Revenue Leaps at Marqeta in Quarter of ‘Solid Growth’

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Marqeta’s CEO said the company would consider acquisitions given that valuations have fallen.

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David Paul Morris/Bloomberg

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Shares of Marqeta jumped more than 3% in after hours trading Wednesday, only to lose ground early Thursday, after the card-issuing company reported a rise in first-quarter revenue.

marqeta said Wednesday that its net loss for the first quarter widened to $60.5 million, or 11 cents a diluted share, compared with $12.8 million in losses, or 10 cents a share, for the same period in 2021. Analysts polled by FactSet had expected a loss of 9 cents a share.

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Revenue increased about 54% to $166.1 million. Analysts had expected $161.3 million, according to FactSet said. Marqeta expects net revenue growth in the second quarter of 46% to 48% and gross profit margins of 40% to 41%, According to an earnings supplement.

“We had another quarter of solid growth. We’ll just continue to execute at the pace we’re executing and the stock will follow,” said Jason Gardner, Marqeta’s founder and CEO.

Marqeta’s shares fell by nearly 6% to close at $6.63 Wednesday. In after-hours trading, the stock was up by 23 cents to $6.86, but by Thursday morning, it had slipped to $6.24, for a loss of 5.9% relative to Wednesday’s close. The stock has dropped more than 60% year to date.

Marqeta provides a card issuing platform. Its technology, an application programming interface, helps companies like Uber Technologies (UBER), DoorDash (DASH) and Instacart issue cards, including debit and prepaid, and process payments for their customers.

Gardner noted that Marqeta’s quarterly total processing volume rose 53% to $37 billion. “Newer customers signed since 2019 accounted for 20% of total processing volume, which is double for the comparable quarter in 2021,” he told Barron’s,

Marqeta is one of about 400 companies that went public in 2021. Only 12% of those companies are trading above their offer prices. In June 2021, Marqeta raised $1.2 billion with its IPO after pricing its shares at $27. The stock is down 75% from the IPO price.

Gardner said there are a number of factors affecting the stock market, including rising inflation, interest rates, and the continued war in Europe. “Now there’s talk about a global economic slowdown,” he said. “The market is unforgiving.”

The decline in stock prices also means that public market valuations have come down. Gardner said acquisitions are something Marqeta would consider. “There’s lots of opportunity,” he said.

Private company valuations have also fallen. Gardner estimated that valuations for private companies have dropped by 30% to 50%. “There are a lot of VCs sitting on the sidelines,” he said. “There’s lots of talk around the difficulty of raising capital right now.”


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