The global modern card issuer reported Total Processing Volume of $71 billion with Net Revenue of $125 million and Gross Profit of $79 million in the second quarter of 2024.

Marqeta, Inc. (NASDAQ: MQ), the global modern card issuing platform, today reported financial results for the second quarter ended June 30, 2024.

The Company reported Total Processing Volume (TPV) of $71 billion, representing a year-over-year increase of 32% driven by volume growth across several use cases.

The Company reported Net Revenue of $125 million, a decrease of 46% year over year, which included a 60 percentage point negative growth impact due to the change in revenue presentation resulting from the new Cash App contract. The Company saw Gross Profit of $79 million for the quarter, down 6% year-over-year, primarily due to the new pricing for Cash App. Marqeta's second quarter earnings represent the last quarter where the Cash App contract renewal, effective as of July 2023, will impact our year-over-year comparisons.

GAAP Net Income for the quarter was $119 million, which includes a $158 million one-time benefit for the reversal of share-based compensation recognized in prior periods due to the forfeiture of the Executive Chairman Long-Term Performance Award. Adjusted EBITDA was negative $2 million.

"The second quarter demonstrates the great returns on our reinvigorated go-to-market approach combined with our ability to deliver innovation at scale. We signed a pioneering techbank, launched a new payment innovation that reimagines what a card can be, and deepened the array of services we can offer globally, all while continuing to grow our TPV and operate with focused efficiency,” said Simon Khalaf, CEO at Marqeta.

Marqeta highlighted several recent business updates that demonstrate its current business momentum:

  • Marqeta announced it has signed a five year deal with Varo Bank, N.A., the first nationally-chartered consumer techbank in the U.S., to become its issuer processor. Varo selected Marqeta for its ability to combine sophisticated virtual, tokenized and physical card issuing technology for the more than five million cards it has in market, with faster speed to market, helping Varo achieve its goals of helping people save and manage their money more easily.
  • We recently announced that we are the first US. issuer-processor certified by Visa to support Visa Flexible Credential, which will allow a single card product to toggle between payment methods on each transaction, bringing multiple funding sources to one card. Cardholders can choose whether to use debit, credit or “pay-in-four” with Buy Now Pay Later. Currently, we are partnering with Affirm, the first program announced in the US to offer Visa Flexible Credential, to enable this capability for their Affirm Card. This reinforces Marqeta’s commitment to innovation and provides us with further differentiation in the BNPL landscape.
  • Marqeta signed Zoho, a global tech company serving over 700 thousand businesses, which transforms how SMBs and enterprises work with a comprehensive suite of more than 50 business management applications. Zoho selected Marqeta for its ability to deliver expense management and embedded finance expertise to launch a card solution that enables businesses to manage expenses efficiently while also supporting their long-term growth.

Operating Highlights

 

In thousands, except percentages and per share data. % change is calculated over the comparable prior-year period (unaudited)

Three Months Ended June 30,

 

%

Change

 

Six Months Ended June 30,

 

%

Change

 

2024

 

 

 

2023

 

 

 

 

2024

 

 

 

2023

 

 

Financial metrics:

 

 

 

 

 

 

 

 

 

 

 

Net revenue

$

125,270

 

 

$

231,115

 

 

(46

%)

 

$

243,237

 

 

$

448,456

 

 

(46

%)

Gross profit

$

79,353

 

 

$

84,609

 

 

(6

%)

 

$

163,512

 

 

$

173,771

 

 

(6

%)

Gross margin

 

63

%

 

 

37

%

 

26 ppts

 

 

67

%

 

 

39

%

 

28 ppts

Total operating (benefit) expenses

($25,689

)

 

$

154,030

 

 

(117

%)

 

$

108,323

 

 

$

330,624

 

 

(67

%)

Net income (loss)

$

119,108

 

 

($58,797

)

 

303

%

 

$

83,048

 

 

($

127,598

)

 

165

%

Net income (loss) margin

 

95

%

 

 

(25

%)

 

120 ppts

 

 

34

%

 

 

(28

%)

 

62 ppts

Net income (loss) per share - basic and diluted

$0.23

 

 

($0.11

)

 

309

%

 

$0.16

 

 

($0.24

)

 

167

%

Key operating metric and Non-GAAP financial measures:

 

 

 

 

 

 

 

 

 

 

 

Total Processing Volume (TPV)

(in millions) 1

$

70,627

 

 

