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MI

Marqeta, Inc. (MQ)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 delivered accelerating fundamentals: Net Revenue $135.8M (+14% YoY), Gross Profit $98.2M (+18% YoY), TPV $79.9B (+29% YoY), Adjusted EBITDA $12.7M (9% margin), GAAP diluted EPS -$0.05 . Management said net revenue and gross profit growth outperformed internal expectations by 3–4 points on favorable mix and a partner incentive .
  • Strategic catalysts: announced agreement to acquire TransactPay (EMI/BIN sponsorship in UK/EEA), and adding the American Express network to Marqeta’s platform later in 2025 .
  • Capital returns: Board authorized an additional $300M buyback (total authorization now $380M); management expects to restart repurchases promptly .
  • FY 2025 outlook: Net revenue +16–18%, gross profit +14–16%, adjusted EBITDA margin 9–10%; Q1 2025 net revenue +14–16%, gross profit +11–13%, adjusted EBITDA margin 10–11% .
  • Operational narrative: Europe TPV growth well over 100%; embedded finance pipeline ~two-thirds of funnel; incentive accounting change from Q2 2025 to smooth quarterly gross profit recognition .

What Went Well and What Went Wrong

What Went Well

  • Strong Q4 performance and profitability trajectory: “Our fourth quarter results once again demonstrate our ability to grow at scale…adjusted EBITDA was $13M in the quarter, translating into a 9% margin” .
  • European momentum and multinational wins: Europe TPV growth well over 100% and first multinational solution sale across U.S. and Europe; signed a consumer co-brand credit partnership with an airline outside the U.S. .
  • Higher-margin services scaling: Real-time decisioning risk product revenue more than doubled YoY; contributes higher gross margins and will be augmented with compliance/insights offerings in 2025 .

What Went Wrong

  • Launch delays stemming from heightened bank regulatory scrutiny: 15 programs delayed by ~70 days in Q3; while Q4 improved, management still working through a backlog and noted three programs pending launch driven by customer-side decisions .
  • Mix headwinds and in-sourcing: Stronger “Powered by” mix reduced net revenue take rate; some sophisticated customers in-sourced program management/risk or connected directly to end users, trimming growth by ~2–3 points in Q4 .
  • Renewal headwinds ahead: Two significant renewals expected in H2 2025 to weigh ~2 points on full-year gross profit growth (and ~4 points in each of Q3/Q4) .

Financial Results

MetricQ2 2024Q3 2024Q4 2024
Net Revenue ($USD Millions)$125.270 $127.967 $135.790
Gross Profit ($USD Millions)$79.353 $90.132 $98.202
Gross Margin (%)63% 70% 72%
GAAP Net Income ($USD Millions)$119.108 $(28.643) $(27.119)
Diluted EPS ($USD)$0.23 $(0.06) $(0.05)
Adjusted EBITDA ($USD Millions)$(1.817) $9.019 $12.663
Adjusted EBITDA Margin (%)(1%) 7% 9%
Total Processing Volume (TPV) ($USD Billions)$70.627B $73.899B $79.913B
KPIQ2 2024Q3 2024Q4 2024
Net Revenue Take Rate (bps)18 bps 17 bps 17 bps
Gross Profit Take Rate (bps)11 bps 12 bps 12 bps
Block Net Revenue Concentration (%)47% 47% 46%
Cash & Cash Equivalents ($USD Millions)$924.730 $886.417 $923.016

Notes:

  • Q2 GAAP net income reflects a one-time reversal of $158M SBC tied to Executive Chairman award forfeiture; FY 2024 reversal totaled $145M .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Revenue Growth (%)Q1 2025—14–16% New
Gross Profit Growth (%)Q1 2025—11–13% New
Adjusted EBITDA Margin (%)Q1 2025—10–11% New
Net Revenue Growth (%)FY 2025—16–18% New
Gross Profit Growth (%)FY 2025—14–16% New
Adjusted EBITDA Margin (%)FY 2025—9–10% New
Adjusted EBITDA ($USD)FY 2025≈$50M (prior expectation) “Well over $50M” with 9–10% margin Raised qualitative target

Operational cadence/notes:

