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DATE

Tuesday, May 5, 2026 at 4:30 p.m. ET

CALL PARTICIPANTS

  • Chief Executive Officer — Mike Milotich
  • Chief Financial Officer — Patti Kangwankij

TAKEAWAYS

  • Total Processing Volume (TPV) -- $112 billion, up 33%, marking the second consecutive quarter above $100 billion and third consecutive quarter with growth exceeding 30%.
  • Net Revenue -- $160 million, representing 19% growth, at the top end of guided expectations.
  • Gross Profit -- $118 million, a 19% increase, with a gross profit take rate of 10.5 basis points, down half a basis point from the previous quarter primarily due to business mix.
  • Adjusted EBITDA -- $33 million, up 66%, with a 20% margin (net revenue basis) and a 28% margin (gross profit basis).
  • GAAP Net Income -- $8 million, with quarterly GAAP profitability achieved for the first time, and diluted EPS of $0.02.
  • Adjusted Operating Expenses -- $84 million, up 7%, which was several points below expectations due to phased investments.
  • Cash and Short-term Investments -- $712 million at quarter end.
  • Share Repurchase -- 9.4 million shares repurchased at an average price of $4.16, reducing total shares outstanding by roughly 2%, with $52 million remaining on the authorization.
  • Block Revenue Concentration -- 42%, down two percentage points sequentially, with non-Block net revenue growing 2x faster than Block.
  • Buy Now, Pay Later (BNPL) TPV Growth -- Near 60%, consistent with Q4 and continuing its momentum; expense management use case grew above 40%.
  • Financial Services Segment -- Growth continues to lag the company average, but excluding Block, this segment grows meaningfully faster, primarily led by neobanking customers.
  • On-Demand Delivery Use Case -- Maintained double-digit growth but below overall company rate due to maturity of the segment.
  • Accounting Change Impact -- Gross profit growth faced a 1.5 percentage point headwind due to a change in recognizing card network incentives, with no further impact expected in future comparisons.
  • Q2 Guidance: Net Revenue and Gross Profit -- Expected growth of 14%-16% for both, with gross profit growth moderation due to tougher year-ago BNPL comps and business mix evolution.
  • Q2 Guidance: Adjusted Operating Expenses -- Expected to grow in the high teens percentage, reflecting a return to normalized investment pace after prior delays.
  • Q2 Guidance: Adjusted EBITDA -- Targeted growth of 10%-12%, with an expectation of breakeven GAAP net income.
  • Full-Year Guidance: Net Revenue -- Growth of 12%-14% expected; gross profit forecasted to grow 10%-12%.
  • Full-Year Guidance: Adjusted EBITDA -- Anticipated mid- to high-20s percent growth, revised upward due to Q1 performance.
  • Full-Year Guidance: GAAP Net Income -- Now projected at $15 million, up $5 million from previous guidance on Q1 outperformance.
  • Reverse Stock Split Proposal -- Planned 1-for-4 split would reduce outstanding shares, with management stating, "We believe a lower share count will provide a clearer reflection of changes in our per-share performance as our business performance evolves over time."
  • Multinational Customer Penetration -- 12 of the top 15 customers operate in more than one country, with six active in at least five countries.
  • New Program Launches -- New credit builder and secured credit cards introduced, as well as early adoption of Mastercard One credential to allow a single programmable card with multiple spend rules and product types.
  • Stablecoin-Backed Card Initiatives -- Partnerships emerging to allow stablecoin settlement, with new customer programs under development to connect crypto wallets to Marqeta-issued cards.
  • Large U.S. Bank Adoption -- An FI is now live with Marqeta-powered virtual credit provisioning, allowing a line of credit within a consumer wallet for in-store purchases, cited as an early step to broader bank relationships.
  • Merchant Routing Impact -- Exposure to merchant routing shifts related to Reg II is described as "minor," with contracts now structured such that "the routing mix does not directly impact us" for most customers.
  • Share Repurchase Rationale -- Management noted, "We believe the current valuation does not properly reflect the market opportunity and our differentiation."

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RISKS

  • Mike Milotich said, "the biggest is macro-related. So far, consumer and SMB seem stable and strong, and we are not seeing impacts to spending trajectory, but we will continue to watch it given the uncertainty."
  • Expectation of Block-related headwinds remains, as indicated by "we do still expect to see a decline of new issuances in Q2 and more in the second half," resulting in a 1.5% to 2% impact on gross profit growth for the year.
  • Gross profit take rate decreased by half a basis point sequentially due to business mix, and management expects future pressures as larger customers with "slightly better pricing" take greater share of TPV base.
  • Q2 gross profit growth expected to decelerate due to "tougher comp from last year's remarkable BNPL growth," renewal activity, and evolving business mix.