$

53,615

 

 

32

%

 

$

137,294

 

 

$

103,635

 

 

32

%

Adjusted EBITDA 2

($1,817

)

 

$

824

 

 

(321

%)

 

$

7,409

 

 

($3,521

)

 

310

%

Adjusted EBITDA margin 2

 

(1

%)

 

 

0.4

%

 

(2 ppts)

 

 

3

%

 

 

(1

%)

 

4 ppts

Non-GAAP operating expenses 2

$

81,170

 

 

$

83,785

 

 

(3

%)

 

$

156,103

 

 

$

177,292

 

 

(12

%)

1

TPV represents the total dollar amount of payments processed through our platform, net of returns and chargebacks. We believe that TPV is a key indicator of the market adoption of our platform, growth of our brand, growth of our customers' businesses and scale of our business.

2

See "Information Regarding Non-GAAP Measures" for definitions of Adjusted EBITDA, Adjusted EBITDA margin, and Non-GAAP operating expenses and the reconciliations of the net loss to Adjusted EBITDA, and of the total operating expenses to Non-GAAP operating expenses.

Second Quarter 2024 Financial Results:

Total Processing Volume increased by 32% year-over-year, rising to $71 billion from $54 billion in the second quarter of 2023.

Net Revenue of $125 million decreased by $106 million, or 46% year-over-year, primarily due to a contract renewal with Cash App, which resulted in a change in revenue presentation in addition to reduced pricing. The revenue presentation change involves the fees owed to Issuing Banks and Card Networks related to the Cash App primary Card Network volume, which are netted against revenue earned from the Cash App program within Net Revenue, resulting in a reduction of $139 million, negatively impacting the growth rate by 60 percentage points. Prior to the third quarter of 2023, these costs were included within Costs of Revenue.

Gross Profit decreased by 6% year-over-year, declining to $79 million from $85 million in the second quarter of 2023 primarily due to reduced pricing from the Cash App renewal. Gross Margin was 63% in the second quarter of 2024.

Net Income increased by $178 million year-over-year to $119 million in the quarter due to the one-time reversal of share-based compensation stemming from the forfeiture of the Executive Chairman Long-Term Performance Award which included $158 million of expenses recognized in previous periods.

Adjusted EBITDA was negative $2 million in the second quarter of 2024, decreasing by $3 million year-over year. Adjusted EBITDA margin was (1%) in the second quarter of 2024, a decrease of 2 percentage points versus last year.

Conference Call

Marqeta will host a live conference call today at 1:30 p.m. Pacific time (4:30 p.m. Eastern time). To join the call, please dial-in 10 minutes in advance: toll-free at 1-844-826-3035 or direct at 1-412-317-5195. The conference call will also be available live via webcast online at http://investors.marqeta.com.

The telephone replay dial-in numbers are 1-844-512-2921 and 1-412-317-6671 and will be available until August 14, 2024, 8:59 p.m. Pacific time (11:59 p.m. Eastern time). The confirmation code for the replay is 10190091.

Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements expressed or implied in this press release include, but are not limited to, statements relating to Marqeta’s quarterly guidance; statements regarding expected accounting treatment and changes to revenue and gross profit; statements regarding Marqeta’s business plans, business strategy and the continued success and growth of our customers; statements and expectations regarding Marqeta's partnerships, new product introductions, and product capabilities, including credit card issuing; and statements made by Marqeta’s CEO and CFO. Actual results may differ materially from the expectations contained in these statements due to risks and uncertainties, including, but not limited to, the following: the effect of uncertainties related to global politics and global economies, our business, results of operations, financial condition, and demand for our platform; the risk that Marqeta’s anticipated accounting treatment may be subject to further changes or developments; the risk that Marqeta is unable to further attract, retain, diversify, and expand its customer base; the risk that Marqeta is unable to drive increased profitable transactions on its platform; the risk that consumers and customers will not perceive the benefits of Marqeta’s products, including credit card issuing, as Marqeta expects; the risk that Marqeta's platform does not operate as intended resulting in system outages; the risk that Marqeta will not be able to achieve the cost structure that Marqeta currently expects; the risk that Marqeta’s solution will not achieve the expected market acceptance; the risk that competition could reduce expected demand for Marqeta’s services, including credit card issuing; the risk that changes in the regulatory landscape could adversely affect Marqeta's operations and revenues; the risk that Marqeta may be unable to maintain relationships with Issuing Banks and Card Networks; the risk that Marqeta is not able to identify and recognize the anticipated benefits of any acquisition; the risk that Marqeta is unable to successfully integrate any acquisition to businesses and related operations; the risk of financial services and banking sector instability and follow on effects to fintech companies; the risk of general economic conditions in either domestic or international markets, including inflation and recessionary fears, conditions resulting from geopolitical uncertainty and instability or war; and the risk that Marqeta may be subject to additional risks due to its international business activities. Detailed information about these risks and other factors that could potentially affect Marqeta’s business, financial condition and results of operations are included or incorporated by reference in the “Risk Factors” disclosed in Marqeta's Annual Report on Form 10-K for the year ended December 31, 2023 and subsequent Quarterly Reports on Form 10-Q, as such risk factors may be updated from time to time in Marqeta’s periodic filings with the SEC, available at www.sec.gov and Marqeta’s website at http://investors.marqeta.com.

