Marqeta (NasdaqGS:MQ) Q4 2025 Earnings call February 24, 2026 04:30 PM ET Company ParticipantsConnor Allen - VPCraig Maurer - Managing DirectorDarrin Peller - Managing DirectorMaria Graizer - Director of Investor RelationsMichael Infante - VP of Equity ResearchMike Milotich - CEOPatti Kangwankij - CFOTimothy Chiodo - Managing DirectorConference Call ParticipantsAndrew Schmidt - Fintech, Software, and Payments Equity Research AnalystSanjay Sakhrani - Managing Director and Senior AnalystOperatorLadies and gen ...

Marqeta (NasdaqGS:MQ) Q4 2025 Earnings call February 24, 2026 04:30 PM ET Speaker6Ladies and gentlemen, welcome to the Marqeta fourth quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Maria Graizer, Director of Investor Relations. Please go ahead.Speaker5Thanks, operator. Good afternoon, everyon ...

Australian buy now, pay later firm Zip says it is seeing enthusiasm from American customers.By completing this form, you agree to receive marketing communications from PYMNTS and to the sharing of your information with our sponsor, if applicable, in accordance with our Privacy Policy and Terms and Conditions .Complete the form to unlock this article and enjoy unlimited free access to all PYMNTS content — no additional logins required.The company reported earnings Thursday (Feb. 19) that showed revenue growt ...

Core Insights - Klarna Group's stock has decreased by 56% since its IPO last September, indicating a significant decline in investor confidence [1] - The company is a leading player in the Buy Now, Pay Later (BNPL) sector, partnering with major brands like Walmart and offering various payment options [3] - Despite reporting a 26% year-over-year revenue increase in Q3, Klarna continues to face net losses, which widened from $4 million to $94 million [4][5] Financial Performance - Revenue for Klarna increased by 26% year-over-year in Q3, with gross merchandise volume rising by 23%, including a notable 48% increase in the U.S. market [4] - The company achieved 4 million card signups in the quarter, contributing to 15% of total global transactions in October, and saw a 32% increase in new users, totaling 114 million [4] - Fair Financing, an interest-based product, experienced a 244% year-over-year increase in U.S. gross merchandise volume, while the merchant count grew by 38% to 850,000 [5] Valuation and Market Sentiment - Klarna's current market capitalization stands at $6.8 billion, with a trading price of $18.11, reflecting a price-to-sales ratio of only 2 times trailing-12-month sales, suggesting it may be undervalued [7] - The market perceives Klarna as risky due to ongoing losses and macroeconomic conditions, but there is potential for recovery and value creation for shareholders in the long term [8]

Core Insights - The latest inflation data indicates a continued easing of price pressures, particularly in essential categories, providing consumers with some relief [1][2] - The Consumer Price Index (CPI) rose 2.4% year over year in January, with a monthly increase of 0.2% on a seasonally adjusted basis, suggesting a pattern of restrained inflation [2] - Essential costs, including housing, food, and bills, have historically consumed a significant portion of household income, particularly for consumers earning less than $50,000 annually [3] Inflation Trends - January's CPI report shows signs of stabilization in critical areas, with energy prices declining 1.5% for the month and 0.3% over the past year, which can positively impact household budgets [4] - Food prices increased modestly, with food and beverages rising 0.2% in January and 2.8% year over year, indicating a normalization after previous volatility [5] - Shelter costs remain elevated but show slower growth, with shelter prices rising 3% over the past year and 0.2% in January, suggesting easing housing-related pressures [9] Service Sector Inflation - Inflation in service-oriented categories remains elevated, with food away from home increasing 4% year over year and medical care services rising 3.9%, indicating persistent cost pressures in labor-intensive sectors [10][11] - Goods-related inflation has shown clearer deceleration, while services inflation continues to exert pressure, highlighting a nuanced inflation narrative [11] Consumer Financial Behavior - Consumers are increasingly utilizing flexible payment mechanisms to manage cash flow, with 31% using credit card installment plans and 14% using buy now, pay later (BNPL) products [12][13] - The adoption rates of installment structures are notably higher among millennials, with 42% of bridge millennials utilizing these mechanisms [13] - The use of installment plans is viewed as a budgeting tool rather than a sign of financial stress, allowing consumers to align payments with income cycles [14] Overall Outlook - January's inflation data and consumer finance trends suggest a gradual recalibration rather than acute disruption, with inflation persisting in shelter and services but moderating in essential categories [15] - Consumers are adapting their financial behaviors through spending prioritization and credit utilization, indicating a demand for flexibility and predictability in a still-elevated price environment [16]