SUMMARY

Marqeta (MQ 0.89%) achieved 19% growth in both net revenue and gross profit, driven by a 33% TPV increase, while reaching GAAP net income profitability and executing a significant share repurchase program. The firm deepened multinational platform penetration, expanded its product continuum into secured credit and credit builder cards, and was recognized by large financial institutions adopting its credit provisioning for in-wallet experiences. Management reaffirmed annual revenue and profit growth guidance, raised full-year adjusted EBITDA outlook, and prepared for a 1-for-4 reverse stock split to reflect evolving per-share performance.

  • Adjusted operating expenses in Q1 came in lower than planned due to delayed implementation of key investment initiatives, which contributed to outperformance in EBITDA and net income for the quarter.
  • Block revenue concentration continued to decline as non-Block revenue expanded 2x faster, offsetting anticipated softness in Cash App issuance while neobanking and lending segments accelerated above company averages.
  • Stablecoin card partnerships and agentic commerce opportunities are in early stages, with management proactively structuring contracts to limit interchange risk from merchant routing shifts.
  • Renewals of significant customer agreements and challenging BNPL comps are expected to pressure gross profit growth rates in subsequent quarters, but management maintained confidence in double-digit revenue and EBITDA growth for the year.
  • Full-year GAAP net income guidance was increased by $5 million to $15 million, reflecting positive Q1 operating leverage and reduced stock-based compensation expense.

INDUSTRY GLOSSARY

  • TPV (Total Processing Volume): The aggregate dollar value of transactions processed on Marqeta's platform during a given period.
  • BNPL (Buy Now, Pay Later): Short-term lending product that allows consumers to purchase goods or services and pay for them over time, often integrated with debit or credit card offerings.
  • Take Rate: The percentage of TPV or merchant volume that Marqeta retains as net revenue or gross profit, relevant for assessing fee-based business models.
  • Mastercard One credential: A single programmable card that can act as debit, credit, installment, and prepaid, with real-time spend controls.
  • Agentic Commerce: Commerce transactions initiated by autonomous software agents on behalf of users, typically leveraging real-time issuing and flexible payment credentials.
  • Reg II: U.S. Federal Reserve regulation controlling debit card interchange fees and network routing choice, impacting card issuers and processors.

Full Conference Call Transcript

Mike Milotich: Thank you for joining us for Marqeta, Inc.’s first quarter 2026 earnings call. I will begin with a brief summary of our Q1 results, then provide an update on how the breadth of our platform capabilities is being leveraged by our customers across multiple geographies and a continuum of products, which differentiates us from other issuer processors. I will then turn the call over to Patti, who will cover the details of our Q1 results and our expectations for the remainder of 2026. Our first quarter results demonstrate the continued momentum of our business. Gross profit grew 19%, which was fueled by 33% TPV growth.

The increasing scale of our platform was on display, as adjusted EBITDA grew to $33 million, achieving a 20% margin, and, importantly, we delivered GAAP profitability this quarter. The $8 million of net income is a testament to our strong growth, operating leverage, and disciplined execution. Marqeta, Inc. has been at the forefront of modern issuing for over a decade, enabling growth and innovation for customers in several diverse use cases and geographies. What makes us unique is how comprehensive and flexible our platform is, spanning debit and credit, consumer and commercial, certified to operate in over 40 countries, combined with the expertise and experience to execute a variety of innovative solutions for our customers.

Our continued momentum this quarter highlights three trends that are growing in prominence within card issuing. First, multinational card issuers are becoming more and more common as card growth shifts from local banks to fintechs and enterprises looking to support their customers in many geographies. Second is an integrated continuum of products that span debit and credit that enables our customers to meet the needs of consumers and SMBs across their financial journey. There are many layers to the market including standalone debit, transaction-based lending integrated with debit in a single card credential, secured credit, charge card, and revolving credit. Our customers are often looking to serve several of those needs with a comprehensive offering.

Third, there are early efforts underway to modernize the technology in the card issuing market. Utilizing modern platforms like Marqeta, Inc., many fintechs have achieved great success and have become big businesses, which is increasing the need for more established issuers to upgrade their capabilities in order to compete effectively. Let me start with the growing demand for multinational card issuing capabilities on a single platform. Already, 12 of our top 15 customers utilize Marqeta, Inc. in more than one country, and six of those 12 are in at least five countries as they continue to expand their businesses without the friction of multiple platform integrations.

