OAKLAND, Calif., (BUSINESS WIRE) -- Marqeta, Inc. /zigman2/quotes/227203754/composite MQ -0.92% , a leading modern card issuing platform, today reported financial results for the second quarter ended June 30, 2021.
Marqeta reported net revenue was $122 million, with total processing volume (TPV) of $26.5 billion, both increases of 76% from the same quarter of 2020. The company saw gross profit of $47 million during the quarter, up 70% from the same quarter of 2020. Marqeta reported a GAAP net loss of $68.6 million and Adjusted EBITDA of $(10.6) million for the quarter ended June 30, 2021.
“Our earnings demonstrate an enormous appetite for modern card issuing, demand across diverse industries and rapid growth with our customers,” said Jason Gardner, Founder and CEO of Marqeta.
Marqeta’s second quarter earnings growth was underscored by several key business updates:
Marqeta announced that it had been chosen by Google to power the launch of a digital card for Google Pay balance users.
Marqeta continues to see strong growth from the Buy Now, Pay Later vertical, where it supports the majority of the leading innovators. During the quarter ended June 30, 2021, net revenue for this vertical increased 350% compared to the same quarter in 2020.
In July, Marqeta extended its agreement with Affirm, a Buy Now, Pay Later category leader, through January 2024, showing the long term commitment its customers are making to build and scale on its platform.
Marqeta added two key leaders with deep experience to drive the next chapter of Marqeta’s growth: Darren Mowry, formerly leading AWS’s business in EMEA, joined as CRO, while Randy Kern, a technology leader with Salesforce, joined as CTO.
Financial and Operating Highlights
|(Dollars in thousands except per share amounts or as noted) (unaudited)||
Three Months Ended
Six Months Ended
|Gross profit margin||38||%||40||%||(2) pps||42||%||39||%||3 pps|
|Net loss margin||(56)||%||(10)||%||(46) pps||(35)||%||(18)||%||(17) pps|
|Net loss per share - basic and diluted ||$||(0.29)||$||(0.06)||383%||$||(0.44)||$||(0.18)||144%|
|Key operating metric and Non-GAAP financial measures 2:|
|Total Processing Volume (TPV) (in millions)||$||26,520||$||15,082||76%||$||50,518||$||24,077||110%|
|Adjusted EBITDA ||$||(10,637)||$||(3,029)||251%||$||(8,990)||$||(13,440)||(33)%|
|Adjusted EBITDA margin 3||(9)||%||(4)||%||(5) pps||(4)||%||(11)||%||(7) pps|
Net loss per share is computed by dividing net loss by the weighted average of common shares and dilutive common shares outstanding during the period.
 We track a number of operating and financial metrics, including the key metric set forth in this table (Total Processing Volume), to help evaluate our business and growth trends, establish budgets, evaluate the effectiveness of our investments, and assess operational efficiencies. Total Processing Volume (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.
 See "Information Regarding Non-GAAP Measures" for definitions of Adjusted EBITDA and Adjusted EBITDA margin and a reconciliation of the net loss to Adjusted EBITDA.
Net Revenue : Net revenue increased by $52.9 million, or 76% year-over-year, driven by higher TPV from existing large customers and continued growth in processing volume from both our Digital Banking and Buy-Now-Pay-Later customers.
Gross Profit: Gross profit increased by 70% year-over-year to $47.0 million. Gross margin decreased from 40% during the quarter ended June 30, 2020, to 38% during the quarter ended June 30, 2021 due to increased card networks fees.
Net Loss : Net loss increased by $61.4 million, or 865%, year-over-year to $68.6 million as a significant increase in gross profit was offset by increases in employee-related costs.
Total Processing Volume : TPV increased by 76% year-over-year.
Adjusted EBITDA : Adjusted EBITDA in the second quarter of 2021 was $(10.6) million, a decrease of $(7.6) million year-over-year.
The following summarizes Marqeta's guidance for the third quarter of 2021:
|Third Quarter 2021|
|Net revenue||$114 - $119 million|
|Adjusted EBITDA (1)||$(16) - $(13) million|
|(1) See "Information Regarding Non-GAAP Measures" for the definition of Adjusted EBITDA.|
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 1-877-407-4018 or direct at 1-201-689-8471. 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 November 9, 2021, 5:00 p.m. Pacific time (8:00 p.m. Eastern time). The confirmation code for the replay is 13721145.
