EX-99.1 2 mqearningsrelease-q2x2023.htm EX-99.1 Document

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MARQETA REPORTS SECOND QUARTER 2023 FINANCIAL RESULTS,
ANNOUNCES FOUR YEAR EXTENSION TO CASH APP CONTRACT

The global modern card issuer had $54 billion in total processing volume, up 33 percent year-over-year,
with net revenue of $231 million in the second quarter of 2023, up 24 percent year-over-year.
OAKLAND, Calif. – August 8, 2023 - Marqeta, Inc. (NASDAQ: MQ), the global modern card issuing platform, today reported financial results for the second quarter ended June 30, 2023.

Total processing volume (TPV) was $54 billion, with net revenue of $231 million, representing year-over-year increases of 33% and 24%, respectively. Gross profit was $85 million, an increase of 8% year over year, resulting in a gross margin of 37%. GAAP net loss was $59 million and Adjusted EBITDA was $1 million.
"In the second quarter, we grew our business to ever-increasing levels of scale, exceeded our sales bookings goals again and reduced our cost structure. Our execution has been strong, including accelerating our go-to-market motion, enhancing our product offering, and extending our partnership with Cash App. I firmly believe Marqeta is well positioned to capitalize on the fast-growing embedded finance market," said Simon Khalaf, CEO of Marqeta.
Recent Business Updates:
Marqeta highlighted several recent business updates that demonstrate its current business momentum:
•Marqeta announced today that it had signed a four year extension with Block to continue powering its popular Cash App card product. This extended deal to power the Cash Card is effective on July 1, 2023 and continues through June of 2027. We believe this renewal demonstrates the value Block sees in the Marqeta platform and this partnership, exemplified by Marqeta’s flexibility, innovation and breadth of service.
•Marqeta announced a new expansion into Brazil with a partnership with Latin American banking-as-a-service platform Fitbank. Through this partnership, Fitbank will be both a Marqeta customer and act as Marqeta's BIN sponsor for customers looking to launch in the region. Brazil is a highly valued expansion point for many of Marqeta’s global customers and has a base of local fintechs looking to build new innovations on modern payment infrastructure.





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Operating Highlights
In thousands, except percentages and per share data. % change is calculated over the comparable prior-year period (unaudited)Three Months Ended June 30,%
Change		Six Months Ended June 30,%
Change
2023202220232022
Financial metrics:
Net revenue$231,115 $186,678 24%$448,456 $352,780 27%
Gross profit$84,609 $78,049 8%$173,771 $152,775 14%
Gross margin37 %42 %39 %43 %
Total operating expenses$154,030 $124,766 23%$330,624 $248,764 33%
Net loss($58,797)($44,688)(32)%($127,598)($105,286)(21)%
Net loss margin(25)%(24)%(28)%(30)%
Net loss per share - basic and diluted($0.11)($0.08)(38)%($0.24)($0.19)(26)%
Key operating metric and Non-GAAP financial measures:
Total Processing Volume (TPV) (in millions) 1
$53,615 $40,457 33%$103,635 $77,083 34%
Adjusted EBITDA 2
$824 ($10,225)108%($3,521)($20,678)83%
Adjusted EBITDA margin 2
0.4 %(5)%(1)%(6)%
Non-GAAP operating expenses 2
$83,785 $88,274 (5)%$177,292 $173,453 2%
1 TPV represents the total dollar amount of payments processed through our platform, net of returns and chargebacks. We believe that TPV is a key indicator of the market adoption of our platform, growth of our brand, growth of our customers' businesses and scale of our business.
2 See "Information Regarding Non-GAAP Measures" for definitions of Adjusted EBITDA, Adjusted EBITDA margin, and Non-GAAP operating expenses and the reconciliations of the net loss to Adjusted EBITDA, and of the total operating expenses to Non-GAAP operating expenses.
Second Quarter 2023 Financial Results:
Net revenue increased by $44 million, or 24% year-over-year, rising to $231 million from $187 million in the second quarter of 2022 resulting from a 33% increase in TPV year-over-year, partially offset by unfavorable changes in the mix of our card programs.
Gross profit increased by 8% year-over-year, rising to $85 million from $78 million in the second quarter of 2022 primarily due to our TPV growth. Gross margin was 37% in the second quarter of 2023.
Net loss increased by $14 million to $59 million in the quarter. Our increase in gross profit was partially offset by increases in compensation & benefits primarily due to restructuring charges and postcombination compensation benefits related to the acquisition of Power Finance. Net loss margin was 25% in the second quarter of 2023.
Total Processing Volume increased by 33% year-over-year, rising to $54 billion from $40 billion in the second quarter of 2022.
Adjusted EBITDA increased by $11 million year-over year, rising to $1 million, in the second quarter of 2023 from an Adjusted EBITDA loss of $10 million in the comparable prior year period. Adjusted EBITDA margin was 0.4% in the second quarter of 2023, an increase of 5 percentage points year-over-year.

