What happened
Marqeta (MQ -2.48%) had a good week: Its share price jumped 8% from last Friday's close through the closing bell on Thursday, according to S&P Global Market Intelligence. Marqeta is up about 19% year to date as of Thursday's close.
Overall, Marqeta beat the markets, as the S&P 500 was up 2.7%, the Dow Jones Industrial Average gained 0.2%, and the Nasdaq Composite jumped 5% this week as of Thursday's close.
So what
Marqeta made some news this week, and the market seemed to like what it heard. The big news is that the payments fintech, which provides the technology platform that allows businesses to create and manage payment programs, hired a new CEO.
The business tapped Simon Khalaf as its new CEO. He will replace founder Jason Gardner, who announced last August that he would be stepping down to let a new hand lead the next phase of growth. Khalaf is an internal hire; he had been Marqeta's chief product officer since June 2022.
Before joining Marqeta, Khalaf had 30 years of experience as a technology executive and entrepreneur, with four different stints as a CEO, including one at Flurry before it was bought by Yahoo. He has also held senior executive positions at Twilio, Verizon, Yahoo, and Novell. Gardner will now serve as executive chairman of the board.
It was indeed big news for the company, which has been growing rapidly. But the stock price was down some 64% in 2022 because it had been overpriced, and the business remains unprofitable and has high expenses. Investors are also concerned about overreliance on one customer, Block, which accounts for the bulk of Marqeta's revenue.
The other big news is that Marqeta announced plans to acquire Power Finance, a credit card program management platform. This is Marqeta's first acquisition, and it's due to close this quarter. Power Finance offers a cloud-based platform that helps other companies manage their credit card programs, and Khalaf said it will enhance Marqeta's platform.
Now what
Marqeta reports fourth-quarter and full-year 2022 earnings on February 28, so keep an eye out to see if the company maintains its growth momentum. In the third quarter, it grew revenue by 46% and gross profit by 36% year over year but had a 16% greater net loss due to higher expenses.
We'll also be alert for news on Marqeta extending its relationship with Block. Its contract with Block for the Cash App expires in March 2024, and its contract for Block's Square Card expires in December 2024.
Marqeta has some big long-term growth potential, but before investing in it, I'd wait for news on Block. We also need to see if the company can continue to broaden the revenue base and move closer to profitability.
