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Aug. 11, 2021, 4:05 p.m. EDT

Marqeta Second Quarter Earnings Report Shows 76 Percent Jump in Net Revenue, Driven by Customer Growth

The global modern card issuing platform issued its first earnings report as a public company, showing net revenue of $122 million, up 76 percent year-over-year, with 76 percent growth in total processing volume and a 70 percent increase in gross profit.

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
June 30,
  %   Six Months Ended
June 30,
  %
  2021   2020     2021   2020  
Financial metrics:                      
Net revenue $ 122,266     $ 69,402     76%   $ 230,249     $ 117,790     95%
Gross profit $ 46,975     $ 27,617     70%   $ 96,832     $ 46,179     110%
Gross profit margin 38 %   40 %   (2) pps   42 %   39 %   3 pps
Net loss $ (68,554)     $ (7,107)     865%   $ (81,392)     $ (21,637)     276%
Net loss margin (56) %   (10) %   (46) pps   (35) %   (18) %   (17) pps
Net loss per share - basic and diluted [1] $ (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 [3] $ (10,637)     $ (3,029)     251%   $ (8,990)     $ (13,440)     (33)%
Adjusted EBITDA margin 3 (9) %   (4) %   (5) pps   (4) %   (11) %   (7) pps

[1] 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.
[2] 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.
[3] 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.

Financial Guidance

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.

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 1-877-407-4018 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.

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 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 .

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 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.

Marqeta, Inc.
 
  Three Months Ended June 30,   Six Months Ended June 30,
  2021   2020   2021   2020
Net revenue $ 122,266     $ 69,402     $ 230,249     $ 117,790  
Costs of revenue 75,291     41,785     133,417     71,611  
Gross profit 46,975     27,617     96,832     46,179  
Operating expenses:              
Compensation and benefits 95,204     25,901     140,043     50,883  
Professional services 6,382     2,479     12,643     4,825  
Technology 7,569     2,660     13,195     5,099  
Occupancy 907     1,080     1,993     2,167  
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 $ (68,554)     $ (7,107)     $ (81,392)     $ (21,637)  
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  
Marqeta, Inc.
 
  June 30,
2021
  December 31,
2020
  (unaudited)    
Assets      
Current assets:      
Cash and cash equivalents $ 1,579,287     $ 220,433  
Restricted cash 7,800     7,800  
Marketable securities 105,053     149,903  
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  
Other assets 1,582     3,886  
Total assets $ 1,780,324     $ 457,680  
Liabilities, redeemable convertible preferred stock and stockholders' equity (deficit)      
Current liabilities      
Accounts payable $ 2,301     $ 2,362  
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  
Other liabilities 8,715     10,452  
Total liabilities 194,338     169,516  
Redeemable convertible preferred stock     501,881  
Stockholders' equity (deficit):      
Preferred stock      
Common stock 54     13  
Additional paid-in capital 1,920,936     39,769  
Accumulated other comprehensive income (loss) (88)     25  
Accumulated deficit (334,916)     (253,524)  
Total stockholders’ equity (deficit) 1,585,986     (213,717)  
Total liabilities, redeemable convertible preferred stock and stockholders' equity (deficit) $ 1,780,324     $ 457,680  
Marqeta, Inc.
 
  Six Months Ended June 30,
  2021   2020
Cash flows from operating activities:      
Net loss $ (81,392)     $ (21,637)  
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  
Other 2,901     601  
Changes in operating assets and liabilities:      
Accounts receivable 2,416     (1,918)  
Settlements receivable 3,269     135  
Network incentives receivable (17,415)     (1,718)  
Prepaid expenses and other assets 354     612  
Accounts payable (18)     (534)  
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  
Marqeta, Inc.
 
    2021   2020   Year over
    Second Quarter   First Quarter   Fourth Quarter   Third Quarter   Second Quarter  
Operating performance:                        
Net revenue   $ 122,266     $ 107,983     $ 88,196     $ 84,306     $ 69,402     76 %
Costs of revenue   75,291     58,126     51,750     49,024     41,785     80 %
Gross profit   46,975     49,857     36,446     35,282     27,617     70 %
Gross profit margin   38 %   46 %   41 %   42 %   40 %   (2) pps
Operating expenses:                        
Compensation and benefits   95,204     44,839     37,747     38,231     25,901     268 %
Professional services   6,382     6,261     3,172     2,132     2,479     157 %
Technology   7,569     5,626     4,708     3,432     2,660     185 %
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 %
Net loss   $ (68,554)     $ (12,838)     $ (13,760)     $ (12,298)     $ (7,107)     865 %
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   $ (10,637)     $ 1,647     $ (2,624)     $ 686     $ (3,029)     251 %
Adjusted EBITDA margin   (9) %   2 %   (3) %   1 %   (4) %   (5) pps
Financial condition:                        
Cash and cash equivalents   $ 1,579,287     $ 247,630     $ 220,433     $ 214,960     $ 215,334     633 %
Restricted cash   $ 7,800     $ 7,800     $ 7,800     $ 7,800     $ 7,800     %
Marketable securities   $ 105,053     $ 140,145     $ 149,903     $ 134,328     $ 96,730     9 %
Total assets   $ 1,780,324     $ 481,803     $ 457,680     $ 424,661     $ 382,260     366 %
Total liabilities   $ 194,338     $ 193,497     $ 169,516     $ 133,922     $ 115,901     68 %
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,
  2021   2020   2021   2020
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 $ (10,637)     $ (3,029)     $ (8,990)     $ (13,440)  
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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210811005826/en/

SOURCE: Marqeta, Inc.

IR Contact: Marqeta Investor Relations, IR@marqeta.com  

COMTEX_391404804/2456/2021-08-11T16:05:22

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/zigman2/quotes/227203754/composite
US : U.S.: Nasdaq
$ 22.51
-0.21 -0.92%
Volume: 2.23M
Oct. 15, 2021 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$12.14 billion
Rev. per Employee
$570,318
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