Marqeta Inc
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Information Technology : IT Services | Small Cap Growth
Company profile

Marqeta, Inc. is engaged in providing modern card issuing and payment processing solutions. The Company operates Marqeta Platform, a cloud-based, open application program interface platform, which enables businesses to develop modern, frictionless payment card experiences for consumer and commercial use cases that are either the core of, or in support of, their core business. Its Platform offers three primary capabilities: Marqeta Issuing, Marqeta Processing, and Marqeta Applications. The Company offers solutions, such as on-demand services, buy now pay later, expense management, travel, alternative lending, disbursements and incentives. The Company offers its solutions to various industries, which includes digital banking, incentives and rewards, online travel, small business lending, on-demand services, media and advertisement agencies, point-of-sale financing, insurance and retail marketplaces. Its customers include businesses like Affirm, DoorDash, Instacart, Klarna, and Square.

Price
Delayed
$6.52
Day's Change
-0.245 (-3.62%)
Bid
--
Ask
--
B/A Size
--
Day's High
6.70
Day's Low
6.44
Volume
(Below Average)

Today's volume of 4,833,845 shares is on pace to be lower than MQ's 10-day average volume of 6,052,864 shares.

4,833,845

Marqeta Reports Third Quarter Net Revenue Increase of 46 Percent Year Over Year, Highlighting New Platform Expansion and Global Customer Momentum

4:05 pm ET November 9, 2022 (BusinessWire) Print

Marqeta, Inc. (NASDAQ: MQ), the global modern card issuing platform, today reported financial results for the third quarter ended September 30, 2022. Total processing volume (TPV) was $42 billion, with net revenue of $192 million. Gross profit was $80 million, an increase of 36% year over year, resulting in a gross margin of 42%. GAAP net loss was $53 million and Adjusted EBITDA loss was $14 million.

"This recent quarter serves as a great example of our continued success and the tremendous market opportunity in front of Marqeta. We signed innovative new customers in both the United States and Europe, we expanded our platform with the launch of new banking capabilities to complement our leadership in modern card issuing, and increased the global utility of our platform with our European data residency program," said Jason Gardner, Founder and CEO of Marqeta.

Recent Business Updates:

Marqeta highlighted several recent business updates that demonstrate its current business momentum:

Marqeta announced the launch of Marqeta for Banking, a portfolio of seven banking products, continuing the expansion of its modern card issuing platform. Marqeta for Banking provides customers with a full set of account, ACH, instant funding and direct deposit products offered through Marqeta's bank partners, enabling its customers to build complete banking products for their end users on the company's platform. Marqeta announced its new data residency offering in Europe, providing additional safeguards to store the most sensitive elements of its European customers' personal data on European data servers. Marqeta announced a new partnership with Raiffeisen Centrobank, to power its Raiffeisen Digital Bank, enabling customers in Poland and Romania to leverage a modern, comprehensive banking experience with streamlined digital accounts and debit cards. Marqeta continued to be the card platform of choice for innovators looking to launch new card programs at scale, including the new Blockchain.com Visa card where user's utilize available cryptocurrency balance to fund purchases in fiat currency, the new Uber Pro card, alongside Branch, and part of an ecosystem of partners working with Stash on its Stash Core banking system and upgraded Stock-Back(R) Debit Mastercard(R).

