[Note About Forward-Looking Statements](index=3&type=section&id=Note%20About%20Forward-Looking%20Statements) This section outlines that the Quarterly Report contains forward-looking statements subject to risks and uncertainties that may cause actual results to differ materially - The report contains forward-looking statements regarding future financial performance, product scaling, growth management, and operational expansion, subject to substantial risks and uncertainties[9](index=9&type=chunk)[10](index=10&type=chunk)[11](index=11&type=chunk) [Part I - Financial Information](index=5&type=section&id=Part%20I%20-%20Financial%20Information) [Item 1. Condensed Consolidated Financial Statements](index=5&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) This section presents Marqeta's unaudited condensed consolidated financial statements and detailed notes for periods ended June 30, 2025, and December 31, 2024 [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Balance Sheet Data | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Total Assets | $1,214,590 | $1,463,204 | | Total Liabilities | $371,157 | $378,186 | | Total Stockholders' Equity | $843,433 | $1,085,018 | - Total assets decreased by **$248.6 million** from December 31, 2024, to June 30, 2025, primarily due to a significant reduction in cash and cash equivalents and short-term investments[15](index=15&type=chunk) [Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20(Loss)) Income Statement Data | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net revenue | $150,392 | $125,270 | $289,465 | $243,237 | | Gross profit | $104,061 | $79,353 | $202,740 | $163,512 | | Net (loss) income | $(647) | $119,108 | $(8,907) | $83,048 | | Basic EPS | $(0.00) | $0.23 | $(0.02) | $0.16 | | Diluted EPS | $(0.00) | $0.23 | $(0.02) | $0.16 | - The company reported a net loss for both the three and six months ended June 30, 2025, a significant decline from net income in the prior year periods, primarily due to the absence of the Executive Chairman long-term performance award benefit and increased operating expenses[18](index=18&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Stockholders' Equity Data | Metric (in thousands) | Balance as of Dec 31, 2024 | Balance as of Jun 30, 2025 | | :-------------------- | :------------------------- | :------------------------- | | Total Stockholder's Equity | $1,085,018 | $843,433 | | Common Stock Shares | 504,296 | 449,459 | | Additional Paid-in Capital | $1,883,190 | $1,650,305 | | Accumulated Deficit | $(797,908) | $(806,815) | - Total stockholders' equity decreased by **$241.6 million** from December 31, 2024, to June 30, 2025, primarily driven by significant common stock repurchases totaling **$275.2 million** and a net loss of **$8.9 million** for the six months ended June 30, 2025[21](index=21&type=chunk)[24](index=24&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash Flow Data | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $22,534 | $26,134 | | Net cash provided by investing activities | $75,719 | $27,336 | | Net cash used in financing activities | $(288,546) | $(109,712) | | Net decrease in cash, cash equivalents, and restricted cash | $(190,293) | $(56,242) | | Cash, cash equivalents, and restricted cash - End of period | $741,223 | $933,230 | - Net cash used in financing activities significantly increased to **$288.5 million** for the six months ended June 30, 2025, primarily due to substantial common stock repurchases, leading to a larger net decrease in cash, cash equivalents, and restricted cash compared to the prior year[24](index=24&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) [1. Business Overview and Basis of Presentation](index=11&type=section&id=1.%20Business%20Overview%20and%20Basis%20of%20Presentation) This note describes Marqeta's business as a digital payment technology provider and its financial position, including an accumulated deficit - Marqeta, Inc. provides digital payment technology, offering a modern card issuing platform that enables customers to create customized payment card programs and primarily earns revenue from processing card transactions[29](index=29&type=chunk)[30](index=30&type=chunk) - The company has an accumulated deficit of **$806.8 million** as of June 30, 2025, and expects to incur net losses for the foreseeable future due to investments in new products, customer acquisition, and international expansion[34](index=34&type=chunk) [2. Summary of Significant Accounting Policies](index=12&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) This note details Marqeta's significant accounting policies, including a revised approach for network incentives and evaluation of new FASB ASUs - Effective in Q2 2025, Marqeta revised its accounting policy for network incentives, now estimating and recognizing incentives based on expected cumulative rates, resulting in **$6.8 million** higher Card Network incentives for the three months ended June 30, 2025[37](index=37&type=chunk) - The company is evaluating the operational and financial reporting implications of new FASB ASUs 2023-09 (Income Tax Disclosures, effective 2025) and 2024-03 (Expense Disaggregation Disclosures, effective 2027)[39](index=39&type=chunk)[41](index=41&type=chunk) [3. Revenue](index=13&type=section&id=3.%20Revenue) This note disaggregates Marqeta's net revenue into platform services and other services, highlighting growth drivers Revenue Disaggregation | Revenue Type (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Platform services revenue, net | $143,135 | $119,271 | $275,004 | $233,205 | | Other services revenue | $7,257 | $5,999 | $14,461 | $10,032 | | Total net revenue | $150,392 | $125,270 | $289,465 | $243,237 | - Total net revenue increased by **20%** for the three months and by **19%** for the six months ended June 30, 2025, compared to the respective prior year periods, primarily driven by growth in platform services[42](index=42&type=chunk) [4. Business Combinations](index=14&type=section&id=4.