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 guidance for the quarter ending September 30, 2021; statements regarding Marqeta’s business plans, business strategy and the continued success and growth of our customers; expectations regarding Marqeta’s ability to address significant global opportunities; and statements made by Marqeta’ Founder and CEO. 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 the global COVID-19 pandemic on U.S. and global economies, our business, results of operations, financial condition, demand for our platform, sales cycles and customer retention; 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 TPV 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; and the risk that Marqeta may be subject to additional risks such as 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 prospectus filed with the Securities and Exchange Commission (the “SEC”) on June 9, 2021 and in its Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2021, 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 .
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 and the Marqeta LinkedIn Feed. 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 36 countries globally.
Marqeta® is a registered trademark of Marqeta, Inc.
|Three Months Ended June 30,||Six Months Ended June 30,|
|Costs of revenue||75,291||41,785||133,417||71,611|
|Compensation and benefits||95,204||25,901||140,043||50,883|
|Depreciation and amortization||874||850||1,781||1,707|
|Marketing and advertising||495||343||990||681|
|Other operating expenses||3,530||1,101||4,825||2,627|
|Total operating expenses||114,961||34,414||175,470||67,989|
|Loss from operations||(67,986)||(6,797)||(78,638)||(21,810)|
|Other income (expense), net||(481)||(295)||(2,648)||200|
|Loss before income tax expense||(68,467)||(7,092)||(81,286)||(21,610)|
|Income tax expense||(87)||(15)||(106)||(27)|
|Net loss per share attributable to common stockholders, basic and diluted||$||(0.29)||$||(0.06)||$||(0.44)||$||(0.18)|
|Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted||234,669,664||120,051,635||183,784,697||119,265,816|
|Cash and cash equivalents||$||1,579,287||$||220,433|
|Accounts receivable, net||5,931||8,420|
|Settlements receivable, net||9,598||12,867|
|Network incentives receivable||37,437||20,022|
|Prepaid expenses and other current assets||11,179||11,461|
|Total current assets||1,756,285||430,906|
|Property and equipment, net||10,104||9,477|
|Operating lease right-of-use assets, net||12,353||13,411|
|Liabilities, redeemable convertible preferred stock and stockholders' equity (deficit)|
|Revenue share payable||82,015||78,191|
|Accrued expenses and other current liabilities||87,323||60,545|
|Total current liabilities||171,639||141,098|
|Redeemable convertible preferred stock warrant liabilities||—||2,517|
|Operating lease liabilities, net of current portion||13,984||15,449|
|Redeemable convertible preferred stock||—||501,881|
|Stockholders' equity (deficit):|
|Additional paid-in capital||1,920,936||39,769|
|Accumulated other comprehensive income (loss)||(88)||25|
|Total stockholders’ equity (deficit)||1,585,986||(213,717)|
|Total liabilities, redeemable convertible preferred stock and stockholders' equity (deficit)||$||1,780,324||$||457,680|
|Six Months Ended June 30,|
|Cash flows from operating activities:|
|Adjustments to reconcile net loss to net cash provided by operating activities:|
|Depreciation and amortization||1,781||1,707|
|Share-based compensation expense||66,928||6,663|
|Non-cash operating leases expense||1,058||1,010|
|Amortization of premium on marketable securities||716||87|
|Provision for doubtful accounts||73||23|
|Changes in operating assets and liabilities:|
|Network incentives receivable||(17,415)||(1,718)|
|Prepaid expenses and other assets||354||612|
|Revenue share payable||3,824||22,580|
|Accrued expenses and other liabilities||22,738||7,947|
|Operating lease liabilities||(1,420)||(848)|
|Net cash provided by operating activities||5,813||14,710|
|Cash flows from investing activities:|
|Purchases of property and equipment||(1,096)||(1,501)|
|Purchases of marketable securities||(13,145)||(63,033)|
|Maturities of marketable securities||57,188||61,720|
|Net cash provided by (used in) investing activities||42,947||(2,814)|