The forward-looking statements in this press release are based on information available to Marqeta as of the date hereof. Marqeta disclaims any obligation to update any forward-looking statements, except as required by law.

Disclosure Information

Investors and others should note that Marqeta announces material financial information to its investors using its investor relations website, SEC filings, press releases, public conference calls and webcasts. Marqeta also uses social media to communicate with its customers and the public about Marqeta, its products and services and other matters relating to its business and market. It is possible that the information Marqeta posts on social media could be deemed to be material information. Therefore, Marqeta encourages investors, the media, and others interested in Marqeta to review the information we post on social media channels including the Marqeta Twitter feed (@Marqeta), the Marqeta Instagram page (@lifeatmarqeta), the Marqeta Facebook page, and the Marqeta LinkedIn page. These social media channels may be updated from time to time.

Use of Non-GAAP Financial Measures

Reconciliations of non-GAAP financial measures to the most directly comparable financial results as determined in accordance with GAAP are included at the end of this press release following the accompanying financial data. For a description of these non-GAAP financial measures, including the reasons management uses each measure, please see the section of the tables titled "Information Regarding Non-GAAP Financial Measures".

About Marqeta, Inc.

Marqeta’s modern card issuing platform empowers its customers to create customized and innovative payment cards. Marqeta’s modern architecture gives its customers the ability to build more configurable and flexible payment experiences, accelerating time-to-market and democratizing access to card issuing technology. Marqeta’s open APIs provide instant access to highly scalable, cloud-based payment infrastructure that enables customers to launch and manage their own card programs, issue cards and authorize and settle payment transactions. Marqeta is headquartered in Oakland, California and is certified to operate in more than 40 countries globally.

Marqeta® is a registered trademark of Marqeta, Inc.

Marqeta, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

(unaudited)

 

 

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Net revenue

$

125,270

 

 

$

231,115

 

 

$

243,237

 

 

$

448,456

 

Costs of revenue

 

45,917

 

 

 

146,506

 

 

 

79,725

 

 

 

274,685

 

Gross profit

 

79,353

 

 

 

84,609

 

 

 

163,512

 

 

 

173,771

 

Operating (benefit) expenses:

 

 

 

 

 

 

 

Compensation and benefits

 

103,166

 

 

 

113,521

 

 

 

198,156

 

 

 

248,159

 

Technology

 

14,769

 

 

 

13,154

 

 

 

27,887

 

 

 

27,744

 

Professional services

 

4,808

 

 

 

4,873

 

 

 

8,678

 

 

 

10,310

 

Occupancy

 

1,204

 

 

 

1,057

 

 

 

2,298

 

 

 

2,211

 

Depreciation and amortization

 

3,956

 

 

 

2,494

 

 

 

7,493

 

 

 

4,474

 

Marketing and advertising

 

728

 

 

 

561

 

 

 

1,106

 

 

 

1,002

 

Other operating expenses

 

3,418

 

 

 

5,103

 

 

 

7,322

 

 

 

10,336

 

Executive chairman long-term performance award

 

(157,738

)

 

 

13,267

 

 

 

(144,617

)

 

 

26,388

 

Total operating (benefit) expenses

 

(25,689

)

 

 

154,030

 

 

 

108,323

 

 

 

330,624

 

Income (loss) from operations

 

105,042

 

 

 

(69,421

)

 

 

55,189

 

 

 

(156,853

)

Other income, net

 

14,216

 

 

 

10,762

 

 

 

28,143

 

 