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Conference Call
Marqeta will host a live conference call today at 1:30 p.m. Pacific time (4:30 p.m. Eastern time). To join the call, please dial-in 10 minutes in advance: toll-free at 1-844-826-3035 or direct at 1-412-317-5195. The conference call will also be available live via webcast online at http://investors.marqeta.com.
The telephone replay dial-in numbers are 1-844-512-2921 and 1-412-317-6671 and will be available until August 15, 2023, 8:59 p.m. Pacific time (11:59 p.m. Eastern time). The confirmation code for the replay is 10180147.
Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements expressed or implied in this press release include, but are not limited to, statements relating to Marqeta’s quarterly guidance; statements regarding expected accounting treatment and changes to revenue and gross profit; statements regarding Marqeta’s business plans, business strategy and the continued success and growth of our customers; statements and expectations regarding Marqeta's partnerships, new product introductions, and product capabilities; and statements made by Marqeta’s CEO and CFO. Actual results may differ materially from the expectations contained in these statements due to risks and uncertainties, including, but not limited to, the following: the effect of uncertainties related to global economies, our business, results of operations, financial condition, demand for our platform, sales cycles and customer retention; the risk that Marqeta’s anticipated accounting treatment may be subject to further changes or developments; the risk that Marqeta is unable to further attract, retain, diversify, and expand its customer base; the risk that Marqeta is unable to drive increased profitable transactions on its platform; the risk that consumers and customers will not perceive the benefits of Marqeta’s products as Marqeta expects; the risk that Marqeta's technology platform, including hosted solutions, do not operate as intended resulting in system outages; the risk that Marqeta will not be able to achieve the cost structure that Marqeta currently expects; the risk that Marqeta’s solution will not achieve the expected market acceptance; the risk that competition could reduce expected demand for Marqeta’s services; the risk that changes in the regulatory landscape adversely affects the gross interchange or other revenue Marqeta earns or adversely affects the bank and network costs Marqeta incurs; the risk that Marqeta may be unable to maintain relationships with Issuing Banks and Card Networks; the risk that Marqeta is not able to identify and recognize the anticipated benefits of any acquisition; the risk that Marqeta is unable to successfully integrate any acquisition to businesses and related operations; the risk of ongoing financial services and banking sector instability and follow on effects to fintech companies, general economic conditions in either domestic or international markets, including inflation and recessionary fears, conditions resulting from geopolitical uncertainty and instability or war, including the direct and indirect effects of the significant military action against Ukraine launched by Russia on U.S. and global economies, our business, results of operations, financial condition, and demand for our platform; and the risk that Marqeta may be subject to additional risks such as inflation or currency fluctuations due to its international business activities. Detailed information about these risks and other factors that could potentially affect Marqeta’s business, financial condition and results of operations are included in the “Risk Factors” disclosed in Marqeta's Annual Report on Form 10-K for the year ended December 31, 2022 and subsequent Quarterly Reports on Form 10-Q, as such risk factors may be updated from time to time in Marqeta’s periodic filings with the SEC, available at www.sec.gov and Marqeta’s website at http://investors.marqeta.com.
The forward-looking statements in this press release are based on information available to Marqeta as of the date hereof. Marqeta disclaims any obligation to update any forward-looking statements, except as required by law.
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Disclosure Information
Investors and others should note that Marqeta announces material financial information to its investors using its investor relations website, SEC filings, press releases, public conference calls and webcasts. Marqeta also uses social media to communicate with its customers and the public about Marqeta, its products and services and other matters relating to its business and market. It is possible that the information Marqeta posts on social media could be deemed to be material information. Therefore, Marqeta encourages investors, the media, and others interested in Marqeta to review the information we post on social media channels including the Marqeta Twitter feed (@Marqeta), the Marqeta Instagram page (@lifeatmarqeta), the Marqeta Facebook page, and the Marqeta LinkedIn page. These social media channels may be updated from time to time.
Use of Non-GAAP Financial Measures
Reconciliations of non-GAAP financial measures to the most directly comparable financial results as determined in accordance with GAAP are included at the end of this press release following the accompanying financial data. For a description of these non-GAAP financial measures, including the reasons management uses each measure, please see the section of the tables titled "Information Regarding Non-GAAP Financial Measures".
About Marqeta, Inc.
Marqeta’s modern card issuing platform empowers its customers to create customized and innovative payment cards. Marqeta’s modern architecture gives its customers the ability to build more configurable and flexible payment experiences, accelerating time-to-market and democratizing access to card issuing technology. Marqeta’s open APIs provide instant access to highly scalable, cloud-based payment infrastructure that enables customers to launch and manage their own card programs, issue cards and authorize and settle payment transactions. Marqeta is headquartered in Oakland, California and is certified to operate in 40 countries globally.
Marqeta® is a registered trademark of Marqeta, Inc.
IR Contact: Marqeta Investor Relations, IR@marqeta.com
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Marqeta, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except share and per share amounts)
(unaudited)
Three Months Ended June 30,Six Months Ended June 30,
2023202220232022
Net revenue$231,115 $186,678 $448,456 $352,780 
Costs of revenue146,506 108,629 274,685 200,005 
Gross profit84,609 78,049 173,771 152,775 
Operating expenses:
Compensation and benefits126,788 97,868 274,547 198,216 
Technology13,154 13,154 27,744 24,538 
Professional services4,873 5,794 10,310 10,564 
Occupancy1,057 1,148 2,211 2,263 
Depreciation and amortization2,494 921 4,474 1,900 
Marketing and advertising561 886 1,002 1,445 
Other operating expenses5,103 4,995 10,336 9,838 
Total operating expenses154,030 124,766 330,624 248,764 
Loss from operations(69,421)(46,717)(156,853)(95,989)
Other income (expense), net10,762 1,802 22,434 (9,875)
Loss before income tax expense(58,659)(44,915)(134,419)(105,864)
Income tax expense (benefit)138 (227)(6,821)(578)
Net loss$(58,797)$(44,688)$(127,598)$(105,286)
Net loss per share attributable to common stockholders, basic and diluted$(0.11)$(0.08)$(0.24)$(0.19)
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted538,267,449 544,704,146 538,988,940 543,524,008 

