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Shares of Marqeta Inc. were up more than 14% in after-hours trading Wednesday after the company, which enables companies to issue debit and credit cards, topped expectations with its latest results while also delivering an upbeat forecast.
The company recorded a third-quarter net loss of $45.7 million, or 8 cents a share, compared with a loss of $12.3 million, or 10 cents a share, in the year-earlier quarter.
Marqeta
MQ,
reported a $4.9 million loss on the basis of adjusted earnings before interest, taxes, depreciation and amortization, which is a non-GAAP metric. The company generated $686,000 in adjusted Ebitda a year earlier.
Revenue rose to $131.5 million from $84.3 million a year earlier. Analysts tracked by FactSet were modeling $119.2 million in revenue. Marqeta also saw total processing volume increase to $27.6 billion from $17.2 billion a year prior.
Growth “was driven by outperformance from both our digital banking and BNPL [buy-now pay-later] customers,” Chief Financial Officer Philip Faix said on the earnings call, though it was partially outweighed by some pullbacks in on-demand delivery volume relative to earlier in the pandemic.
“We see our third-quarter results as yet another proof point of the tremendous progress and the impact we are already having in global money movement, and we are only scratching the surface when it comes to the many ways Marqeta enables modern card issuing,” Chief Executive Jason Gardner said on the call.
The company highlighted a series of recent customer wins, including Bill.com Holdings Inc.
BILL,
which will use Marqeta technology to help small- and medium-sized businesses make their payment processes more efficient. The company will also work with Figure on its digital account that offers buy-now pay-later functions.
“A clean beat + impressive recent deal wins should be enough to drive solid share outperformance in tomorrow’s tape,” Barclays analyst Ramsey El-Assal wrote.
Buy-now pay-later remains a hot area for Marqeta, as does helping cryptocurrency-focused companies offer customers the ability to spend their crypto assets through cards.
When consumers pay with a buy-now pay-later service like Affirm Holdings Inc.
AFRM,
there is a Marqeta-powered card inserted into the payment flow. Crypto wallets like that from Coinbase Global Inc.
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allow customers to swipe Marqeta-powered cards to make payments in the real world, and then Coinbase will check the user’s crypto balance, sell crypto for fiat, and fund the transaction.
The company is “focused on those demand trends” where it can help companies in key verticals build connections to point-of-sale systems, Gardner told MarketWatch. “We have the prescience to see what we believe our platform, or modern card issuing, will be able to help.”
Marqeta has largely focused on virtual cards and debit cards, but the company is planning to get more involved in the processing of building credit cards. It helped bring to life a recent offering from M1 that lets people earn up to 10% in cash-back rewards when they spend at companies they have also invested in through the platform.
“With 52% of card spend happening on credit in the U.S., this is a massive market opportunity that is underserved by current technology, which has done little to modernize the credit card experience,” Gardner said on the earnings call. “Therefore, our credit-card issuing platform is a critical strategic priority for Marqeta.”
For the fourth quarter, Marqeta projects $134 million to $139 million in net revenue and an Ebitda loss of $7 million to $10 million. Analysts tracked by FactSet were modeling $125.8 million in revenue and a $24.8 million Ebitda loss.
Shares have declined 16.6% over the past three months as the S&P 500
SPX,
has risen 4.7%.
