Leading edge card issuer Marqeta (NASDAQ: MQ) announced better-than-expected revenue in Q2 CY2025, with sales up 20.1% year on year to $150.4 million. Guidance for next quarter’s revenue was better than expected at $148.4 million at the midpoint, 1.8% above analysts’ estimates. Its non-GAAP profit of $0.01 per share was significantly above analysts’ consensus estimates.

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StockStory’s Take

Marqeta’s second quarter results were well received by the market, driven by strong execution across key growth areas and a significant beat on both revenue and adjusted profitability. Management attributed the positive performance to broad-based strength in total processing volume, particularly within lending and Buy Now, Pay Later (BNPL) use cases, as well as effective operating expense discipline. Interim CEO and CFO Michael Milotich noted, “Our focus this year has been on expanding and deepening our customer relationships while enabling their continued growth through innovative programs, value-added services and seamless geographic expansions with consistent and effective execution.”

Looking forward, Marqeta’s updated guidance is shaped by ongoing product innovation, expansion of its platform capabilities, and anticipated contributions from the recent TransactPay acquisition. Management highlighted that continued momentum in BNPL and expense management, along with new value-added services and a broader international footprint, are expected to drive further growth. Milotich stated, “The current trajectory of the business, the additional platform capabilities on the road map to be delivered in the second half and the completed acquisition of TransactPay make us confident that we can deliver on our 2025 growth objectives while rapidly improving the profitability of the business.”

Key Insights from Management’s Remarks

Management emphasized that growth in Q2 was largely propelled by diversified customer adoption, robust BNPL performance, and the expansion of value-added services, with international markets—especially Europe—playing an increasingly important role.

• BNPL expansion fuels growth: Marqeta’s continued leadership in BNPL was evident, with each of the company’s top 10 BNPL customers accelerating their growth. The launch of flexible payment credentials and partnerships like Klarna’s KlarnaOne Card highlighted Marqeta’s ability to support evolving consumer payment preferences, enabling users to pay later anywhere cards are accepted.
• Value-added services scaling: The company’s value-added services, including real-time decisioning and advanced fraud detection, saw gross profit more than double year-over-year. Over 40 customers—contributing nearly 20% of non-Block processing volume—have adopted these services, and Marqeta is enhancing these offerings with artificial intelligence to support complex risk management needs.
• European momentum and TransactPay acquisition: European processing volume more than doubled from the prior year, supported by both local and multi-regional customers expanding programs across new markets. The completed acquisition of TransactPay enables Marqeta to provide a unified program management solution in Europe, opening access to larger customers and allowing easier cross-border expansion.
• Operating efficiency drives profitability: Adjusted operating expenses fell, aided by delayed investments, improved organizational design, and technology efficiency initiatives. The company’s focus on engineering productivity and reduced reliance on outside services contributed to a record adjusted EBITDA margin.
• Diverse use cases and customer wins: Growth was broad-based, with lending, expense management, and embedded finance all showing strong performance. Marqeta noted that non-Block neobanking customers are growing significantly faster than Block, and embedded finance wins included onboarding a large global brand seeking a full-stack card solution.

Drivers of Future Performance

Marqeta expects continued growth to be driven by new product rollouts, expanded value-added services, and integration of TransactPay, though some near-term headwinds remain from accounting changes and macro uncertainty.

• BNPL innovation and adoption: Management believes ongoing enhancements to BNPL capabilities—including in-app multi-provider BNPL options and the rollout of flexible credential cards—will drive higher engagement for both issuing partners and end users. The company expects a limited release of new BNPL features before the holiday season, with broader adoption in 2026, positioning Marqeta as a key enabler of modern payment experiences.
• European expansion and larger customer reach: With the completion of the TransactPay acquisition, Marqeta anticipates capturing more value from existing customers while unlocking new opportunities among larger enterprises seeking unified processing, program management, and licensing across regions. Management expects this to translate into a more uniform and scalable offering between North America and Europe.
• Margin management and investment discipline: While accounting changes related to network incentives will pressure gross profit growth in the next two quarters, Marqeta plans to offset some of these headwinds through continued expense optimization, delayed marketing investments, and improved technology utilization. The company aims for adjusted EBITDA margins in the mid-teens for the full year.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will watch (1) the rollout and adoption of Marqeta’s new BNPL features and flexible credential products, (2) the integration progress and revenue contributions from TransactPay in Europe, and (3) the trajectory of value-added services as a driver of both customer retention and margin improvement. Expansion into new markets and execution on key customer contract renewals will also be important signposts.

Marqeta currently trades at $6.33, up from $5.70 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free).

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