Marqeta, Inc. Class A Common Stock 2026 Q2 Earnings Call

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Good afternoon, everyone, and welcome to Marqeta's Second Quarter 2026 Earnings Call. Hosting today's call are Mike Milotich, Marqeta's CEO, and Patti Kangwankij, Marqeta's CFO. Before we begin, I would like to remind everyone that today's call may contain forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties, including those set forth in our filings with the SEC, which are available on our investor relations website, including our annual report on Form 10-K and our subsequent periodic filings with the SEC. Actual results may differ materially from any forward-looking statements we make today. These forward-looking statements speak only as of the time of this call, and the company does not assume any obligation or intent to update them except as required by law. In addition, today's call includes non-GAAP financial measures.

These measures should be considered as a supplement to and not a substitute for GAAP financial measures. Reconciliations to the most directly comparable GAAP measures can be found in today's earnings press release or earnings release supplemental materials, which are available on our investor relations website. I'd like to turn the call over to Mike.

Thank you, Sarah, and thank you for joining us for Marqeta's Second Quarter 2026 earnings call. I'll begin with a brief summary of our Q2 results, then provide an update on how our customers are leveraging the increasing breadth of our platform capabilities across multiple geographies and a diverse set of use cases, which we believe continues to differentiate us from other issuer processors. I will then turn the call over to Patty, who will cover the details of our Q2 financial results and our expectations for the remainder of 2026. The Second Quarter results reflect our strong underlying business performance. TPV was $120 billion and grew 32%, which was the fourth consecutive quarter above 30% growth. This fueled gross profit growth of 17%.

The increasing scale of our business drove 31% adjusted EBITDA growth, achieving a 21% EBITDA margin and delivered $8 million of GAAP net income, our second consecutive quarter of GAAP profitability. These results are a testament to our durable growth, operating leverage, and execution. Marqeta has been at the forefront of modern issuer processing for over a decade, enabling growth and innovation for customers looking for the flexibility and control to deliver unique offerings to their end users. What we believe makes us unique is the breadth and configurability of our platform, spanning debit and credit, consumer and commercial, certified in over 40 countries, combined with the expertise and experience to execute innovative solutions. Our momentum this quarter highlights three ways this differentiation is translating into growth. First, the demand for multinational card issuing continues to increase as our customers extend their programs across borders on our single stack platform.

Second, we are broadening and enhancing our product suite to support the breadth of our customers' needs. This includes offering end-to-end stablecoin-backed card solutions to meet the accelerating demand for digital asset-backed payments, several money movement options beyond card to minimize the need for our customers to have multiple partners, and strengthening our fraud solution with third-party data sources to deliver increased program profitability and customer satisfaction. Third, the continued expansion of our customer base to include more business with large enterprises, in addition to the fintechs we have served all along. Our traction with large enterprises has real momentum, with the latest evidence being the size of the average deal signed in Q2 was up over 90% year-over-year. These signings continue to increase the number of embedded finance programs launching in the market with Marqeta. Let me start with the growing demand for multinational card issuing.

Our customers continue to expand their businesses across borders without the friction of multiple platform integrations. In this quarter, we added new capabilities and partners to enhance how we support them. Where this is particularly evident is in Europe, which builds upon our expanding offering in the region following our acquisition of TransactPay last year. Earlier in Q2, we announced our partnership with Banking Circle, which expands our bank partnership account and money movement offering into 30 additional European countries to enable businesses to enrich their card programs with embedded banking services and multi-rail payment capabilities. This new bank partnership, in combination with our TransactPay EMI license, allows our customers to gain access to a single foundation for integrating card issuing, multi-currency account functionality, and European payment rails for domestic and cross-border money movement.

In Q2, we also had another existing customer expand from the U.S. into Europe by leveraging TransactPay. Building on our long-standing relationship, Expensify is utilizing our expanded capabilities to bring its expense management card offering to the U.K. and E.U. Expensify's European customers can now access the same spend management capabilities that have driven the rapid growth of its card offering in the U.S. Once again, our platform enabled a customer to scale into new markets through a single integration. Let me shift to the broadening and enhancing of our product suite in three distinct ways: new settlement models with stablecoins, money movement beyond the card, and enhanced fraud detection with additional data elements. I will start with stablecoin-backed cards. Our strategy here is straightforward, to make digital dollars spendable through the same trusted card rails our customers and users already utilize on a daily basis.

We are introducing our stablecoin offering across a couple of fronts. The first is new strategic partnerships with both Zero Hash and BVNK, leading infrastructure platforms for crypto, stablecoins, and tokenized assets. Zero Hash and BVNK will provide the regulated global infrastructure, including custody, compliance, liquidity, and on-chain money movement. Marqeta will provide the card issuance while also managing the bank and network relationships. Together, we will enable stablecoin-backed card solutions that link directly to existing card rails, making it possible to use stablecoins for purchases anywhere a card is accepted without additional integrations or regulatory burdens. In addition, these partnerships further support Marqeta's leadership at the intersection of crypto and fiat payments, strengthening our ability to deliver flexible solutions to both crypto native and non-crypto companies. In addition, we are also a participant in OpenUSD, a new open stablecoin standard designed as shared infrastructure for businesses moving money over the internet.

Participating alongside others across the payments, banking, and technology ecosystem positions us to give our customers access to additional stablecoin options as this market scales. In addition to stablecoins, we are further extending the payment rails you can access through the Marqeta platform with multiple well-established money movement options in the U.S., U.K., and EU. Our commercial customers in particular, increasingly want to utilize multiple payment rails through one platform. Today, most B2B payments happen without a card, and businesses have to stitch together multiple providers and banks for capabilities like ACH, real-time payments, push to card, and wires. This is a natural extension of our platform strategy, providing a unified offering that brings card and non-card money movement together through a single Marqeta integration, so our commercial customers can execute more of their payments with us.

Beyond new rails, we are also enhancing our fraud offering we call Real-Time Decisioning, which delivered over 80% gross profit growth in the first half of this year. By partnering with leading acquirers and fraud prevention providers, including Adyen, Riskified and Signifyd, we are incorporating rich merchant transaction data into our proprietary risk score and fraud detection capabilities. This additional data, including device, location, order, and account information, helps customers reduce fraudulent transactions and increase authorization rates. This ultimately enhances the profitability of the customer's card program through better fraud detection and a reduction of false positives. Finally, a strong proof point of our differentiation momentum is the caliber of embedded finance businesses we're winning, both expanding inside our marquee relationships and winning sophisticated new customers.

One recent example of our land and expand success is with a Fortune 500 customer that we signed initially in Q3 last year. This customer serves millions of users by enabling electronic supplier payments for small and medium-sized businesses. In Q2, we signed a second program with them to power a stored value account with a linked debit card for individuals in payroll programs with SMBs. What is unique about this program is that the account is owned by the individual, not tied to a specific employer, so it stays with them across jobs and can be funded via ACH, real-time payments, and mobile check deposit. We're also winning sophisticated new customers. This quarter, we signed a deal to flip an existing program for a leading payments and expense management platform serving film and television production companies.

This customer will be migrating their current volume to Marqeta for the increased flexibility to run a tailored program, as well as our track record for delivering innovative solutions. Before I wrap up, let me say a few things about our business with Block, where our relationship remains strong and continues to grow. Late in the quarter, we began to see a modest decline in Cash App new issuance, which was in line with our expectations and therefore factored into our guidance. I want to reiterate that diversification of providers is a standard risk management practice in the industry and understandable for Block, given we help power Cash App, Square, and Afterpay. The majority of our largest customers have diversified in recent years, yet our growth has remained strong and steady.