 

22,434

 

Income (loss) before income tax expense

 

119,258

 

 

 

(58,659

)

 

 

83,332

 

 

 

(134,419

)

Income tax expense (benefit)

 

150

 

 

 

138

 

 

 

284

 

 

 

(6,821

)

Net income (loss)

$

119,108

 

 

$

(58,797

)

 

$

83,048

 

 

$

(127,598

)

 

 

 

 

 

 

 

 

Net income (loss) per share attributable to Class A and Class B common stockholders

 

 

 

 

 

 

 

Basic

$

0.23

 

 

$

(0.11

)

 

$

0.16

 

 

$

(0.24

)

Diluted

$

0.23

 

 

$

(0.11

)

 

$

0.16

 

 

$

(0.24

)

Weighted-average shares used in computing net income (loss) per share attributable to Class A and Class B common stockholders

 

 

 

 

 

 

 

Basic

 

515,959

 

 

 

538,267

 

 

 

516,973

 

 

 

538,989

 

Diluted

 

524,401

 

 

 

538,267

 

 

 

525,415

 

 

 

538,989

 

 

Marqeta, Inc.

Condensed Consolidated Balance Sheets

(in thousands)

 

 

June 30, 2024

 

December 31, 2023

 

(unaudited)

 

 

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

924,730

 

 

$

980,972

 

Restricted cash

 

8,500

 

 

 

8,500

 

Short-term investments

 

228,833

 

 

 

268,724

 

Accounts receivable, net

 

25,956

 

 

 

19,540

 

Settlements receivable, net

 

27,765

 

 

 

29,922

 

Network incentives receivable

 

34,168

 

 

 

53,807

 

Prepaid expenses and other current assets

 

22,949

 

 

 

27,233

 

Total current assets

 

1,272,901

 

 

 

1,388,698

 

Operating lease right-of-use assets, net

 

5,653

 

 

 

6,488

 

Property and equipment, net

 

33,011

 

 

 

18,764

 

Intangible assets, net

 

32,702

 

 

 

35,631

 

Goodwill

 

123,523

 

 

 

123,523

 

Other assets

 

20,493

 

 

 

16,587

 

Total assets

$

1,488,283

 

 

$

1,589,691

 

Liabilities and stockholders' equity

 

 

 

Current liabilities

 

 

 

Accounts payable

$

3,685

 

 

$

1,420

 

Revenue share payable

 

176,425

 

 

 

173,645

 

Accrued expenses and other current liabilities

 

157,736

 

 

 

161,514

 

Total current liabilities

 

337,846

 

 

 

336,579

 

Operating lease liabilities, net of current portion

 

3,254

 

 

 

5,126

 

Other liabilities

 

4,808

 

 

 

4,591

 

Total liabilities

 

345,908

 

 

 

346,296

 

Stockholders' equity :

 

 

 

Preferred stock

 

 

 

 

 

Common stock

 

51

 

 

 

52

 

Additional paid-in capital

 

1,885,744

 

 

 

2,067,776

 

Accumulated other comprehensive (loss) income

 

(1,273

)

 

 

762

 

Accumulated deficit

 

(742,147

)

 

 

(825,195

)

Total stockholders’ equity

 

1,142,375

 

 

 

1,243,395

 

Total liabilities and stockholders' equity

$

1,488,283

 

 

$

1,589,691

 

 

Marqeta, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

 

Six Months Ended June 30,

 

 

2024

 

 

 

2023

 

Cash flows from operating activities:

 

 

 

Net income (loss)

$

83,048

 

 

$

(127,598

)

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

 

 

 

Depreciation and amortization

 

7,493

 

 

 

4,474

 

Share-based compensation expense

 

67,604

 

 

 

63,776

 

Executive chairman long-term performance award

 

(144,617

)

 

 

26,388

 

Non-cash postcombination compensation expense

 

 

 

 

32,430

 

Non-cash operating leases expense

 

258

 

 

 

1,231

 

Amortization of premium (accretion of discount) on short-term investments

 

(1,823

)

 

 

(2,311

)

Other

 

(45

)

 

 

499

 

Changes in operating assets and liabilities:

 

 

 

Accounts receivable

 

(6,692

)

 

 

63

 

Settlements receivable

 

2,157

 

 

 

7,513

 

Network incentives receivable

 

19,639

 

 

 

(24,402

)

Prepaid expenses and other assets

 

2,478

 