Operating Highlights

In thousands, except percentages and per share data. % change is calculated over the comparable prior-year period (unaudited)                                           Three Months Ended September                                                   %                                                                        Nine Months Ended September                                                                        %
                                                                                                                                                                                                                 30,                                                                                         Change                                                                                                     30,                                                                                                    Change
                                                                                                                                                   ------------------------------------------------------------------------------------------------------------------------                                                -------------------- --------------------------------------------------------------------------------------------------------------------------------------------       --------------------
                                                                                                                                      2022                       2021                                            2022                       2021            
                                                                                                                              -------------------- --------------------                      -------------------- -------------------- --------------------                                                                -------------------- --------------------                      -------------------- -------------------- --------------------
Financial metrics:                                                                                                                                                                                                                                                                                      
                                                                                                                                                 $              191,621                        $              131,512              46%                              $              544,401                        $              361,761              50%
   Net revenue
                                                                                                                                                 $               80,102                        $               59,074              36%                              $              232,877                        $              155,906              49%
   Gross profit
                                                                                                                                                  42 %                                          45 %                                              43 %                                          43 %                       
   Gross margin
                                                                                                                                                 $              139,598                        $              104,712              33%                              $              388,362                        $              280,181              49%
   Total operating expenses
                                                                                                                                                 $              (53,168 )                                         $              (45,730 )                              (16)%                             $             (158,454 )                                         $             (127,122 )                              (25)%
   Net loss
                                                                                                                                                 (28 )%                                        (35 )%                                            (29 )%                                        (35 )%                      
   Net loss margin
                                                                                                                                                 $                (0.10 )                                         $                (0.08 )                              (25)%                             $                (0.29 )                                         $                (0.42 )                               31%
   Net loss per share - basic and diluted
----------------------------------------------------------------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Key operating metric and Non-GAAP financial measures:                                                                                                                                                                                                                                                   
                                                                                                                                                 $               42,473                        $               27,569              54%                              $              119,556                        $               78,087              53%
   Total Processing Volume (TPV) (in millions) (1)
                                                                                                                                                 $              (13,631 )                                         $               (4,939 )                             (176)%                             $              (34,308 )                                         $              (13,928 )                             (146)%
   Adjusted EBITDA (2)
                                                                                                                                                  (7 )%                                         (4 )%                                             (6 )%                                         (4 )%                      
   Adjusted EBITDA margin (2)
                                                                                                                                                 $               93,733                        $               64,013              46%                              $              267,185                        $              169,834              49%
   Non-GAAP operating expenses (2)
----------------------------------------------------------------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
(1) 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.

Third Quarter 2022 Financial Results:

Net revenue increased by $60 million, or 46% year-over-year, rising to $192 million from $132 million in the third quarter of 2021 resulting from a 54% increase in TPV year-over-year, partially offset by unfavorable changes in our card programs mix.

Gross profit increased by 36% year-over-year, rising to $80 million from $59 million in the third quarter of 2021 primarily due to our TPV growth. Gross margin was 42% in the third quarter of 2022.

Net loss increased by $7 million to $53 million in the quarter. Our increase in gross profit was offset by increases in compensation, benefits and technology expenses as we continued our investment in our people and platform.

Total Processing Volume increased by 54% year-over-year, rising to $42 billion from $28 billion in the third quarter of 2021.

Adjusted EBITDA in the third quarter of 2022 was ($14) million. Adjusted EBITDA margin was (7%) in the third quarter of 2022.

Financial Guidance

The following summarizes Marqeta's guidance for the fourth quarter of 2022:

         Fourth Quarter 2022
-------------------------- --------------------
Net Revenue Growth               29 - 31%
         
Gross Profit Margin              42 - 43%
         
Adjusted EBITDA Margin (1)    Negative 5 - 6%
-------------------------- --------------------

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 23, 2022, 8:59 p.m. Pacific time (11:59 p.m. Eastern time). The confirmation code for the replay is 13733567.

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 quarterly guidance; statements regarding Marqeta's business plans, business strategy and the continued success and growth of our customers; statements and expectations regarding Marqeta's partnerships, new product introductions, and product capabilities; 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 and other public health emergencies 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; the risk that Marqeta may be unable to maintain relationships with Issuing Banks and Card Networks; general economic conditions in either domestic or international markets, including inflation and recessionary fears, conditions resulting from geopolitical uncertainty and instability or war, including, the direct and indirect effects of the significant military action against Ukraine launched by Russia on U.S. and global economies, our business, results of operations, financial condition, and demand for our platform; and the risk that Marqeta may be subject to additional risks such as inflation or 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 Annual Report on Form 10-K for the year ended December 31, 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 (@Marqeta), the Marqeta Instagram page (@lifeatmarqeta), the Marqeta Facebook page, and the Marqeta LinkedIn page. 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 40 countries globally.

Marqeta(R) is a registered trademark of Marqeta, Inc.

                                                                                                                                                                   Marqeta, Inc.
                                                                                                                                                  Condensed Consolidated Statements of Operations
                                                                                                                                                (in thousands, except share and per share amounts)
                                                                                                                                                                    (unaudited)
                                                                                                                                                                
