Marqeta, Inc. (NASDAQ: MQ), the global modern card issuing platform, today reported financial results for the fourth quarter and full year ended December 31, 2023.
Total processing volume (TPV) was $62 billion for the quarter, representing a 33% year-over-year increase, and TPV was $222 billion for the full 2023 fiscal year, an annual increase of 34%.
Marqeta's Q4 earnings are the Company's second full quarter of financial results reflecting its Cash App contract renewal effective as of July 2023. Marqeta reported Q4 net revenue of $119 million, a 42% decrease in net revenue, which reflected a 59 percentage point negative growth impact due to the change in revenue presentation resulting from the new Cash App contract. The Company saw gross profit of $83 million during the quarter, down 4% year-over-year, primarily due to the new pricing for Cash App. For the full 2023 fiscal year, Marqeta reported net revenue of $676 million and gross profit of $330 million, representing an annual decrease of 10%, and an increase of 3%, respectively.
For the quarter ended December 31, 2023, Marqeta reported a GAAP net loss of $40 million and Adjusted EBITDA income of $3 million. For the year ended December 31, 2023, the Company reported a GAAP net loss of $223 million and an adjusted EBITDA loss of $2 million.
"2023 was transformative for Marqeta, as we enhanced our platform with new credit card program management capabilities, renewed the large majority of our processing volume to longer term deals, and delivered on operating efficiency," said Simon Khalaf, CEO at Marqeta. "We are entering 2024 with a best-in-class product set, continued growth in Fintech, and exciting opportunities in embedded finance."
Recent Business Updates:
Following the launch of its revamped credit card platform in October 2023, Marqeta announced its first credit deals showing early traction for its new offerings across varying embedded finance use cases, from travel and entertainment to professional spend management:
Internet Travel Solutions (ITS) is a leading provider of travel management software and will utilize Marqeta’s comprehensive credit card platform to launch a multi-use travel and expense (T&E) commercial credit card for the mid-sized business market.
Affinipay will use Marqeta to build a flexible and customized credit offering, embedded directly into its platform. Affinipay’s LawPay Visa SMB revolving credit card, powered by Marqeta, will be the first comprehensive solution in the legal industry that helps law firms pay, track and manage firm and client expenses.
Fourth Quarter 2023 Financial Results:
TPV increased by 33% year-over-year, from $47 billion for the quarter ended December 31, 2022, to $62 billion for the quarter ended December 31, 2023.
Net revenue of $119 million decreased by $85 million, or (42%) year-over-year, primarily driven by the contract renewal with Cash App, which allowed for reduced pricing and also resulted in a change to the revenue presentation. The impact of fees owed to Issuing Banks and Card Networks related to the Cash App primary Card Network volume, which are netted against revenue earned from the Cash App program within Net Revenue, was a reduction of $120 million, negatively impacting the growth rate by 59 percentage points. Prior to the quarter ended June 30, 2023, these costs were included within Cost of Revenue.
Gross profit decreased by 4% year-over-year to $83 million from $87 million in the fourth quarter of 2022 primarily due to reduced pricing from the Cash App renewal. Gross margin was 70% in the fourth quarter.
Net loss increased by $14 million, or 53%, year-over-year to $40 million, primarily driven by expenses related to the Power Finance acquisition.
Adjusted EBITDA in the fourth quarter of 2023 was an income of $3 million, an increase of $11 million year-over-year.
Full Year 2023 Financial Results:
TPV increased by 34% year-over-year, from $166 billion in 2022, to $222 billion in 2023.
Net revenue decreased by $72 million, or (10%) year-over-year, primarily driven by the contract renewal with Cash App, which allowed for reduced pricing and also resulted in a change to the revenue presentation. The impact of fees owed to Issuing Banks and Card Networks related to the Cash App primary Card Network volume, which are netted against revenue earned from the Cash App program within Net Revenue, was a reduction of $234 million, negatively impacting the growth rate by 31 percentage points. In prior periods, these costs were included within Cost of Revenue.
Gross profit increased by $10 million, or 3% year-over-year. Gross margin was 49% for the year ended December 31, 2023.
Net loss increased by $38 million, or 21%, year-over-year to $223 million, primarily driven by expenses related to the Power Finance acquisition.
Adjusted EBITDA for the year ended December 31, 2023 was a loss of $2 million, a $40 million year-over-year improvement.