 

 

14,467

 

Accounts payable

 

1,413

 

 

 

(3,239

)

Revenue share payable

 

2,780

 

 

 

(16,341

)

Accrued expenses and other liabilities

 

(6,484

)

 

 

(11,828

)

Operating lease liabilities

 

(1,075

)

 

 

(1,642

)

Net cash provided by (used in) operating activities

 

26,134

 

 

 

(36,520

)

Cash flows from investing activities:

 

 

 

Purchases of property and equipment

 

(2,193

)

 

 

(668

)

Capitalization of internal-use software

 

(10,471

)

 

 

(6,395

)

Business combination, net of cash acquired

 

 

 

 

(131,914

)

Purchases of short-term investments

 

 

 

 

(279,548

)

Maturities of short-term investments

 

40,000

 

 

 

296,000

 

Net cash provided by (used in) investing activities

 

27,336

 

 

 

(122,525

)

Cash flows from financing activities:

 

 

 

Proceeds from exercise of stock options, including early exercised stock options, net of repurchase of early exercised unvested options

 

108

 

 

 

2,299

 

Proceeds from shares issued in connection with employee stock purchase plan

 

1,629

 

 

 

1,775

 

Taxes paid related to net share settlement of restricted stock units

 

(20,287

)

 

 

(10,070

)

Repurchase of common stock

 

(91,162

)

 

 

(67,073

)

Net cash used in financing activities

 

(109,712

)

 

 

(73,069

)

Net decrease in cash, cash equivalents, and restricted cash

 

(56,242

)

 

 

(232,114

)

Cash, cash equivalents, and restricted cash- Beginning of period

 

989,472

 

 

 

1,191,646

 

Cash, cash equivalents, and restricted cash - End of period

$

933,230

 

 

$

959,532

 

Marqeta, Inc.

Financial and Operating Highlights

(in thousands, except per share data or as noted)

(unaudited)

 

 

 

2024

 

2023

 

Year over Year Change Q2'24 vs Q2'23

 

 

Second Quarter

 

First Quarter

 

Fourth Quarter

 

Third Quarter

 

Second Quarter

 

Operating performance:

 

 

 

 

 

 

 

 

 

 

 

 

Net revenue

 

$

125,270

 

 

$

117,968

 

 

$

118,822

 

 

$

108,891

 

 

$

231,115

 

 

(46

%)

Costs of revenue

 

 

45,917

 

 

 

33,807

 

 

 

35,589

 

 

 

36,383

 

 

 

146,506

 

 

(69

%)

Gross profit

 

 

79,353

 

 

 

84,161

 

 

 

83,233

 

 

 

72,508

 

 

 

84,609

 

 

(6

%)

Gross margin

 

 

63

%

 

 

71

%

 

 

70

%

 

 

67

%

 

 

37

%

 

26 ppts

Operating (benefit) expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

 

103,166

 

 

 

94,990

 

 

 

95,790

 

 

 

102,433

 

 

 

113,521

 

 

(9

%)

Technology

 

 

14,769

 

 

 

13,118

 

 

 

13,938

 

 

 

13,930

 

 

 

13,154

 

 

12

%

Professional services

 

 

4,808

 

 

 

3,870

 

 

 

7,172

 

 

 

4,197

 

 

 

4,873

 

 

(1

%)

Occupancy and equipment

 

 

1,204

 

 

 

1,094

 

 

 

1,076

 

 

 

1,074

 

 

 

1,057

 

 

14

%

Depreciation and amortization

 

 

3,956

 

 

 

3,537

 

 

 

3,159

 

 

 

3,108

 

 

 

2,494

 

 

59

%

Marketing and advertising

 

 

728

 

 

 

378

 

 

 

1,219

 

 

 

346

 

 

 

561

 

 

30

%

Other operating expenses

 

 

3,418

 

 

 

3,905

 

 

 

3,804

 

 

 

3,833

 

 

 

5,103

 

 

(33

%)

Executive chairman long-term performance award

 

 

(157,738

)

 

 

13,121

 

 

 

13,413

 

 

 

13,413

 

 

 

13,267

 

 

(1289

%)

Total operating (benefit) expenses

 

 

(25,689

)

 

 

134,013

 

 

 

139,571

 

 

 

142,334

 

 

 

154,030

 

 

(117

%)

Income (loss) from operations

 

 

105,042

 

 

 

(49,852

)

 

 

