Marqeta Reports Fourth Quarter and Full Year 2022 Financial Results

The global modern card issuing platform had $47 billion in fourth quarter total processing volume, up 41 percent year-over-year, and generated $204 million in fourth quarter net revenue, up 31 percent year-over-year

The company's annual total processing volume was up 50 percent year-over-year to $166 billion, generating $748 million in annual revenue, up 45 percent from 2021

Marqeta, Inc. (NASDAQ: MQ), the global modern card issuing platform, today reported financial results for the fourth quarter and full year ended December 31, 2022.

Total processing volume (TPV) was $47 billion for the quarter and net revenue was $204 million. This represented a 41% increase in TPV and a 31% increase in net revenue, compared with the same quarter of 2021. The company saw gross profit of $87 million during the quarter, up 15% year-over-year. GAAP net loss was $26 million and an Adjusted EBITDA loss of $7 million for the quarter ended December 31, 2022.

For the full 2022 fiscal year, TPV was $166 billion and net revenue was $748 million. This represented annual increases of 50% and 45%, respectively, from 2021 results. The company saw gross profit of $320 million during 2022, up 38% from the year prior. The company reported GAAP net loss of $185 million and an Adjusted EBITDA loss of $42 million for the year ended December 31, 2022.

"I am very proud of the scale our business reached in 2022," said Simon Khalaf, CEO of Marqeta. "Now we are entering 2023 uniquely positioned to capture the massive opportunity in embedded finance. Our cloud native and API-first platform offers a fully bundled offering - debit, credit, risk, money movement and program management tools, making it seamless for our customers to embed financial services into their own products.”

Recent Business Updates:

• Marqeta announced Simon Khalaf as its new CEO, with founding CEO Jason Gardner shifting to the role of Executive Chairman. Khalaf is a veteran technology executive who originally joined the company in June 2022 as Chief Product Officer.
• Marqeta announced and completed the acquisition of Power Finance Inc., a modern credit card program management platform, which will strengthen Marqeta’s credit capabilities and enhances its leadership in modern card issuing across all card types.
• Marqeta announced its new Web Push Provisioning Product, expanding its industry-leading tokenization offerings with new capabilities that allow cardholders to instantly tokenize a card into a mobile wallet without downloading a third-party application.
• Marqeta, alongside Mastercard, was chosen by Rakuten to support the launch of its Club R Pay product, an integrated digital card solution for Rakuten's 12 million loyalty members that allows them to shop on over 2,000 sites while enjoying their Rakuten rewards.

Operating Highlights

Fourth Quarter 2022 Financial Results:

• TPV increased by 41% year-over-year, from $33 billion for the quarter ended December 31, 2021, to $47 billion for the quarter ended December 31, 2022.
• Net revenue of $204 million increased by $48 million, or 31% year-over-year, primarily driven by higher total processing volume, partially offset by changes in our card program mix, particularly the growth of the Powered by Marqeta offering.
• Gross profit increased by 15% year-over-year to $87 million from $76 million in the fourth quarter of 2021. Gross margin was 43% in the fourth quarter.
• Net loss decreased by $10 million, or 28%, year-over-year to $26 million. The loss results from our increase in compensation, benefits and technology expenses as we continued our investment in our people and platform, offset by our increase in gross profit.
• Adjusted EBITDA in the fourth quarter of 2022 was a loss of $7 million, a decline of $9 million year-over-year.

Full Year 2022 Financial Results:

• TPV increased by 50% year-over-year, from $111 billion in 2021, to $166 billion in 2022.
• Net revenue increased by $231 million, or 45% year-over-year, primarily driven by higher total processing volume, partially offset by changes in our card program mix, particularly the growth of the Powered by Marqeta offering.
• Gross profit increased by $88 million, or 38% year-over-year. Gross margin was 43% for the year ended December 31, 2022.
• Net loss increased by $21 million, or 13%, year-over-year to $185 million, primarily resulting from headcount growth.
• Adjusted EBITDA for the year ended December 31, 2022 was a loss of $42 million, a decline of $29 million year-over-year.

Financial Guidance:

The following summarizes Marqeta's guidance for the first quarter of 2023:

A reconciliation of Adjusted EBITDA to the comparable GAAP measure for the first quarter of 2023 is not available due to the challenges and impracticability with estimating some of the items, such as share-based compensation expense, depreciation and amortization expense, and payroll tax expense, as such items cannot be reasonably predicted and could be significant. Because of those challenges, reconciliations of such forward-looking non-GAAP financial measures are not available without unreasonable effort.

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 1-877-407-4018 or direct at 1-201-689-8471. 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 March 14, 2023, 5:00 p.m. Pacific time (8:00 p.m. Eastern time). The confirmation code for the replay is 13735873.

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 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; and statements made by Marqeta’s CEO. 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 economies, our business, results of operations, financial condition, demand for our platform, sales cycles and customer retention; 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 as Marqeta expects; the risk that Marqeta's technology platform, including hosted solutions, do 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; the risk that changes in the regulatory landscape adversely affects the gross interchange or other revenue Marqeta earns or adversely affects the bank and network costs Marqeta incurs; 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; general economic conditions in either domestic or international markets, including inflation and recessionary fears, conditions resulting from geopolitical uncertainty and instability or war, including, the direct and indirect effects of the significant military action against Ukraine launched by Russia on U.S. and global economies, our business, results of operations, financial condition, and demand for our platform; and the risk that Marqeta may be subject to additional risks such as inflation or currency fluctuations 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 in the “Risk Factors” disclosed in Marqeta's Annual Report on Form 10-K for the year ended December 31, 2022, 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 40 countries globally.

Marqeta^® is a registered trademark of Marqeta, Inc.

Marqeta, Inc.

Reconciliation of GAAP to NON-GAAP Measures

(in thousands)

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; payroll tax related to share-based compensation; acquisition related expenses which consists of due diligence costs related to potential acquisitions, and transaction costs, integration costs and amortization of intangible assets related to successful acquisitions; income tax expense (benefit); and other expense (income) net, which consists of changes in the fair value of redeemable convertible preferred stock warrant liabilities (for periods prior to the IPO), realized foreign currency gains and losses, interest income from our marketable securities, 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 certain annual employee bonus plans.

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; payroll tax related to share-based compensation; and acquisition related expenses which consists of due diligence costs related to potential acquisitions, and transaction costs, integration costs and amortization of intangible assets related to successful acquisitions.

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:

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