One of the latest examples of international expansion is Sezzle, who is now launching its virtual card in Canada. This allows Sezzle's Canadian consumers to enjoy the same BNPL flexibility at participating retailers that accept contactless payments while benefiting from the same seamless checkout experience their U.S. consumers already enjoy. Another example of our support for a global offering is Ramp, who is expanding its corporate expense management solutions across new international markets. By leveraging Marqeta, Inc.’s modern card issuing platform, Ramp is expanding local card issuing into Australia, Japan, Singapore, Brazil, and Mexico, with further geographic expansion planned for later this year.

This will allow Ramp to provide its customers with flexible financial solutions in new markets including the ability to issue virtual and physical cards with customized spend limits, helping businesses thrive on a truly global stage. Marqeta, Inc. enables this rapid international scaling through a single integration, once again demonstrating our ability to operate at scale and enabling disruptors as they take share from legacy providers. An emerging use case that will be multinational from the start is stablecoin-backed card programs leveraging stablecoin settlement through our bank and network partners. In addition to extending our support of our crypto-native customers, we are currently forming new partnerships with crypto infrastructure providers to manage on- and off-ramping for fiat-native customers.

A stablecoin-backed card issued on the Marqeta, Inc. platform could be linked to a crypto wallet enabling spend in local fiat from a stablecoin balance. We are building the capabilities and establishing the partnerships to support both existing and new customers to meet the growing demand for this multinational use case. Now let me shift to the integrated continuum of products. In the past several quarters, we have spoken about the rise of BNPL as a feature of a debit offering. But there is also increasing demand for another offering that bridges the gap for consumers who are looking for greater financial flexibility beyond debit but do not yet qualify for revolving credit.

A secured credit card enables the consumer to build credit through their daily spend, eventually advancing to unsecured credit. Our continuum of products seamlessly enables fintechs and enterprises to serve consumers throughout their entire financial life cycle. A compelling example of this continuum involves one of our existing customers, a large and rapidly growing embedded finance brand with an established debit program on our platform. They have launched a new credit builder card with us to help consumers establish and strengthen their credit profiles. This product is designed to make credit building automatic and accessible.

Consumers can use the card for everyday purchases, while funds are automatically set aside to pay off the monthly balance which is then reported to the credit bureaus. Over time, this helps their consumers build credit if they later desire to have an unsecured option, while our customer leverages our platform to grow and retain their user base throughout their evolving needs. Marqeta, Inc.’s strength across this continuum, particularly our experience with flexible credentials, is also attracting new customers with established portfolios. This quarter, we signed a customer that provides consumers with a personal financial assistant to help them better manage their financial lives.

They sought a partner that enables innovation and could embed BNPL into a secured credit offering, allowing consumers to toggle between secured credit and installments on a single card for greater flexibility. This customer will migrate their existing portfolio to Marqeta, Inc., and we are one of the early adopters of the issuer-managed Mastercard One credential to support this new customer. The One credential gives consumers a single programmable card spanning debit, credit, installments, and prepaid with spending rules they control in real time. While the existing program migrating is from the U.S., this customer is also looking for a partner who can support rapid geographical expansion and eventually enable them to add revolving credit products to their offering.

This win exemplifies the unique value that Marqeta, Inc. delivers to our customers: program migration to our modern platform delivering an innovative, multithreaded, comprehensive solution that is a market first, utilizing our leadership in flexible credentials across multiple geographies. Lastly, I want to highlight the emerging efforts of long-established issuers seeking new capabilities to meet the evolving needs of consumers and businesses with the modern, agile capabilities embraced by the fintech disruptors. In some cases, it could involve platform migrations, but many issuers are also considering more creative solutions to start their modernization efforts for specific use cases or programs before they take on bigger changes in their infrastructure.

Leveraging Marqeta, Inc.’s virtual card expertise, a large U.S. financial institution has begun to provision a line of credit directly into a consumer wallet, eliminating lengthy and costly integrations. This enhancement will allow the bank's customers to leverage credit to spend seamlessly in physical retail locations, followed soon by online capabilities, driving engagement and unlocking significant value. This innovative lending use case is a powerful demonstration of Marqeta, Inc.’s modern and flexible platform deploying sophisticated cutting-edge capabilities at scale, which is an early step forward in Marqeta, Inc. establishing, expanding, and deepening our relationships with large banks.

