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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended March 31, 2026
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from __________ to __________
Commission File Number: 001-40465
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) | ||||
| (Address of principal executive offices) | (Zip Code) | ||||
(510 ) 671-5437
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
The | ||||||||||||||
| (Nasdaq Global Select Market) | ||||||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| ☒ | Accelerated filer | ☐ | ||||||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||
| Emerging growth company | ||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of April 30, 2026, there were 391,222,103 shares of the registrant's Class A common stock, par value $0.0001 per share, outstanding and 32,808,210 shares of the registrant's Class B common stock, par value $0.0001 per share, outstanding.
TABLE OF CONTENTS
| Page | ||||||||
2
Note About Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the federal securities laws, which are statements that involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “shall,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:
•uncertainties related to U.S. and global economies and the effect on our business, results of operations, and financial condition;
•our future financial performance and any fluctuations in such performance, including our net revenue, costs of revenue, gross profit, and operating expenses, and our ability to achieve future profitability;
•our ability to introduce and scale new products and services, such as our credit card platform;
•our ability to effectively manage or sustain our growth and expand our operations;
•our ability to enhance our platform and services and develop and expand our capabilities;
•our ability to further attract, retain, diversify, and expand our customer base;
•our ability to maintain our relationships with Issuing Banks, Card Networks, and the other third parties with which we work;
•our strategies, plans, objectives, and goals;
•our plans to expand internationally;
•past and future acquisitions, investments, and other strategic investments;
•our ability to compete in existing and new markets and offerings;
•our estimated market opportunity;
•economic and industry trends, projected growth, or trend analysis;
•the impact of political, social, and/or economic instability or military conflict;
•our ability to develop and protect our brand;
•changes or developments in laws and regulations and our ability to comply with laws and regulations;
•our ability to successfully defend litigation brought against us;
•our ability to attract and retain qualified employees and key personnel;
•our ability to repurchase shares under authorized share repurchase programs and receive expected financial benefits; and
•our ability to maintain effective disclosure controls and internal controls over financial reporting.
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We caution you that the foregoing list may not contain all of the forward-looking statements made in this Quarterly Report on Form 10-Q. You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, results of operations, financial condition, and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, and other factors described or incorporated by reference in the section titled “Risk Factors” in our most recently filed Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (the “2025 Annual Report”), as may be updated from time to time by this Quarterly Report on Form 10-Q or other quarterly or periodic filings. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. The results, events, and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events, or circumstances could differ materially from those described in the forward-looking statements. The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law. Unless otherwise indicated or unless the context requires otherwise, all references in this document to “Marqeta”, the “Company”, the “Registrant,” “we”, “us”, “our”, or similar references are to Marqeta, Inc. Capitalized terms used and not defined above are defined elsewhere within this Quarterly Report on Form 10-Q.
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PART I - Financial Information
Item 1. Financial Statements
Marqeta, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except per share amounts)
(unaudited)
| March 31, 2026 | December 31, 2025 | ||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Restricted cash | |||||||||||
| Short-term investments | |||||||||||
| Accounts receivable, net | |||||||||||
| Network incentives receivable | |||||||||||
| Settlements receivable, net | |||||||||||
| Prepaid expenses and other current assets | |||||||||||
| Total current assets | |||||||||||
Property and equipment, net | |||||||||||
Operating lease right-of-use assets, net | |||||||||||
Intangible assets, net | |||||||||||
| Goodwill | |||||||||||
| Other assets | |||||||||||
| Total assets | $ | $ | |||||||||
| Liabilities and stockholders’ equity | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | $ | |||||||||
| Revenue share payable | |||||||||||
Funds payable and amounts due to customers | |||||||||||
| Accrued expenses and other current liabilities | |||||||||||
| Total current liabilities | |||||||||||
| Operating lease liabilities, net of current portion | |||||||||||
| Other liabilities | |||||||||||
| Total liabilities | |||||||||||
Commitments and contingencies (Note 9) | |||||||||||
| Stockholders’ equity: | |||||||||||
Preferred stock, $ | |||||||||||
Common stock, $ | |||||||||||
| Additional paid-in capital | |||||||||||
Accumulated other comprehensive (loss) income | ( | ||||||||||
| Accumulated deficit | ( | ( | |||||||||
| Total stockholders’ equity | |||||||||||
| Total liabilities and stockholders’ equity | $ | $ | |||||||||
See accompanying notes to Condensed Consolidated Financial Statements.
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Marqeta, Inc.
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)
(in thousands, except per share amounts)
(unaudited)
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Net revenue | $ | $ | |||||||||
| Costs of revenue | |||||||||||
| Gross profit | |||||||||||
Operating expenses: | |||||||||||
| Compensation and benefits | |||||||||||
| Technology | |||||||||||
| Depreciation and amortization | |||||||||||
| Professional services | |||||||||||
| Occupancy | |||||||||||
| Marketing and advertising | |||||||||||
| Other operating expenses | |||||||||||
| Total operating expenses | |||||||||||
Income (loss) from operations | ( | ||||||||||
Other income, net | |||||||||||
Income (loss) before income tax expense | ( | ||||||||||
Income tax expense | |||||||||||
Net income (loss) | $ | $ | ( | ||||||||
Other comprehensive (loss) income, net of taxes: | |||||||||||
| Change in foreign currency translation adjustment | ( | ||||||||||
Net change in unrealized loss on short-term investments | ( | ( | |||||||||
Net other comprehensive (loss) income | ( | ||||||||||
Comprehensive income (loss) | $ | $ | ( | ||||||||
Net income (loss) per share attributable to Class A and Class B common stockholders | |||||||||||
Basic | $ | $ | ( | ||||||||
Diluted | $ | $ | ( | ||||||||
Weighted-average shares used in computing net income (loss) per share attributable to Class A and Class B common stockholders | |||||||||||
Basic | |||||||||||
Diluted | |||||||||||
See accompanying notes to Condensed Consolidated Financial Statements.
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Marqeta, Inc.
Condensed Consolidated Statements of Stockholders' Equity
(in thousands)
(unaudited)
Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2025 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
| Repurchase and retirement of common stock, including excise tax | ( | — | ( | — | — | ( | |||||||||||||||||||||||||||||
| Share-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
| Issuance of common stock upon net settlement of restricted stock units | — | ( | — | — | ( | ||||||||||||||||||||||||||||||
| Issuance of common stock upon exercise of options | — | — | — | ||||||||||||||||||||||||||||||||
| Change in accumulated other comprehensive income (loss) | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
| Net income | — | — | — | — | |||||||||||||||||||||||||||||||
| Balance as of March 31, 2026 | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||
| Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||
| Shares | Amount | ||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2024 | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||
| Repurchase and retirement of common stock, including excise tax | ( | ( | ( | — | — | ( | |||||||||||||||||||||||||||||
| Share-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
| Issuance of common stock upon net settlement of restricted stock units | — | ( | — | — | ( | ||||||||||||||||||||||||||||||
| Issuance of common stock upon exercise of options | — | — | — | ||||||||||||||||||||||||||||||||
| Change in accumulated other comprehensive loss | — | — | — | — | |||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
| Balance as of March 31, 2025 | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||
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Marqeta, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Cash flows from operating activities: | |||||||||||
Net income (loss) | $ | $ | ( | ||||||||
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: | |||||||||||
| Depreciation and amortization | |||||||||||
| Share-based compensation expense | |||||||||||
| Non-cash operating leases expense | |||||||||||
Accretion of discount on short-term investments | ( | ( | |||||||||
| Other | ( | ||||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Accounts receivable | ( | ||||||||||
| Network incentives receivable | ( | ||||||||||
| Settlements receivable | ( | ||||||||||
| Prepaid expenses and other assets | ( | ( | |||||||||
| Accounts payable | ( | ||||||||||
| Revenue share payable | |||||||||||
| Accrued expenses and other liabilities | ( | ( | |||||||||
| Operating lease liabilities | ( | ( | |||||||||
Net cash (used in) provided by operating activities | ( | ||||||||||
| Cash flows from investing activities: | |||||||||||
| Maturities of short-term investments | |||||||||||
| Capitalization of internal-use software | ( | ( | |||||||||
| Purchases of property and equipment | ( | ( | |||||||||
Net cash provided by investing activities | |||||||||||
| Cash flows from financing activities: | |||||||||||
| Repurchase of common stock | ( | ( | |||||||||
Change in funds payable and amounts due to customers | ( | ||||||||||
| Taxes paid related to net share settlement of restricted stock units | ( | ( | |||||||||
| Proceeds from exercise of stock options, including early exercised stock options, net of repurchase of early exercised unvested options | |||||||||||
| Net cash used in financing activities | ( | ( | |||||||||
Net decrease in cash, cash equivalents, and restricted cash | ( | ( | |||||||||
| Cash, cash equivalents, and restricted cash- Beginning of period | |||||||||||
| Cash, cash equivalents, and restricted cash - End of period | $ | $ | |||||||||
See accompanying notes to Condensed Consolidated Financial Statements.
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Marqeta, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Reconciliation of cash, cash equivalents, and restricted cash | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Restricted cash | |||||||||||
Restricted cash, included in Other assets | |||||||||||
| Total cash, cash equivalents, and restricted cash | $ | $ | |||||||||
| Supplemental disclosures of non-cash investing and financing activities: | |||||||||||
Contingent and holdback considerations, not yet paid | $ | $ | |||||||||
| Repurchase of common stock, including excise tax, accrued and not yet paid | $ | $ | |||||||||
| Share-based compensation capitalized to internal-use software | $ | $ | |||||||||
| Purchase of property and equipment accrued and not yet paid | $ | $ | |||||||||
See accompanying notes to Condensed Consolidated Financial Statements.
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Marqeta, Inc.
Notes to Condensed Consolidated Financial Statements
(Tabular Amounts in Thousands, Except Per Share Amounts, Ratios, or as Noted)
(unaudited)
1. Business Overview and Basis of Presentation
Marqeta, Inc. (“the Company”) was incorporated in the state of Delaware in 2010 and creates digital payment technology for innovation leaders. The Company's modern card issuing platform empowers its customers to create customized and innovative payment card programs, giving them the configurability and flexibility to build better payment experiences.
The Company provides all of its customers issuer processor services and for most of its customers it also acts as a card program manager. The Company primarily earns revenue from processing card transactions for its customers.