%20Business%20Combinations) This note details Marqeta's acquisition of TransactPay, expanding its services in the UK and Europe - On July 31, 2025, Marqeta completed the acquisition of TransactPay for **€46.0 million** in cash, with up to **€5.0 million** in contingent consideration, to provide BIN Sponsorship and E-Money Licensing services[46](index=46&type=chunk) [5. Intangible Assets, net](index=14&type=section&id=5.%20Intangible%20Assets%2C%20net) This note provides a summary of Marqeta's intangible assets, primarily developed technology, and their net value Intangible Assets Summary | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Developed technology | $41,000 | $41,000 | | Accumulated amortization | $(14,155) | $(11,226) | | Intangible assets, net | $26,845 | $29,774 | - Net intangible assets decreased to **$26.8 million** as of June 30, 2025, from **$29.8 million** at December 31, 2024, due to ongoing amortization of developed technology[47](index=47&type=chunk) [6. Short-term Investments](index=14&type=section&id=6.%20Short-term%20Investments) This note details Marqeta's short-term investments, primarily U.S. treasury securities, and their fair value Short-term Investments Summary | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Total short-term investments (Fair Value) | $88,865 | $179,409 | | U.S. treasury securities | $79,993 | $168,900 | | Asset-backed securities | $8,872 | $10,509 | - Short-term investments, classified as available-for-sale, significantly decreased from **$179.4 million** at December 31, 2024, to **$88.9 million** at June 30, 2025, with U.S. treasury securities comprising the majority[49](index=49&type=chunk)[50](index=50&type=chunk) [7. Fair Value Measurements](index=15&type=section&id=7.%20Fair%20Value%20Measurements) This note presents Marqeta's assets measured at fair value, including cash equivalents and short-term investments Fair Value Assets Summary | Asset Type (in thousands) | June 30, 2025 Total Fair Value | December 31, 2024 Total Fair Value | | :------------------------ | :----------------------------- | :--------------------------------- | | Cash equivalents | $491,051 | $751,429 | | Short-term investments | $88,865 | $179,409 | | Total assets measured at fair value | $589,733 | $938,838 | - The company's total assets measured at fair value decreased from **$938.8 million** at December 31, 2024, to **$589.7 million** at June 30, 2025, primarily due to reductions in money market funds and U.S. treasury securities[53](index=53&type=chunk)[54](index=54&type=chunk) [8. Certain Balance Sheet Components](index=16&type=section&id=8.%20Certain%20Balance%20Sheet%20Components) This note provides details on specific balance sheet components, including property and equipment and accrued liabilities Balance Sheet Components Detail | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Property and equipment, net | $50,238 | $37,523 | | Internally developed and purchased software | $67,029 | $47,300 | | Accrued expenses and other current liabilities | $158,216 | $177,059 | - Net property and equipment increased to **$50.2 million** as of June 30, 2025, from **$37.5 million** at December 31, 2024, driven by significant capitalization of internal-use software development costs[56](index=56&type=chunk)[57](index=57&type=chunk) [9. Leases](index=17&type=section&id=9.%20Leases) This note outlines Marqeta's lease obligations, including an amendment to its Oakland lease - Marqeta amended its Oakland lease in Q2 2025, extending the term for certain floors by 24 months, resulting in an increase of approximately **$3.5 million** in operating lease right-of-use assets and liabilities[60](index=60&type=chunk) Lease Metrics | Lease Metric | June 30, 2025 | December 31, 2024 | | :------------- | :------------ | :---------------- | | Weighted average remaining operating lease term (in years) | 2.2 | 1.1 | | Weighted average discount rate | 4.6% | 7.6% | [10. Commitments and Contingencies](index=18&type=section&id=10.%20Commitments%20and%20Contingencies) This note details Marqeta's restricted cash, legal proceedings, and other contingent liabilities - The company has **$8.5 million** in restricted cash, including a **$7.0 million** deposit at an Issuing Bank for transaction settlement collateral and **$1.5 million** for a letter of credit related to its Oakland lease[63](index=63&type=chunk)[64](index=64&type=chunk) - Marqeta is a defendant in consolidated securities class action lawsuits and shareholder derivative lawsuits alleging false or misleading statements, with potential losses currently unestimable[66](index=66&type=chunk)[67](index=67&type=chunk)[68](index=68&type=chunk) [11. Stock Incentive Plans](index=20&type=section&id=11.%20Stock%20Incentive%20Plans) This note details Marqeta's share-based compensation expense, including restricted stock units and stock options Share-based Compensation Expense | Share-based Compensation (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Restricted stock units | $24,375 | $28,656 | $47,909 | $52,819 | | Stock options | $1,349 | $5,974 | $3,623 | $12,585 | | Total share-based compensation expense (benefit) | $30,257 | $(119,529) | $58,694 | $(73,015) | - Total share-based compensation expense increased significantly to **$30.3 million** for the three months and **$58.7 million** for the six months ended June 30, 2025, compared to a benefit in prior year periods, due to the forfeiture of the Executive Chairman long-term performance award in 2024[74](index=74&type=chunk) [12. Stockholders' Equity Transactions](index=21&type=section&id=12.