On November 4, 2024, Marqeta Inc (MQ, Financial) released its 8-K filing detailing its financial results for the third quarter of 2024. Headquartered in Oakland, California, Marqeta provides a card-issuing platform that enables digital, physical, and tokenized payment solutions. The company primarily earns revenue through processing and ATM fees.
Performance Overview and Challenges
Marqeta reported a Total Processing Volume (TPV) of $74 billion, marking a 30% increase year-over-year. Net revenue reached $128 million, aligning with analyst estimates, and reflecting an 18% increase from the previous year. Despite these gains, the company posted a GAAP net loss of $29 million, although this was an improvement from the $54.99 million loss in the same quarter last year. The adjusted EBITDA was $9 million, a significant turnaround from a negative $2.06 million in Q3 2023.
The company's performance is crucial as it demonstrates Marqeta's ability to scale its operations and manage costs effectively. However, challenges such as the renegotiated platform partnership and the faster growth of Powered by Marqeta volume, which impacted revenue mix, could pose future hurdles.
Financial Achievements and Industry Impact
Marqeta's gross profit increased by 24% to $90 million, with a gross margin of 70%, up from 67% in the previous year. This improvement underscores the company's operational efficiency and its ability to leverage increased processing volumes. Such financial achievements are vital in the software industry, where scalability and margin improvements are key indicators of long-term viability.
Key Financial Metrics
Marqeta's balance sheet remains robust with $886 million in cash and cash equivalents, although this is a decrease from $981 million at the end of 2023. The company's total assets stood at $1.44 billion, with liabilities at $340 million, indicating a strong equity position. The company's net loss per share improved to $0.06 from $0.10, aligning with analyst expectations.
In the third quarter our true growth trajectory was back on display as we lapped the Block contract renewal, while continuing to demonstrate operational discipline to fuel strong Adjusted EBITDA," said Simon Khalaf, CEO at Marqeta.
| Metric | Q3 2024 | Q3 2023 | % Change |
|---|---|---|---|
| Net Revenue | $128 million | $109 million | 18% |
| Gross Profit | $90 million | $73 million | 24% |
| Net Loss | ($29 million) | ($55 million) | 47% improvement |
| Adjusted EBITDA | $9 million | ($2 million) | 537% improvement |
Analysis and Strategic Developments
Marqeta's strategic initiatives, such as the introduction of the Portfolio Migration service and Marqeta Flex, are designed to enhance its platform's capabilities and attract new customers. These developments are crucial for maintaining competitive advantage and expanding market share in the rapidly evolving fintech landscape.
Looking ahead, Marqeta's guidance for the fourth quarter anticipates net revenue growth of 10-12% and gross profit growth of 13-15%, reflecting cautious optimism amid a challenging banking environment. The company's ability to navigate these challenges while continuing to innovate will be key to sustaining its growth trajectory.
Explore the complete 8-K earnings release (here) from Marqeta Inc for further details.