(56,338

)

 

 

(69,826

)

 

 

(69,421

)

 

251

%

Other income (expense), net

 

 

14,216

 

 

 

13,926

 

 

 

14,932

 

 

 

15,074

 

 

 

10,762

 

 

32

%

Income (loss) before income tax expense

 

 

119,258

 

 

 

(35,926

)

 

 

(41,406

)

 

 

(54,752

)

 

 

(58,659

)

 

303

%

Income tax expense (benefit)

 

 

150

 

 

 

134

 

 

 

(1,030

)

 

 

238

 

 

 

138

 

 

9

%

Net income (loss)

 

$

119,108

 

 

$

(36,060

)

 

$

(40,376

)

 

$

(54,990

)

 

$

(58,797

)

 

303

%

Income (loss) per share - basic

 

$

0.23

 

 

$

(0.07

)

 

$

(0.08

)

 

$

(0.10

)

 

$

(0.11

)

 

309

%

Income (loss) per share - diluted

 

$

0.23

 

 

$

(0.07

)

 

$

(0.08

)

 

$

(0.10

)

 

$

(0.11

)

 

309

%

TPV (in millions)

 

$

70,627

 

 

$

66,666

 

 

$

61,979

 

 

$

56,650

 

 

$

53,615

 

 

32

%

Adjusted EBITDA

 

$

(1,817

)

 

$

9,228

 

 

$

3,292

 

 

$

(2,062

)

 

$

824

 

 

321

%

Adjusted EBITDA margin

 

 

(1

%)

 

 

8

%

 

 

3

%

 

 

(2

%)

 

 

0.4

%

 

(2 ppts)

Financial condition:

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

924,730

 

 

$

970,357

 

 

$

980,972

 

 

$

947,749

 

 

$

950,157

 

 

(3

%)

Restricted cash

 

$

8,500

 

 

$

8,500

 

 

$

8,500

 

 

$

7,800

 

 

$

9,375

 

 

(9

%)

Short-term investments

 

$

228,833

 

 

$

228,324

 

 

$

268,724

 

 

$

349,395

 

 

$

432,354

 

 

(47

%)

Total assets

 

$

1,488,283

 

 

$

1,558,361

 

 

$

1,589,691

 

 

$

1,603,249

 

 

$

1,704,143

 

 

(13

%)

Total liabilities

 

$

345,908

 

 

$

347,696

 

 

$

346,296

 

 

$

308,166

 

 

$

331,528

 

 

4

%

Stockholders' equity

 

$

1,142,375

 

 

$

1,210,665

 

 

$

1,243,395

 

 

$

1,295,083

 

 

$

1,372,615

 

 

(17

%)

ppts = percentage points

 

Marqeta, Inc.

Reconciliation of GAAP to NON-GAAP Measures

(in thousands)

(unaudited)

Information Regarding Non-GAAP Measures

In addition to the financial measures prepared in accordance with generally accepted accounting principles in the United States (“GAAP”), this press release contains certain non-GAAP financial measures. Marqeta considers Adjusted EBITDA, Adjusted EBITDA Margin, and Non-GAAP operating expenses as supplemental measures of the company’s performance that are not required by, nor presented in accordance with GAAP.

We define Adjusted EBITDA as net income (loss) adjusted to exclude depreciation and amortization; share-based compensation expense; executive chairman long-term performance award; payroll tax related to share-based compensation; restructuring charges; acquisition-related expenses which consist of due diligence costs, transaction costs and integration costs related to potential or successful acquisitions, and cash and non-cash postcombination compensation expenses; income tax expense (benefit); and other income (expense), net, which consists of interest income from our short-term investments, realized foreign currency gains and losses, our share of equity method investments’ profit or loss, impairment of equity method investments or other financial instruments, and gain from sale of equity method investments. We believe that Adjusted EBITDA is an important measure of operating performance because it allows management and our board of directors to evaluate and compare our core operating results, including our operating efficiencies, from period to period. Additionally, we utilize Adjusted EBITDA as an input into our calculation of our annual employee bonus plans and performance-based restricted stock units.

Adjusted EBITDA Margin is calculated as Adjusted EBITDA divided by net revenue. This measure is used by management and our board of directors to evaluate our operating efficiency.