To wrap up, this quarter reinforces the momentum behind our business and the increasing value a modern card issuing platform delivers for innovators worldwide. Our financial results in Q1, combined with the business being onboarded and the capabilities being deployed, reflect how the comprehensiveness and flexibility of our platform is enabling our customers to expand and thrive. At the same time, our experience, expertise, and scale position us well to capture the emerging demand for multinational card issuing, an integrated continuum of products, and modern solutions for long-established issuers.

Therefore, as we look ahead, we will continue to help fintechs and enterprises grow the pie, but we are also ready to help modernize existing programs with the capabilities that end users are beginning to expect. The current momentum combined with our expanding capabilities and the enormous opportunity ahead makes us confident that we will drive long-term value for our customers and shareholders. I will now turn the call over to Patti to discuss our Q1 financial results and expectations for 2026 in more detail.

Patti Kangwankij: Thank you, Mike, and good afternoon, everyone. Our financial results for Q1 reflect a solid quarter. Both net revenue and gross profit grew 19% on a year-over-year basis, driven by TPV growth of 33%, with all three growth rates at the top end of expectations. Adjusted operating expenses were better than expected, which, coupled with strong gross profit growth, resulted in adjusted EBITDA growth of 66%. Most notably, we achieved GAAP profitability in the quarter with net income of $8 million. Q1 TPV was $112 billion, with strong growth on a continuously expanding base of 33% year over year.

This is the second quarter in a row with TPV over $100 billion and the third quarter in a row with growth over 30%. Non-Block TPV continues to grow over 2x faster than Block TPV. Growth within our Financial Services use case continues to be a little slower than the overall company; we did not see any discernible changes to Cash App new issuance in the quarter. Excluding Block, Financial Services continues to grow meaningfully faster than the overall company, driven by neobanking customers. Lending, including buy now, pay later, growth remained on par with Q4 growth at nearly 60% on a year-over-year basis.

This continues to be driven by the growth in flexible network credential usage and our customers' continued geographic expansion on our platform. Expense management growth remains over 40%. The robust growth is a result of customers continuing to expand their market share by acquiring new end users, made possible by their utilization of our unique configurable capabilities. On-demand delivery growth continues to be in the double digits but below the company's overall growth rate, as this is our most mature use case. Q1 net revenue was $160 million, growing 19% year over year. Block net revenue concentration was 42% in Q1, two percentage points less than last quarter, as our non-Block revenue is growing 2x faster than Block revenue.

Q1 gross profit was $118 million. The 19% year-over-year growth was at the top end of expectations. Q1 gross profit growth had a headwind of 1.5 percentage points due to the revision of our accounting policy for estimating and recognizing card network incentives, which started in Q2 2025. As a reminder, this is the last quarter in which we will have any impact on the year-over-year comparison related to the accounting change. Our gross profit take rate was 10.5 basis points, half a basis point lower than last quarter, largely due to business mix. Q1 adjusted operating expenses were $84 million, growing 7% year over year.

This is several points better than expectations due to the phased implementation of key investment initiatives. We continue to remain focused on operating efficiency and are realizing the benefits from the increased scale of our platform. Q1 adjusted EBITDA was $33 million, a margin of 20% based on net revenue. Adjusted EBITDA margin based on gross profit was 28% and illustrates the expansion of our business' profitability. Our Q1 GAAP net income was $8 million with an EPS of $0.02 as a result of gross profit growth, platform scale, and lower operating expenses, and benefiting from lower stock-based compensation.

This quarter marks a significant milestone as we achieved GAAP net income profitability and remain confident in our ability to generate positive net income on an annual basis going forward. We ended the quarter with $712 million in cash and short-term investments. Our share repurchase activity remains ongoing as we continue to believe the current valuation does not fairly represent the company's value or the market opportunity ahead of us. In Q1, we repurchased 9.4 million shares at an average price of $4.16. As of March 31, we had over $52 million remaining on our latest buyback authorization. Before we transition to our expectations for Q2 and the full year, I wanted to acknowledge that our business continues to grow.