  • From Q2 2025, incentives will be accrued quarterly based on expected annual tiers, smoothing quarterly gross profit vs prior recognition timing; Q2 reported gross profit growth will receive ~8-point lift from accounting change .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024)Previous Mentions (Q3 2024)Current Period (Q4 2024)Trend
Embedded finance momentumPipeline includes large digital brands; expanding debit/credit/BNPL solutions; program management capabilities expanding in Europe Heightened bank scrutiny delaying launches; adding bank partners; embedded finance demand rising ~Two-thirds of pipeline embedded finance; first multinational solution sale; accelerating platform breadth Strengthening demand; improving delivery processes
BNPL & flexible credentialsFirst US issuer-processor certified for Visa Flexible Credential; Affirm partnership; expect 2024–2025 revenue impact Visa reported many issuers in pipeline; Marqeta among first to launch; wallet integrations expanding Advancing Visa Flex launches; partnering on Mastercard One; developing Marqeta Flex distribution in wallets Broadening adoption across networks/wallets
Europe growth & capabilitiesBuilding Warsaw PM hub; strong traction with Trade Republic, Lydia Program management parity in Europe prioritized Q4 Europe TPV growth well over 100%; TransactPay acquisition to add EMI/BIN sponsorship Accelerating with integrated licensing
Regulatory/complianceElevated investment in compliance; operating discipline Launch delays from bank regulatory oversight; backlog; adding bank partners Processes standardized; fees for mid-process changes; 3 programs pending launch (customer-driven) Transitioning from delays to streamlined onboarding
Capital allocation$200M buyback (Q2); repurchased 11M shares Q3 repurchases ~$49M New $300M authorization; intent to restart buybacks; total authorization $380M Increasing capital return
Management/leadership——CEO transition: Mike Milotich appointed Interim CEO, continuing CFO role; CEO search underway Leadership change; continuity maintained

Management Commentary

  • “We are excited to welcome the American Express network as a new option for credit and debit card programs…offering American Express will further widen the choices on our platform” (Mike Milotich) .
  • “Our European business continues to gain momentum with Q4 TPV growth well over 100%…we signed our first multinational solution sale” (Mike Milotich) .
  • “New programs…contribute over $40M to net revenue in 2025…behind our $60M goal previously shared due to fewer launches and delays” (Mike Milotich) .
  • “Board has approved an additional $300M share buyback…we intend to capitalize…at prices well below what we believe is fair market value” (Mike Milotich) .
  • “We anticipate we will accrue incentives each quarter starting in Q2 2025…much less variation in quarterly incentives recorded in the P&L” (Mike Milotich) .

Q&A Highlights

  • TransactPay rationale and synergy: acquiring EMI/BIN capacity shortens multi-year build; single-provider value proposition; assumed close ~July 1, 2025; ~1 point lift to full-year 2025 net revenue and gross profit, neutral to EBITDA .
  • Embedded finance competitive posture: full-stack APIs, debit/credit/BNPL, program management, global footprint; engaging many large multinationals; advantage from modern scalable platform .
  • Growth drivers and risks: Neo-banking, BNPL/lending, expense management leading; macro a key risk; new program ramp depends on customer execution; continued focus on compliance and onboarding efficiency .
  • Buyback/valuation: company prepared to restart repurchases; sees valuation below fair value; total authorization $380M .
  • Path to GAAP profitability: targeting quarterly GAAP profitability exiting 2026; widen gap between gross profit growth and OpEx growth via scale and efficiency .

Estimates Context

  • Wall Street consensus (S&P Global) for MQ’s Q4 2024 EPS and revenue was unavailable due to SPGI daily request limit; therefore, we cannot provide a vs-consensus comparison in this recap. We anchor assessment to company-reported results and guidance and note management’s statement of outperformance vs internal expectations by 3–4 points in net revenue and gross profit growth in Q4 .

Key Takeaways for Investors

  • Q4 executed strongly with broad-based growth and margin expansion; adjusted EBITDA reached a record $12.7M (9%), supporting a durable profitability trajectory into 2025 .
  • Strategic expansion in Europe (TransactPay acquisition) and network breadth (AmEx addition) should enhance win rates for embedded finance and multinational programs; expect tangible revenue/Gross Profit lift starting H2 2025, larger impact in 2026 .
  • Near-term cadence: Q1 2025 gross profit growth 11–13% before accelerating in Q2 (mid-20s reported including accounting change), then mid-teens in H2 as renewals offset ramping programs/services; monitor renewal pricing effects on gross profit growth .
  • Capital return catalyst: $300M incremental buyback authorization with intent to deploy; consider buyback pace and opportunistic timing alongside earnings cadence .
  • Watch operational de-risking: onboarding standardization, added bank partners, and incentive accrual change to reduce quarterly volatility; progress on launching delayed programs is pivotal for sustaining growth .
  • Mix watchpoints: growing Powered-by volume and customer in-sourcing can dilute net revenue growth vs TPV/Gross Profit; focus on high-margin services (risk, program management) to offset .
  • Leadership transition: Interim CEO/CFO continuity plus active CEO search; assess execution consistency and strategy on embedded finance leadership .