Basis of Presentation
The accompanying Condensed Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and the applicable rules and regulations of the Securities and Exchange Commission, (“SEC”), for interim reporting. Certain information and note disclosures included in the Company’s annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. The Condensed Consolidated Balance Sheet as of December 31, 2025 has been derived from the Company’s audited consolidated financial statements, which are included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, which was filed with the SEC on February 24, 2026. The accompanying Condensed Consolidated Financial Statements should be read in conjunction with the Company’s consolidated financial statements and notes thereto included in the Annual Report on Form 10-K.
The accompanying Condensed Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. In the opinion of management, the accompanying Condensed Consolidated Financial Statements reflect all adjustments of a normal, recurring nature considered necessary for a fair presentation of the Company's consolidated financial position, results of operations, comprehensive income (loss), and cash flows for the interim periods presented. The interim results for the three months ended March 31, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026, or for any other future annual or interim period.
Use of Estimates
The preparation of the financial statements in conformity with GAAP requires management to make various estimates and assumptions relating to reported amounts of assets and liabilities, disclosure of contingent liabilities, and reported amounts of revenue and expenses. Significant estimates and assumptions include, but are not limited to, the fair value and useful lives of assets acquired and liabilities assumed through business combinations, the estimation of contingent liabilities, the fair value of equity awards and warrants, share-based compensation, the estimation of variable consideration in contracts with customers, the cumulative network incentive rate the Company expects to earn during the annual measurement period, and valuation of income taxes. Actual results could differ materially from these estimates.
Business Risks and Uncertainties
Prior to the quarter ended March 31, 2026, the Company incurred net losses in each quarter since its inception, with the exception of the quarter ended June 30, 2024, which was primarily due to the forfeiture of the Executive Chairman Long-Term Incentive Award. As of March 31, 2026, the Company had an accumulated deficit of $804.0 million. The Company believes that its cash and cash equivalents of $674.8 million and short-term investments of $37.3 million as of March 31, 2026 are sufficient to fund its operations through at least the next twelve months from the issuance of these financial statements.
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2. Summary of Significant Accounting Policies
Significant Accounting Policies
There have been no material changes to the Company’s significant accounting policies from the Annual Report on Form 10-K for the fiscal year ended December 31, 2025.
Recent Accounting Pronouncements
In November 2024, the FASB issued Accounting Standards Update No. 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures” (“ASU 2024-03”). ASU 2024-03 is intended to improve disclosures about a public business entity's expenses and provide more detailed information to investors about the types of expenses in commonly presented expense captions. The amendments in this ASU are effective for fiscal years beginning after December 15, 2026, and interim periods within those fiscal years. The Company plans to adopt this pronouncement and make the necessary updates to its disclosures for the year ending December 31, 2027. While the Company is currently evaluating the operational and financial reporting implications of this standard, the Company does not currently expect the adoption of ASU 2024-03 to have a material impact on its financial statements or disclosures.
3. Revenue
Disaggregation of Revenue
The following table provides information about disaggregated revenue from customers:
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Platform services revenue, net | $ | $ | |||||||||
| Other services revenue | |||||||||||
| Total net revenue | $ | $ | |||||||||
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Contract Balances
The following table provides information about contract assets and deferred revenue:
| Contract balance | Balance sheet line reference | March 31, 2026 | December 31, 2025 | |||||||||||||||||
| Contract assets - current | Prepaid expenses and other current assets | $ | $ | |||||||||||||||||
| Contract assets - non-current | Other assets | |||||||||||||||||||
| Total contract assets | $ | $ | ||||||||||||||||||
| Deferred revenue - current | Accrued expenses and other current liabilities | $ | $ | |||||||||||||||||
| Deferred revenue - non-current | Other liabilities | |||||||||||||||||||
| Total deferred revenue | $ | $ | ||||||||||||||||||
Net revenue recognized during the three months ended March 31, 2026 and 2025 that was included in the deferred revenue balances at the beginning of the respective periods was $4.1 million and $4.6 million, respectively.
Remaining Performance Obligations
The Company has performance obligations associated with commitments in customer contracts for future stand-ready obligations to process transactions throughout the contractual term. As of March 31, 2026, the aggregate transaction price allocated to our remaining performance obligations was $37.0 million. The Company expects to recognize approximately 71 % within two years and the remaining 29 % over the next to five years .
4. Business Combinations
TransactPay
The Company completed its acquisition of TransactPay on July 31, 2025. See Note 4, “Business Combinations,” to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 for additional information regarding this acquisition. There have been no changes to the purchase price or the allocation of purchase price since December 31, 2025. The measurement period for the acquisition remains open as of March 31, 2026. No measurement period adjustments were recognized during the three months ended March 31, 2026.
Contingent Consideration
As previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, the acquisition of TransactPay included two earn-out arrangements (the “Regulatory Improvement Earn-out” of $2.3 million and the “Digital Products Earn-out” of up to $3.4 million) payable upon satisfaction of specified post-closing performance conditions. The digital products relate to an emerging line of business that was not part of TransactPay’s core operations at the time of acquisition. The accruals for both earn-outs are included as part of accrued expenses and other current liabilities in the Condensed Consolidated Balance Sheets.
As of December 31, 2025, the Company had accrued approximately $2.3 million for the Regulatory Improvement Earn-out and approximately $1.3 million for the Digital Products Earn-out based on the facts available at that time. The Regulatory Improvement Earn-out liability remained unchanged at approximately $2.3 million as of March 31, 2026.
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5. Goodwill and Intangible Assets, net
Goodwill
Goodwill consisted of the following:
Balance as of December 31, 2025 | $ | ||||
Foreign currency adjustment | ( | ||||
Balance as of March 31, 2026 | $ | ||||
Intangible Assets, net
The following table presents the Intangible assets resulting from the Company’s business combinations as of the dates presented:
| March 31, 2026 | December 31, 2025 | ||||||||||
Finite-lived intangible assets: | |||||||||||
Developed technology | $ | $ | |||||||||
Customer relationships (1) | |||||||||||
Total finite-lived intangible assets, gross | |||||||||||
Accumulated amortization | ( | ( | |||||||||
Total finite-lived Intangible assets, net | |||||||||||
Indefinite-lived intangible assets: | |||||||||||
EMI licenses (1) | |||||||||||
Total intangible assets, net | $ | $ | |||||||||
The amortization period for developed technology and customer relationships intangible assets is 7 years and 2 years, respectively. Amortization expense for intangible assets was $2.3 million and $1.5 million for the three months ended March 31, 2026 and 2025, respectively.
6. Short-term Investments
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The amortized cost, unrealized gain, and estimated fair value of the Company's short-term investments consisted of the following:
| March 31, 2026 | |||||||||||||||||
| Amortized Cost | Unrealized Gain | Estimated Fair Value | |||||||||||||||
| Short-term Investments | |||||||||||||||||
| U.S. treasury securities | $ | $ | $ | ||||||||||||||
| Asset-backed securities | |||||||||||||||||
| Total short-term investments | $ | $ | $ | ||||||||||||||
| December 31, 2025 | |||||||||||||||||
| Amortized Cost | Unrealized Gain | Estimated Fair Value | |||||||||||||||
| Short-term investments | |||||||||||||||||
| U.S. treasury securities | $ | $ | $ | ||||||||||||||
| Asset-backed securities | |||||||||||||||||
| Total short-term investments | $ | $ | $ | ||||||||||||||
The Company did no
There were no
The following table summarizes the stated maturities of the Company’s short-term investments:
| March 31, 2026 | December 31, 2025 | ||||||||||||||||||||||
| Amortized Cost | Estimated Fair Value | Amortized Cost | Estimated Fair Value | ||||||||||||||||||||
| Due within one year | $ | $ | $ | $ | |||||||||||||||||||
Due after one year through five years | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
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7. Fair Value Measurements
The following tables present the fair value hierarchy for assets and liabilities measured at fair value:
| March 31, 2026 | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total Fair Value | ||||||||||||||||||||
| Cash equivalents | |||||||||||||||||||||||
| U.S. treasury bills | $ | $ | $ | $ | |||||||||||||||||||
| Money market funds | |||||||||||||||||||||||
| Commercial paper | |||||||||||||||||||||||
Certificates of deposit | |||||||||||||||||||||||
| Corporate debt securities | |||||||||||||||||||||||
| Short-term investments | |||||||||||||||||||||||
| U.S. treasury securities | |||||||||||||||||||||||
| Asset-backed securities | |||||||||||||||||||||||
Restricted cash | |||||||||||||||||||||||
Money market funds | |||||||||||||||||||||||
| Total assets measured at fair value | $ | $ | $ | $ | |||||||||||||||||||
| December 31, 2025 | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total Fair Value | ||||||||||||||||||||
| Cash equivalents | |||||||||||||||||||||||
| U.S. treasury bills | $ | $ | $ | $ | |||||||||||||||||||
| Money market funds | |||||||||||||||||||||||
Commercial paper | |||||||||||||||||||||||
| Certificates of deposit | |||||||||||||||||||||||
Corporate debt securities | |||||||||||||||||||||||
| Short-term investments | |||||||||||||||||||||||
| U.S. treasury securities | |||||||||||||||||||||||
| Asset-backed securities | |||||||||||||||||||||||
| Restricted cash | |||||||||||||||||||||||
| Money market funds | |||||||||||||||||||||||
Total assets measured at fair value | $ | $ | $ | $ | |||||||||||||||||||
The Company classifies money market funds, U.S. treasury bills, commercial paper, certificates of deposit, U.S. treasury securities, asset-backed securities, and corporate debt securities within Level 1 or Level 2 of the fair value hierarchy because the Company values these investments using quoted market prices or alternative pricing sources and models utilizing market observable inputs.
There were no transfers of financial instruments between the fair value hierarchy levels during the three months ended March 31, 2026, or the year ended December 31, 2025.
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8. Certain Balance Sheet Components
Property and Equipment, net
Property and equipment consisted of the following:
| March 31, 2026 | December 31, 2025 | ||||||||||
| Internally developed and purchased software | $ | $ | |||||||||
| Computer equipment | |||||||||||
| Leasehold improvements | |||||||||||
| Furniture and fixtures | |||||||||||
Total property and equipment, gross | |||||||||||
| Accumulated depreciation and amortization | ( | ( | |||||||||
| Property and equipment, net | $ | $ | |||||||||
Depreciation and amortization expense related to property and equipment was $6.5 million and $3.9 million for the three months ended March 31, 2026 and 2025, respectively.