EPS will become increasingly important and a better reflection of our business growth. With that, I would like to briefly touch on the proposed reverse stock split that was included in our proxy statement filed with the SEC in April. The reverse stock split would reduce Marqeta, Inc.’s common stock at a ratio of 1-for-4 and will result in higher reported net earnings or loss per share. At approximately 434 million shares, $0.01 of EPS is $4.34 million of net income, while at approximately 108 million shares, $0.01 of EPS is $1.08 million of net income. We believe a lower share count will provide a clearer reflection of changes in our per-share performance as our business performance evolves over time.

Now let's transition to the expectations for Q2 2026. Consistent with what we shared last quarter, we expect both Q2 net revenue and gross profit to grow between 14% to 16%. As a reminder, gross profit growth in Q2 is expected to be slower than Q1, primarily due to a tougher comp from last year's remarkable BNPL growth which started in Q2, as well as renewal activity and evolving business mix. We continue to be focused with our investments, which are primarily directed towards platform capabilities and innovation. Q2 adjusted operating expenses are expected to grow in the high teens, consistent with the expectations we shared last quarter.

As a reminder, the higher growth rate is due to a tougher comparison versus Q2 2025, when the expenses were uncharacteristically low due to investment delays during the CEO transition last year. Q2 adjusted EBITDA growth is expected to be 10% to 12%, in line with our previous expectations, and we expect to be at breakeven on a GAAP net income basis in Q2. For the full year, while we recognize the increasing levels of macroeconomic uncertainty, we are not currently seeing any notable shift in spend or consumer behavior. As a result, we are assuming consistent spending patterns for the remainder of the year, but noting the risk.

Our expectations for net revenue and gross profit for the year remain consistent with what we shared last quarter. We expect net revenue growth of 12% to 14% and gross profit growth of 10% to 12%. While the Q1 results did come in at the higher end of expectations, this is not enough for us to revise our outlook upwards for the entire year, and we expect our net revenue and gross profit projections for the remaining three quarters and the full year to be consistent with what we guided to at the time of our fourth quarter call.

We do, however, expect 2026 adjusted EBITDA growth to be several points higher than we shared last quarter, in the mid to high 20s percent, due to the outperformance in Q1. Lastly, we now expect to generate about $15 million in GAAP net income for the year, up $5 million based on our Q1 outperformance. The breadth and flexibility of our platform is translating directly into customer growth and expansion. The programs being onboarded and the capabilities being deployed this quarter reflect demand across both new and existing customers, and demonstrate how the continuum of products we offer enables customers to build and scale on a single modern platform.

Our expertise and scale position us to capture an evolving set of opportunities that we believe will continue to drive long-term value for customers and shareholders. In conclusion, we are starting 2026 on a solid foundation, showcasing the momentum of the business, combining gross profit growth and disciplined investment. The ongoing benefits of scale give us confidence that we can sustain this trajectory of profitable growth at scale. I will now turn it back over to the operator for questions.

Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer session. If you would like to ask a question, a confirmation tone will indicate your line is in the question queue. You may press star and 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. Ladies and gentlemen, we will wait for a moment while we poll for questions. We will take the first question from the line of Darrin Peller from Wolfe Research. Please go ahead.

Darrin Peller: Hey, guys. Thanks for taking the question. You called out the non-Block growth being as strong as it is, and you mentioned the verticals. We are getting questions, and I am curious to know what the underlying strength is coming from—let us call it same-store sales. Are your existing customers really outperforming? And talk a little more about your ability to keep gaining market share in those verticals. What has really been driving the differentiation in expense management and BNPL as its core areas for you? Do you see more and more barriers to entry for you guys to continue that?

Patti Kangwankij: Thank you for the question, Darrin. We see pretty broad-based growth across our use cases right now. BNPL is maintaining its momentum at nearly 60%, and expense management is growing at over 40% this quarter. We are very pleased with that. A majority of that is driven by existing programs because these programs take time to launch and grow, but a lot of it is with the existing customers that we have. As we have talked about for several quarters, for BNPL we have seen over four quarters of growth over 50% with BFC, geographic expansion, Pay Anywhere cards, and stronger user growth among SMB lending solutions.

These continue, and we continue to lead from a product perspective, including the Mastercard One credential program launching later this year, as Mike mentioned. While we will be lapping some tough comps over the next few quarters and expect some decrease in growth rates over time, in expense management our capabilities continue to lead in terms of how uniquely we can configure products.

Mike Milotich: The only thing I would add, Darrin, is that some of this is the unique capabilities of our platform—certainly we are in the lead when it comes to flexible credentials and have been a leader for some time in expense management—but it is also a tribute to our customer base. They continue to win, and the adoption of their services is growing faster than the market, and they are taking share. We are an enabler of their success. As they continue to significantly outperform the market, that continues to drive our growth, along with lots of new business and new programs.