%20Stockholders'%20Equity%20Transactions) This note details Marqeta's share repurchase programs and their impact on stockholders' equity - Marqeta completed its **$200 million** 2024 Share Repurchase Program by March 31, 2025, repurchasing **19.2 million shares** for **$80.5 million** during the first six months of 2025[78](index=78&type=chunk)[80](index=80&type=chunk) - A new **$300 million** 2025 Share Repurchase Program was authorized on February 25, 2025, with **$106.9 million** remaining available after repurchasing **42.3 million shares** for **$193.1 million** during the six months ended June 30, 2025[79](index=79&type=chunk)[81](index=81&type=chunk) [13. Net (Loss) Income Per Share Attributable to Common Stockholders](index=22&type=section&id=13.%20Net%20(Loss)%20Income%20Per%20Share%20Attributable%20to%20Common%20Stockholders) This note presents Marqeta's basic and diluted net loss per share for the reported periods Earnings Per Share Data | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Basic Net (Loss) Income Per Share | $(0.00) | $0.23 | $(0.02) | $0.16 | | Diluted Net (Loss) Income Per Share | $(0.00) | $0.23 | $(0.02) | $0.16 | | Weighted-average shares (Basic) | 461,517 | 515,959 | 481,260 | 516,973 | - The company reported a basic and diluted net loss per share of **$(0.00)** for Q2 2025 and **$(0.02)** for the six months ended June 30, 2025, reflecting the overall net loss compared to positive EPS in prior year periods[18](index=18&type=chunk)[86](index=86&type=chunk) [14. Income Tax](index=24&type=section&id=14.%20Income%20Tax) This note details Marqeta's income tax expense and the impact of recent tax legislation Income Tax Expense | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Income tax expense | $206 | $150 | $441 | $284 | - Income tax expense remained relatively flat year-over-year, primarily attributable to profitable foreign jurisdictions, as the company maintains a full valuation allowance against its U.S. federal and state net deferred tax assets[88](index=88&type=chunk)[133](index=133&type=chunk) - The company is evaluating the impact of the 'One Big Beautiful Bill Act' (Tax Act) signed in July 2025, which reinstates 100% bonus depreciation and Section 174 expensing, but expects no material impact on its 2025 tax expense[90](index=90&type=chunk)[134](index=134&type=chunk) [15. Concentration Risks and Significant Customers](index=24&type=section&id=15.%20Concentration%20Risks%20and%20Significant%20Customers) This note highlights Marqeta's significant customer concentration and reliance on a single Issuing Bank for transaction settlement - Marqeta has significant customer concentration, with its largest customer, Block, accounting for **46%** and **45%** of net revenue for the three and six months ended June 30, 2025, respectively[94](index=94&type=chunk)[151](index=151&type=chunk)[170](index=170&type=chunk) - A significant portion of payment transactions (**65%** for Q2 2025, **66%** for H1 2025) are settled through one Issuing Bank, Sutton Bank, posing a concentration risk[93](index=93&type=chunk) [16. Segment Information](index=24&type=section&id=16.%20Segment%20Information) This note confirms Marqeta operates as a single operating segment, providing a global, cloud-based payment platform - Marqeta operates as a single operating segment and reporting unit, providing a global, cloud-based, open API platform for modern card issuing and transaction processing[95](index=95&type=chunk) Segment Financials | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net revenue | $150,392 | $125,270 | $289,465 | $243,237 | | Gross profit | $104,061 | $79,353 | $202,740 | $163,512 | | (Loss) income from operations | $(9,228) | $105,042 | $(27,766) | $55,189 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on Marqeta's financial condition and results of operations, highlighting key metrics, non-GAAP measures, revenue, expenses, liquidity, and critical accounting policies [Overview](index=26&type=section&id=Overview) This section provides an overview of Marqeta's mission to modernize financial services through its payment platform and service models - Marqeta's mission is to modernize financial services by providing a platform for customized payment card programs through open APIs, enabling customers to launch and manage card programs and transactions[102](index=102&type=chunk) - The company offers 'Managed By Marqeta' (MxM) for full program management and 'Powered By Marqeta' (PxM) for platform access and processing, catering to diverse customer needs[103](index=103&type=chunk)[107](index=107&type=chunk) [Impact of Macroeconomic Factors](index=26&type=section&id=Impact%20of%20Macroeconomic%20Factors) This section discusses the unpredictable impact of macroeconomic factors on Marqeta's processing volumes and financial results - Marqeta acknowledges the unpredictable impact of macroeconomic factors, including geopolitical conflicts, inflation, and interest rates, on its processing volumes and future financial results, potentially leading to lower consumer spending and foreign currency fluctuations[106](index=106&type=chunk)[108](index=108&type=chunk) [Key Operating Metric and Non-GAAP Financial Measures](index=27&type=section&id=Key%20Operating%20Metric%20and%20Non-GAAP%20Financial%20Measures) This section presents Marqeta's key operating metrics, including Total Processing Volume (TPV), and non-GAAP financial measures like Adjusted EBITDA Key Operating Metrics and Non-GAAP Measures | Metric (in thousands, except TPV in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total Processing Volume (TPV) | $91,386 | $70,627 | $175,857 | $137,294 | | Net revenue | $150,392 | $125,270 | $289,465 | $243,237 | | Gross profit | $104,061 | $79,353 | $202,740 | $163,512 | | Gross margin | 69% | 63% | 70% | 67% | | Adjusted EBITDA | $28,509 | $(1,817) | $48,590 | $7,409 | | Adjusted EBITDA margin | 19% | (1)% | 17% | 3% | - Total Processing Volume (TPV) increased by **29%** for Q2 2025 and **28%** for H1 2025 year-over-year, indicating strong market adoption and customer business growth[111](index=111&type=chunk) - Adjusted EBITDA significantly improved, reaching **$28.5 