The Company capitalized $10.7 million and $8.6 million as internal-use software development costs during the three months ended March 31, 2026, and 2025, respectively.
Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consisted of the following:
| March 31, 2026 | December 31, 2025 | |||||||||||||
Accrued costs of revenue | $ | $ | ||||||||||||
Accrued compensation and benefits | ||||||||||||||
Deferred revenue | ||||||||||||||
Accrued tax liabilities | ||||||||||||||
Due to Issuing Banks | ||||||||||||||
Contingent consideration liability (see Note 4) | ||||||||||||||
Holdback consideration liability | ||||||||||||||
Accrued professional services | ||||||||||||||
Other accrued liabilities | ||||||||||||||
Accrued expenses and other current liabilities | $ | $ | ||||||||||||
9. Commitments and Contingencies
Letter of Credit and Restricted Cash
In connection with the Oakland lease, the Company is required to provide the landlord a $0.9 million letter of credit. The Company has secured this letter of credit by depositing $0.9 million with the issuing financial
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institution. This amount is classified as restricted cash and recorded in other assets on the Condensed Consolidated Balance Sheets.
As of March 31, 2026, the balance of restricted cash associated with these customer funds was $280.3 million, of which $48.3 million is invested in money market funds.
Legal Contingencies
From time to time in the normal course of business, the Company may be subject to various legal matters such as threatened or pending claims or proceedings. Given the unpredictable nature of legal proceedings, the Company bases its assessment on the information available at the time the financials are available to be issued. As additional information becomes available, the Company reassesses the probability of the loss contingency and the potential liability, and may revise the estimate. The Company is currently involved in the following matters:
On December 9, 2024, a putative securities class action lawsuit, captioned Wai v. Marqeta, Inc., et al., Case No. 24-cv-08874 (N.D. Cal.), was filed in federal court in the Northern District of California (“Court”) against the Company, its former Chief Executive Officer, and its Chief Financial Officer (“Defendants”) alleging violations of federal securities laws. The lawsuit asserted that Defendants made false or misleading statements relating to the Company’s performance or revenue and gross profit expectations in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.
On December 10, 2024, a second putative securities class action lawsuit, captioned Ford v. Marqeta, Inc., et al., Case No. 24-cv-08892 (N.D. Cal.), was filed in the same Court against the same Defendants alleging violations of the same federal securities laws. The second lawsuit asserted similar theories of liability as the first lawsuit but alleges a broader putative class period of between May 7, 2024 and November 4, 2024 and some additional and/or different allegations on which the claims are based. Both lawsuits (collectively, the “Securities Actions”) seek to recover damages on behalf of shareholders who acquired shares of the Company’s common stock during their respective putative class periods. The Securities Actions have been consolidated into one consolidated securities litigation captioned In re Marqeta, Inc. Securities Litigation, Case No. 24-08874-YGR (N.D. Cal) and the Court has appointed a lead plaintiff and lead plaintiff’s counsel in the matter. On April 10, 2025, the lead plaintiff filed a consolidated amended complaint, which alleges a putative class period of between February 28, 2024 and November 4, 2024. The Company and the other Defendants filed a motion to dismiss the consolidated amended complaint on May 15, 2025.
On November 3, 2025, a settlement was reached, in principle, with the lead plaintiff’s counsel to resolve the Securities Actions for payments totaling $13.0 million, subject to further documentation and judicial approvals. The Company’s Directors & Officers insurance policy includes a $5.0 million self-insured retention that applies to covered losses related to the Securities Actions, including legal defense fees and settlement payments. If finalized, the settlement will be funded by insurance less the self-insured retention.
As of March 31, 2026 and December 31, 2025, the Company had $13.0 9.4 million and $9.3 million as of March 31, 2026 and December 31, 2025, respectively, and is recorded in prepaid expenses and other current assets. The receivable reflects the portion of settlement expected to be covered by insurance, determined by applying legal fees incurred through March 31, 2026 toward the self-insured retention. As additional legal fees are incurred beyond this date, they will further reduce the remaining self-insured retention, resulting in a corresponding increase to the receivable balance.
On February 4, 2025, a putative shareholder derivative lawsuit, captioned Smith v. Khalaf, et al., Case No. 25-cv-01174 (N.D. Cal.), was filed in the same Court against certain of the Company’s current and former officer and its Board of Directors (as then constituted), and names the Company as a nominal defendant. This lawsuit asserts claims for breach of fiduciary duties and violations of federal securities laws, among other claims, between the time period of May 7, 2024 and November 4, 2024 under similar theories as the Securities Actions. Two other substantially similar putative shareholder derivative lawsuits, captioned Ojserkis v. Khalaf, et al., Case No. 25-cv-01883 (N.D. Cal.) and Preciado v. Khalaf, et al., Case No. 3:25-cv-02100 (N.D. Cal.), were filed on February 21, 2025 and February 27, 2025, respectively. All three putative shareholder derivative suits have been consolidated into one lawsuit captioned In re Marqeta, Inc.
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Derivative Litigation, Case No. 4:25-cv-01174-YGR (N.D. Cal). The consolidated derivative action is currently stayed pending developments in the consolidated Securities Actions.
Settlement of Payment Transactions
Pre-funding amounts deposited by program management customers into accounts maintained at Issuing Banks may only be used to settle customers’ payment transactions, and are not subject to the same safeguarding regulations as TransactPay’s customer funds, and as such, are not considered assets of the Company. Accordingly, the funds held in customers’ accounts at Issuing Banks are not reflected on the Company’s Condensed Consolidated Balance Sheets. If a customer does not have sufficient funds to settle a transaction, the Company is liable to the Issuing Bank to settle the transaction and would therefore incur losses if such amounts cannot be subsequently recovered from the customer. The Company did not incur losses of this nature during the three months ended March 31, 2026 and 2025, respectively.
Indemnifications
In the ordinary course of business, the Company enters into agreements of varying scope and terms pursuant to which it agrees to indemnify customers, Card Networks, Issuing Banks, vendors, lessors, and other parties with respect to certain matters, including, but not limited to, losses arising out of the breach of such agreements, services to be provided by the Company or from intellectual property infringement claims made by third parties. With respect to Issuing Banks, the Company has received requests for indemnification from time to time and may indemnify an Issuing Bank for losses such Issuing Bank may incur for non-compliance with applicable laws and regulations, if those losses resulted from the Company’s failure to perform under its program agreement. No significant claims have been incurred during the three months ended March 31, 2026 and 2025.
In addition, the Company has entered into indemnification agreements with its directors and certain officers and employees that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers, or employees. As of March 31, 2026 and December 31, 2025, no demands have been made upon the Company to provide indemnification under such agreements, and the Company is not aware of any claims that could have a material effect on its Condensed Consolidated Financial Statements.
10. Stock Incentive Plans
The following table presents the share-based compensation expense by award type recognized within the following line items in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) and Condensed Consolidated Balance Sheet in the periods presented:
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Restricted stock units | $ | $ | |||||||||
| Stock options | |||||||||||
Performance restricted stock units | ( | ( | |||||||||
Employee Stock Purchase Plan | |||||||||||
Share-based compensation recorded within Compensation and benefits | |||||||||||
Property and equipment (capitalized internal-use software) | |||||||||||
Total share-based compensation expense | $ | $ | |||||||||
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Restricted Stock Units and Performance Share Units
A summary of the Company's restricted stock units (RSUs) and performance-based restricted stock units (PSUs) activity under the Plans was as follows:
Number of Units | Weighted- average grant date fair value per share | ||||||||||
Balance as of December 31, 2025 | $ | ||||||||||
Granted | $ | ||||||||||
Vested | ( | $ | |||||||||
Forfeited | ( | $ | |||||||||
Balance as of March 31, 2026 | $ | ||||||||||
As of March 31, 2026, unrecognized compensation expense related to unvested RSUs and PSUs was $166.6 million. These costs are expected to be recognized over a weighted-average period of 2.2 years.
Stock Options
A summary of the Company's stock option activity under the Plans is as follows:
Number of Options | Weighted- Average Exercise Price per Share | Weighted - Average remaining Contractual Life (Years) | Aggregate Intrinsic Value (1) | ||||||||||||||||||||
Balance as of December 31, 2025 | $ | $ | |||||||||||||||||||||
Granted | |||||||||||||||||||||||
Exercised | ( | ||||||||||||||||||||||
Forfeited | |||||||||||||||||||||||
Balance as of March 31, 2026 | $ | $ | |||||||||||||||||||||
Exercisable as of March 31, 2026 (2) | $ | $ | |||||||||||||||||||||
Vested as of March 31, 2026 | $ | $ | |||||||||||||||||||||
(1) Intrinsic value is calculated based on the difference between the exercise price of in-the-money-stock options and the fair value of the common stock as of the respective balance sheet dates.
(2) The 2011 Plan allows for early exercise of stock options. Accordingly, options granted under this plan are included as exercisable stock options regardless of vesting status.
As of March 31, 2026, aggregate unrecognized compensation expense related to unvested outstanding stock options was $1.4 million. These costs are expected to be recognized over a weighted-average period of 0.8 years.
11. Stockholders’ Equity Transactions
Share Repurchase Programs
On May 6, 2024, the Company’s Board of Directors authorized a share repurchase program of up to $200 million of the Company’s Class A common stock (the “2024 Share Repurchase Program”). Under the 2024 Share Repurchase Program, the Company was authorized to repurchase shares through open market purchases, in privately negotiated transactions or by other methods, in accordance with applicable federal securities laws, including through trading plans under Rule 10b5-1 of the Exchange Act. The number of shares repurchased and the timing of purchases were based on general business and market conditions, and other factors, including legal requirements.
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During the three months ended March 31, 2025, the Company repurchased approximately 19.2 million shares under the 2024 Share Repurchase Program for a total cost of $80.5 million, at an average price of $4.20 per share. The aggregate cost of the shares repurchased and the related transaction costs and excise taxes of $1.1 million during the three months ended March 31, 2025 are reflected as a reduction to common stock and Additional paid-in capital on the Company’s Condensed Consolidated Balance Sheet. Repurchases under the 2024 Share Repurchase Program were completed as of March 31, 2025.