As Patti mentioned last quarter, our top 15 customers did over 30 new programs with us over the last two years. Our customers are successful and they continue to build on our platform, and that is what is driving our success.

Darrin Peller: That is great to hear. One quick follow-up on Block. Any further incremental learnings relative to what you measured in terms of impact on this year's performance—any change between now and the last few months?

Patti Kangwankij: I will start with what we are assuming for the forecast and what we have been seeing, then turn it over to Mike to talk about the broader relationship. On our last call, we talked about our new issuance assumption being that we would slowly, gradually decrease new issuance in the first half and then have no new issuances in the second half. We cannot speak to Block's business, but in Q1 we did not see any discernible changes to new issuances.

It is still too early to tell for the entire year, but we do still expect to see a decline of new issuances in Q2 and more in the second half—so essentially shifting the curve out to the right a bit. We had mentioned 1.5% to 2% of gross profit growth impact at our last earnings call, and now we are at the lower end of that given the delays, so we are probably closer to the 1.5% growth impact as of right now.

Mike Milotich: Consistent with what we have said in the past, our relationship is very strong. We are communicating on a very regular basis. The fact that they want to diversify, we understand and have accepted. Importantly, we continue to engage in new ideas and new things that we can do together. The relationship remains very healthy and strong.

Operator: We will take the next question from the line of Connor Allen from JPMorgan. Please go ahead.

Connor Allen: Hi, thanks for taking my questions. Curious about the demand more broadly for the secured credit card programs. I caught your comments about the embedded finance brand layering that on. How broad is that interest across your customer set? And as a follow-up, on demand for more flexible card products—you were very early to BFC and Mastercard One—are you seeing competitors step up there?

Mike Milotich: Thanks, Connor, for your question. We are seeing more and more demand. There is really a continuum of products. Ten years ago, you were either debit or revolving credit, maybe a charge card. The market is evolving into a continuum where you can start someone on debit, then give them transaction-based lending—which allows you to control risk because it is done on a transaction basis—and with a flexible credential you can do that on the same card. The next step is helping the consumer start to build credit through a credit builder card, better positioning them for revolving credit down the road.

If you are a fintech or embedded finance company, you want to serve the entire spectrum of your customer base and not leave anyone behind, matching the right customer with the right product. Decline rates on premium co-brand cards can be quite high, which is not a great experience—especially for customers already using other products. Offering secured plus installment options helps address that and can help customers work toward the product they originally wanted. As I mentioned, we now have a customer launching later this year that will combine a secured card with embedded BNPL—skipping past debit and doing secured credit plus transactional lending on a single card. We think there is a growing market for this capability.

On flexible credentials, not yet in a significant way. We know from our network partners that competition is coming. We appreciated the lead but knew we would not be the only provider forever. There may be a couple of others live on a limited basis today, and by the end of the year it could become more substantial. It is safe to say we have a significant lead that will likely continue for at least the next several quarters.

Operator: We will take the next question from the line of Bryan Keane from Citi. Please go ahead.

Bryan Keane: Yes, thank you. I wanted to ask about the outperformance in EBITDA and the change in GAAP net income. What in the business is driving that? And does any of that upside in margin continue into the second, third, and fourth quarters? And as a follow-up, on business mix you called out a little bit lower take rate due to mix—how should we think about growth rates and take rate going forward as a result?

Patti Kangwankij: Thanks, Bryan. In Q1, from a top-line and momentum perspective, TPV, net revenue, and gross profit were all on the high end of the range. EBITDA and net income beat our expectations—our first quarter of true operating GAAP profitability. The EBITDA outperformance was due to lower-than-expected adjusted operating expenses. A couple of key investment initiatives were a little slower to ramp. We ended the quarter where we wanted to be in terms of trajectory, but the uptick started later, which resulted in the EBITDA beat. For net income, we benefited from the EBITDA beat and were slightly lower than expected on stock-based compensation. For the full year, it is still early.

We are monitoring a number of key initiatives and the macro environment. At this point, there is not a lot of new information that changes our outlook for the next few quarters, so we are reiterating our guide for net revenue and gross profit, and flowing through what we saw in Q1 for EBITDA and net income—hence the slight increase in our guidance for the year. On business mix and take rate, on an overall portfolio basis we are pretty good at estimating and are reiterating gross profit growth guidance. Sometimes the customer mix changes—last year BNPL outperformed, and program mix varies between program-managed and processing-only.

