Marqeta, Inc. ((MQ)) has held its Q3 earnings call. Read on for the main highlights of the call.
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Marqeta, Inc.’s recent earnings call painted a picture of robust growth and strategic challenges. The company reported exceptional growth in total processing volume (TPV), net revenue, and gross profit, largely driven by strong performance in lending and European expansion. However, the call also highlighted potential headwinds, including customer renewal discussions and Cash App’s diversification plans, which could impact future growth.
Record TPV Growth
Marqeta achieved a record total processing volume (TPV) of $98 billion in Q3, marking a 33% increase year-over-year. This growth rate is the highest since Q1 2024, underscoring the company’s strong market position and operational efficiency.
Strong Net Revenue and Gross Profit
The company reported Q3 net revenue of $163 million, a 28% increase from the previous year. Gross profit also saw a significant rise, reaching $115 million, which represents a 27% year-over-year growth. These figures highlight Marqeta’s ability to capitalize on market opportunities and drive financial success.
Adjusted EBITDA and Path to Profitability
Marqeta’s adjusted EBITDA reached an all-time high of $30 million for Q3, with a 19% margin. This milestone demonstrates the company’s progress towards profitability and its effective cost management strategies.
Expansion and Innovation in Lending Use Cases
The company reported significant growth in lending use cases, particularly in the Buy Now, Pay Later sector. TPV growth in these areas outpaced the overall company growth, indicating strong demand and Marqeta’s innovative approach to financial services.
Successful Expansion in Europe
Europe continues to be a bright spot for Marqeta, with TPV growth exceeding 100% year-over-year. The acquisition of TransactPay has played a crucial role in this success, enhancing Marqeta’s capabilities and market reach in the region.
Renewal Challenges
Marqeta is currently engaged in renewal discussions with two large customers, which are expected to result in a growth headwind of approximately 2 points in Q4. This challenge underscores the competitive nature of the industry and the importance of maintaining strong customer relationships.
Cash App Diversification
Cash App’s plan to diversify its new issuance with another processor is anticipated to cause a 2-point drag on Marqeta’s growth in 2026. This development highlights the dynamic nature of the fintech landscape and the need for Marqeta to adapt to changing market conditions.
Impact of Accounting Changes
Revised accounting policies for network incentives are expected to create a drag on gross profit growth in Q4 by about 5.5 points. This change reflects the evolving regulatory environment and its impact on financial reporting.
Forward-Looking Guidance
Looking ahead, Marqeta remains optimistic about its financial performance. The company expects continued strong growth, with Q4 net revenue and gross profit anticipated to rise by at least 5 percentage points, and adjusted EBITDA margin by 2 points. For the full year 2025, Marqeta projects net revenue growth of approximately 22% and gross profit growth of 23%. Strategic priorities include expanding customer relationships and geographic reach, particularly in lending and Buy Now, Pay Later use cases. The acquisition of TransActPay is expected to further enhance Marqeta’s competitive edge in Europe.
In conclusion, Marqeta’s earnings call highlighted a period of impressive growth and strategic expansion, despite facing some challenges. The company’s strong financial performance and forward-looking guidance suggest a promising future, with continued focus on innovation and market expansion. Investors and market watchers will be keen to see how Marqeta navigates the challenges ahead and capitalizes on its growth opportunities.