On February 25, 2025, the Company’s Board of Directors authorized an additional share repurchase program for up to $300 million of the Company’s Class A common stock (the “February 2025 Share Repurchase Program”). Under the February 2025 Share Repurchase Program, the Company was authorized to repurchase shares through open market purchases, in privately negotiated transactions, or by other means, in accordance with applicable federal securities laws, including through trading plans under Rule 10b5-1 of the Exchange Act. The number of shares repurchased and the timing of purchases were based on general business and market conditions, and other factors, including legal requirements. The 2025 Share Repurchase Program has no set expiration date.
During the three months ended March 31, 2025, the Company repurchased approximately 7.1 million shares under the February 2025 Share Repurchase Program for $30.3 million, at an average price of $4.28 per share. The aggregate cost of the shares repurchased and the related transaction costs and excise taxes of $0.5 million during the three months ended March 31, 2025 are reflected as a reduction to Common stock and Additional paid-in capital on the Company’s Condensed Consolidated Balance Sheet. Repurchases under the February 2025 Share Repurchase Program were completed during the fourth quarter of 2025.
On December 4, 2025, the Company’s Board of Directors authorized an additional share repurchase program of up to $100 million of the Company’s Class A common stock (the “December 2025 Share Repurchase Program”). Under the December 2025 Share Repurchase Program, the Company is authorized to repurchase shares through open market purchases, in privately negotiated transactions, or by other means, in accordance with applicable federal securities laws, including through trading plans under Rule 10b5-1 of the Exchange Act. The number of shares repurchased and the timing of purchases are based on general business and market conditions, and other factors, including legal requirements. The December 2025 Share Repurchase Program has no set expiration date.
During the three months ended March 31, 2026, the Company repurchased approximately 9.4 million shares under the December 2025 Share Repurchase Program for $39.1 million, at an average price of $4.16 per share. The aggregate cost of the shares repurchased and the related transaction costs and excise taxes of $0.5 million during the three months ended March 31, 2026 are reflected as a reduction to Common stock and Additional paid-in capital on the Company’s Condensed Consolidated Balance Sheet. As of March 31, 2026, $52.4 million remained available for future share repurchases under the December 2025 Share Repurchase Program.
12. Net Income (Loss) Per Share Attributable to Common Stockholders
Basic net income (loss) per share is computed by dividing the net income (loss) by the weighted-average number of shares of common stock outstanding during the period. Diluted net income (loss) per share is computed by dividing net income (loss) by the weighted-average number of shares of common stock outstanding, adjusted for the dilutive effect of all potential shares of common stock. In periods when the Company reported a net loss, diluted net loss per share is the same as basic net loss per share because the effects of potentially dilutive items are anti-dilutive.
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The Company calculated basic and diluted net income (loss) per share attributable to common stockholders as follows:
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
Class A | Class B | Class A | Class B | ||||||||||||||||||||
| Numerator | |||||||||||||||||||||||
| Net income (loss) attributable to common stockholders, basic | $ | $ | $ | ( | $ | ( | |||||||||||||||||
| Net income (loss) attributable to common stockholders, diluted | $ | $ | $ | ( | $ | ( | |||||||||||||||||
| Denominator | |||||||||||||||||||||||
| Weighted-average shares used in computing basic net income (loss) share attributable to common stockholders | |||||||||||||||||||||||
| Effect of dilutive potential shares of common stock | |||||||||||||||||||||||
Weighted-average shares used in computing diluted net income (loss) per share attributable to common stockholders | |||||||||||||||||||||||
Net income (loss) per share attributable to common stockholders, basic | $ | $ | $ | ( | $ | ( | |||||||||||||||||
Net income (loss) per share attributable to common stockholders, diluted | $ | $ | $ | ( | $ | ( | |||||||||||||||||
As the liquidation and dividend rights are identical for Class A common stock and Class B common stock, the undistributed earnings are allocated on a proportionate basis and the resulting income or loss per share will, therefore, be the same for both Class A common stock and Class B common stock on an individual or combined basis.
The following potentially dilutive securities were excluded from the computation of diluted net loss per share during the three months ended March 31, 2025 because including them would have had an anti-dilutive effect as the Company was in a loss position during the period:
Three Months Ended March 31, 2025 | |||||||||||
| Class A | Class B | ||||||||||
Warrants to purchase Class B common stock | |||||||||||
Stock options, restricted stock, and employee stock purchase plan | |||||||||||
| Total | |||||||||||
Potentially dilutive securities that were excluded from the computation of diluted net income per share during the three months ended March 31, 2026 because including them would have had an anti-dilutive effect were as follows:
Three Months Ended March 31, 2026 | |||||||||||
Class A | Class B | ||||||||||
| Stock options, restricted stock, and employee stock purchase plan | |||||||||||
13. Income Tax
The Company recorded income tax expense of $0.2
The Company is subject to income tax audits in the U.S. and foreign jurisdictions. The Company records liabilities related to uncertain tax positions and believes that it has provided adequate reserves for income tax uncertainties in all open tax years.
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14. Concentration Risks and Significant Customers
Financial instruments that potentially expose the Company to concentration of credit risk consist of cash and cash equivalents, short-term investments, and accounts receivable. Cash and cash equivalents held with financial institutions may exceed federally insured limits, posing potential credit risk.
As of March 31, 2026 and December 31, 2025, short-term investments were $37.3 million and $62.5 million, respectively, and there was no concentration of securities of the same issuer with an aggregate fair value greater than 5% of the total balance, except for U.S. treasury securities, which amounted to $32.0 million, or 86 %, at March 31, 2026 and $56.1 million, or 90 %, at December 31, 2025, respectively.
A significant portion of the Company's payment transactions are settled through one Issuing Bank, Sutton Bank. For the three months ended March 31, 2026 and 2025, 61 % and 67 %, respectively, of Total Processing Volume, which is the total dollar amount of payments processed through the Company’s platform, net of returns and chargebacks, was settled through Sutton Bank.
15. Segment Information
The Company's chief operating decision maker (“CODM”) is its Chief Executive Officer, who regularly reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance. The Company provides a single, global, cloud-based, open API platform for modern card issuing and transaction processing, and primarily earns revenue from processing card transactions for its customers. As such, the Company operates as a single operating segment and reporting unit.
The CODM assesses performance and decides how to allocate resources based on consolidated net income or loss as the measure of profit and loss and consolidated total assets. The measure of segment assets is reported on the balance sheet as total assets. The CODM uses net income or loss in the annual budgeting process and subsequent monitoring of budget versus actual results as well as in assessing the return on consolidated total assets.
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The following is the information used by the CODM in assessing segment performance:
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Net revenue | $ | $ | |||||||||
| Cost of revenue | |||||||||||
| Gross profit | |||||||||||
| Significant expenses: | |||||||||||
| Employee compensation and benefits | |||||||||||
| Share based compensation | |||||||||||
| Technology | |||||||||||
| Depreciation and amortization | |||||||||||
| Professional services | |||||||||||
Occupancy | |||||||||||
| Marketing and advertising | |||||||||||
| Other operating expenses | |||||||||||
Income (loss) from operations | ( | ||||||||||
| Interest income | |||||||||||
Other income | |||||||||||
Income tax expense | |||||||||||
Segment and consolidated net income (loss)(1) | $ | $ | ( | ||||||||
Net revenue outside of the United States, based on the billing address of the customer, was 17 % and 11 %, for the three months ended March 31, 2026 and 2025, respectively.
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16. Subsequent Events
On April 10, 2026, the Company filed a preliminary proxy statement on Schedule 14A with the Securities and Exchange Commission in connection with its 2026 Annual Meeting of Stockholders scheduled for June 10, 2026. Among the proposals to be considered by stockholders is a proposal to approve an amendment to the Company’s Amended and Restated Certificate of Incorporation to (i) effect a 1-for-4 reverse stock split of the Company’s Class A common stock, Class B common stock, and preferred stock and (ii) make a proportional reduction in the number of authorized shares of each class. If approved by stockholders, the Company’s Chief Executive Officer and Chief Financial Officer, in consultation with the Board of Directors, will have sole discretion to determine whether and when to implement the reverse stock split and authorized shares reduction, if at all, provided any such action occurs within one year of stockholder approval. The Company can provide no assurance that the reverse stock split will be implemented or that it will achieve any of the intended benefits.
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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion and analysis of our financial condition and results of operations together with our Condensed Consolidated Financial Statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q and in our 2025 Annual Report. This discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties. As discussed in the section titled “Note About Forward Looking Statements”, our actual results may differ materially from those discussed in these forward-looking statements as a result of various factors, including those set forth or incorporated by reference under the section titled “Risk Factors” in this Quarterly Report on Form 10-Q and in our 2025 Annual Report.
Overview
Marqeta’s mission is modernizing financial services by making the entire payment experience native and delightful. Marqeta’s modern platform empowers our customers to create customized and innovative payment card programs with configurability and flexibility. Marqeta’s open APIs provide instant access to highly scalable, cloud-based payment infrastructure that enables customers to embed the payments experience into apps or websites for a personalized user experience. Customers can launch and manage their own card programs, issue cards, and authorize and settle payment transactions quickly using our platform. We also deliver robust bank, network, and card program management and value added services, allowing our customers to embed Marqeta in their offering without having to build certain complex compliance elements or customer support services.
Marqeta’s innovative products are developed with deep domain expertise and a customer-first mindset to launch, scale, and manage card programs. Marqeta provides the following offerings based on a customer’s desired level of control and responsibility:
•Processing: Marqeta provides all of its customers with issuer processor services as our core offering. Payment processing provides customers with access to the Marqeta dashboard via our APIs and webhooks, our JIT Funding feature, and assists with certain configuration elements that enable customers to use the platform independently.
•Bank and Network Management: Marqeta provides a service option to connect customers to an Issuing Bank partner to act as the BIN sponsor for the customer’s card program, define and manage a number of the primary tasks related to launching a card program, and can provide a full range of services including configuring many of the critical resources required by a customer’s production environment and managing the applicable regulations and the Issuing Bank. In addition, Marqeta provides another service offering to manage compliance with applicable Card Network rules.
