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01/11 11:27
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call summary and Q&A session highlight several positive developments, including strong revenue and gross profit growth, strategic acquisitions like TransactPay, and expansion into new markets with partners like Klarna. While there are some uncertainties, such as macroeconomic challenges and contract renewals, the overall sentiment is bolstered by the company's optimistic guidance, new business pipeline, and strategic initiatives. The company's market cap suggests a moderate reaction, resulting in a positive stock price prediction of 2% to 8%.
Total Processing Volume (TPV) $98 billion in Q3 2025, a 33% increase year-over-year. This growth was driven by broad-based acceleration, including lending use cases like Buy Now, Pay Later, and geographic expansion.
Net Revenue $163 million in Q3 2025, a 28% increase year-over-year. Growth was attributed to robust performance across various use cases and the inclusion of TransActPay acquisition.
Gross Profit $115 million in Q3 2025, a 27% increase year-over-year. Growth was fueled by strong TPV growth and a slightly higher gross profit take rate.
Adjusted EBITDA $30 million in Q3 2025, representing a 19% margin. This was driven by exceptional gross profit growth and disciplined expense management.
Europe TPV Growth Over 100% year-over-year in Q3 2025. This was driven by diverse use cases and the acquisition of TransActPay, which expanded capabilities in the region.
Non-Block TPV Growth 2.5x faster than Block TPV in Q3 2025. Growth was supported by strong performance in Europe and other non-Block use cases.
On-Demand Delivery Growth Accelerated to double digits in Q3 2025, growing twice as fast as the previous quarter. This was fueled by merchant category and geographic expansion.
Lending TPV Growth (including Buy Now, Pay Later) Accelerated 10 points versus Q2 2025, with a year-over-year growth rate double the overall company TPV growth. Growth was driven by increased adoption of Pay Anywhere card solutions and geographic expansion.
Adjusted Operating Expenses $84 million in Q3 2025, a 4% increase year-over-year. Growth was on the lower end of expectations due to a timing shift of marketing initiatives.
GAAP Net Loss $3.6 million in Q3 2025. This included $8 million of interest income and a nonrecurring litigation-related expense of $4.3 million.
Buy Now, Pay Later (BNPL): Marqeta has been at the forefront of enabling pay anywhere cards, allowing end users to pay anywhere cards are accepted and split purchases over time. They were the first to support Visa flexible credentials in the U.S., which has been rapidly adopted, including Klarna's expansion into Europe.
Commercial Programs: Signed a Fortune 500 customer to enable electronic supplier payments for SMBs. This program will launch with a new U.S. bank partner in Q4.
Credit Solutions: Selected to power a credit solution for loyalty programs for small and mid-sized companies, utilizing services like tokenization, disputes, and real-time decisioning risk product.
Geographic Expansion: Strong growth in Europe with TPV growth over 100% year-over-year. Acquisition of TransActPay has increased customer interest and referrals, enabling a complete offering in the U.K. and EU comparable to North America.
Bank Partnerships: Added new bank partners in the U.S. (Cross River Bank, Coastal Community Bank) and Europe (Griffin Bank in the U.K., with plans for an EU partner in 2026). Built a business integration platform to rapidly onboard partners globally.
Operational Efficiency: Built a business integration platform to reduce bank integration time by over 50%, centralize business logic, and improve cost structure.
TPV Growth: Achieved $98 billion in TPV for Q3, a 33% year-over-year increase, marking the highest growth rate since Q1 2024.
Customer Diversification: Non-Block TPV is growing 2.5x faster than Block TPV, with non-Block customers growing over 3x faster in financial services use cases.
Profitability Focus: Achieved $30 million in adjusted EBITDA for Q3, a 19% margin, showcasing progress on the path to profitability.
Regulatory Compliance: The company is expanding its bank supply with partners who prioritize regulatory compliance. However, maintaining compliance across multiple geographies, including the U.S., U.K., and EU, could pose challenges as the company scales.