                                                                                                          Three Months Ended                                                                                                           Nine Months Ended
                                                                                                                                September 30,                                                                                                                                  September 30,
                                                                          ------------------------------------------------------------------------------------------------------------------                            --------------------------------------------------------------------------------------------------------------------
                                                           2022          2021          2022           2021    
                                                                          -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- -------- --------------------                      -------------------- -------- --------------------
Net revenue                                                                                  $ 191,621                        $ 131,512                        $  544,401                        $  361,761  
Costs of revenue                                                            111,519        72,438        311,524        205,855  
                                                                          -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- -------- --------------------                      -------------------- -------- --------------------
Gross profit                                                                 80,102        59,074        232,877        155,906  
Operating expenses:                                                                                                                                                            
                                                                            105,887        84,462        304,103        229,121  
   Compensation and benefits
                                                                             13,422         9,299         37,960         22,494  
   Technology
                                                                              6,620         4,704         17,184         12,731  
   Professional services
                                                                              1,125         1,091          3,388          3,083  
   Occupancy
                                                                                935           786          2,834          2,567  
   Depreciation and amortization
                                                                                688           490          2,133          1,480  
   Marketing and advertising
                                                                             10,921         3,880         20,760          8,705  
   Other operating expenses
                                                                          -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- -------- --------------------                      -------------------- -------- --------------------
                                                                            139,598       104,712        388,362        280,181  
      Total operating expenses
                                                                          -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- -------- --------------------                      -------------------- -------- --------------------
Loss from operations                                                        (59,496 )                        (45,638 )                        (155,485 )                        (124,275 )
Other income (expense), net                                                   6,333           (57 )                          (3,542 )                          (2,706 )
                                                                          -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- -------- --------------------                      -------------------- -------- --------------------
Loss before income tax expense                                              (53,163 )                        (45,695 )                        (159,027 )                        (126,981 )
Income tax expense (benefit)                                                      5            35           (573 )                             141  
                                                                          -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- -------- --------------------                      -------------------- -------- --------------------
Net loss                                                                                     $ (53,168 )                                         $ (45,730 )                                         $ (158,454 )                                         $ (127,122 )
                                                                          -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- -------- --------------------                      -------------------- -------- --------------------
Net loss per share attributable to common stockholders, basic and diluted                    $   (0.10 )                                         $   (0.08 )                                         $    (0.29 )                                         $    (0.42 )
                                                                          ==================== ======= ====================                      ==================== ======= ====================                      ==================== ======== ====================                      ==================== ======== ====================
                                                                                        Marqeta, Inc.
                                                                            Condensed Consolidated Balance Sheets
                                                                                       (in thousands)
                                                                            
                                                         September 30,                                              December 31,
                                                                                2022                                                                          2021
                                                      ------------------------------------------------------                        ------------------------------------------------------
                                                          (unaudited)                          
Assets                                                                                         
Current assets:                                                                                
                                                                         $      1,204,857                        $      1,247,581  
   Cash and cash equivalents
                                                                 7,800                7,800  
   Restricted cash
                                                               441,132              452,875  
   Marketable securities
                                                                12,800               13,187  
   Accounts receivable, net
                                                                10,350               11,266  
   Settlements receivable, net
                                                                27,063               30,399  
   Network incentives receivable
                                                                38,930               35,617  
   Prepaid expenses and other current assets
                                                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------
Total current assets                                         1,742,932            1,798,725  
Property and equipment, net                                      8,030                9,687  
Operating lease right-of-use assets, net                         9,607               11,296  
Equity method investment                                         7,843                8,384  
Other assets                                                     6,043                2,286  
                                                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------
Total assets                                                             $      1,774,455                        $      1,830,378  
                                                      ==================== ============== ====================                      ==================== ============== ====================
Liabilities and stockholders' equity                                                           
Current liabilities                                                                            
                                                                         $          2,741                        $          2,693  
   Accounts payable
                                                               116,095              121,179  
   Revenue share payable
                                                               131,398              114,096  
   Accrued expenses and other current liabilities
                                                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------
Total current liabilities                                      250,234              237,968  
Operating lease liabilities, net of current portion              9,928               12,427  
Other liabilities                                                1,955                6,557  
                                                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------
Total liabilities                                              262,117              256,952  
Stockholders' equity :                                                                         
                                                        --       --  
   Preferred stock
                                                                    54                   54  
   Common stock
                                                             2,098,764            1,993,055  
   Additional paid-in capital
                                                               (10,573 )                                (2,230 )
   Accumulated other comprehensive loss
                                                              (575,907 )                              (417,453 )
   Accumulated deficit
                                                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------
Total stockholders' equity        1,512,338            1,573,426  
                                                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------
                                                                                                                      Marqeta, Inc.
                                                                                                     Condensed Consolidated Statements of Cash Flows
                                                                                                                     (in thousands)
                                                                                                                       (unaudited)
                                                                                               
