Marqeta, Inc. Q1 FY2026 earnings call

Mike started with a summary of Q1 results, noting continued momentum. Marketa's platform is comprehensive and flexible, enabling multinational card issuing, an integrated continuum of products, and modernization efforts for long-established issuers. Examples include Sezzle launching virtual card in Canada, Ramp expanding corporate expense management solutions, a customer launching a credit builder card, and a large U.S. financial institution using Marketa's virtual card expertise to provision a line of credit. Patty discussed Q1 financial results, including net revenue, gross profit, adjusted operating expenses, adjusted EBITDA, and net income. Mentioned share repurchase activity and the proposed reverse stock split.

First quarter results show continued momentum. Gross profit grew 19% fueled by 33% TPV growth. Adjusted EBITDA grew to 33 million with a 20% margin and GAAP profitability achieved with $8 million net income. Q1 TPV was $112 billion. Net revenue was $166 million, growing 19% year over year. Gross profit was $118 million, 19% year-over-year growth. Block net revenue concentration was 42% in Q1, two percentage points less than last quarter. Adjusted operating expenses were $84 million, growing 7% year over year. Adjusted EBITDA was $33 million with a 20% margin based on net revenue. Ended the quarter with $712 million in cash and short-term investments.

Expects Q2 net revenue and gross profit to grow between 14 to 16%. Adjusted operating expenses expected to grow in the high teens. Adjusted EBITDA growth expected to be 10% to 12% and break-even on gap net income basis in Q2. For full year, net revenue growth expected 12% to 14%, gross profit growth 10% to 12%, adjusted EBITDA growth several points higher than previous guidance mid to high 20s percent, and expect to generate about $15 million in gap net income for the year, up $5 million based on Q1 outperformance.

Biggest risk is more macro related, with consumer and SMB spending trajectory being a concern. Also, early efforts with agentic and stablecoin-backed card programs have some complexity and early-stage challenges to work out.

Q: Darren Peller from Wolf Research asked about non-block growth drivers, customer base outperformance, differentiation in expense management and BNPL, and barriers to entry.

A: Darren was told broad-based growth across use cases, existing customers driving growth, Marketa leading in innovation and product perspective, and relationship with customers remains strong.

Q: Connor Allen from J.P. Morgan asked about demand for secured credit card programs.

A: Connor was informed of increasing demand for secured credit cards as part of a continuum of products, with customers wanting to serve the entire spectrum of their customer base.

Q: Brian Keene from Citi asked about outperformance in EBITDA and GAAP net income, and business mix impact on growth rates and take rate.

A: Brian was told Q1 results were strong due to lower than expected adjusted operating expenses, and business mix had a modest headwind but overall guidance remains.

Q: Tim Chiodo from UBS asked about merchant routing for alternative networks and unit economics strategy.

A: Tim was told merchant routing is relatively stable, and Marketa has shifted pricing model to disassociate from interchange.

Q: Sanjay Sakrani from KBW asked about opportunities for outperformance and risks, and competitive intensity in working with large financial institutions.

A: Sanjay was told expense management could be an outperformer, biggest risk is macro related, and competitive intensity has been constant.

Q: Andrew Schmidt from KeyBank Capital Markets asked about Marketa's role in agentic and digital assets.

A: Andrew was told Marketa is well positioned for agentic as issuer-led, and there's growing demand for stablecoin-backed card programs as additive to business.

Q: Nate Sevenson from Deutsche Bank asked about back half growth dynamics and the large financial institution product.

A: Nate was told cash app new issuances impact is closer to one and a half points, and the large financial institution product relationship started from references in the market and is starting to roll out, with potential to help win more large financial institutions.