•Program Management: Marqeta provides additional program management services that are required as part of a card program, including chargebacks and dispute resolution, reconciliation, and card fulfillment.
•Value Added Services: Marqeta provides value added services that offer a more seamless experience for our customers, which include tokenization, real-time decisioning and fraud management, digital banking, and other customer experience services.
Impact of Macroeconomic Factors
We are unable to predict the impact macroeconomic factors, including various geopolitical conflicts, uncertainty related to global elections, changes in inflation and interest rates, and uncertainty in global regulatory and economic conditions, including as a result of uncertainty in global trade from potential tariffs and counter tariffs, will have on our processing volumes, and on our future results of operations. A deterioration in macroeconomic conditions could increase the risk of lower consumer spending, including discretionary spending, consumer and merchant bankruptcy, insolvency, business failure, higher credit losses, foreign currency fluctuations, or other business interruption, which may adversely impact our business. We continue to monitor these situations and may take actions that alter our operations and business practices as may be required by federal, state, or local authorities or that we determine are in the best interests of our customers, vendors, and employees. See the section titled “Risk Factors” in this Quarterly Report on Form 10-Q and in our 2025 Annual Report for further discussion or incorporation by reference of the possible impact of these macroeconomic factors on our business.
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Key Operating Metric and Non-GAAP Financial Measures
We review a number of operating and financial metrics, including the key operating metric set forth below, to help us evaluate our business and growth trends, establish budgets, evaluate the effectiveness of our investments, and assess operational efficiencies. In addition to the results determined in accordance with GAAP, the following table sets forth a key operating metric and non-GAAP financial measures that we consider useful in evaluating our operating performance:
| Three Months Ended March 31, | |||||||||||
(dollars in thousands unless otherwise noted) | 2026 | 2025 | |||||||||
| Total Processing Volume (TPV) (in millions) | $ | 112,360 | $ | 84,472 | |||||||
Net revenue | $ | 165,798 | $ | 139,073 | |||||||
Gross profit | $ | 117,592 | $ | 98,679 | |||||||
| Gross margin | 71 | % | 71 | % | |||||||
Net income (loss) | $ | 7,834 | $ | (8,260) | |||||||
Net income (loss) margin | 5 | % | (6) | % | |||||||
Total operating expenses | $ | 115,498 | $ | 117,217 | |||||||
| Non-GAAP Measures: | |||||||||||
Adjusted EBITDA | $ | 33,338 | $ | 20,081 | |||||||
| Adjusted EBITDA margin | 20 | % | 14 | % | |||||||
Adjusted operating expenses | $ | 84,254 | $ | 78,598 | |||||||
Total Processing Volume (“TPV”) - TPV represents the total dollar amount of payments processed through our platform, net of returns and chargebacks. We believe that TPV is a key operating metric and a principal indicator of the market adoption of our platform, growth of our brand, growth of our customers' businesses and scale of our business.
Adjusted EBITDA - Adjusted EBITDA is a non-GAAP financial measure that is calculated as Net income (loss) adjusted, as applicable, to exclude depreciation and amortization; share-based compensation expense; payroll tax related to share-based compensation; restructuring and other one-time costs; acquisition related expenses which consist of due diligence costs, transaction costs and integration costs related to potential or successful acquisitions and cash and non-cash postcombination compensation expenses; non-recurring litigation expense; income tax expense (benefit); and other income, net, which consists primarily of interest income from our short-term investments and cash deposits, impairment of financial instruments and realized foreign currency gains and losses. We believe that Adjusted EBITDA is an important measure of operating performance because it allows management and our Board of Directors to evaluate and compare our core operating results, including our operating efficiencies, from period to period. Additionally, we utilize Adjusted EBITDA as an input into our calculation of our annual employee bonus plans and performance-based restricted stock units. See the section below titled “Use of Non-GAAP Financial Measures” for a discussion of the use of non-GAAP measures, a change in presentation, and a reconciliation of Net income (loss) to Adjusted EBITDA.
Adjusted EBITDA Margin - Adjusted EBITDA Margin is a non-GAAP financial measure that is calculated as Adjusted EBITDA divided by Net revenue. This measure is used by management and our Board of Directors to evaluate our operating efficiency. See the section below titled “Use of Non-GAAP Financial Measures” for a discussion of the use of non-GAAP measures and a reconciliation of Net income (loss) to Adjusted EBITDA Margin.
Adjusted Operating Expenses - Adjusted operating expenses is a non-GAAP financial measure that is calculated as Total operating expenses adjusted, as applicable, to exclude depreciation and amortization; share-based compensation expense; payroll tax related to share-based compensation; restructuring and other one-time costs; non-recurring litigation expense; and acquisition-related expenses which consists of due diligence costs, transaction cost and integration costs related to potential or successful acquisitions, and cash and non-cash postcombination compensation expenses. We believe that adjusted operating expenses is an important measure of operating performance because it allows management and our
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Board of Directors to evaluate and compare our core operating results, including our operating efficiencies, from period to period. See the section below titled “Use of Non-GAAP Financial Measures” for a discussion of the use of non-GAAP measures, a change in presentation, and a reconciliation of total operating expenses to adjusted operating expenses.
Components of Results of Operations
Net Revenue
We have two components of net revenue: platform services revenue, net and other services revenue.
Platform services revenue, net. Platform services revenue includes Interchange Fees, net of Revenue Share and other service-level payments to customers, and Card Network and Issuing Bank costs for certain customer arrangements where the Company is an agent in the delivery of services to the customer. Platform services revenue also includes processing and other fees, including value added services. “Interchange Fees” are transaction-based and volume-based fees set by a Card Network and paid by a merchant bank to the Issuing Bank that issued the payment card used to purchase goods or services from a merchant. We earn Interchange Fees on card transactions we process for our customers and the fees are based on a percentage of the transaction amount plus a fixed amount per transaction. Interchange Fees are recognized when the associated transactions are settled.
Revenue Share payments are incentives to our customers to increase their processing volumes on our platform. Revenue Share is generally computed as a percentage of the Interchange Fees earned or processing volume and is paid to our customers monthly. Revenue Share payments are recorded as a reduction to net revenue. Generally, as customers' processing volumes increase, the rates at which we share revenue increase.
Processing and other fees are priced as either a percentage of processing volume or on a fee per transaction basis and are earned, for example, when payment cards are used at automated teller machines or to make cross-border purchases. Minimum processing fees, where customers' processing volumes fall below certain thresholds, as well as transaction fees for utilizing other value-added services and program management features, are also included in processing and other fees.
We recognize revenue when the promised services are complete, and our performance obligations are satisfied. Platform services are considered complete when we have authorized the transaction, validated that the transaction has no errors, and accepted and posted the data to our records.
Other services revenue. Other services revenue primarily consists of revenue earned for card fulfillment services. Card fulfillment fees are generally billed to customers upon ordering card inventory and recognized as revenue when the cards are shipped to the customers.
Costs of Revenue
Costs of revenue consist of Card Network fees, Issuing Bank fees, and card fulfillment costs for customer arrangements where we are the principal in providing services to the customer and excludes depreciation and amortization, which is reported separately within the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). Card Network fees are equal to a specified percentage of processing volume or a fixed amount per transaction routed through the respective Card Network. Issuing Bank fees compensate our Issuing Banks for issuing cards to our customers and sponsoring our card programs with the Card Networks and are typically equal to a specified percentage of processing volume or a fixed amount per transaction. Card fulfillment costs include physical cards, packaging, and other fulfillment costs.
We have marketing and incentive arrangements with Card Networks, that provide us with monetary incentives for establishing customer card programs with and routing transaction volume through the respective Card Networks. These incentives are typically calculated as a percentage of the processed transaction volume or the number of transactions routed through the Card Network. We account for these incentives as a reduction of Card Network fees within Costs of Revenue in customer arrangements where we act as the principal. As processing volumes increase, we earn a higher cumulative incentive rate,
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subject to achieving specific cumulative volume thresholds within an annual measurement period. For certain incentive arrangements, the annual measurement period may not align with our fiscal year.
We estimate and recognize network incentives based on the cumulative incentive rate we expect to earn over the annual measurement period. We estimate the cumulative incentive rates based on our forecasts for the annual measurement periods, which incorporates both historical experience and our expectations of future events, in addition to other qualitative considerations. The estimated cumulative incentive rates are applied to the volume and/or number of transactions processed during the reporting period to calculate the quarterly network incentives recognized.
Operating Expenses
Compensation and Benefits. Compensation and benefits consist primarily of salaries, employee benefits, severance and other termination benefits, incentive compensation, contractors’ cost, and share-based compensation.
Technology. Technology consists primarily of third-party hosting fees, software licenses, and hardware purchases below our capitalization threshold, and support and maintenance costs.
Professional Services. Professional services consist primarily of consulting, legal, audit, and recruiting fees.
Occupancy. Occupancy consists primarily of rent expense, repairs, maintenance, and other building related costs.
Depreciation and Amortization. Depreciation and amortization consist primarily of depreciation of our fixed assets and amortization of capitalized internal-use software and developed technology intangible assets.
Marketing and Advertising. Marketing and advertising consist primarily of costs of general marketing and promotional activities.
Other Operating Expenses. Other operating expenses consist primarily of insurance costs, indemnification costs, travel-related expenses, indirect state and local taxes, and other general office expenses.
Other Income, net
Other income, net consists primarily of interest income from our short-term investments and cash deposits, and realized foreign currency gains and losses.
Income Tax Expense
Income tax expense consists of U.S. federal and state income taxes, and income taxes related to certain foreign jurisdictions. We maintain a full valuation allowance against our U.S. federal and state net deferred tax assets as we have concluded that it is not more likely than not that we will realize our net deferred tax assets.
