Marqeta’s Processing Volumes Surge 27% on Card Issuance, BNPL and Flex Credential Growth

Marqeta’s first quarter results surged across several metrics as new and existing card issuance programs grew on a global stage across debit and credit channels, and the company’s platform gains a tailwind as it enables new BNPL and embedded finance offerings.

Total processing volume (TPV) of $84 billion was up by 27%.

Forward looking guidance looks for net revenue growth in the range of 13% to 15%.

Shares were up 3% in after-hours trading on Wednesday.

Mike Milotich, interim CEO and CFO, said that net revenue growth of 18% to $139 million was driven by “the wide variety of use cases we enable for our customers.”

Card issuance, he said, has evolved beyond de novo programs predominantly tied to FinTechs “towards innovative and disruptive initiatives that leverage cards in new ways.” The firm’s platform model, he said, has been making it easier for card programs to migrate to reduce client firms’ operational burdens and to set up new credit and debit programs.

Europe remains a market showing growth, as TPV jumped by more than 100% in the quarter, said Milotich, who said that “adding program management is a key lever for enhancing our offering to provide a more holistic solution for customers operating in Europe.”

The acquisition of TransactPay is on track to close by the end of the third quarter, he said, “And we expect it to be a significant step in delivering our program management offering that is comparable to other geographies like the U.S. and Canada. The transaction is driving significant customer interest, as it means more control of the entire card offering and seamless geographic expansion.” He noted there have been strides made in issuing cards that allow users to spend crypto.

Elsewhere, the CEO said, there will be a white label app available later this year, incorporating some of the elements of the recently announced UX Toolkit which will give customers “a fully branded out-of-the-box solution. … The intended benefit for our customers will be the ability to establish a market presence quickly with our Marqeta managed app experience, then transition to a fully embedded solution over time without redoing compliance work or reengineering core user flows.”

Growth in Lending and BNPL

Beyond Block (the company’s largest customer at 45% of Marqeta revenues), Milotich said that non-Block TPV grew at 2x faster than Block TPV, “fueled by a wide range of customers across several use cases. Consistent with the last several quarters, financial services, lending including buy now, pay later, and expense management drove the bulk of our TPV growth.”

Lending and expense management TPV continued to grow over 30% “and both accelerated a bit from last quarter,” given a boost by the combination of Klarna’s migration to the Marqeta platform in Europe, and “our BNPL customers benefiting from the increased adoption of Pay Anywhere card solution and distribution through wallets, both are supported in part by newly available flexible network credentials and strong user growth among SMB lending solutions.”

He also said that despite a challenging macro environment, there has not been a spending shift across the platform, telling analysts, “Breaking down the spend by low, medium and high discretionary TPV based on merchant category reveals no meaningful shift in the mix of spending in Q1 versus the past several quarters.”