million** (**19% margin**) for Q2 2025 and **$48.6 million** (**17% margin**) for H1 2025, compared to negative or low positive figures in prior year periods[111](index=111&type=chunk) [Components of Results of Operations](index=28&type=section&id=Components%20of%20Results%20of%20Operations) This section details the components of Marqeta's revenue and expenses, including platform services, other services, and operating costs - Net revenue comprises platform services revenue (Interchange Fees, processing fees) recognized upon transaction authorization and posting, and other services revenue (card fulfillment) recognized upon card shipment[117](index=117&type=chunk)[118](index=118&type=chunk)[121](index=121&type=chunk)[122](index=122&type=chunk) - Costs of revenue include Card Network fees, Issuing Bank fees, and card fulfillment costs, with Card Network incentives now estimated based on expected cumulative rates over the annual measurement period[123](index=123&type=chunk)[124](index=124&type=chunk)[127](index=127&type=chunk) - Operating expenses consist of compensation and benefits, technology, professional services, and other costs, noting the prior year's Executive Chairman Long-Term Performance Award forfeiture[128](index=128&type=chunk)[129](index=129&type=chunk)[130](index=130&type=chunk)[131](index=131&type=chunk) [Results of Operations](index=31&type=section&id=Results%20of%20Operations) [Comparison of the Three Months Ended June 30, 2025 and 2024](index=32&type=section&id=Comparison%20of%20the%20Three%20Months%20Ended%20June%2030%2C%202025%20and%202024) This section compares Marqeta's financial performance for the three months ended June 30, 2025, versus the prior year, detailing revenue, expenses, and net income changes Quarterly Performance Comparison | Metric (in thousands) | Q2 2025 | Q2 2024 | $ Change | % Change | | :-------------------- | :------ | :------ | :------- | :------- | | Net revenue | $150,392 | $125,270 | $25,122 | 20% | | TPV (in millions) | $91,386 | $70,627 | $20,759 | 29% | | Gross profit | $104,061 | $79,353 | $24,708 | 31% | | Gross margin | 69% | 63% | | 6 pp | | Total operating expenses (benefit) | $113,289 | $(25,689) | $138,978 | 541% | | Net (loss) income | $(647) | $119,108 | $(119,755)| (101)% | - Net revenue increased by **20%** driven by a **29%** increase in TPV, primarily from financial services, lending, and expense management use cases, with non-top-five customers growing **70%**[138](index=138&type=chunk)[140](index=140&type=chunk) - Gross profit increased by **31%** and gross margin improved by **6 percentage points**, as **$6.8 million** higher network incentives (due to revised accounting policy) largely offset increased Card Network and Issuing Bank fees[141](index=141&type=chunk)[142](index=142&type=chunk) - Total operating expenses surged by **541%** due to the absence of the prior year's Executive Chairman long-term performance award benefit and lower compensation and share-based compensation expenses, partially offset by higher depreciation and amortization[143](index=143&type=chunk)[146](index=146&type=chunk)[148](index=148&type=chunk) - Other income, net, decreased by **38%** due to lower interest income from reduced short-term investment and cash balances, following **$162.9 million** in share repurchases[149](index=149&type=chunk) [Comparison of the Six Months Ended June 30, 2025 and 2024](index=35&type=section&id=Comparison%20of%20the%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) This section compares Marqeta's financial performance for the six months ended June 30, 2025, versus the prior year, detailing revenue, expenses, and net income changes Half-Year Performance Comparison | Metric (in thousands) | H1 2025 | H1 2024 | $ Change | % Change | | :-------------------- | :------ | :------ | :------- | :------- | | Net revenue | $289,465 | $243,237 | $46,228 | 19% | | TPV (in millions) | $175,857 | $137,294 | $38,563 | 28% | | Gross profit | $202,740 | $163,512 | $39,228 | 24% | | Gross margin | 70% | 67% | | 3 pp |\ | Total operating expenses (benefit) | $230,506 | $108,323 | $122,183 | 113% | | Net (loss) income | $(8,907) | $83,048 | $(91,955)| (111)% | - Net revenue grew by **19%** for the six months ended June 30, 2025, driven by a **28%** increase in TPV, with strong growth across financial services, lending, and expense management, and a **67%** increase from non-top-five customers[154](index=154&type=chunk)[156](index=156&type=chunk) - Gross profit increased by **24%** and gross margin improved by **3 percentage points**, despite higher costs of revenue, due to the revised accounting policy for network incentives[159](index=159&type=chunk)[160](index=160&type=chunk) - Total operating expenses increased by **113%**, primarily due to the absence of the Executive Chairman long-term performance award benefit from the prior year, partially offset by lower compensation expenses from post-combination compensation and stock award forfeitures[161](index=161&type=chunk)[162](index=162&type=chunk)[167](index=167&type=chunk) - Other income, net, decreased by **31%** due to lower interest income from reduced cash and short-term investment balances, following **$193.1 million** in share repurchases[168](index=168&type=chunk) [Use of Non-GAAP Financial Measures](index=38&type=section&id=Use%20of%20Non-GAAP%20Financial%20Measures) This section explains Marqeta's use of non-GAAP measures like Adjusted EBITDA to evaluate core operating results and efficiencies - Marqeta uses non-GAAP measures like Adjusted EBITDA and Adjusted operating expenses to evaluate core operating results and efficiencies, acknowledging their limitations and encouraging review alongside GAAP measures[172](index=172&type=chunk)[173](index=173&type=chunk) Non-GAAP Reconciliation | Non-GAAP Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Adjusted EBITDA | $28,509 | $(1,817) | $48,590 | $7,409 | | Adjusted EBITDA Margin | 