We define Non-GAAP operating expenses as total operating expenses adjusted to exclude depreciation and amortization; share-based compensation expense; executive chairman long-term performance award; payroll tax related to share-based compensation; restructuring charges; and acquisition-related expenses which consists of due diligence costs, transaction costs and integration costs related to potential or successful acquisitions, and cash and non-cash postcombination compensation expenses. We believe that Non-GAAP operating expenses is an important measure of operating performance because it allows management and our board of directors to evaluate and compare our core operating results, including our operating efficiencies, from period to period.

Adjusted EBITDA, Adjusted EBITDA Margin, and Non-GAAP operating expenses should not be considered in isolation, or construed as an alternative to net loss, or any other performance measures derived in accordance with GAAP, or as an alternative to cash flow from operating activities or as a measure of the company's liquidity. In addition, other companies may calculate Adjusted EBITDA differently than Marqeta does, which limits its usefulness in comparing Marqeta’s financial results with those of other companies.

The following table shows Marqeta's GAAP results reconciled to non-GAAP results included in this release:

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

GAAP net revenue

$

125,270

 

 

$

231,115

 

 

$

243,237

 

 

$

448,456

 

GAAP net income (loss)

$

119,108

 

 

$

(58,797

)

 

$

83,048

 

 

$

(127,598

)

GAAP net income (loss) margin

 

95

%

 

 

(25

%)

 

 

34

%

 

 

(28

%)

GAAP total operating (benefit) expenses

$

(25,689

)

 

$

154,030

 

 

$

108,323

 

 

$

330,624

 

 

 

 

 

 

 

 

 

GAAP net income (loss)

$

119,108

 

 

$

(58,797

)

 

$

83,048

 

 

$

(127,598

)

Depreciation and amortization expense

 

3,956

 

 

 

2,494

 

 

 

7,493

 

 

 

4,474

 

Share-based compensation expense(1)

 

36,291

 

 

 

33,789

 

 

 

67,604

 

 

 

66,667

 

Executive chairman long-term performance award(1)

 

(157,738

)

 

 

13,267

 

 

 

(144,617

)

 

 

26,388

 

Payroll tax expense related to share-based compensation

 

702

 

 

 

638

 

 

 

1,867

 

 

 

1,278

 

Acquisition-related expenses (2)

 

9,930

 

 

 

11,684

 

 

 

19,873

 

 

 

46,152

 

Restructuring

 

 

 

 

8,373

 

 

 

 

 

 

8,373

 

Other income, net

 

(14,216

)

 

 

(10,762

)

 

 

(28,143

)

 

 

(22,434

)

Income tax expense (benefit)

 

150

 

 

 

138

 

 

 

284

 

 

 

(6,821

)

Adjusted EBITDA

$

(1,817

)

 

$

824

 

 

$

7,409

 

 

$

(3,521

)

Adjusted EBITDA Margin

 

(1

%)

 

 

0.4

%

 

 

3

%

 

 

(1

%)

 

 

 

 

 

 

 

 

GAAP Total operating (benefit) expenses

$

(25,689

)

 

$

154,030

 

 

$

108,323

 

 

$

330,624

 

Depreciation and amortization expense

 

(3,956

)

 

 

(2,494

)

 

 

(7,493

)

 

 

(4,474

)

Share-based compensation expense(1)

 

(36,291

)

 

 

(33,789

)

 

 

(67,604

)

 

 

(66,667

)

Executive chairman long-term performance award(1)

 

157,738

 

 

 

(13,267

)

 

 

144,617

 

 

 

(26,388

)

Payroll tax expense related to share-based compensation

 

(702

)

 

 

(638

)

 

 

(1,867

)

 

 

(1,278

)

Restructuring

 

 

 

 

(8,373

)

 

 

 

 

 

(8,373

)

Acquisition-related expenses (2)

 

(9,930

)

 

 

(11,684

)

 

 

(19,873

)

 

 

(46,152

)

Non-GAAP operating expenses

$

81,170

 

 

$

83,785

 

 

$

156,103

 

 

$

177,292

 

(1)

Prior period amounts related to the Executive Chairman Long-Term Performance Award have been reclassified to conform to the current period presentation.

(2)

Acquisition-related expenses, which include transaction costs, integration costs and cash and non-cash postcombination compensation expense, have been excluded from Adjusted EBITDA as such expenses are not reflective of our ongoing core operations and are not representative of the ongoing costs necessary to operate our business; instead, these are costs specifically associated with a discrete transaction.

 

IR Contact: Marqeta Investor Relations, IR@marqeta.com

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