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Results of Operations
The following table sets forth our results of operations for the periods presented:
| Three Months Ended March 31, | ||||||||||||||
| (dollars in thousands) | 2026 | 2025 | ||||||||||||
| Net revenue | $ | 165,798 | $ | 139,073 | ||||||||||
| Costs of revenue | 48,206 | 40,394 | ||||||||||||
| Gross profit | 117,592 | 98,679 | ||||||||||||
Operating expenses: | ||||||||||||||
| Compensation and benefits | 78,018 | 86,050 | ||||||||||||
| Technology | 18,090 | 14,811 | ||||||||||||
| Depreciation and amortization | 8,854 | 5,331 | ||||||||||||
| Professional services | 4,631 | 5,695 | ||||||||||||
| Occupancy | 1,179 | 917 | ||||||||||||
| Marketing and advertising | 1,160 | 469 | ||||||||||||
| Other operating expenses | 3,566 | 3,944 | ||||||||||||
| Total operating expenses | 115,498 | 117,217 | ||||||||||||
Income (loss) from operations | 2,094 | (18,538) | ||||||||||||
Other income, net | 5,933 | 10,513 | ||||||||||||
Income (loss) before income tax expense | 8,027 | (8,025) | ||||||||||||
Income tax expense | 193 | 235 | ||||||||||||
Net income (loss) | $ | 7,834 | $ | (8,260) | ||||||||||
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Comparison of the Three Months Ended March 31, 2026 and 2025
Net Revenue
| Three Months Ended March 31, | ||||||||||||||||||||||||||
| (dollars in thousands) | 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||||
| Net revenue: | ||||||||||||||||||||||||||
| Total platform services, net | $ | 156,225 | $ | 131,867 | $ | 24,358 | 18 | % | ||||||||||||||||||
| Other services | 9,573 | 7,206 | 2,367 | 33 | % | |||||||||||||||||||||
| Total net revenue | $ | 165,798 | $ | 139,073 | $ | 26,725 | 19 | % | ||||||||||||||||||
| Total Processing Volume (TPV) (in millions) | $ | 112,360 | $ | 84,472 | $ | 27,888 | 33 | % | ||||||||||||||||||
Total platform services, net revenue increased by $24.4 million, or 18%, for the three months ended March 31, 2026, compared to the same period in 2025. The overall increase in platform services revenue was primarily driven by a 33% increase in TPV, partially offset by unfavorable shifts in our card program mix, particularly the expansion of programs where we provide processing services with minimal or no program management.
Other services revenue increased by $2.4 million, or 33%, for the three months ended March 31, 2026, compared to the same period in 2025, primarily driven by professional services rendered for a certain network integration project that was completed in the first quarter of 2026.
The increase in TPV was driven by strong performance across all our major use cases, particularly financial services, lending including buy-now-pay later, and expense management. TPV for our top five customers, based on their individual processing volumes in each respective period, increased 25%, in the three months ended March 31, 2026, compared to the same period in 2025. while TPV from all other customers, as a group, grew 58%, over the same period. Note that the composition of the top five customers may differ between the two periods.
Costs of Revenue and Gross Margin
| Three Months Ended March 31, | ||||||||||||||||||||||||||
| (dollars in thousands) | 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||||
| Costs of revenue: | ||||||||||||||||||||||||||
| Card Network fees, net | $ | 37,131 | $ | 30,642 | $ | 6,489 | 21 | % | ||||||||||||||||||
| Issuing Bank fees | 4,601 | 3,967 | 634 | 16 | % | |||||||||||||||||||||
| Other | 6,474 | 5,785 | 689 | 12 | % | |||||||||||||||||||||
| Total costs of revenue | $ | 48,206 | $ | 40,394 | $ | 7,812 | 19 | % | ||||||||||||||||||
| Gross profit | $ | 117,592 | $ | 98,679 | $ | 18,913 | 19 | % | ||||||||||||||||||
| Gross margin | 71 | % | 71 | % | ||||||||||||||||||||||
Costs of revenue increased by $7.8 million, or 19%, for the three months ended March 31, 2026, compared to the same period in 2025. This increase was primarily driven by higher Card Network and Issuing Bank fees associated with the 33% increase in TPV.
As the increase in costs of revenue was outpaced by the net revenue growth discussed above, gross profit increased by $18.9 million, or 19%, while gross margin remained flat for the three months ended March 31, 2026, compared to the same period in 2025.
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Operating Expenses
| Three Months Ended March 31, | ||||||||||||||||||||||||||
| (dollars in thousands) | 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||
| Salaries, bonus, benefits and payroll taxes | $ | 58,001 | $ | 60,135 | $ | (2,134) | (4) | % | ||||||||||||||||||
| Share-based compensation | 20,017 | 25,915 | (5,898) | (23) | % | |||||||||||||||||||||
| Total compensation and benefits | 78,018 | 86,050 | (8,032) | (9) | % | |||||||||||||||||||||
| Percentage of net revenue | 47 | % | 62 | % | ||||||||||||||||||||||
| Technology | 18,090 | 14,811 | 3,279 | 22 | % | |||||||||||||||||||||
| Percentage of net revenue | 11 | % | 11 | % | ||||||||||||||||||||||
| Depreciation and amortization | 8,854 | 5,331 | 3,523 | 66 | % | |||||||||||||||||||||
| Percentage of net revenue | 5 | % | 4 | % | ||||||||||||||||||||||
| Professional services | 4,631 | 5,695 | (1,064) | (19) | % | |||||||||||||||||||||
| Percentage of net revenue | 3 | % | 4 | % | ||||||||||||||||||||||
| Occupancy | 1,179 | 917 | 262 | 29 | % | |||||||||||||||||||||
| Percentage of net revenue | 1 | % | 1 | % | ||||||||||||||||||||||
| Marketing and advertising | 1,160 | 469 | 691 | 147 | % | |||||||||||||||||||||
| Percentage of net revenue | 1 | % | — | % | ||||||||||||||||||||||
| Other operating expenses | 3,566 | 3,944 | (378) | (10) | % | |||||||||||||||||||||
| Percentage of net revenue | 2 | % | 3 | % | ||||||||||||||||||||||
Total operating expenses | $ | 115,498 | $ | 117,217 | $ | (1,719) | (1) | % | ||||||||||||||||||
| Percentage of net revenue | 70% | 84% | ||||||||||||||||||||||||
Salaries, bonus, benefits, and payroll taxes decreased by $2.1 million, or 4%, for the three months ended March 31, 2026, compared to the same period in 2025. This decrease was primarily driven by lower post-combination compensation expenses for former Power Finance employees, an increase in capitalized salaries, bonus, and benefits costs related to internal-use software development in 2026, and lower year-over-year severance and one-time retention bonuses awarded to certain key employees. These were partially offset by a year-over-year increase in salaries, bonus, and contractor expenses as a result of an increase in headcount during the three months ended March 31, 2026, compared to the same period in 2025.
Share-based compensation decreased by $5.9 million, or 23%, for the three months ended March 31, 2026, compared to the same period in 2025. This decrease was primarily driven by the fully vesting of higher grant-date fair value awards issued in prior years. These older awards are being replaced by new awards granted in more recent periods that carry lower grant-date fair values.
Technology expenses increased by $3.3 million, or 22%, for the three months ended March 31, 2026, compared to the same period in 2025. This increase was mainly driven by higher software licenses and hosting costs to support system and tool implementations amid ongoing business growth.
Depreciation and amortization expense increased by $3.5 million, or 66%, for the three months ended March 31, 2026, compared to the same period in 2025. This increase was primarily driven by higher amortization of internally developed software as additional projects were capitalized and placed into service, as well as amortization of the customer relationships intangible asset acquired from TransactPay in the third quarter of 2025.
Professional services expenses decreased by $1.1 million or 19%, for the three months ended March 31, 2026, compared to the same period in 2025 due to professional fees incurred during the quarter ended March 31, 2025 that did not reoccur during the same period in 2026.
Occupancy expense remained relatively flat for the three months ended March 31, 2026, compared to the same period in 2025.
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Marketing and advertising expenses increased by $0.7 million, or 147%, for the three months ended March 31, 2026, compared to the same period in 2025, primarily due to increased spending on brand campaigns and continued investment in marketing and advertising initiatives.
Other operating expenses remained relatively flat for the three months ended March 31, 2026 compared to the same period in 2025.
Other Income, net
| Three Months Ended March 31, | ||||||||||||||||||||||||||
| (dollars in thousands) | 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||||
Other income, net | $ | 5,933 | $ | 10,513 | $ | (4,580) | (44) | % | ||||||||||||||||||
| Percentage of net revenue | 4 | % | 8 | % | ||||||||||||||||||||||
Other income, net decreased by $4.6 million, or 44%, for the three months ended March 31, 2026, compared to the same period in 2025. This decrease was primarily driven by lower interest income from our short-term investment portfolio and cash balances, as average balances were lower due to share repurchases completed in 2025 and the first quarter of 2026. We also realized lower average yields during the first quarter of 2026 compared to the same period in 2025. This decrease was partially offset by a $0.9 million gain from the remeasurement of the Digital Products Earn-out liability related to the TransactPay acquisition during the three months ended March 31, 2026.
Income Tax Expense
Income tax expense remained relatively flat for the three months ended March 31, 2026 compared to the same period in 2025.
Customer Concentration
We generated 42% and 45% of our net revenue from our largest customer, Block, during the three months ended March 31, 2026 and 2025, respectively.
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Use of Non-GAAP Financial Measures
Our non-GAAP measures have limitations as analytical tools and you should not consider them in isolation. These non-GAAP measures should not be viewed as a substitute for, or superior to, measures prepared in accordance with GAAP. In evaluating these non-GAAP measures, note that we will likely incur expenses in the future similar to the adjustments in the presentation of our non-GAAP measures set forth under “Key Operating Metric and Non-GAAP Financial Measures”. There are a number of key limitations related to the use of these non-GAAP measures compared to their most directly comparable GAAP measures including the following:
•other companies, including companies in our industry, may calculate adjusted EBITDA and Adjusted operating expenses differently or not at all, limiting their usefulness as comparative measures;
•although depreciation and amortization are non-cash charges, the assets being depreciated or amortized may require future replacement, and adjusted EBITDA does not reflect cash requirements for such replacements or new capital expenditures; and
•adjusted EBITDA does not reflect the effect of income taxes that may represent a reduction in cash available to us.
We encourage investors to review the related GAAP financial measures and the reconciliation of the non-GAAP financial measures to their most directly comparable GAAP financial measures.
