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MI

Marqeta, Inc. (MQ)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered accelerating scale and improving profitability: TPV $84.5B (+27% YoY), Net Revenue $139.1M (+18% YoY), Gross Profit $98.7M (+17% YoY), and record Adjusted EBITDA $20.1M (14% margin), with gross margin stable at 71% .
  • Against Wall Street, MQ beat consensus on revenue ($139.1M vs $135.3M*) and EPS (-$0.003 vs -$0.038*), aided by favorable business mix and continued non-Block growth outpacing Block .
  • Guidance: FY25 Net Revenue growth lowered to 13–15% (from 16–18%) due to a renegotiated platform partner agreement that reduces revenue but does not affect gross profit; FY25 Adjusted EBITDA margin raised to 10–11% (from 9–10%) on stronger expense efficiency and lower revenue denominator .
  • Key catalysts: live migrations (Perpay credit, Bitpanda debit across 26 countries, 10 currencies), European expansion (TransactPay acquisition expected to close by end-Q3), and flexible credential BNPL distribution; buybacks resumed with 26.2M shares repurchased at $4.22 avg, $270M authorization remaining .

What Went Well and What Went Wrong

  • What Went Well

    • “Our Q1 results demonstrate our ability to execute our growth plans while simultaneously increasing our level of profitability” — Interim CEO/CFO Mike Milotich; record Adjusted EBITDA and margin expansion .
    • Non-Block TPV grew more than 2x faster than Block; gross profit beat guidance midpoint by ~5 points due to favorable mix and ramping new programs; Block net revenue concentration fell to 45% (vs 46% in Q4) .
    • Strategic migrations: Perpay credit (new issuance since Feb; active cardholders migrating) and Bitpanda debit launched “in the same quarter” across 26 EU countries and 10 currencies, demonstrating migration velocity and European program management capability .

  • What Went Wrong

    • Varo migration terminated; Q1 GP +~1 point tailwind from early termination but lowers H2 ramp; management expects to absorb impact via stronger performance elsewhere .
    • Net revenue growth headwind (~3 pts) from a renegotiated platform partner agreement (similar to FY24 Cash App presentation) — reduces revenue, no gross profit impact; FY25 revenue guide trimmed accordingly .
    • Some largest customers underperformed in Q1 (offset by mix benefits); persistent macro/regulatory uncertainty and bank onboarding pace remain watch items despite stable April TPV growth .

Financial Results

MetricQ1 2024Q4 2024Q1 2025
Net Revenue ($USD Millions)$117.97 $135.79 $139.07
Gross Profit ($USD Millions)$84.16 $98.20 $98.68
Gross Margin (%)71% 72% 71%
Net (Loss) Income ($USD Millions)($36.06) ($27.12) ($8.26)
Diluted EPS ($USD)($0.07) ($0.05) ($0.02)
Adjusted EBITDA ($USD Millions)$9.23 $12.66 $20.08
Adjusted EBITDA Margin (%)8% 9% 14%
Total Processing Volume (TPV) ($USD Millions)$66,666 $79,913 $84,472

  • Segment/Mix KPIs | Metric | Q4 2024 | Q1 2025 | |--------|---------|---------| | Block Net Revenue Concentration (%) | 46% | 45% | | Net Revenue Take Rate (bps) | 17 | 16 | | Gross Profit Take Rate (bps) | 12 | 12 |

  • Balance Sheet & Liquidity KPIs | Metric | Dec 31, 2024 | Mar 31, 2025 | |--------|---------------|--------------| | Cash and Cash Equivalents ($USD Millions) | $923.02 | $830.90 | | Short-term Investments ($USD Millions) | $179.41 | $157.54 | | Total Assets ($USD Millions) | $1,463.20 | $1,349.63 | | Stock Repurchases | Minimal in Q4; new $300M authorization | 26.2M shares at $4.22 avg; $270M remaining |

  • Estimate Comparison (Consensus vs Actual) | Metric | Q4 2024 Estimate | Q4 2024 Actual | Q1 2025 Estimate | Q1 2025 Actual | |--------|-------------------|----------------|------------------|----------------| | Revenue ($USD Millions) | $132.71* | $135.79 | $135.30* | $139.07 | | Primary EPS ($USD) | ($0.0487)* | ($0.0324) [GetEstimates periods align with GAAP] | ($0.0382)* | ($0.0033) [GetEstimates periods align with GAAP] |

Values retrieved from S&P Global*

Guidance Changes

MetricPeriodPrevious Guidance (Feb 26, 2025)Current Guidance (May 7, 2025)Change
Net Revenue GrowthQ2 2025—11–13% New Q2 guide; lower vs prior cadence due to platform partner accounting
Gross Profit GrowthQ2 2025—23–25% New Q2 guide; includes ~8-pt lift from incentive accrual change
Adjusted EBITDA MarginQ2 2025—10–11% New Q2 guide; +1 pt vs prior outlook on lower OpEx
Net Revenue GrowthFY 202516–18% 13–15% Lowered; accounting presentation change; no GP impact
Gross Profit GrowthFY 202514–16% 14–16% Maintained; aiming high end after Q1 beat
Adjusted EBITDA MarginFY 20259–10% 10–11% Raised; efficiency + smaller revenue denominator