|Cash flows from financing activities:|
|Proceeds from initial public offering, net of underwriters' discounts and commissions||1,319,809||—|
|Proceeds from issuance of redeemable convertible preferred stock, net of issuance costs||—||143,109|
|Proceeds from exercise of stock options, including early exercised stock options||2,571||561|
|Payments for net settlement of restricted stock units||(10,273)||—|
|Payment of deferred offering costs||(1,981)||(511)|
|Repurchase of early exercised unvested options||(32)||(65)|
|Net cash provided by financing activities||1,310,094||143,094|
|Net increase in cash, cash equivalents, and restricted cash||1,358,854||154,990|
|Cash, cash equivalents, and restricted cash- Beginning of period||228,233||68,144|
|Cash, cash equivalents, and restricted cash - End of period||$||1,587,087||$||223,134|
|Second Quarter||First Quarter||Fourth Quarter||Third Quarter||Second Quarter|
|Costs of revenue||75,291||58,126||51,750||49,024||41,785||80||%|
|Gross profit margin||38||%||46||%||41||%||42||%||40||%||(2)||pps|
|Compensation and benefits||95,204||44,839||37,747||38,231||25,901||268||%|
|Occupancy and equipment||907||1,086||1,070||1,100||1,080||(16)||%|
|Depreciation and amortization||874||907||890||901||850||3||%|
|Marketing and advertising||495||495||618||371||343||44||%|
|Other operating expenses||3,530||1,295||1,346||1,287||1,101||221||%|
|Total operating expenses||114,961||60,509||49,551||47,454||34,414||234||%|
|Loss from operations||(67,986)||(10,652)||(13,105)||(12,172)||(6,797)||900||%|
|Other income (expense), net||(481)||(2,167)||(638)||(83)||(295)||63||%|
|Loss before income tax expense||(68,467)||(12,819)||(13,743)||(12,255)||(7,092)||865||%|
|income tax expense||(87)||(19)||(17)||(43)||(15)||480||%|
|Loss per share - basic and diluted||$||(0.29)||$||(0.10)||$||(0.11)||$||(0.10)||$||(0.06)||383||%|
|TPV (in millions)||$||26,520||$||23,998||$||18,748||$||17,250||$||15,082||76||%|
|Adjusted EBITDA margin||(9)||%||2||%||(3)||%||1||%||(4)||%||(5)||pps|
|Cash and cash equivalents||$||1,579,287||$||247,630||$||220,433||$||214,960||$||215,334||633||%|
|Redeemable preferred stock||$||—||$||501,881||$||501,881||$||501,881||$||478,857||(100)||%|
|Stockholders' equity (deficit)||$||1,585,986||$||(213,575)||$||(213,717)||$||(211,142)||$||(212,498)||(846)||%|
pps = percentage points
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 and Adjusted EBITDA Margin 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 share-based compensation expense; payroll tax related to share-based compensation; depreciation and amortization; income tax expense; and other income (expense) net, which consists of changes in the fair value of redeemable convertible preferred stock warrant liabilities (for periods prior to the IPO), realized foreign currency gains and losses, and interest income from our marketable securities. 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 certain 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.
Adjusted EBITDA and Adjusted EBITDA Margin 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.
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,|
|GAAP net revenue||$||122,266||$||69,402||$||230,249||$||117,790|
|GAAP net loss||$||(68,554)||$||(7,107)||$||(81,392)||$||(21,637)|
|GAAP net loss margin||(56)||%||(10)||%||(35)||%||(18)||%|
|GAAP net loss||$||(68,554)||$||(7,107)||$||(81,392)||$||(21,637)|
|Depreciation and amortization expense||874||850||1,781||1,707|
|Share-based compensation expense||55,536||2,918||66,928||6,663|
|Payroll tax expense related to share-based compensation||939||—||939||—|
|Other income (expense), net||481||295||2,648||(200)|
|Income tax expense||87||15||106||27|
|Adjusted EBITDA Margin||(9)||%||(4)||%||(4)||%||(11)||%|
A reconciliation of Adjusted EBITDA to the comparable GAAP measure is not available due to the challenges and impracticability with estimating some of the items as such items cannot be reasonably predicted. Because of those challenges, reconciliations of such forward-looking non-GAAP financial measures are not available without unreasonable effort.
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SOURCE: Marqeta, Inc.
IR Contact: Marqeta Investor Relations, IR@marqeta.com
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