                                                                                                                                                         Nine Months Ended
                                                                                                                                                                              September 30,
                                                                                                                 --------------------------------------------------------------------------------------------------------------------------------
                                                                                                     2022                 2021       
                                                                                                                 -------------------- -------------- --------------------                      -------------------- -------------- --------------------
Cash flows from operating activities:                                                                                                                     
Net loss                                                                                                                            $       (158,454 )                                         $       (127,122 )
Adjustments to reconcile net loss to net cash provided by operating activities:                                                                           
Depreciation and amortization                                                                                               2,834                2,567  
Share-based compensation expense                                                                                          115,662              105,893  
Non-cash operating leases expense                                                                                           1,689                1,579  
Amortization of premium on marketable securities                                                                              449                  974  
Impairment of other financial instruments                                                                                  11,616       --  
Other                                                                                                                         445                2,999  
Changes in operating assets and liabilities:                                                                                                              
                                                                                                                              271                  974  
   Accounts receivable
                                                                                                                              916               (2,584 )
   Settlements receivable
                                                                                                                            3,336              (20,002 )
   Network incentives receivable
                                                                                                                          (11,596 )                                (6,089 )
   Prepaid expenses and other assets
                                                                                                                             (891 )                                   282  
   Accounts payable
                                                                                                                           (5,084 )                                 9,992  
   Revenue share payable
                                                                                                                           13,144               34,037  
   Accrued expenses and other liabilities
                                                                                                                           (2,231 )                                (2,147 )
   Operating lease liabilities
                                                                                                                 -------------------- -------------- --------------------                      -------------------- -------------- --------------------
Net cash (used in) provided by operating activities                                                                       (27,894 )                                 1,353  
                                                                                                                 -------------------- -------------- --------------------                      -------------------- -------------- --------------------
Cash flows from investing activities:                                                                                                                     
Purchases of property and equipment                                                                                        (1,700 )                                (2,251 )
Purchases of patents                                                                                                         (600 )                        --  
Purchases of marketable securities                                                                                        (21,660 )                              (375,089 )
Maturities of marketable securities                                                                                        24,900              114,688  
                                                                                                                 -------------------- -------------- --------------------                      -------------------- -------------- --------------------
Net cash (used in) provided by investing activities                                                                           940             (262,652 )
                                                                                                                 -------------------- -------------- --------------------                      -------------------- -------------- --------------------
Cash flows from financing activities:                                                                                                                     
Proceeds from initial public offering, net of underwriters' discounts and commissions   --            1,319,809  
Proceeds from exercise of stock options, including early exercised stock options                                            5,733                2,799  
Proceeds from exercise of warrants                                                                                 --                   60  
Proceeds from shares issued in connection with employee stock purchase plan                                                 2,775       --  
Taxes paid related to net share settlement of restricted stock units                                                      (11,576 )                               (18,448 )
Repurchases of common stock                                                                                               (12,702 )                        --  
Payment of deferred offering costs                                                                                 --               (3,134 )
                                                                                                                 -------------------- -------------- --------------------                      -------------------- -------------- --------------------
Net cash (used in) provided by financing activities                                                                       (15,770 )                             1,301,086  
                                                                                                                 -------------------- -------------- --------------------                      -------------------- -------------- --------------------
Net (decrease) increase in cash, cash equivalents, and restricted cash                                                    (42,724 )                             1,039,787  
Cash, cash equivalents, and restricted cash- Beginning of period                                                        1,255,381              228,233  
                                                                                                                 -------------------- -------------- --------------------                      -------------------- -------------- --------------------
                                                                                                                                                                                                                                     Marqeta, Inc.
                                                                                                                                                                                                                                     Financial and Operating Highlights
                                                                                                                                                                                                                                     (in thousands, except per share data or as noted)
                                                                                                                                                                                                                                     (unaudited)
                                                                                                                                                                                                                                                                                                                                                                            