19% | (1)% | 17% | 3% | | Adjusted operating expenses | $75,552 | $81,170 | $154,150 | $156,103 | [Liquidity and Capital Resources](index=39&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses Marqeta's liquidity position, capital resources, and share repurchase programs - As of June 30, 2025, Marqeta's liquidity consisted of **$821.6 million** in cash, cash equivalents, and short-term investments, deemed sufficient to fund operations for at least the next 12 months[178](index=178&type=chunk)[183](index=183&type=chunk) - The company completed its **$200 million** 2024 Share Repurchase Program and initiated a new **$300 million** 2025 Share Repurchase Program, with **$106.9 million** remaining available as of June 30, 2025[180](index=180&type=chunk)[181](index=181&type=chunk) - The acquisition of TransactPay was completed on July 31, 2025, for **€46.0 million** in cash, impacting future liquidity[179](index=179&type=chunk) [Cash Flows](index=40&type=section&id=Cash%20Flows) This section analyzes Marqeta's cash flow activities from operations, investing, and financing for the reported periods Cash Flow Summary | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $22,534 | $26,134 | | Net cash provided by investing activities | $75,719 | $27,336 | | Net cash used in financing activities | $(288,546) | $(109,712) | - Net cash provided by operating activities decreased to **$22.5 million** for H1 2025, primarily due to unfavorable timing of settlements for network incentive receivables and accrued expenses[187](index=187&type=chunk) - Net cash provided by investing activities increased to **$75.7 million** for H1 2025, driven by higher proceeds from maturities of short-term investments[189](index=189&type=chunk) - Net cash used in financing activities significantly increased to **$288.5 million** for H1 2025, mainly due to substantial common stock repurchases under the 2024 and 2025 Share Repurchase Programs[191](index=191&type=chunk) [Obligations and Other Commitments](index=41&type=section&id=Obligations%20and%20Other%20Commitments) This section confirms no material changes to Marqeta's obligations and other commitments since the 2024 Annual Report, except for a lease extension - There have been no material changes to obligations and other commitments since the 2024 Annual Report, except for the lease extension disclosed in Note 9[193](index=193&type=chunk) [Critical Accounting Policies and Estimates](index=41&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section highlights the revised accounting policy for Card Network incentives as the only material change to critical accounting policies - The only change to critical accounting policies is the revised method for estimating Card Network incentives, as detailed in Note 2, with no other material changes reported compared to the 2024 Annual Report[196](index=196&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=42&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section outlines Marqeta's exposure to market risks, specifically interest rate risk and foreign currency exchange risk, noting minimal impact due to short maturities and U.S. dollar denominated operations - Marqeta's cash, cash equivalents, and short-term investments totaled **$821.6 million** as of June 30, 2025, with fair value not significantly impacted by interest rate fluctuations due to short-term maturities[198](index=198&type=chunk) - The company's operations are not subject to significant foreign currency risk, as most sales and operating expenses are denominated in U.S. dollars, with a hypothetical 10% change having no material impact[199](index=199&type=chunk) [Item 4. Controls and Procedures](index=43&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of Marqeta's disclosure controls and procedures as of June 30, 2025, with no material changes to internal control over financial reporting during Q2 2025 - Marqeta's disclosure controls and procedures were evaluated and deemed effective at a reasonable assurance level as of June 30, 2025[202](index=202&type=chunk) - There have been no material changes in the company's internal control over financial reporting during the second quarter of fiscal 2025[203](index=203&type=chunk) [Part II - Other Information](index=44&type=section&id=Part%20II%20-%20Other%20Information) [Item 1. Legal Proceedings](index=44&type=section&id=Item%201.%20Legal%20Proceedings) This section details ongoing consolidated securities class action and shareholder derivative lawsuits against Marqeta, alleging false or misleading statements, with potential losses currently unestimable - Marqeta is facing consolidated securities class action lawsuits (Wai v. Marqeta, Inc., et al. and Ford v. Marqeta, Inc., et al.) alleging violations of federal securities laws due to false or misleading statements regarding company performance and revenue/gross profit expectations[206](index=206&type=chunk)[207](index=207&type=chunk) - Additionally, the company is a nominal defendant in consolidated shareholder derivative lawsuits (Smith v. Khalaf, et al., Ojserkis v. Khalaf, et al., and Preciado v. Khalaf, et al.) asserting claims for breach of fiduciary duties and federal securities law violations[208](index=208&type=chunk) [Item 1A. Risk Factors](index=44&type=section&id=Item%201A.