Financial Data and Key Metrics Changes - The company reported excellent results for Q2 of FY 2026, with significant growth in key metrics, although specific figures were not disclosed in the opening remarks [6][10]. - The company expects RLTC take rates to hover slightly above 4% for Q3 and Q4, indicating a stable margin outlook despite some year-over-year softening in revenue take rates [21][24]. Business Line Data and Key Metrics Changes - The Affirm Card has shown remarkable growth, with GMV up nearly 160% year-over-year and active cardholders increasing by 121% [61]. - The "other" category, which includes various smaller merchants, has grown to represent 15% of total GMV, indicating a diversification in the business [30][87]. Market Data and Key Metrics Changes - The company is experiencing healthy consumer trends, with consumers showing a willingness to borrow and repay, contributing to stable growth in the current economic environment [18][19]. - The ABS market remains constructive, with recent deals priced with spreads under 100 basis points, reflecting strong market confidence in the company's credit outcomes [49]. Company Strategy and Development Direction - The company is focused on expanding its merchant base and diversifying its offerings, with plans to explore new verticals such as home improvement and medical services [110]. - The application for a bank charter is aimed at achieving regulatory certainty and unlocking new product opportunities in the future, although the timeline for approval is uncertain [38][72]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the current consumer health and the ability to manage credit effectively, with no significant deviations from previous quarters [18][97]. - The company anticipates a slowdown in GMV growth to 30% in Q3 and 25% in Q4, primarily due to the transition with a large retail partner [66]. Other Important Information - The company is actively monitoring regulatory developments, particularly concerning potential caps on BNPL rates, but has not seen any immediate threats [70][72]. - The partnership with Fiserv aims to integrate buy now, pay later capabilities into existing banking products, indicating a strategic move to broaden market reach [115]. Q&A Session Summary Question: Dynamics of growth with top merchants - Management noted that the top five merchants for Q2 FY 2026 are different from the previous year, and the business is diversifying well despite some concentration [10][14]. Question: Overview of consumer trends and economic health - Management indicated that consumers are healthy and willing to repay loans, with no significant changes observed in the current quarter [18][19]. Question: RLTC margin trajectory - Management expects RLTC take rates to remain slightly above 4% in the upcoming quarters, with benefits from reduced funding costs [21][24]. Question: Impact of competition on merchant pricing - Management stated that aggressive promotional strategies from competitors have not affected Affirm's pricing or market position [28]. Question: Growth in the "other" category - Management explained that the "other" category includes a diverse range of small merchants, which are increasingly recognizing the value of offering Affirm [30][33]. Question: Bank charter application rationale - Management clarified that the primary motivation for applying for a bank charter is regulatory certainty, with potential long-term benefits for product offerings [38][72]. Question: ABS deal execution - Management highlighted strong execution in the ABS market, with favorable pricing conditions reflecting confidence in the company's credit management [49]. Question: Growth opportunities in new verticals - Management discussed the cautious approach to entering new verticals, emphasizing consumer demand as the driving factor for expansion [110].

Financial Data and Key Metrics Changes - The company reported excellent results for Q2 of fiscal 2026, with significant growth in key metrics [4][10] - The RLTC take rates are expected to remain slightly above 4% for Q3 and Q4, with transaction costs benefiting from lower funding costs [21][22] Business Line Data and Key Metrics Changes - The Affirm Card saw GMV growth of just under 160% year-over-year, with active cardholders increasing by 121% and 0% deals on the card rising by 190% [60] - The "other" category, which includes various small merchants, has grown to 15% of total GMV and is experiencing triple-digit growth [29][32] Market Data and Key Metrics Changes - The company is seeing healthy consumer trends, with consumers willing and able to repay loans, indicating a stable economic environment [15] - The ABS market remains constructive, with recent deals priced with spreads under 100 basis points, reflecting strong market confidence [48] Company Strategy and Development Direction - The company is focused on expanding its network and aims to be universally accepted across various retail sectors, similar to major credit card brands [109] - The decision to explore new verticals such as home improvement and medical is driven by consumer demand and the goal of building a comprehensive service network [108] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the current consumer health and the ability to manage credit effectively, with no significant disturbances noted in the market [94] - The company is tracking regulatory developments closely but has not identified any immediate concerns regarding potential caps on BNPL rates [70][71] Other Important Information - The company has applied for a bank charter to enhance regulatory certainty and potentially unlock new products and services in the future [38][39] - The Boost AI product is still in early stages, but it is expected to enhance merchant engagement through automated A/B testing [46] Q&A Session Summary Question: Can you discuss the dynamics of growth with the top five merchants? - Management noted that the top five merchants for Q2 of FY 2026 are different from the previous year, and the business is diversifying well despite some concentration [11] Question: What are the current consumer and credit trends? - Management indicated that consumers are healthy and willing to repay loans, with no significant deviations from previous quarters [15] Question: Can you elaborate on the RLTC margin trajectory? - Management expects RLTC take rates to hover around 4% for the remainder of the year, with transaction costs benefiting from favorable funding conditions [21][22] Question: How is competition affecting merchant pricing? - Management stated that aggressive promotional strategies from competitors have not impacted Affirm's pricing or market position [26][28] Question: What is the growth outlook for the Affirm Card and international expansion? - The Affirm Card is a significant growth driver, with plans for further expansion in the UK and other international markets [61][62] Question: What is the current state of the ABS market? - Management reported strong execution in the ABS market, with favorable pricing conditions and high confidence from investors [48] Question: How is the regulatory environment evolving? - Management is actively monitoring regulatory discussions but has not seen immediate threats to their business model [70][71] Question: What are the implications of entering new verticals? - Management clarified that new verticals are based on consumer demand and are part of a strategy to build a comprehensive service network [108]