----------------------------------- -------------------- -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                    2022                                                                                                                                                                                           2021                                                                                           Year over
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           Year Change
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            Q3'22 vs
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              Q3'21
                                                         ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                --------------------------------------------------------------------------------------------------------------------------------------------
                                                Third                                                           Second                                                        First Quarter                                                       Fourth                                                            Third                              
                                                                                     Quarter                                                                             Quarter                                                                                                                                                                 Quarter                                                                             Quarter
-----------------------------------                      ------------------------------------------------------------                        ------------------------------------------------------------                        ------------------------------------------------------------                        ------------------------------------------------------------                        ------------------------------------------------------------
Operating performance:                                                                                                                                                                                                                                                       
Net revenue                                              $              191,621                        $              186,678                        $              166,102                        $              155,414                        $              131,512                       46 %
Costs of revenue                                     111,519                    108,629                     91,376                     79,615                     72,438                       54 %
-----------------------------------                      -------------------- -------------------- --------------------                      -------------------- -------------------- --------------------                      -------------------- -------------------- --------------------                      -------------------- -------------------- --------------------                      -------------------- -------------------- --------------------
Gross profit                                          80,102                     78,049                     74,726                     75,799                     59,074                       36 %
-----------------------------------                      -------------------- -------------------- --------------------                      -------------------- -------------------- --------------------                      -------------------- -------------------- --------------------                      -------------------- -------------------- --------------------                      -------------------- -------------------- --------------------
Gross margin                                              42 %                                          42 %                                          45 %                                          49 %                                          45 %                                        (3) pps
                                                                                                                                                                                                                                                                             
   Operating expenses:
                                                     105,887                     97,868                    100,348                     88,995                     84,462                       25 %
      Compensation and benefits
                                                      13,422                     13,154                     11,384                     11,143                      9,299                       44 %
      Technology
                                                       6,620                      5,794                      4,770                      5,712                      4,704                       41 %
      Professional services
                                                       1,125                      1,148                      1,115                      1,097                      1,091                        3 %
      Occupancy and equipment
                                                         935                        921                        979                        967                        786                       19 %
      Depreciation and amortization
                                                         688                        886                        559                        804                        490                       40 %
      Marketing and advertising
                                                      10,921                      4,995                      4,843                      4,811                      3,880                      181 %
      Other operating expenses
-----------------------------------                      -------------------- -------------------- --------------------                      -------------------- -------------------- --------------------                      -------------------- -------------------- --------------------                      -------------------- -------------------- --------------------                      -------------------- -------------------- --------------------
Total operating expenses                             139,598                    124,766                    123,998                    113,529                    104,712                       33 %
-----------------------------------                      -------------------- -------------------- --------------------                      -------------------- -------------------- --------------------                      -------------------- -------------------- --------------------                      -------------------- -------------------- --------------------                      -------------------- -------------------- --------------------
Loss from operations                                 (59,496 )                                     (46,717 )                                     (49,272 )                                     (37,730 )                                     (45,638 )                                        30 %
Other income (expense), net                            6,333                      1,802                    (11,677 )                                         142                        (57 )                                          n/m
Loss before income tax expense                       (53,163 )                                     (44,915 )                                     (60,949 )                                     (37,588 )                                     (45,695 )                                        16 %
Income tax expense (benefit)                               5                       (227 )                                        (351 )                                        (781 )                                          35                      (86 )%
-----------------------------------                      -------------------- -------------------- --------------------                      -------------------- -------------------- --------------------                      -------------------- -------------------- --------------------                      -------------------- -------------------- --------------------                      -------------------- -------------------- --------------------
Net loss                                                 $              (53,168 )                                         $              (44,688 )                                         $              (60,598 )                                         $              (36,807 )                                         $              (45,730 )                                        16 %
-----------------------------------                      -------------------- -------------------- --------------------                      -------------------- -------------------- --------------------                      -------------------- -------------------- --------------------                      -------------------- -------------------- --------------------                      -------------------- -------------------- --------------------
Loss per share - basic and diluted                       $                (0.10 )                                         $                (0.08 )                                         $                (0.11 )                                         $                (0.07 )                                         $                (0.08 )                                        25 %
-----------------------------------                      -------------------- -------------------- --------------------                      -------------------- -------------------- --------------------                      -------------------- -------------------- --------------------                      -------------------- -------------------- --------------------                      -------------------- -------------------- --------------------
TPV (in millions)                                        $               42,473                        $               40,457                        $               36,626                        $               33,046                        $               27,569                       54 %
Adjusted EBITDA                                          $              (13,631 )                                         $              (10,225 )                                         $              (10,453 )                                         $                1,162                        $               (4,939 )                                       176 %
Adjusted EBITDA margin                                    (7 )%                                         (5 )%                                         (6 )%                                          1 %                                          (4 )%                                       (3) pps
Financial condition:                                                                                                                                                                                                                                                         
Cash and cash equivalents                                $            1,204,857                        $            1,220,273                        $            1,197,257                        $            1,247,581                        $            1,260,220                       (4 )%
Restricted cash                                          $                7,800                        $                7,800                        $                7,800                        $                7,800                        $                7,800           -- %
Marketable securities                                    $              441,132                        $              444,873                        $              447,046                        $              452,875                        $              408,954                        8 %
Total assets                                             $            1,774,455                        $            1,776,930                        $            1,793,483                        $            1,830,378                        $            1,783,142           -- %
Total liabilities                                        $              262,117                        $              242,373                        $              249,851                        $              256,952                        $              209,802                       25 %
Stockholders' equity                                     $            1,512,338                        $            1,534,557                        $            1,543,632                        $            1,573,426                        $            1,573,340                       (4 ) %
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, Adjusted EBITDA Margin, and Non-GAAP operating expenses 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 depreciation and amortization; share-based compensation expense; payroll tax related to share-based compensation; legal, financial, and tax due diligence costs related to potential acquisitions; income tax expense (benefit); and other expense (income) 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, interest income from our marketable securities, our share of equity method investments' profit or loss, and impairment of equity method investments or other financial instruments. 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.