That had a modest headwind, but we were still at the top end this quarter and reiterating for the full year.

Mike Milotich: Historically, the mix effect is often driven by some of our largest customers still growing very fast. Approximately five of our top 10 are still growing over 50%. As they take a little more share within our TPV base, that can create a bit of pressure because they have slightly better pricing. We think that is a great outcome and exactly what we want. We structure pricing in a disciplined way to create win-win outcomes—puts a little pressure on take rate, but it is a good outcome.

Operator: We will take the next question from the line of Timothy Chiodo from UBS. Please go ahead. Tim, please unmute your line and proceed.

Timothy Chiodo: I am here. Thank you. An industry question on Reg II as it relates to card-not-present. Can you talk about what Marqeta, Inc. sees in terms of merchants deciding to route to the alternative network on the back of cards that you issue, and what that means for Marqeta, Inc.’s unit economics?

Mike Milotich: Thanks, Tim. On merchant routing, for the most part it is pretty stable. Many have already made routing moves. Occasionally we see certain merchants increase routing to alternative networks after doing some work on their side, but those are fewer and farther between now and do not change the mix significantly from month to month or quarter to quarter. From a unit economics perspective, our exposure is minor. We have shifted our pricing model over the last few years to get paid for the service we provide and to disassociate our economics from interchange. For the most part, that is how our contracts are structured, so the routing mix does not directly impact us.

It can come up in negotiations, and there are a few customers where we still have some exposure, but each year the comparable exposure continues to shrink.

Operator: We will take the next question from the line of Sanjay Sakhrani from KBW. Please go ahead.

Sanjay Sakhrani: Good afternoon. Last year, BNPL, expense management, and Europe were all good drivers of outperformance. As we look at this year, where might there be opportunities to outperform, and where are the risks—especially with geopolitical events, higher fuel prices, etc.? And as a follow-up, on the large FI you are working with, do you feel competitive intensity is picking up versus the past?

Mike Milotich: Starting with BNPL, the business continues to grow really fast. As Patti said, it is still growing nearly 60%. Comps will get tougher, so the growth rate will slow, but the dollar growth remains healthy. Expense management is very steady and has accelerated the last couple of quarters, driven by our customers winning share and our experience and scale, which positions us to win additional business. If I had to pick an outperformer for the year, I would choose expense management. Generally, we are pretty good at predicting how the business will go since we have a lot of conversations with customers. In terms of risk, the biggest is macro-related.

So far, consumer and SMB seem stable and strong, and we are not seeing impacts to spending trajectory, but we will continue to watch it given the uncertainty. On competitive intensity with large FIs, it is less about intensity and more about momentum behind modernizing. Conversations are becoming more frequent and substantive. We see three approaches: full conversions (least likely starting point), de novo opportunities for new products, and infusing modern capabilities without heavy lifting—the third is what we highlighted. Similar to how BNPL customers inject a virtual card for in-store purchases, we are helping a bank inject a line of credit into an existing wallet experience without disrupting the current program.

It saves effort and complexity by leveraging our technology. That gets our foot in the door so they can experience our platform, which we believe will lead to broader adoption. The overall competitive intensity is fairly similar; who we see most often varies by use case, but the level has been constant over the last four years.

Operator: We will take the next question from the line of Analyst from KeyBanc Capital Markets. Please go ahead.

Analyst: Hi, Mike. Hi, Patti. Thanks for taking the question. On agentic commerce, maybe talk about Marqeta, Inc.’s role. There are use cases where a virtual card can be used successfully. Still early on protocols, but how can Marqeta, Inc. play? And then on digital assets, good to see the stablecoin-linked card development—what are you seeing in terms of demand?

Mike Milotich: Thanks for the question. On agentic commerce, doing things in real time and flexibly is native to our platform, which positions us well. Our view is that for agentic to be successful it will need to be issuer-led more than merchant-led. Early attempts at autonomous checkout have seen fraud challenges. Issuers are better positioned—they have KYC, device fingerprints, and behavioral data—so they can authenticate the user before sending an agent to purchase on their behalf. We also believe virtual cards will often be used to minimize risk—provisioning a virtual card with specifications and limitations for the agent rather than exposing the underlying credential. These capabilities position us well, but it is early.