%20Risk%20Factors) This section states no material changes to the risk factors previously disclosed in the company's 2024 Annual Report on Form 10-K, which could adversely affect its business and financial condition - There have been no material changes to the risk factors since the 2024 Annual Report on Form 10-K, which are incorporated by reference[210](index=210&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=45&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section reports no recent unregistered sales of equity securities and details Class A common stock repurchases under the 2025 Share Repurchase Program - No unregistered sales of equity securities occurred during the period[211](index=211&type=chunk) Share Repurchase Activity | Period | Total Number of Shares Purchased (in thousands) | Average Price Paid per Share | | :----------------- | :-------------------------------------------- | :--------------------------- | | April 1 - 30, 2025 | 12,744 | $3.89 | | May 1 - 31, 2025 | 15,899 | $4.85 | | June 1 - 30, 2025 | 6,599 | $5.47 | | Total | 35,242 | | - As of June 30, 2025, **$106.9 million** remained available for future share repurchases under the **$300 million** 2025 Share Repurchase Program[212](index=212&type=chunk) [Item 3. Defaults Upon Senior Securities](index=45&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is marked as not applicable, indicating no defaults upon senior securities - This item is not applicable[213](index=213&type=chunk) [Item 4. Mine Safety Disclosures](index=45&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is marked as not applicable, indicating no mine safety disclosures - This item is not applicable[214](index=214&type=chunk) [Item 5. Other Information](index=45&type=section&id=Item%205.%20Other%20Information) This section discloses that Todd Pollak and Crystal Sumner adopted Rule 10b5-1 trading arrangements for the sale of Class A Common Stock - Todd Pollak, Chief Revenue Officer, adopted a Rule 10b5-1 trading arrangement on May 16, 2025, for the sale of up to **202,135 shares** of Class A Common Stock, effective until June 30, 2026[215](index=215&type=chunk) - Crystal Sumner, Chief Administrative Officer, adopted a Rule 10b5-1 trading arrangement on June 10, 2025, for the sale of up to **91,000 shares** of Class A Common Stock, effective until June 19, 2026[216](index=216&type=chunk) [Item 6. Exhibits](index=46&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including lease amendments and officer certifications - Key exhibits include the Fourth Amendment to Lease (Exhibit 10.1) and certifications from the Principal Executive and Financial Officer (Exhibits 31.1 and 32.1)[218](index=218&type=chunk) [Signatures](index=47&type=section&id=Signatures) This section contains the signature of Michael (Mike) Milotich, Interim CEO & CFO, confirming the due authorization and filing of the report on August 6, 2025 - The report is signed by Michael (Mike) Milotich, Interim Chief Executive Officer & Chief Financial Officer, on August 6, 2025[222](index=222&type=chunk)

Financial Performance - Marqeta's Total Processing Volume (TPV) in Q2 2025 reached $91 billion[8], reflecting a 29% increase year-over-year[8] - Net Revenue for Q2 2025 was $150 million[12], representing a 20% increase year-over-year[12] - Gross Profit for Q2 2025 was $104 million[15], with a Gross Profit Margin of 69%[15]; the increase was partly driven by a revised accounting policy for estimating and recognizing Card Network Incentives, effective Q2'25, which contributed 8.6 percentage points to the Gross Profit growth[16] - Adjusted Operating Expenses for Q2 2025 were $76 million[18], a decrease of 7% year-over-year[18] - Adjusted EBITDA for Q2 2025 was $29 million[21], resulting in an Adjusted EBITDA Margin of 19%[21] Financial Guidance - The company projects Net Revenue Growth of 15-17% for Q3 2025 and 17-18% for fiscal year 2025[32] - Gross Profit Growth is expected to be 12-13% for Q3 2025 and 18-19% for fiscal year 2025[32] - Adjusted EBITDA Margin is anticipated to be 15-17% for Q3 2025 and 14-15% for fiscal year 2025[32] Non-GAAP Measures - The report utilizes non-GAAP financial measures such as Adjusted EBITDA, Adjusted EBITDA Margin, and Adjusted Operating Expenses to provide supplemental insights into the company's performance[23] - Adjusted EBITDA is defined as Net (loss) income adjusted to exclude depreciation and amortization; share-based compensation expense; executive chairman long-term performance award; payroll tax related to share-based compensation; restructuring and other one-time costs; acquisition-related expenses; income tax expense; and other income, net[24] - Adjusted Operating Expenses are defined as total operating expenses adjusted to exclude depreciation and amortization; share-based compensation expense; executive chairman long-term performance award; payroll tax related to share-based compensation; restructuring and other one-time costs; and acquisition-related expenses[26]

Financial Performance - Total Processing Volume (TPV) reached $91 billion, a year-over-year increase of 29% from $71 billion[2] - Net Revenue for Q2 2025 was $150 million, reflecting a 20% increase year-over-year, driven by higher volumes[7] - Gross Profit increased by 31% year-over-year to $104 million, with a Gross Margin of 69%[8] - Adjusted EBITDA was $29 million, representing a significant increase of 1,669% year-over-year, with an Adjusted EBITDA margin of 19%[10] - Net revenue for Q2 2025 reached $150,392 thousand, a 20.1% increase from $125,270 thousand in Q2 2024[21] - Gross profit for the first half of 2025 was $202,740 thousand, up 24% from $163,512 thousand in the same period of 2024[21] - Adjusted EBITDA for Q2 2025 was $28,509 million, a significant increase from a loss of $1,817 million in Q2 2024[36] - Adjusted EBITDA margin for Q2 2025 improved to 19%, up from -1% in Q2 2024, indicating enhanced operational efficiency[36] Profitability and Loss - The company reported a Net Loss of $0.6 million, a decline of $120 million compared to a Net Income of $119.1 million in the prior year[9] - The net loss for the first half of 2025 was $(8,907) thousand, a significant decrease from net income of $83,048 thousand in the same period of 2024[21] - Net loss for Q2 2025 was $647 million, a substantial improvement from a net income of $119,108 million in Q2 2024[36] Expenses and Liabilities - Total operating expenses increased significantly by 541% year-over-year to $113.3 million, impacting overall profitability[6] - Total operating expenses for Q2 2025 