We define Non-GAAP operating expenses as total operating expenses adjusted to exclude depreciation and amortization; share-based compensation expense; payroll tax related to share-based compensation; and legal, financial, and tax due diligence costs related to potential acquisitions.

Adjusted EBITDA, Adjusted EBITDA Margin, and Non-GAAP operating expenses 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                                                                                                           Nine Months Ended
                                                                                                                 September 30,                                                                                                                                  September 30,
                                                           ------------------------------------------------------------------------------------------------------------------                            --------------------------------------------------------------------------------------------------------------------
                                            2022          2021          2022           2021    
                                                           -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- -------- --------------------                      -------------------- -------- --------------------
GAAP net revenue                                                              $ 191,621                        $ 131,512                        $  544,401                        $  361,761  
GAAP net loss                                                                 $ (53,168 )                                         $ (45,730 )                                         $ (158,454 )                                         $ (127,122 )
GAAP net loss margin                                             (28 )%                           (35 )%                            (29 )%                            (35 )%
GAAP total operating expenses                                                 $ 139,598                        $ 104,712                        $  388,362                        $  280,181  
                                                                                                                                             
GAAP net loss                                                                 $ (53,168 )                                         $ (45,730 )                                         $ (158,454 )                                         $ (127,122 )
                                                                 935           786          2,834          2,567  
   Depreciation and amortization expense
                                                              43,509        38,965        115,662        105,893  
   Share-based compensation expense
                                                                 508           614          1,768          1,553  
   Payroll tax expense related to share-based compensation
                                                                 913           334            913            334  
   Due diligence costs related to potential acquisitions
                                                              (6,333 )                             57          3,542          2,706  
   Other expense (income), net
                                                                   5            35           (573 )                             141  
   Income tax expense (benefit)
                                                           -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- -------- --------------------                      -------------------- -------- --------------------
Adjusted EBITDA                                                               $ (13,631 )                                         $  (4,939 )                                         $  (34,308 )                                         $  (13,928 )
                                                           ==================== ======= ====================                      ==================== ======= ====================                      ==================== ======== ====================                      ==================== ======== ====================
Adjusted EBITDA Margin                                            (7 )%                            (4 )%                             (6 )%                             (4 )%
                                                                                                                                             
GAAP Total operating expenses                                                 $ 139,598                        $ 104,712                        $  388,362                        $  280,181  
                                                                (935 )                           (786 )                          (2,834 )                          (2,567 )
   Depreciation and amortization expense
                                                             (43,509 )                        (38,965 )                        (115,662 )                        (105,893 )
   Share-based compensation expense
                                                                (508 )                           (614 )                          (1,768 )                          (1,553 )
   Payroll tax expense related to share-based compensation
                                                                (913 )                           (334 )                            (913 )                            (334 )
   Due diligence costs related to potential acquisitions
                                                           -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- -------- --------------------                      -------------------- -------- --------------------

A reconciliation of Adjusted EBITDA to the comparable GAAP measure for the fourth quarter of 2022 is not available due to the challenges and impracticability with estimating some of the items as such items cannot be reasonably predicted and could be significant. 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/20221109005990/en/

SOURCE: Marqeta, Inc.

IR Contact: Marqeta Investor Relations, IR@marqeta.com
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COMTEX_418491709/1006/2022-11-09T16:05:26

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