements of Cash Flows detail the cash generated from or used in operating, investing, and financing activities for the three months ended March 31, 2025, showing a net decrease in cash, cash equivalents, and restricted cash | Cash Flow Activity | Q1 2025 (in thousands) | Q1 2024 (in thousands) | | :-------------------------------- | :--------------------- | :--------------------- | | Net cash provided by operating activities | $9,987 | $426 | | Net cash provided by investing activities | $14,861 | $33,502 | | Net cash used in financing activities | ($116,967) | ($44,543) | | Net decrease in cash, cash equivalents, and restricted cash | ($92,119) | ($10,615) | - Operating activities provided $9,987 thousand in cash in Q1 2025, a significant increase from $426 thousand in Q1 2024[23] - Financing activities used substantially more cash in Q1 2025 ($116,967 thousand) compared to Q1 2024 ($44,543 thousand), primarily due to increased repurchase of common stock[23] Supplemental Financial Data Quarterly Financial and Operating Trends This section provides a comprehensive overview of Marqeta's financial and operating performance across multiple quarters, highlighting trends in revenue, profitability, expenses, and key metrics like TPV and Adjusted EBITDA | Metric | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | Q1 2024 | YoY Change Q1'25 vs Q1'24 | | :----------------------------- | :-------- | :-------- | :-------- | :-------- | :-------- | :------------------------ | | Net revenue (in thousands) | $139,073 | $135,790 | $127,967 | $125,270 | $117,968 | 18 % | | Gross profit (in thousands) | $98,679 | $98,202 | $90,132 | $79,353 | $84,161 | 17 % | | Gross margin | 71 % | 72 % | 70 % | 63 % | 71 % | — ppts | | Total operating expenses (in thousands) | $117,217 | $135,628 | $132,363 | ($25,689) | $134,013 | (13 %) | | Net (loss) income (in thousands) | ($8,260) | ($27,119) | ($28,643) | $119,108 | ($36,060) | (77 %) | | TPV (in millions) | $84,472 | $79,913 | $73,899 | $70,627 | $66,666 | 27 % | | Adjusted EBITDA (in thousands) | $20,081 | $12,663 | $9,019 | ($1,817) | $9,228 | 118 % | | Adjusted EBITDA margin | 14 % | 9 % | 7 % | (1 %) | 8 % | 6 ppts | | Cash and cash equivalents (in thousands) | $830,897 | $923,016 | $886,417 | $924,730 | $970,357 | (14 %) | - TPV has shown consistent quarter-over-quarter growth, increasing from $66,666 million in Q1 2024 to $84,472 million in Q1 2025[25] - Adjusted EBITDA has significantly improved, moving from a negative value in Q2 2024 to $20,081 thousand in Q1 2025, with a corresponding increase in Adjusted EBITDA margin[25] Reconciliation of GAAP to Non-GAAP Measures Non-GAAP Measures Definitions This section defines Marqeta's non-GAAP financial measures, including Adjusted EBITDA, Adjusted EBITDA Margin, and Non-GAAP operating expenses, explaining their calculation and why management uses them to evaluate core operating performance - Adjusted EBITDA is defined as net loss adjusted for depreciation and amortization, share-based compensation, executive chairman long-term performance award, payroll tax, restructuring costs, acquisition-related expenses, income tax, and other income, net[28] - Adjusted EBITDA is used by management and the board to evaluate core operating results and efficiencies, and as an input for employee bonus plans[28] - Non-GAAP operating expenses exclude similar non-cash and one-time items from total operating expenses to provide a clearer view of ongoing operational costs[30] GAAP to Non-GAAP Reconciliation Tables This section provides detailed tables reconciling Marqeta's GAAP Net Loss and Total Operating Expenses to their respective non-GAAP counterparts, Adjusted EBITDA and Non-GAAP Operating Expenses, for Q1 2025 and Q1 2024 | Metric | Q1 2025 (in thousands) | Q1 2024 (in thousands) | | :------------------------------------------ | :--------------------- | :--------------------- | | GAAP Net loss | ($8,260) | ($36,060) | | Depreciation and amortization expense | $5,331 | $3,537 | | Share-based compensation expense | $25,915 | $31,313 | | Executive chairman long-term performance award | — | $13,121 | | Payroll tax expense related to share-based compensation | $777 | $1,165 | | Acquisition-related expenses | $4,238 | $9,944 | | Restructuring and other one-time costs | $2,358 | — | | Other income, net | ($10,513) | ($13,926) | | Income tax expense | $235 | $134 | | Adjusted EBITDA | $20,081 | $9,228 | | Adjusted EBITDA Margin | 14 % | 8 % | | Metric | Q1 2025 (in thousands) | Q1 2024 (in thousands) | | :------------------------------------------ | :--------------------- | :--------------------- | | GAAP Total operating expenses | $117,217 | $134,013 | | Depreciation and amortization expense | ($5,331) | ($3,537) | | Share-based compensation expense | ($25,915) | ($31,313) | | Executive chairman long-term performance award | — | ($13,121) | | Payroll tax expense related to share-based compensation | ($777) | ($1,165) | | Acquisition-related expenses | ($4,238) | ($9,944) | | Restructuring and other one-time costs | ($2,358) | — | | Non-GAAP operating expenses | $78,598 | $74,933 | - A forward reconciliation of Adjusted EBITDA margin to GAAP is not available for Q2 and full year 2025 due to the impracticability of estimating certain items[35]