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A reconciliation of Net income (loss) to adjusted EBITDA and GAAP operating expenses to Adjusted operating expenses for the periods presented is as follows:
| Three Months Ended March 31, | ||||||||||||||
| (dollars in thousands) | 2026 | 2025 | ||||||||||||
| Net revenue | $ | 165,798 | $ | 139,073 | ||||||||||
Net income (loss) | $ | 7,834 | $ | (8,260) | ||||||||||
Net income (loss) margin | 5 | % | (6) | % | ||||||||||
Total operating expenses | $ | 115,498 | $ | 117,217 | ||||||||||
Net income (loss) | $ | 7,834 | $ | (8,260) | ||||||||||
Share-based compensation expense | 20,017 | 25,915 | ||||||||||||
| Depreciation and amortization expense | 8,854 | 5,331 | ||||||||||||
Restructuring and other one-time costs (1) | 841 | 2,358 | ||||||||||||
| Payroll tax expense related to share-based compensation | 820 | 777 | ||||||||||||
Acquisition-related expenses (2) | 712 | 4,238 | ||||||||||||
Other income, net | (5,933) | (10,513) | ||||||||||||
Income tax expense | 193 | 235 | ||||||||||||
| Adjusted EBITDA | $ | 33,338 | $ | 20,081 | ||||||||||
| Adjusted EBITDA Margin | 20 | % | 14 | % | ||||||||||
Total operating expenses | $ | 115,498 | $ | 117,217 | ||||||||||
Share-based compensation expense | (20,017) | (25,915) | ||||||||||||
| Depreciation and amortization expense | (8,854) | (5,331) | ||||||||||||
Restructuring and other one-time costs (1) | (841) | (2,358) | ||||||||||||
| Payroll tax expense related to share-based compensation | (820) | (777) | ||||||||||||
Acquisition-related expenses (2) | (712) | (4,238) | ||||||||||||
Adjusted operating expenses | $ | 84,254 | $ | 78,598 | ||||||||||
(1) Restructuring and other one-time costs include the costs associated with the transition of our former CEO and other one-time costs related to retention bonuses provided to other key employees. These bonuses have service requirements and are expensed over the requisite service period.
(2) Acquisition-related expenses, which include transaction costs, integration costs and cash and non-cash postcombination compensation expense, have been excluded from adjusted EBITDA as such expenses are not reflective of our ongoing core operations and are not representative of the ongoing costs necessary to operate our business; instead, these are costs specifically associated with a discrete transaction.
Liquidity and Capital Resources
As of March 31, 2026, our primary sources of liquidity consisted of cash, cash equivalents, and short-term investments totaling $712.1 million, held primarily for working capital purposes. Our cash equivalents and short-term investments were comprised primarily of bank deposits, money market funds, U.S. treasury bills, U.S. treasury securities, asset-backed securities, commercial paper, certificates of deposit, and corporate debt securities. We have historically incurred significant operating losses, as reflected in our accumulated deficit. We believe our existing cash and cash equivalents and our short-term investments will be sufficient to meet our working capital and capital expenditure needs for more than the next 12 months. As of the date of filing this Quarterly Report on Form 10-Q, we have access to and control over all our cash, cash equivalents, and short-term investments, with the exception of restricted cash. The majority of our restricted cash amounts are held solely for safeguarding customer funds in connection with TransactPay’s card and e-money wallet programs, and are not available for our general corporate purposes or operations.
Our Board of Directors has periodically authorized share repurchase programs for repurchases of shares of our Class A common stock, including most recently on December 4, 2025, when our Board of Directors authorized an additional share repurchase program of up to $100 million of the Company’s Class A
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common stock (the “December 2025 Share Repurchase Program”). Under the December 2025 Share Repurchase Program, the Company is authorized to repurchase shares through open market purchases, in privately negotiated transactions, or by other means, in accordance with applicable federal securities laws, including through trading plans under Rule 10b5-1 of the Exchange Act. The number of shares repurchased and the timing of purchases are based on general business and market conditions, and other factors, including legal requirements. The December 2025 Share Repurchase Program has no set expiration date. As of March 31, 2026, $52.4 million remained available for future share repurchases under the December 2025 Share Repurchase Program.
We believe our existing cash and cash equivalents, and short-term investments of $712.1 million as of March 31, 2026, will be sufficient to meet our working capital and capital expenditure needs for at least the next 12 months. As of the date of filing this Quarterly Report on Form 10-Q, we maintain full access to and control over all our cash, cash equivalents and short-term investments, except amounts held as restricted cash. Our future capital requirements will depend on many factors, such as continued investment in product development, platform infrastructure, share repurchases, potential strategic acquisitions, capital expenditures, and global expansion. We plan to allocate cash to support ongoing business investments, infrastructure enhancements, and non-cancellable purchase commitments with cloud-computing service providers and certain Issuing Banks.
As of March 31, 2026, we had $281.3 million in restricted cash, of which $280.3 million is related to the cash and cash equivalents held by TransactPay on behalf of its customers related to card and e-money wallet programs.
Cash Flows
The following table summarizes our cash flows for the periods indicated:
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| (in thousands) | |||||||||||
Net cash (used in) provided by operating activities | $ | (3,367) | $ | 9,987 | |||||||
Net cash provided by investing activities | 16,057 | 14,861 | |||||||||
| Net cash used in financing activities | (74,538) | (116,967) | |||||||||
Net decrease in cash, cash equivalents, and restricted cash | $ | (61,848) | $ | (92,119) | |||||||
Operating Activities
Our primary source of cash from operating activities is net revenue. The primary uses of cash in operating activities include Card Network and Issuing Bank fees and employee-related compensation. The timing of settlements of certain operating assets and liabilities, such as revenue share payments, bonus payments, prepayments to cloud-computing service providers, settlements receivable and network incentives receivable, may impact the amounts reported as net cash provided by or used in operating activities in the Condensed Consolidated Statements of Cash Flows.
Net cash used in operating activities was $3.4 million for the three months ended March 31, 2026, compared to net cash provided by operating activities of $10.0 million for the same period in 2025. The year-over-year change was primarily driven by unfavorable working capital timing, particularly related to network incentive receivables and settlement receivables, which was partially offset by higher gross profit and lower operating expenses and year-over-year growth in the revenue share payable.
Investing Activities
Net cash provided by investing activities primarily consists of proceeds from maturities of short-term investments, while net cash used in investing activities primarily includes purchases of short-term investments, purchases of property and equipment, capitalized costs for internal-use software development, and business combinations when they occur.
Net cash provided by investing activities increased by $1.2 million to $16.1 million for the three months ended March 31, 2026, from $14.9 million in the same period in 2025. This increase was primarily due to additional proceeds from maturities of short-term investments, partially offset by additional investments in internal-use software.
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Financing Activities
Net cash used in financing activities consists primarily of net payments related to share-based compensation activities, our share repurchase programs and the net impact of funds payable and amounts owed to customers.
Net cash used in financing activities decreased to $74.5 million for the three months ended March 31, 2026, from $117.0 million in the same period in 2025. This decrease was primarily due to lower repurchases of our Class A common stock, partially offset by changes in funds payable and amounts due to customers
Obligations and Other Commitments
There have been no other material changes to our obligations and other commitments from those reported in our 2025 Annual Report.
For additional information about our contractual obligations and other commitments, see Note 9 “Commitments and Contingencies” to our condensed consolidated financial statements.
Critical Accounting Policies and Estimates
Our Condensed Consolidated Financial Statements are prepared in accordance with GAAP. The preparation of these Condensed Consolidated Financial Statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs, and expenses, and the related disclosures. On an ongoing basis, we evaluate our accounting estimates and assumptions. Our actual results may differ from these estimates under different assumptions or conditions.
There have been no material changes to our critical accounting policies and estimates described in “Management's Discussion and Analysis of Financial Condition and Results of Operations” set forth in our 2025 Annual Report.
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Item 3. Quantitative and Qualitative Disclosures about Market Risk
We have operations within the United States and globally, and are exposed to market risks in the ordinary course of our business. Information relating to quantitative and qualitative disclosures about these market risks is described below.
Interest Rate Risk
As of March 31, 2026, our cash, cash equivalents, and short-term investments totaled $712.1 million, comprising cash deposits, money market funds, U.S. treasury bills, U.S. treasury securities, commercial paper, certificates of deposits, asset-backed securities and corporate debt securities. The fair value of these holdings would not be significantly impacted by interest rate fluctuations due to their short-term maturities. Because we classify our short-term investments as “available-for-sale”, no gains or losses are recognized in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) due to changes in interest rates unless such securities are sold prior to maturity or declines in fair value are due to credit losses. We have the ability and intent to hold all short-term investments until maturity. A hypothetical 100 basis point increase or decrease in interest rates would not have a material effect on our financial results or condition.
Foreign Currency Exchange Risk
Most of our sales and operating expenses are denominated in U.S. dollars, and therefore our results of operations are not currently subject to significant foreign currency risk. As of March 31, 2026, a hypothetical 10% change in foreign currency exchange rates applicable to our business would not have had a material impact on our Condensed Consolidated Financial Statements.
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Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act as of the end of the period covered by this Quarterly Report on Form 10-Q. Disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Based on such evaluation, our management has concluded our disclosure controls and procedures were effective at a reasonable assurance level as of March 31, 2026.
Changes in Internal Control Over Financial Reporting
In connection with the acquisition of TransactPay, the Company continues to review its internal controls and is implementing changes as deemed necessary. While we are in the process of implementing controls related to the ongoing integration of TransactPay, there have been no changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the first quarter of fiscal 2026 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
Limitations on Effectiveness of Controls and Procedures
The effectiveness of any internal control over financial reporting is subject to inherent limitations, including the exercise of judgment in designing, implementing, operating, and evaluating the controls and procedures, and the inability to eliminate misconduct completely. Accordingly, any system of internal control over financial reporting, no matter how well designed and operated, can only provide reasonable, not absolute assurance that its objectives will be met. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. We intend to continue to monitor and upgrade our internal controls as necessary or appropriate for our business, but cannot assure you that such improvements will be sufficient to provide us with effective internal control over financial reporting.
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PART II - Other Information
Item 1. Legal Proceedings
From time to time, we may be subject to legal proceedings and claims arising in the ordinary course of business. We are currently involved in the following matter:
On December 9, 2024, a putative securities class action lawsuit, captioned Wai v. Marqeta, Inc., et al., Case No. 24-cv-08874 (N.D. Cal.), was filed in federal court in the Northern District of California (“Court”) against the Company and certain of its current and former officers (“Defendants”) alleging violations of federal securities laws. The lawsuit asserts that during the putative class period of between August 7, 2024 and November 4, 2024, Defendants made false or misleading statements relating to the Company’s performance or revenue and gross profit expectations in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.
