Marqeta’s Earnings Call: Growth Amid Challenges

Marqeta, Inc. ((MQ)) has held its Q1 earnings call. Read on for the main highlights of the call.

Marqeta, Inc. recently held its earnings call, revealing a generally positive sentiment despite some challenges. The company boasted strong growth metrics, particularly in Total Processing Volume (TPV) and revenue, alongside strategic achievements like successful program migrations and European expansion. However, the termination of a deal with Varo and a renegotiated partner agreement posed some hurdles. Overall, the positive developments overshadowed the setbacks, painting an optimistic picture for the company’s future.

Strong Total Processing Volume (TPV) Growth

Marqeta reported a robust increase in TPV, reaching $84 billion in the first quarter, which marks a 27% rise compared to the same period in 2024. This growth was achieved despite a minor headwind from the leap year, showcasing the company’s resilience and capacity to drive substantial transaction volumes.

Net Revenue and Gross Profit Increase

The first quarter saw Marqeta’s net revenue climb to $139 million, an 18% year-over-year increase. Gross profit also rose by 17% to $99 million, resulting in a healthy gross margin of 71%. These figures highlight the company’s ability to generate significant revenue and maintain strong profitability.

Adjusted EBITDA Achievement

Marqeta achieved an adjusted EBITDA of $20 million in the first quarter, translating to a 14% margin. This accomplishment was driven by growth in gross profit and efficient management of operating expenses, reflecting the company’s focus on financial health and operational efficiency.

European Expansion

The company experienced significant growth in Europe, with TPV more than doubling in the first quarter. This expansion is supported by the potential acquisition of TransactPay by the end of the third quarter, which is expected to enhance Marqeta’s program management offerings and strengthen its presence in the European market.

Successful Migrations

Marqeta successfully completed migrations for clients such as Klarna, Perpay, and Bitpanda. These migrations demonstrate Marqeta’s capability in efficiently handling complex program transitions, reinforcing its reputation as a reliable partner for fintech companies.

Termination of Varo Deal

The planned migration of Varo’s program will no longer proceed as Varo shifts its focus to existing products. This development is expected to impact Marqeta’s anticipated growth in the latter half of the year, posing a challenge to its expansion plans.

Revenue Impact from Platform Partner Agreement

A renegotiated platform partner agreement led to a three-point reduction in net revenue growth for the first quarter due to reduced pricing. However, this adjustment did not affect the company’s gross profit, indicating that Marqeta’s core profitability remains intact.

Forward-Looking Guidance

Looking ahead, Marqeta provided detailed guidance for the second quarter and full year of 2025. For Q2, the company anticipates net revenue growth between 11% and 13% and gross profit growth of 23% to 25%, influenced by an incentive accounting change. The adjusted EBITDA margin is projected to be between 10% and 11%. For the full year, Marqeta expects net revenue growth between 13% and 15%, with gross profit growth remaining between 14% and 16%. The adjusted EBITDA margin is revised upwards to 10% to 11%, driven by lower expenses and improved efficiency.

In summary, Marqeta’s earnings call painted a picture of a company experiencing strong growth and strategic achievements, despite facing some challenges. The positive sentiment was driven by impressive growth metrics and successful expansions, particularly in Europe. While the termination of the Varo deal and a renegotiated partner agreement present obstacles, Marqeta’s forward-looking guidance suggests continued strength and resilience in its financial performance.