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Marqeta, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
June 30,
2023		December 31,
2022
(unaudited)
Assets
Current assets:
Cash and cash equivalents$950,157 $1,183,846 
Restricted cash9,375 7,800 
Short-term investments432,354 440,858 
Accounts receivable, net15,253 15,569 
Settlements receivable, net10,515 18,028 
Network incentives receivable67,063 42,661 
Prepaid expenses and other current assets29,098 38,007 
Total current assets1,513,815 1,746,769 
Property and equipment, net14,330 7,440 
Operating lease right-of-use assets, net7,784 9,015 
Goodwill123,446 — 
Other assets44,768 7,122 
Total assets$1,704,143 $1,770,346 
Liabilities and stockholders' equity
Current liabilities
Accounts payable$2,818 $3,798 
Revenue share payable125,853 142,194 
Accrued expenses and other current liabilities189,669 136,887 
Total current liabilities318,340 282,879 
Operating lease liabilities, net of current portion7,132 9,034 
Other liabilities6,056 5,477 
Total liabilities331,528 297,390 
Stockholders' equity :
Preferred stock— — 
Common stock52 53 
Additional paid-in capital2,103,870 2,082,373 
Accumulated other comprehensive loss(1,476)(7,237)
Accumulated deficit(729,831)(602,233)
Total stockholders’ equity1,372,615 1,472,956 
Total liabilities and stockholders' equity$1,704,143 $1,770,346 

