Marqeta stock soars after earnings as outlook tops expectations

Marqeta
MQ,
+10.07%
posted adjusted earnings before interest, taxes, depreciation, and amortization (Ebitda) of $1.2 million, whereas it lost $2.6 million on the metric a year prior. The FactSet consensus was for a $9.5 million loss on the basis of adjusted Ebitda, which is a non-GAAP metric.

Marqeta’s revenue rose to $155.4 million from $86.2 million, while analysts were forecasting $137.8 million.

The company disclosed in early February that it expected to exceed the forecasts for revenue and adjusted Ebitda that it had offered back in November. That outlook had called for $134 million to $139 million in revenue and an adjusted Ebitda loss of $7 million to $10 million.

The company generated total processing volume (TPV) of $33.0 billion, up from $18.7 billion a year earlier.

Shares of Marqeta were up more than 14% in after-hours trading Wednesday, after they rose 10.1% to close out the regular session. Earlier Wednesday, Marqeta announced a partnership with Citi Commercial Cards.

Newer partnerships with Plaid and Citi “[help] MQ diversify away from the dependence on debit cards, positioning it well in the new world of real time account-to-account payments,” wrote Mizuho’s Dan Dolev.

For the first quarter, Marqeta anticipates revenue growth of 48% to 50% and an adjusted Ebitda margin of -8% to -9%. The FactSet consensus called for $137.1 million in March-quarter revenue, or about 27% above the year-prior total.

“Our approach in 2022 will be more balanced between fueling our existing customers’ success and building for the future,” Chief Executive Jason Gardner said on the company’s earnings call.

He shared that newer initiatives like credit and banking-as-a-service “did not get as much focus as we would have liked” as existing Marqeta customers were seeing rapid growth with more established offerings, but the company ramped hiring for the emerging areas toward the end of 2021.

Credit is “a fairly large strategic focus for us,” Gardner told MarketWatch.

Looking ahead to 2022, Gardner is upbeat about Marqeta’s potential despite macroeconomic headwinds.

“We just got out of a two-year pandemic, and now there’s more uncertainty,” he told MarketWatch, but he’s optimistic about the company’s opportunity to further penetrate a massive market. So far, Marqeta processes less than 1% of carded volume in the U.S., and its share is even smaller internationally. The company is in 39 countries so far and plans new additions later this year.

Gardner believes that Marqeta’s market experience will continue to be a differentiator. He shared on the call that the expense-management vertical was “approaching” $2 billion in TPV in the latest quarter, whereas the segment was “insignificant” a year before.

Businesses are “not going to take a risk on an unproven platform,” he said in his conversation with MarketWatch, one reason why he’s upbeat about the company’s positioning in that vertical.

The stock is off about 40% over the past three months as the S&P 500
SPX,
+2.57%
has declined about 8%.