were $113,289 thousand, compared to a benefit of $(25,689) thousand in Q2 2024[21] - Total liabilities increased to $371,157 million, a 7% rise from $345,908 million in Q2 2024[28] Cash Flow and Assets - Cash and cash equivalents decreased to $732,722 thousand as of June 30, 2025, down from $923,016 thousand at the end of 2024[24] - Total assets decreased to $1,214,590 thousand as of June 30, 2025, compared to $1,463,204 thousand at the end of 2024[24] - Net cash provided by operating activities for the first half of 2025 was $22,534 thousand, down from $26,134 thousand in the same period of 2024[26] - The company reported a net cash used in financing activities of $(288,546) thousand for the first half of 2025, compared to $(109,712) thousand in 2024[26] Strategic Initiatives - The acquisition of TransactPay was completed on July 31, 2025, enhancing Marqeta's program management capabilities in Europe[5] - The KlarnaOne Card, a new debit card allowing consumers to pay later, is currently in trial with a broader rollout expected later this year[5] Accounting and Policy Changes - The increase in Gross Profit was partly due to a revised accounting policy for Card Network incentives, contributing 8.6 percentage points to the growth[8] - The company capitalized $13,598 thousand in internal-use software during the first half of 2025, compared to $10,471 thousand in the same period of 2024[26] Shareholder Information - The weighted-average shares used in computing net loss per share for Q2 2025 were 461,517 thousand, compared to 515,959 thousand in Q2 2024[21] - Stockholders' equity fell to $843,433 million, a 26% decrease from $1,142,375 million in Q2 2024[28]

Core Insights - The article discusses the emergence of the Model Context Protocol (MCP) as a standardized solution for AI systems to communicate with external services, similar to how APIs transformed web integration [2][4] - It highlights the historical parallels between the rise of APIs and the anticipated trajectory of MCP, suggesting that the middle layer of integration will be commoditized while value shifts to upstream infrastructure providers and downstream vertical experts [3][23] Group 1: MCP Overview - MCP defines a standardized way for AI agents to interact with services, featuring components like tool discovery, instruction parsing, and standardized response formats, which enhance usability and integration [4][8] - The introduction of MCP is expected to create new business opportunities while also eliminating shallow integration businesses, as seen in the API era [3][30] Group 2: Historical Context and Lessons - The article reflects on the API boom of the 2010s, where many API startups failed due to a lack of unique value propositions, while a few succeeded by mastering complex regulatory or vertical domain rules [9][14] - It emphasizes that the standardization of connections leads to a redistribution of value, favoring those who provide robust infrastructure or solve specific vertical challenges [23][30] Group 3: Value Creation and Capture - In the MCP era, value capture will primarily benefit upstream model hosts like OpenAI and Anthropic, as they will earn significant revenue from increased usage of AI agents [30][35] - Downstream opportunities will arise for companies that address regulatory challenges or provide observability platforms for AI agent performance, similar to how vertical API companies thrived by mastering complex workflows [30][43] Group 4: Strategic Implications for Startups - Startups are encouraged to focus on vertical MCP servers that embed complex business logic, rather than generic tools, to build competitive advantages [37][42] - The article warns that without unique regulatory barriers or deep vertical expertise, companies risk being replaced in the MCP landscape, echoing the fate of many horizontal API startups [36][42]

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 [1][2] Group 1: Lawsuit Details - The class action complaint was filed on December 9, 2024, covering a Class Period from May 7, 2024, to November 4, 2024 [1] - The lawsuit claims that Marqeta made false and misleading statements regarding regulatory challenges and subsequently had to cut its guidance for Q4 2024 [2] - Investors reportedly suffered damages when the true details about Marqeta's business outlook were revealed [2] Group 2: Contact Information - Long-term stockholders of Marqeta are encouraged to contact Bragar Eagel & Squire, P.C. for more information regarding the claims [3] - The law firm offers no cost or obligation for inquiries related to the investigation [3]

Core Viewpoint - Wall Street anticipates a year-over-year decline in earnings for Marqeta (MQ) despite higher revenues, with a focus on how actual results will compare to estimates [1] Earnings Expectations - Marqeta is expected to report a quarterly loss of $0.03 per share, reflecting a year-over-year change of -113% [3] - Revenue is projected to be $140.05 million, representing an 11.8% increase from the previous year [3] Estimate Revisions - The consensus EPS estimate has been revised 25% lower in the last 30 days, indicating a reassessment by analysts [4] - A negative Earnings ESP of -53.85% suggests analysts have become bearish on Marqeta's earnings prospects [12] Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive or negative reading can predict deviations from consensus estimates, but its predictive power is significant mainly for positive readings [9][10] - Marqeta's current Zacks Rank is 3, making it challenging to predict an earnings beat [12] Historical Performance - In the last reported quarter, Marqeta was expected to post a loss of $0.05 per share but actually reported a loss of -$0.02, resulting in a surprise of +60.00% [13] - Over the past four quarters, Marqeta has beaten consensus EPS estimates three times [14] Conclusion - Marqeta does not appear to be a strong candidate for an earnings beat, and investors should consider other factors when making decisions regarding the stock ahead of the earnings release [17]