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Marqeta, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Six Months Ended June 30,
20232022
Cash flows from operating activities:
Net loss$(127,598)$(105,286)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization4,474 1,900 
Share-based compensation expense90,164 72,153 
Non-cash postcombination compensation expense32,430 — 
Non-cash operating leases expense1,231 1,111 
Amortization of premium (accretion of discount) on short-term investments(2,311)338 
Impairment of other financial instruments— 11,616 
Other499 326 
Changes in operating assets and liabilities:
Accounts receivable63 5,067 
Settlements receivable7,513 833 
Network incentives receivable(24,402)17,133 
Prepaid expenses and other assets14,467 (14,982)
Accounts payable(3,239)(1,609)
Revenue share payable(16,341)(4,092)
Accrued expenses and other liabilities(11,828)(6,987)
Operating lease liabilities(1,642)(1,464)
Net cash used in operating activities(36,520)(23,943)
Cash flows from investing activities:
Purchases of property and equipment(668)(868)
Capitalization of internal-use software(6,395)— 
Business combination, net of cash acquired(131,914)— 
Purchases of short-term investments(279,548)(12,999)
Maturities of short-term investments296,000 12,900 
Net cash used in investing activities(122,525)(967)
Cash flows from financing activities:
Proceeds from exercise of stock options, including early exercised stock options, net of repurchase of early exercised unvested options2,299 3,407 
Proceeds from shares issued in connection with employee stock purchase plan1,775 2,775 
Taxes paid related to net share settlement of restricted stock units(10,070)(8,580)
Repurchases of common stock(67,073)— 
Net cash used in financing activities(73,069)(2,398)
Net decrease in cash, cash equivalents, and restricted cash(232,114)(27,308)
Cash, cash equivalents, and restricted cash- Beginning of period1,191,646 1,255,381 
Cash, cash equivalents, and restricted cash - End of period$959,532 $1,228,073 

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Marqeta, Inc.
Financial and Operating Highlights
(in thousands, except per share data or as noted)
(unaudited)
20232022Year over Year Change Q2'23 vs Q2'22
Second QuarterFirst QuarterFourth QuarterThird QuarterSecond Quarter
Operating performance:
Net revenue$231,115 $217,343 $203,805 $191,621 $186,678 24 %
Costs of revenue146,506 128,179 116,681 111,519 108,629 35 %
Gross profit84,609 89,164 87,124 80,102 78,049 8 %
Gross margin37 %41 %43 %42 %42 %(5) pps
Operating expenses:
Compensation and benefits126,788 147,759 110,991 105,887 97,868 30 %
Technology13,154 14,590 14,401 13,422 13,154 — %
Professional services4,873 5,437 6,295 6,620 5,794 (16)%
Occupancy and equipment1,057 1,154 1,126 1,125 1,148 (8)%
Depreciation and amortization2,494 1,980 1,019 934 921 171 %
Marketing and advertising561 441 1,862 688 886 (37)%
Other operating expenses5,103 5,236 5,753 10,922 4,995 2 %
Total operating expenses154,030 176,597 141,447 139,598 124,766 23 %
Loss from operations(69,421)(87,433)(54,323)(59,496)(46,717)49 %
Other income (expense), net10,762 11,672 28,468 6,333 1,802 n/m
Loss before income tax expense(58,659)(75,761)(25,855)(53,163)(44,915)31 %
Income tax expense (benefit)138 (6,960)471 5 (227)(161)%
  Net loss$(58,797)$(68,801)$(26,326)$(53,168)$(44,688)32 %
Loss per share - basic and diluted$(0.11)$(0.13)$(0.05)$(0.10)$(0.08)38 %
TPV (in millions)$53,615 $50,020 $46,704 $42,473 $40,457 33 %
Adjusted EBITDA$824 $(4,346)$(7,488)$(13,630)$(10,225)(108)%
Adjusted EBITDA margin0.4 %(2)%(4)%(7)%(5)%5  pps
Financial condition:
Cash and cash equivalents$950,157 $1,050,414 $1,183,846 $1,204,857 $1,220,273 (22)%
Restricted cash$9,375 $7,800 $7,800 $7,800 $7,800 20 %
Short-term investments$432,354 $408,675 $440,858 $441,132 $444,873 (3)%
Total assets$1,704,143 $1,774,183 $1,770,346 $1,774,455 $1,776,930 (4)%
Total liabilities$331,528 $340,533 $297,390 $262,117 $242,373 37 %
Stockholders' equity$1,372,615 $1,433,650 $1,472,956 $1,512,338 $1,534,557 (11)%
pps = percentage points
n/m = not meaningful

