Marqeta, Inc. Q2 FY2025 earnings call

• Q2 demonstrated strong growth with TPV at $91 billion, net revenue up 20%, and adjusted EBITDA at $29 million.
• Innovation in lending use cases, particularly Buy Now, Pay Later, with advancements like Visa Flexible Credentials and KlarnaOne Card.
• Value-added services gross profit more than doubled year-over-year, with real-time decisioning being a key contributor.
• Europe TPV continues to grow over 100%, and the acquisition of TransactPay will enhance program management across North America and Europe.
• Focus on enabling customer innovation, expanding geographies, and deepening relationships through new programs and services.

In the second quarter, total processing volume (TPV) was $91 billion, a 29% increase year-over-year. Net revenue was $150 million, growing 20% year-over-year. Gross profit was $104 million, a 31% increase versus Q2 2024, resulting in a gross margin of 69%. Adjusted EBITDA was $29 million, a 19% margin. TPV growth was driven by various use cases including lending, Buy Now, Pay Later, and expense management. Non-Block TPV grew nearly 3x faster than Block TPV, with financial services, lending, and expense management driving much of the growth.

• Full year 2025 revenue, gross profit, and adjusted EBITDA margins are expected to be 3 to 4 points higher than previously anticipated.
• The impact of revised accounting policy for network incentives will shift from a tailwind in Q2 to a headwind in Q3 and Q4.
• TransactPay will contribute to revenue and gross profit growth, with an expected 1.5 points lift in Q3 and 2 points in Q4.
• Q3 and Q4 adjusted operating expenses are expected to grow in the mid-single digits, with Q3 adjusted EBITDA margin at 12%-13% and Q4 at 1 point higher, leading to full year adjusted EBITDA margin between 14%-15%.

• Macroeconomic uncertainty with uneven indicators affecting spend and employment trends.
• Regulatory environment impact on banks, potentially slowing operational tempo and affecting business dynamics.
• Potential changes in open banking data access costs, which could impact customer usage patterns and cost structures.

Q: Can you elaborate on Buy Now, Pay Later capabilities and their benefits?

A: The product allows consumers to get multiple BNPL options at purchase using existing debit cards, differentiating issuing partners' products and bringing distribution to BNPL customers.

Q: How are investments and profitability progressing?

A: Investments focus on platform, banking/money movement, credit, and white label app; profitability is ahead, with expectation of GAAP breakeven in 2026.

Q: Any updates on credit pipeline and American Express integration?

A: Close to certifying with Amex, Perpay migration nearly complete, and co-brand with airline expected later this year.

Q: Thoughts on open banking data access changes?

A: Minimal direct impact now, but something to watch as it could affect customer usage patterns and costs.