Marqeta, Inc. Q3 2024 Earnings Report

Marqeta, Inc. (NASDAQ: MQ), a global modern card issuing platform, reported solid performance in Q3 2024 with increased total processing volume (TPV) and net revenue. Despite facing regulatory scrutiny affecting growth projections, the company remains confident in its long-term growth strategy.

Key Takeaways

• Marqeta's TPV in Q3 reached $74 billion, a 30% year-over-year increase.
• Net revenue for Q3 was $128 million, up 18% from the previous year, with a gross profit of $90 million (up 24% year-over-year).
• Adjusted EBITDA was $9 million, and operating expenses were $81 million, a 9% year-over-year increase.
• The company launched a new product, portfolio migration, and announced Marqeta Flex for mid-2025 to enhance Buy Now Pay Later (BNPL) options.
• Regulatory scrutiny has delayed program launches by 30% to 40%, averaging a 70-day postponement, affecting Q4 2024 and 2025 projections.
• Marqeta is focused on cost optimization, projecting an adjusted EBITDA margin of 5% to 7% for Q4 and approximately $50 million in 2025.

Company Outlook

• Marqeta expects a full-year 2024 net revenue decline of approximately 26% with gross profit growth of about 6%.
• The Visa Flexible Credential is set to launch, with significant demand expected in the U.S., U.K., and EU markets.

Bearish Highlights

• Net revenue take rate decreased to 17 basis points due to a shift towards lower-margin customers and renegotiated platform partner agreements.
• Regulatory scrutiny has delayed 15 program launches, impacting Q4 2024 and 2025 growth.

Bullish Highlights

• The TPV growth was broad-based across sectors, with lending and expense management showing steady growth.
• Early investments in compliance are seen as a competitive advantage amidst industry-wide delays.

Misses

• Some new programs underperformed, leading to a backlog of program launches that impact future quarters.
• A 6-point headwind to gross profit growth in Q4 was mainly due to new program delays, with existing sales estimates unchanged.

Q&A Highlights

• Executives expressed optimism in the existing customer base and sales pipeline, particularly with embedded finance customers.
• Focus is placed on optimizing partnerships and onboarding new banks to mitigate delays.
• Clearer quarterly guidance is expected in the next earnings call in February 2024.

In summary, Marqeta Inc. shows resilience despite regulatory challenges, with promising Q3 results. Continued commitment to efficiency and innovation supports its future growth trajectory. Detailed insights will be shared during the next earnings call in February 2024.

InvestingPro Insights

• Recent financial performance shows strong returns and liquidity for Marqeta, despite expected sales declines.
• InvestingPro data indicates Marqeta's liquid assets exceed short-term obligations, signifying solid financial health.

Note: This article was generated with AI support and reviewed for accuracy.