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Marqeta, Inc.
Reconciliation of GAAP to NON-GAAP Measures
(in thousands)
(unaudited)
Information Regarding Non-GAAP Measures
In addition to the financial measures prepared in accordance with generally accepted accounting principles in the United States (“GAAP”), this press release contains certain non-GAAP financial measures. Marqeta considers Adjusted EBITDA, Adjusted EBITDA Margin, and Non-GAAP operating expenses as supplemental measures of the company’s performance that are not required by, nor presented in accordance with GAAP.
We define Adjusted EBITDA as net income (loss) adjusted to exclude depreciation and amortization; share-based compensation expense; payroll tax related to share-based compensation; restructuring charges; acquisition-related expenses which consist of due diligence costs, transaction costs and integration costs related to potential or successful acquisitions, and non-cash postcombination compensation expenses; income tax expense (benefit); and other income (expense), net, which consists of interest income from our short-term investments, realized foreign currency gains and losses, our share of equity method investments’ profit or loss, impairment of equity method investments or other financial instruments, and gain from sale of equity method investments. We believe that Adjusted EBITDA is an important measure of operating performance because it allows management and our board of directors to evaluate and compare our core operating results, including our operating efficiencies, from period to period. Additionally, we utilize Adjusted EBITDA as an input into our calculation of our annual employee bonus plans.
Adjusted EBITDA Margin is calculated as Adjusted EBITDA divided by net revenue. This measure is used by management and our board of directors to evaluate our operating efficiency.
We define Non-GAAP operating expenses as total operating expenses adjusted to exclude depreciation and amortization; share-based compensation expense; payroll tax related to share-based compensation; restructuring charges; and acquisition-related expenses which consists of due diligence costs, transaction costs and integration costs related to potential or successful acquisitions, and non-cash postcombination compensation expenses.
Adjusted EBITDA, Adjusted EBITDA Margin, and Non-GAAP operating expenses should not be considered in isolation, or construed as an alternative to net loss, or any other performance measures derived in accordance with GAAP, or as an alternative to cash flow from operating activities or as a measure of the company's liquidity. In addition, other companies may calculate Adjusted EBITDA differently than Marqeta does, which limits its usefulness in comparing Marqeta’s financial results with those of other companies.


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The following table shows Marqeta's GAAP results reconciled to non-GAAP results included in this release:
Three Months Ended June 30,Six Months Ended June 30,
2023202220232022
GAAP net revenue$231,115 $186,678 $448,456 $352,780 
GAAP net loss$(58,797)$(44,688)$(127,598)$(105,286)
GAAP net loss margin(25)%(24)%(28)%(30)%
GAAP total operating expenses$154,030 $124,766 $330,624 $248,764 
GAAP net loss$(58,797)$(44,688)$(127,598)$(105,286)
Depreciation and amortization expense2,494 921 4,474 1,900 
Share-based compensation expense47,056 35,148 93,055 72,153 
Payroll tax expense related to share-based compensation638 423 1,278 1,258 
Acquisition-related expenses (1)
11,684 — 46,152 — 
Restructuring8,373 — 8,373 — 
Other expense (income), net(10,762)(1,802)(22,434)9,875 
Income tax expense (benefit)138 (227)(6,821)(578)
Adjusted EBITDA$824 $(10,225)$(3,521)$(20,678)
Adjusted EBITDA Margin0.4 %(5)%(1)%(6)%
GAAP Total operating expenses$154,030 $124,766 $330,624 $248,764 
Depreciation and amortization expense(2,494)(921)(4,474)(1,900)
Share-based compensation expense(47,056)(35,148)(93,055)(72,153)
Payroll tax expense related to share-based compensation(638)(423)(1,278)(1,258)
Restructuring(8,373)— (8,373)— 
Acquisition-related expenses(11,684)— (46,152)— 
Non-GAAP operating expenses$83,785 $88,274 $177,292 $173,453 
_______________
(1) Acquisition-related expenses, which include transaction costs, integration costs and non-cash postcombination compensation expense, have been excluded from Adjusted EBITDA as such expenses are not reflective of our ongoing core operations and are not representative of the ongoing costs necessary to operate our business; instead, these are costs specifically associated with a discrete transaction.
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