We are having conversations, with some engagement but not broad market deployments yet. On stablecoin-linked cards, we see it as additive, not disruptive. In mature markets, customers are looking to target new opportunities, often around remittance or payouts. Blockchain and stablecoins are effective at moving money, but a card credential is the most effective way to spend it. A card fronting the wallet allows quick and cheaper distribution across countries while giving end users a familiar, user-friendly credential to put stablecoins to use. Demand is centered on wallets with broad functionality. This product would live alongside debit, secured credit, or revolving credit to support use cases that are harder or more expensive to do on traditional rails.

Operator: We will take the next question from the line of Craig Maurer from FT Partners. Please go ahead.

Craig Maurer: Thanks for taking the questions. On Earned Wage Access, it has been about a year since we heard about the product and we have seen substantial growth from some players in the market. Can you talk about growth in that industry? And on share repurchases, I believe you purchased about $39 million worth of stock in the first quarter and should have about $60 million left on the authorization—plans going forward?

Mike Milotich: Thanks for your question, Craig. On Earned Wage Access, there continue to be good discussions with customers, particularly as we move more into embedded finance opportunities. Companies are looking to distribute earnings or funds to employees faster, usually for retention—whether gig workers or traditional employees. It is an attractive value proposition. We are working to establish the right partnerships because complexity often comes from payroll and tax calculations. In gig environments, the business model is geared to per-transaction pricing, so it is more seamless. For typical employees, it is more complicated. We are optimizing the solution, and customers with the most success are taking on a lot of the payroll/tax work to get it right.

Patti Kangwankij: From a share repurchase standpoint, as of the end of Q1, we had about $52 million remaining of the $100 million authorized by the Board. We repurchased about 9.4 million shares at $4.16, decreasing total shares by roughly 2%. We believe the current valuation does not properly reflect the market opportunity and our differentiation. As long as our market valuation lags, we intend to continue repurchasing shares. We are not yet committing to systematically repurchasing, but we will continue to evaluate as we get closer to depleting the current authorization.

Operator: We will take the next question from the line of Tien-Tsin Huang from JPMorgan. Please go ahead.

Mike Milotich: Turning to capital allocation. Our balance sheet remains strong while continuing to invest in the business.

Operator: Please go ahead with your question. Tien-Tsin, please unmute your line and proceed with your question. Since there is no response, we will move to the next question, which is from the line of Analyst from Deutsche Bank. Please go ahead.

Analyst: Hey, thanks for the question. I wanted to walk through some of the back-half growth dynamics. Last quarter, you called out four discrete items: lapping strong BNPL growth, renewals, Block issuance commentary, and the Transact Pay item. Can you reconfirm the expected impact to the back half of the year? For the full year, you are saying it is closer to 1.5 points rather than 2 points—does that mean the back half is a little bit lower on an absolute basis and some shifted to Q1? And on the renewal assumptions, I think one was supposed to start impacting Q2 gross profit—confirm timing and magnitude?

Patti Kangwankij: For the Cash App impact, we stated 1.5 to 2 percentage points of gross profit growth impact for the full year. Based on delays and the shift—given we have not seen discernible changes as of Q1—we are shifting the curve to the right, closer to 1.5. It is fair to assume that for the back half, when we say Cash App new issuances is a 2 to 3 percentage point headwind, it is on the lower end of that range as well, though eventually we will get there. Regarding renewals, we mentioned the impact of two renewals: one was completed in Q4 last year, and the second we still expect to land this quarter.

Analyst: Helpful. And more color on the large financial institution with provisioning a line of credit directly into a consumer wallet—what specifically are you doing, how did the relationship come about, is the wallet issued by the FI itself, and thoughts on timing and how this helps you win more large FIs?

Mike Milotich: This opportunity came from market references—networks and others suggested they speak to Marqeta, Inc. The wallet already exists; they provide this functionality and wanted to inject credit into that product without recarding or replatforming. We had experience with a similar solve for BNPL customers—injecting a virtual credential into an experience—and that is how the conversation started. It has started to roll out and is live in market now. For future business, we want to be doing processing for large banks so they can directly compare functionality. Any opportunity to do programs—even relatively small ones—is a big opportunity, as it demonstrates our platform's capabilities.

Conversations with banks are getting more frequent as fintechs and embedded finance companies get bigger, which is pushing banks to evaluate their technology capabilities. The timing of decisions is to be determined, but interest in paths to modernizing card issuing technology is rising.

Operator: Ladies and gentlemen, with that, we conclude the question and answer session. Thank you for your participation, and you may now disconnect your line.