Marqeta, Inc. (NASDAQ: MQ), a leading modern card issuing platform, saw its stock price plummet over 30% in after-hours trading on Monday after reporting disappointing third-quarter earnings and providing weak guidance for the fourth quarter.

For Q3, Marqeta reported an adjusted loss of $0.06 per share, slightly worse than the consensus estimate of $0.05. Revenue grew 18% year-over-year to $128 million but narrowly missed expectations of $128.09 million. While total processing volume increased by 30% to $74 billion and gross profit rose 24% to $90 million, the company's guidance for Q4 fell significantly short.

Marqeta projected net revenue growth of just 10-12% and gross profit growth of 13-15% for Q4, significantly lower than Wall Street expectations. CEO Simon Khalaf cited "heightened scrutiny of the banking environment and specific customer program changes" as major factors impacting the weaker-than-expected Q4 outlook.

The company highlighted that increased regulatory scrutiny has caused delays in launching new customer programs, pushing the ramp-up of processing volumes and revenue into Q4 and potentially into 2025 as it works through the backlog. Additionally, some sophisticated fintech customers are taking on more responsibilities in-house, such as program management and risk services, reducing their reliance on Marqeta's platform.

These transitory factors appear to have significantly slowed Marqeta's expected growth in the near term, leading to the drastic stock sell-off despite the company's long-term growth prospects remaining intact. Investors will closely monitor Marqeta's ability to navigate the heightened regulatory environment and effectively onboard new customer programs over the coming quarters.