Core Insights - The Buy Now, Pay Later (BNPL) industry is currently a polarizing topic in the market, generating significant discussion among investors and analysts [1]. Group 1: Market Sentiment - There is considerable noise in the market regarding the BNPL industry, with varying opinions from critics and supporters [1]. Group 2: Analyst Perspective - The article is written from a personal perspective, aiming to provide insights for both beginners and advanced readers, focusing on business and economic analysis [1].

Core Insights - Affirm Holdings, Inc. (AFRM) has upgraded its credit risk evaluation by incorporating real-time financial signals into its underwriting process, enhancing the accuracy of credit assessments [1][9] - The new method is currently available for Affirm Card users and will soon be accessible to a broader audience who opt to link their banking data [2] - This approach allows Affirm to assess creditworthiness based on current financial health rather than outdated credit histories, potentially increasing consumer purchasing power [4] Group 1: Affirm's New Underwriting Process - Affirm's upgraded underwriting now includes real-time bank account balances and cash flow trends, moving away from static credit reports [1][9] - The new system aligns credit decisions with real-life financial situations, improving risk assessment and promoting responsible lending [3] - Early results indicate that this richer view of consumer finances can significantly enhance purchasing power [4] Group 2: Market Position and Performance - The upgrade is expected to improve Affirm's credit quality by reducing default risk and expanding its consumer base, leading to increased approvals and revenue growth [5] - Affirm's Gross Merchandise Value rose 42% year over year in Q1 of fiscal 2026, reaching $10.8 billion [5] - Affirm's shares have increased by 25.2% over the past year, outperforming the broader industry and the S&P 500 Index [7] Group 3: Competitive Landscape - Competitors like PayPal and Block, Inc. are also expanding their BNPL services, with PayPal's total payment volume increasing by 8% to $458.1 billion and Block's BNPL gross merchandise volume climbing 17% to $9.7 billion [6] - The competition in the digital consumer lending space is intensifying, highlighting the need for innovative approaches like Affirm's [6] Group 4: Valuation and Earnings Estimates - Affirm's forward price-to-earnings ratio stands at 55.42X, significantly higher than the industry average of 31.72X, indicating a premium valuation [11] - The Zacks Consensus Estimate predicts a 560% surge in Affirm's fiscal 2026 earnings year over year, followed by a 56.8% increase in the subsequent year [11]

Core Insights - Klarna made its stock market debut in September 2025, but its shares have decreased by approximately 24% since the IPO, contrasting with a 7% increase in the S&P 500 index [1][2] Business Model - Klarna's primary service is the "Buy Now, Pay Later" (BNPL) model, particularly its "Pay in 4" option, which allows consumers to make four interest-free payments if the total amount is repaid within about six weeks [3] - The company also offers longer-term financing options, termed Fair Financing, which are closed-end loans with terms ranging from six to 24 months and are designed for higher-cost goods and services [4] Financial Performance - Klarna achieved a record quarterly revenue of $903 million in Q3 2025, reflecting a 28% year-over-year increase [5] - The gross merchandise value (GMV) in the U.S. surged by 43%, contributing to an overall GMV of $32.7 billion [6] - The total number of merchants using Klarna's services increased by 38% to around 850,000, alongside a 32% rise in active customers [6] Strategic Direction - Klarna is positioning itself as a "digital bank," indicating a shift in focus beyond just BNPL services to broader financial offerings [9] - The company plans to launch its own stablecoin, KlarnaUSD, which aims to reduce costs and potentially enhance profitability if managed effectively [10]