Group 1 - Marqeta, Inc. (MQ) has reached an important support level and recently experienced a "golden cross," indicating a potential bullish trend [1][4] - A golden cross occurs when a stock's short-term moving average, typically the 50-day, crosses above its long-term moving average, usually the 200-day, suggesting a strong breakout [2] - The golden cross pattern consists of three stages: a downtrend followed by a crossover of moving averages, and finally an upward momentum leading to higher prices [3] Group 2 - Over the past four weeks, MQ's stock has gained 31.3%, and it currently holds a 2 (Buy) rating on the Zacks Rank, suggesting further breakout potential [4] - There have been three upward revisions in earnings expectations for the current quarter, with no downward revisions, indicating a positive outlook for MQ [4][5] - The combination of earnings estimate revisions and the technical breakout position makes MQ a stock to watch for potential gains in the near future [5]

Core Insights - ABM has shown a strong performance, climbing 7% over the past month, outperforming the S&P 500 composite's 6% rally, attributed to a disciplined transformation strategy [1] Group 1: Transformation Strategy - In 2015, ABM launched the 2020 Vision, aiming for long-term, profitable growth through a streamlined, industry-focused operating model, centralizing functions and standardizing service delivery across key verticals [2] - In 2021, ABM introduced ELEVATE, a strategic plan emphasizing digitization, data, and workforce development, resulting in stronger client traction and operational scalability [3] Group 2: Strategic Expansion - ABM's acquisition of Quality Uptime in 2024 marks a significant shift into the data center space, enhancing its capabilities in electrical testing and power distribution, crucial for AI-driven facilities, positioning ABM as a full-suite provider in a high-margin growth segment [4] Group 3: Shareholder Value - ABM has distributed dividends of $51.9 million, $57.5 million, and $56.5 million in fiscal years 2022, 2023, and 2024, respectively, and returned $97.5 million, $138.1 million, and $56.1 million through share repurchases in the same years, reflecting a commitment to enhancing shareholder value [5] Group 4: Financial Strength - ABM maintains a solid financial footing with a current ratio of 1.52, above the industry average of 1.31, ensuring operational agility and reinforcing investor confidence [6] Group 5: Market Position - ABM currently holds a Zacks Rank 2 (Buy), indicating strong market positioning, alongside other top-ranked stocks in the Zacks Business Services sector [7]

Group 1 - Marqeta (MQ) is currently outperforming its peers in the Business Services sector, with a year-to-date gain of approximately 39.1% compared to the sector average return of 3.4% [4] - The Zacks Rank for Marqeta is 2 (Buy), indicating a positive outlook based on earnings estimates and revisions, with a 27.5% increase in the consensus estimate for full-year earnings over the past quarter [3] - Marqeta belongs to the Financial Transaction Services industry, which includes 35 companies and has an average gain of 5.3% year-to-date, further highlighting Marqeta's strong performance [5] Group 2 - The Business Services sector consists of 270 individual stocks and currently holds a Zacks Sector Rank of 3, indicating its relative performance among 16 sector groups [2] - Another notable stock in the Business Services sector is AppLovin (APP), which has returned 20.5% year-to-date and has a Zacks Rank of 1 (Strong Buy) [4][5] - The Technology Services industry, to which AppLovin belongs, has a current Zacks Industry Rank of 50 and has moved up by 5.8% year-to-date [6]

Industry Overview - Mobile payments are financial transactions conducted through smartphones, tablets, or wearable devices, facilitated by digital wallets and contactless technologies [1] - The global mobile payments market was valued at $3.84 trillion in 2024 and is expected to grow to $4.97 trillion in 2025, reaching an estimated $26.53 trillion by 2032, indicating a CAGR of 27% [4] Technological Advancements - Emerging technologies like blockchain and artificial intelligence are reshaping the mobile payments landscape, enhancing transaction transparency and fraud prevention [2] - Modern mobile payment platforms offer consolidated interfaces that integrate multiple cards and bank accounts, significantly boosting user convenience [3] Key Players - Green Dot Corporation (GDOT) provides mobile payment capabilities through its digital banking services and mobile application, with features like account management and cash deposits at over 95,000 retail locations [6][7] - Shift4 Payments (FOUR) offers mobile payment solutions, including the SkyTab mobile point-of-sale system, supporting various payment types and advanced security features [9][10] - Marqeta, Inc. (MQ) enables businesses to integrate digital payment solutions into their applications, with a focus on Buy Now, Pay Later options and real-time transaction processing [12][13] - NCR Voyix Corporation (VYX) has expanded its mobile payment solutions for the retail and restaurant industries, introducing technologies like Aloha Pay-At-Table to enhance customer experience [15][16] Financial Performance - Green Dot's active accounts reached 3.58 million in Q1 2025, marking a 2% year-over-year growth, with a Gross Dollar Volume of $37.3 billion, up 21% [8] - Shift4 Payments generated $755.7 million in payments-based revenues in Q1 2025, growing 15% year-over-year [11] - Marqeta's total processing volume reached $84 billion in Q1 2025, a 27% year-over-year increase [14] - NCR Voyix had over 77,000 platform sites and 8,000 payment sites as of Q1 2025, signaling year-over-year increases of 27% and 7%, respectively [17]