• Total Process Volume (TPV): $80 billion in Q4, a 29% increase year-over-year.
• Net Revenue: $136 million in Q4, growing 14% year-over-year.
• Gross Profit: $98 million in Q4, an 18% increase year-over-year, with a gross margin of 72%.
• Adjusted EBITDA: $13 million in Q4, translating into a 9% margin.
• Net Revenue Take Rate: 17 basis points, unchanged from the previous quarter.
• Block Net Revenue Concentration: 46% in Q4, down 1 point from Q3 2024 and 5 points from Q4 2023.
• Cash and Short-term Investments: $1.1 billion at the end of Q4.
• GAAP Net Loss: $27 million in Q4.
• Share Buyback Authorization: $380 million total, with $300 million newly approved.

• Warning! GuruFocus has detected 5 Warning Signs with AAOI.

Release Date: February 26, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Marqeta Inc (NASDAQ:MQ) reported a 29% increase in Total Process Volume (TPV) to $80 billion in Q4 2024, demonstrating strong growth.
• The company's Q4 net revenue grew by 14% year-over-year, reaching $136 million.
• Marqeta Inc (NASDAQ:MQ) achieved a gross profit of $98 million in Q4, an 18% increase from the previous year, with a gross margin of 72%.
• The company secured a significant consumer co-brand credit partnership with an established airline, highlighting its competitive edge in payment innovation.
• Marqeta Inc (NASDAQ:MQ) is expanding its platform capabilities by integrating the American Express network, enhancing customer options for credit and debit card programs.

Negative Points

• The leadership transition with the stepping down of CEO Simon Khalaf may create uncertainty during the search for a new CEO.
• Three program launches remain delayed due to customer decisions, which could impact future revenue growth.
• The company faces challenges with contract renewals in 2025, which are expected to weigh on gross profit growth by approximately 2 percentage points.
• Marqeta Inc (NASDAQ:MQ) is behind its $60 million goal for new program contributions due to fewer launches and regulatory delays.
• The macroeconomic environment remains a risk factor, potentially affecting spending and growth projections.

Q & A Highlights

Q: Can you explain the rationale behind acquiring TransactPay instead of building similar capabilities internally? A: TransactPay is a bin sponsorship provider with an e-money institution license, allowing it to issue e-money and undertake payments in the UK and EU. Acquiring TransactPay allows Marqeta to become the bin sponsor, providing more control over offerings and simplifying contracting for customers. Building this capability internally would take several years, and TransactPay already has the specialized resources and proven performance, making it a seamless addition to Marqeta's value proposition. (Michael Milotich, Interim CEO and CFO)

Q: What does the pipeline look like after securing the airline partnership, and who did you compete against for this business? A: The pipeline is strong, with significant momentum in embedded finance. Approximately two-thirds of the pipeline consists of embedded finance customers, a significant increase from previous quarters. The airline partnership was won by offering a more engaging and embedded user experience, appealing to digital-first companies. (Michael Milotich, Interim CEO and CFO)

Q: Are you equipped to win large embedded finance deals, and what are the key components needed? A: Marqeta is well-positioned to win large embedded finance deals, offering a full solution provider package through APIs, including credit, debit, BNPL, and program management. Marqeta's platform supports global operations, providing a unique and differentiated offering that appeals to large companies looking for comprehensive solutions. (Michael Milotich, Interim CEO and CFO)

Q: Does the 2025 guidance assume the acquisition of TransactPay, and what is the expected timeline for GAAP profitability? A: Yes, the 2025 guidance assumes the acquisition of TransactPay in Q3. Marqeta expects to achieve GAAP profitability on a quarterly basis by the end of 2026, driven by gross profit growth outpacing expense growth, benefiting from scale and efficiency improvements. (Michael Milotich, Interim CEO and CFO)

Q: What are the main risks for Marqeta in 2025, and how do you plan to mitigate them? A: Key risks include macroeconomic factors affecting spending and the timing of new program launches, which depend on customer readiness. Marqeta mitigates these risks by maintaining close customer relationships and aligning on growth expectations. The company also focuses on expanding its service offerings and leveraging its growing installed base to drive growth. (Michael Milotich, Interim CEO and CFO)

For the complete transcript of the earnings call, please refer to the full earnings call transcript.