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Earnings Results: Marqeta stock gains after earnings as revenue forecast exceeds expectations

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Shares of Marqeta Inc. rose about 7% in after-hours trading Wednesday after the company, which makes card-issuing technology, topped revenue expectations for its latest quarter and issued an upbeat forecast.

The company reported a net loss of $53.2 million, or 10 cents a share, compared with a loss of $45.7 million, or 8 cents a share, in the year-earlier quarter. Marqeta’s
MQ,
-8.50%

per-share loss matched the FactSet consensus.

On an adjusted basis, Marqeta recorded adjusted earnings before interest, taxes, depreciation and amortization (Ebitda) of $13.6 million, compared with $4.9 million a year prior, while analysts were anticipating $14.6 million.

Revenue rose to $191.6 million from $131.5 million, whereas the FactSet consensus was for $180.9 million.

Total processing volume rose by 54% to $42 billion. Chief Financial Officer Mike Milotich called out that TPV in the expense-management vertical almost tripled relative to a year before.

On the earnings call, executives highlighted overseas momentum.

“International expansion is another big opportunity for Marqeta, and we have experienced significant momentum in Europe in recent quarters,” Chief Executive Jason Gardner said, noting that the company can “now meet the high data-residency standards adopted by many European businesses.”

For the fourth quarter, Marqeta executives anticipate 29% to 31% net revenue growth, which implies revenue of $200.5 million to $203.6 million. The FactSet consensus was for $190.8 million.

Executives continue to see big opportunities in credit, a newer area for the company, as well as with Marqeta’s recently launched banking-services offering.

“A lot of companies operate at a program level, so everyone under that program gets the same card with the same rewards,” Gardner told MarketWatch of the credit-card industry. Marqeta’s credit offering is “built to be very specific to the user” so that if a user shops at a specific store, for example, that person could get targeted rewards.

The newly announced banking offering similarly expands Marqeta’s market potential, in his view.

“We’ve been well known for many years for modern card issuing,” he said, but many companies “want a more comprehensive money-movement product” with a focus on inflows, which can help generate revenue for both the company and Marqeta.

Marqeta’s stock lost 8.5% in Wednesday’s regular session. It’s lost 76% over the past 12 months as the S&P 500
SPX,
-2.08%

has declined 20%.

Gardner acknowledged that Marqeta’s stock has been weighed down by broader market conditions, though “obviously there’s pressure on stock” as well stemming from market uncertainty about the timing of Marqeta’s renewal of its agreement with Block Inc.
SQ,
-8.48%
,
its largest customer.

“We’ll let everyone know when we get that renewed,” he said.

In the meantime, Marqeta is “a very well run business” that’s “delivered what I think to be great results,” he added.

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