Marqeta(US:MQ)2021-08-10 16:00Financial Performance - Total Processing Volume (TPV) for Q2 2021 reached $26.52 billion, a 76% increase from $15.08 billion in Q2 2020[133] - Net revenue for Q2 2021 was $52.9 million, representing a 76% increase compared to the same period in 2020[126] - Gross profit for Q2 2021 was $19.4 million, up 70% from the previous year[126] - The net loss for Q2 2021 was $68.55 million, compared to a net loss of $7.11 million in Q2 2020, resulting in a net loss margin of 56%[133] - Adjusted EBITDA for Q2 2021 was $(10.64) million, with an adjusted EBITDA margin of (9%) compared to (4%) in Q2 2020[133] - Net revenue for the three months ended June 30, 2021, was $122.3 million, a 76% increase from $69.4 million in the same period of 2020[155] - Total Processing Volume (TPV) for the three months ended June 30, 2021, reached $26.5 billion, up 76% from $15.1 billion in the same period of 2020[155] - Gross profit increased by $19.4 million, or 70%, for the three months ended June 30, 2021, resulting in a gross margin of 38%[162] - The net loss for the three months ended June 30, 2021, was $68.6 million, compared to a net loss of $7.1 million in the same period of 2020[170] - Total net revenue for the six months ended June 30, 2021, was $230.2 million, reflecting a 95% increase from $117.8 million in the same period of 2020[173] - Gross profit increased by $50.7 million, or 110%, for the six months ended June 30, 2021, with a gross margin of 42%, up from 39% in the same period of 2020[179] Operating Expenses - Operating expenses surged to $115.0 million for the three months ended June 30, 2021, a 234% increase from $34.4 million in the same period of 2020[163] - Operating expenses rose by $107.5 million, or 158%, for the six months ended June 30, 2021, primarily driven by a 175% increase in total compensation and benefits expenses[180] - Compensation and benefits expenses increased by $69.3 million, or 268%, for the three months ended June 30, 2021, primarily due to a rise in employee-related costs and share-based compensation[163] Revenue Sources - Interchange Fees are a key revenue component, calculated based on a percentage of card transaction amounts plus a fixed amount per transaction[139] - The company generated 72% of its net revenue from its largest customer, Square, during the three months ended June 30, 2021[170] - The company generated 73% of its net revenue from its largest customer, Square, during the six months ended June 30, 2021[187] - Total Payment Volume (TPV) for the top five customers grew by 101% for the six months ended June 30, 2021, while TPV from all other customers grew by 210% compared to the same period in 2020[175] Cash Flow and Liquidity - Cash and cash equivalents, along with marketable securities, totaled $1.7 billion as of June 30, 2021, sufficient to meet working capital needs for at least the next 12 months[195] - Net cash provided by operating activities was $5.8 million for the six months ended June 30, 2021, compared to $14.7 million in the same period in 2020[198] - Net cash provided by operating activities decreased for the six months ended June 30, 2021, compared to the same period in 2020, primarily due to increases in operating expenses and non-cash charges[200] - Net cash provided by investing activities increased for the six months ended June 30, 2021, primarily due to a decrease in purchases of marketable securities[202] - Net cash provided by financing activities increased for the six months ended June 30, 2021, primarily due to proceeds from the IPO, net of underwriters' commission and discounts[204] IPO and Capital Structure - The company received net proceeds of $1.3 billion from its IPO, after deducting underwriting discounts and commissions[121] - The company completed its IPO in June 2021, receiving aggregate proceeds of $1.3 billion after deducting underwriting discounts and commissions[194] Internal Controls and Risks - The company identified a material weakness in internal control over financial reporting related to the timely reconciliations of certain customer-related settlement bank accounts[235] - The company is in the process of implementing additional controls to address the identified material weakness[236] - No changes in internal control over financial reporting were identified that materially affected the company's controls during the reporting period[237] - Management acknowledges that controls can only provide reasonable assurance of achieving objectives[238] Market and Economic Factors - The American Rescue Plan's cash stimulus payments contributed to the increase in TPV and net revenue for the first half of 2021[126] - A hypothetical 100 basis point increase or decrease in interest rates would not have a material effect on the company's financial results[231] - As of June 30, 2021, a hypothetical 10% change in foreign currency exchange rates would not have had a material impact on the company's financial statements[232] - Most sales and operating expenses are denominated in U.S. dollars, indicating minimal foreign currency exchange risk[232]