Customer Renewals: The company is actively engaged in renewal discussions with two large customers. The outcome of these negotiations could impact revenue, as one renewal is expected to take effect in Q4, resulting in a headwind of approximately 2 points.
Economic Uncertainty: The company has noted macroeconomic uncertainty, which could impact its growth trajectory and financial performance.
Integration Complexity: The acquisition of TransActPay and the integration of new bank partners require seamless technical and operational integration. Any delays or issues could disrupt operations and customer satisfaction.
Revenue Concentration: Block's net revenue concentration decreased to 44%, but it remains a significant portion of the company's revenue. Over-reliance on a few large customers could pose risks if these customers reduce their business with Marqeta.
Accounting Policy Changes: The revised accounting policy for network incentives has created a headwind for gross profit growth, particularly in Q4, where it is expected to drag growth by about 5.5 points.
Litigation Expense: The company incurred a nonrecurring litigation-related expense of $4.3 million in Q3, which could indicate potential legal risks.
Supply Chain and Operational Complexity: The company is expanding its geographic reach and product offerings, which increases operational complexity. Managing this complexity effectively is critical to sustaining growth.
Q4 2025 Net Revenue and Gross Profit Growth: Net revenue is expected to grow between 22% and 24% in Q4 and approximately 22% for the full year 2025. Gross profit growth is expected to be between 17% and 19% in Q4 and approximately 23% for the full year 2025.
Adjusted EBITDA Margin: Adjusted EBITDA margin is expected to be between 15% and 16% in Q4 and approximately 17% for the full year 2025, equating to over $100 million in adjusted EBITDA for 2025.
Customer Renewals Impact: Renewal discussions with two large customers are ongoing. One renewal is expected to be in effect in Q4, resulting in a headwind of approximately 2 points to gross profit growth.
Accounting Policy Impact: The revised accounting policy for network incentives will create a drag of about 5.5 points on gross profit growth in Q4, which is approximately 4 points more than the drag experienced in Q3.
Marketing Expenses: A timing shift of marketing expenses from Q3 to Q4 is expected, aligning with mid-single-digit growth in adjusted operating expenses for Q4.
Bank Partner Expansion: Integration with Coastal Community Bank in the U.S. is underway to support programs starting in 2026. Griffin Bank in the U.K. is live, with a new program launching broadly in Q1 2026. A new EU bank partner is planned for the first half of 2026.
Geographic and Product Expansion: The business integration platform enables rapid onboarding of additional partners globally, reducing bank integration time by over 50%. This supports scaling new products and geographies efficiently.
Buy Now, Pay Later (BNPL) Growth: Lending, including BNPL, is growing much faster than overall company TPV growth, driven by increased adoption of Pay Anywhere card solutions and geographic expansion.
Europe TPV Growth: Europe continues to deliver strong results, with TPV growth remaining over 100% year-over-year, supported by the TransActPay acquisition and expansion of expense management customers into Europe.
Share Repurchase Activity: Our share repurchase activity remains ongoing as we continue to believe the current valuation does not fairly represent the company's value or the market opportunity ahead of us. In Q3, we repurchased 3.2 million shares at an average price of $6.12. For the year-to-date period ending September 30, 2025, we have repurchased 64.6 million shares at an average price of $4.53, which is a reduction of nearly 13% of the total issued and outstanding shares as of the 2024 year-end. As of September 30, we had $88 million remaining on our buyback authorization.
The earnings call summary and Q&A session highlight several positive developments, including strong revenue and gross profit growth, strategic acquisitions like TransactPay, and expansion into new markets with partners like Klarna. While there are some uncertainties, such as macroeconomic challenges and contract renewals, the overall sentiment is bolstered by the company's optimistic guidance, new business pipeline, and strategic initiatives. The company's market cap suggests a moderate reaction, resulting in a positive stock price prediction of 2% to 8%.
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