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024)Current Period (Q1 2025)Trend
Migrations & Program FlipsKlarna EU migration; building migration capability Perpay credit migration; Bitpanda flip launched across 26 countries, 10 currencies Strengthening execution; faster timelines
European Expansion & TransactPayAnnounced TransactPay acquisition; closing ~Q3 Pipeline strong; program management parity; deal on track by end-Q3 Expansion catalyst for sales and GP
BNPL & Flexible CredentialsVisa flexible credentials; Mastercard One plans; Marqeta Flex roadmap Continuing traction; Pay Anywhere distribution; consumer wallets Scaling distribution channels
AI/Agentic CommerceProduct innovation focus; risk/compliance insights Positioned to enable Agentic commerce; dynamic, real-time decisioning Thought leadership; early adoption
Regulatory/Bank OnboardingHeightened scrutiny slowed launches; structured frameworks Deregulation not yet speeding banks; onboarding bar remains elevated Neutral; process intensity persists
Macro/Spend MixMix stable; less high-discretionary exposure No meaningful mix shift; April TPV growth a few points higher Stable demand backdrop
Block Concentration46% in Q4; non-Block outgrowing 45% in Q1; non-Block still outgrowing Diversifying revenue base
Share Repurchases$380M total authorization; restart planned 26.2M shares at $4.22; $270M remaining Active capital return

Management Commentary

  • “Non-Block TPV grew more than 2x faster than Block… financial services, lending… and expense management drove the bulk of our TPV growth” .
  • “We began migrating a U.S. consumer credit program (Perpay) and an innovative debit program in Europe (Bitpanda)… launch executed simultaneously in 26 countries and 10 currencies” .
  • “Very similar to last year, we renegotiated a platform partner agreement… reduces our revenue but has no impact on gross profit… reminder why we focus on gross profit” .
  • “European business continues to expand rapidly, and our recent launch of program management in Europe is a promising and valuable expansion” .
  • “We plan to add 2 new banks before the end of the year… technology work essentially done with one; kickoff in recent weeks with the other” .

Q&A Highlights

  • AI/Agentic commerce: MQ sees strong fit for issuer processing, real-time controls, and dynamic rewards; AI focus spans product innovation, employee productivity, and support automation .
  • Conversion capacity: migrations are labor-intensive but MQ is resourced; targeting capability-led flips given modern platform advantage; Varo termination was product focus, not MQ resourcing .
  • Pipeline/macros: cycles stable; April TPV growth above Q1; risks include slower launches or recessionary spend impacts, but several prospects motivated to accelerate 2025 launches .
  • Europe pipeline: strong momentum; TransactPay enhances completeness; Bitpanda flip shows “record time” launch feasibility across many geographies/currencies .
  • Guidance clarifications: FY25 GP 14–16% maintained with Q1 beat pushing to high end; FY25 EBITDA margin raised; revenue guide lowered by accounting-only platform partner change .

Estimates Context

  • Q1 2025: Revenue beat ($139.1M vs $135.3M*), EPS beat (-$0.003 vs -$0.038*), with beats driven by favorable mix and non-Block outperformance .
  • Q4 2024: Revenue beat ($135.8M vs $132.7M*), EPS beat (-$0.032 vs -$0.049*), aided by holiday season strength, incentive achievement, and higher-yield use cases .
    Values retrieved from S&P Global*

Key Takeaways for Investors

  • Mix-driven leverage: focus on gross profit as primary performance lens given revenue presentation changes; expect continued GP growth at high end of 14–16% FY25 range barring macro deterioration .
  • Migrations as a durable moat: demonstrated flips (Perpay, Bitpanda) de-risk future conversions; strengthens MQ’s candidacy for established brands seeking modern issuer processing .
  • Europe is a growth vector: >100% TPV growth and TransactPay (closing ~end-Q3) should boost program management parity and embedded finance wins; expect incremental GP lift into 2026+ .
  • Diversification: Block concentration trending down (45% in Q1); non-Block growth outpacing across neobanking, BNPL, and expense management, mitigating single-customer exposure .
  • Capital returns and cost discipline: active buybacks, tighter OpEx growth, and scale economies underpin higher FY25 EBITDA margin (10–11%) .
  • Near-term trading setup: positive estimate-revision risk on GP and EBITDA margins as migrations ramp and incentive accounting normalizes in Q2 (23–25% GP growth guide) .
  • Medium-term thesis: credit issuing (consumer/commercial) ramps through 2026–27, flexible credentials expand BNPL distribution, and broader embedded finance pipeline supports durable multi-year GP growth .

Sources

  • Q1 2025 8-K and Press Release: financials, guidance, non-GAAP reconciliations .
  • Q1 2025 Earnings Call Transcript: strategy, mix, pipeline, guidance commentary .
  • Q4 2024 8-K/Press Release and Call: prior-quarter benchmarks, FY25 initial guidance .
  • Other Q1-relevant press releases: Perpay credit migration .