On December 10, 2024, a second putative securities class action lawsuit, captioned Ford v. Marqeta, Inc., et al., Case No. 24-cv-08892 (N.D. Cal.), was filed in the same Court against the same Defendants alleging violations of the same federal securities laws. The second lawsuit asserts similar theories of liability as the first lawsuit but alleges a broader putative class period of between May 7, 2024 and November 4, 2024 and some additional and/or different allegations on which the claims are based. Both lawsuits (collectively, the “Securities Actions”) seek to recover damages on behalf of shareholders who acquired shares of the Company’s common stock during their respective putative class periods. The Securities Actions have been consolidated into one consolidated securities litigation captioned In re Marqeta, Inc. Securities Litigation, Case No. 24-08874-YGR (N.D. Cal) and the Court has appointed a lead plaintiff and lead plaintiff’s counsel in the matter. On April 10, 2025, the lead plaintiff filed a consolidated amended complaint, which alleges a putative class period of between February 28, 2024 and November 4, 2024. We and the other Defendants filed a motion to dismiss the consolidated amended complaint on May 15, 2025.
On November 3, 2025, a settlement was reached, in principle, with the lead plaintiff’s counsel to resolve the Securities Actions for payments totaling $13.0 million, subject to further documentation and judicial approvals. The Company’s Directors and Officers insurance policy includes a $5.0 million self-insured retention that applies to covered losses related to the Securities Actions, including legal defense fees and settlement payments. If finalized, the settlement will be funded by insurance less the self-insured retention.
On February 4, 2025, a putative shareholder derivative lawsuit, captioned Smith v. Khalaf, et al., Case No. 25-cv-01174 (N.D. Cal.), was filed in the same Court against certain of the Company’s current and former officers and its Board of Directors (as then constituted), and named the Company as a nominal defendant. This lawsuit asserts claims for breach of fiduciary duties and violations of federal securities laws, among other claims, between the time period of May 7, 2024 and November 4, 2024 under similar theories as the Securities Actions. Two other substantially similar putative shareholder derivative lawsuits, captioned Ojserkis v. Khalaf, et al., Case No. 25-cv-01883 (N.D. Cal.) and Preciado v. Khalaf, et al., Case No. 3:25-cv-02100 (N.D. Cal.) were filed on February 21, 2025 and February 27, 2025, respectively. All three putative shareholder derivative suits have been consolidated into one lawsuit captioned In re Marqeta, Inc. Derivative Litigation, Case No. 4:25-cv-01174-YGR (N.D. Cal). The consolidated derivative action is currently stayed pending developments in the consolidated Securities Actions.
Given the inherent uncertainty of litigation, the Company cannot reasonably estimate the likelihood of an unfavorable outcome or the amount or range of any potential loss.
Item 1A. Risk Factors
In addition to the other information set forth in this Quarterly Report on Form 10-Q, our business, financial condition, results of operations, cash flows, future prospects, and the trading price of our Class A common stock can be affected by a number of factors, whether currently known or unknown, including but not limited to those described in Part I, Item 1A of our 2025 Annual Report under the heading "Risk Factors," which are incorporated herein by reference, any one or more of which could, directly or indirectly, materially and adversely affect our business, financial condition, results of operations, cash flows, future prospects, and the trading price of our Class A common stock, or cause them to vary materially from past or anticipated future results. Except as set forth below, there have been no material
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changes to our risk factors since the 2025 Annual Report. The following risk factor is being added to supplement the risk factors previously disclosed in the 2025 Annual Report:
The proposed reverse stock split may fail to achieve any anticipated benefits.
We have scheduled our 2026 annual meeting of stockholders to be held on June 10, 2026, at which time our stockholders will vote on whether to approve an amendment to our amended and restated certificate of incorporation to effect a 1-for-4 reverse stock split of our capital stock (the “Reverse Stock Split”) and proportionately reduce the number of authorized shares of our capital stock. We cannot assure you that a Reverse Stock Split will have other anticipated benefits. The effect of a Reverse Stock Split, and the announcement or implementation of a Reverse Stock Split, cannot be predicted with any certainty and could negatively affect the trading price of our Class A Common Stock. It is also possible that the per share market price of our Class A Common Stock after a Reverse Stock Split will not increase in the same proportion as the reduction in the number of our outstanding shares of Class A Common Stock following the Reverse Stock Split, which would cause a reduction in the value of the Company as measured by our market capitalization. Although we believe a Reverse Stock Split may improve the marketability and trading costs of our Common Stock, we cannot provide you with any assurances to this effect. Even if we successfully implement a Reverse Stock Split, the market price of our Class A Common Stock may thereafter decrease due to factors unrelated to the Reverse Stock Split, including our results of operations, financial position, or prospects.
A Reverse Stock Split may decrease the liquidity of our Class A Common Stock and result in higher transaction costs for “odd lot” positions of less than 100 shares. The liquidity of our Class A Common Stock may be negatively impacted by a Reverse Stock Split, given the reduced number of shares that would be outstanding after the Reverse Stock Split, particularly if the stock price does not increase as a result of the Reverse Stock Split. In addition, if a Reverse Stock Split is implemented, it would likely increase the number of our stockholders who own “odd lots” of fewer than 100 shares of our Class A Common Stock. Brokerage commission and other costs of transactions in odd lots are generally higher than the costs of transactions of 100 or more shares of our Class A Common Stock. Accordingly, a Reverse Stock Split may not achieve the desired results of increasing marketability and lowering trading costs of our Class A Common Stock described above.
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Recent Sales of Unregistered Securities
None.
Purchase of Equity Securities
The following table summarizes the repurchases of our Class A common stock during the three months ended March 31, 2026 (in thousands, except per share amounts):
| Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1) | ||||||||||||||||||||||
| January 1 - 31, 2026 | 2,319 | $ | 4.49 | 2,319 | $ | 81,144 | ||||||||||||||||||||
| February 1 - 28, 2026 | 4,329 | $ | 4.06 | 4,329 | $ | 63,584 | ||||||||||||||||||||
| March 1 - 31, 2026 | 2,760 | $ | 4.04 | 2,760 | $ | 52,433 | ||||||||||||||||||||
| Total | 9,408 | 9,408 | ||||||||||||||||||||||||
(1) On December 4, 2025, our Board of Directors authorized an additional share repurchase program of up to $100 million of the Company’s Class A common stock (the “December 2025 Share Repurchase Program”). Under the December 2025 Share Repurchase Program, we are authorized to repurchase shares through open market purchases, in privately negotiated transactions, or by other means, in accordance with applicable federal securities laws, including through trading plans under Rule 10b5-1 of the Exchange Act. The number of shares repurchased and the timing of purchases are based on general business and market conditions, and other factors, including legal requirements. The December 2025 Share Repurchase Program has no set expiration date.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
(c) During our last fiscal quarter, on March 12, 2026 , Todd Pollak , our Chief Revenue Officer , adopted a “Rule 10b5-1 trading arrangement” as defined in Regulation S-K Item 408 providing for the sale from time to time of an aggregate of up to 75,100 shares of our Class A Common Stock. The trading arrangement is intended to satisfy the affirmative defense in Rule 10b5-1(c). The duration of the trading arrangement is until March 18, 2027 , or earlier if all transactions under the trading arrangement are completed, but in no case earlier than one year, or later than two years, from March 18, 2026. This trading arrangement will not commence until the termination of his previous trading arrangement by its terms on June 30, 2026.
No other officers, as defined in Rule 16a-1(f), or directors adopted or terminated
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Item 6. Exhibits
The following exhibits are filed herewith or incorporated by reference herein:
| Incorporated by Reference | ||||||||||||||||||||||||||||||||
| Exhibit No. | Description | Form | File No. | Exhibit No. | Filing Date | |||||||||||||||||||||||||||
10.1† | 10-K | 001-40465 | 10.20 | 2/24/26 | ||||||||||||||||||||||||||||
10.2† | 10-K | 001-40465 | 10.32 | 2/24/26 | ||||||||||||||||||||||||||||
10.3† | 10-K | 001-40465 | 10.33 | 2/24/26 | ||||||||||||||||||||||||||||
| 31.1* | ||||||||||||||||||||||||||||||||
| 31.2* | ||||||||||||||||||||||||||||||||
| 32.1** | ||||||||||||||||||||||||||||||||
| 32.2** | ||||||||||||||||||||||||||||||||
| 101.INS* | Inline XBRL Instance Document. | |||||||||||||||||||||||||||||||
| 101.SCH* | Inline XBRL Taxonomy Extension Schema Document. | |||||||||||||||||||||||||||||||
| 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |||||||||||||||||||||||||||||||
| 101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |||||||||||||||||||||||||||||||
| 101.LAB* | Inline XBRL Taxonomy Extension Labels Linkbase Document. | |||||||||||||||||||||||||||||||
| 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |||||||||||||||||||||||||||||||
| 104* | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101). | |||||||||||||||||||||||||||||||
† | Certain confidential information contained in this exhibit has been omitted because it is both (i) not material and (ii) is the type that the Registrant treats as private or confidential. | |||||||||||||||||||||||||||||||
# | Indicates management contract or compensatory plan, contract or agreement. | |||||||||||||||||||||||||||||||
| * | Filed herewith. | |||||||||||||||||||||||||||||||
| ** | Furnished herewith. The certifications attached as Exhibits 32.1 and 32.2 that accompany this Quarterly Report on Form 10-Q are deemed furnished and not filed with the SEC and are not to be incorporated by reference into any filing of the Company under the Securities Act or the Exchange Act, whether made before or after the date of this Quarterly Report on Form 10-Q, irrespective of any general incorporation language contained in such filing. | |||||||||||||||||||||||||||||||
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| MARQETA, INC. | |||||||||||
Date: May 5, 2026 | By: | /s/ Patti Kangwankij | |||||||||
| Name: | Patti Kangwankij | ||||||||||
| Title: | Chief Financial Officer (Principal Financial Officer) | ||||||||||
Date: May 5, 2026 | By: | /s/ Sarah Barkema | |||||||||
| Name: | Sarah Barkema | ||||||||||
| Title: | Chief Accounting Officer (Principal Accounting Officer) | ||||||||||
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