A long-running theme this earnings season has been that — through the final quarter of the year and beyond — consumers have continued to spend using cards while buy now, pay later (BNPL) has seen hockey stick-like growth as a payment option.
The banks and payments networks have said as much, and the latest earnings report for the year ended December 31, 2021, from card issuing platform Marqeta shows a convergence of those trends translating into double digit processing volumes.
And, per management commentary, BNPL represented “well in excess of 10%” of that volume.
Much of the overall net revenue growth fueled by client firms grew significantly due to shifts in consumer behavior and new eCommerce experiences, particularly with on-demand delivery.
During the conference call with analysts, CEO Jason Gardner said that 76% growth in total processing volume (TPV) — $33 billion — represented an acceleration from the company’s 60% growth rate in the third quarter. Marqeta expects TPV to grow by more than 40% through the rest of the year.
Gardner noted that the company passed the $100 billion milestone in that processing metric for the first time as measured on an annual basis. That milestone, he said, “demonstrates our ability to provide modern infrastructure that enables fast-growing companies to deliver innovative high volume card programs globally.”
Along with the acceleration in processing volume growth rates, the company’s latest reading of 76% revenue growth also was accelerated from the 56% seen in the third quarter.
Looking through the period that stretched from 2019 to 2021, Gardner said TPV grew by 400%.
He referenced a Wednesday (March 9) announcement that Marqeta will be used by Citi Commercial Cards for its tokenization-as-a-service capabilities, a pact that will allow Citi to provision corporate plastic cards and virtual cards into mobile wallets. Such partnerships, Gardner said, will serve as an “efficient way to broaden our products.”
Chief Financial Officer Mike Milotich said the quarter was marked by strong holiday spending and noted that newer customers — those who joined the platform in 2019 and thereafter — grew three times more quickly than those who joined the platform prior to 2019.
The diverse customer base also lessened the firm’s concentration of revenues derived from Block (formerly Square) to 63% from 68% in the third quarter of 2021.
Elsewhere, management pointed to the recently announced pact with Plaid as a continued move beyond card issuing into enabling global money movement, enabled by easier bank account authentication.
The overall revenue retention rate across the company’s entire base stood at 175%. Net revenues were up 76% from a year ago to $155 million (beating the Street at $139 million).
Investors were cheered by the results, sending the stock up 15% after hours to $12.37.
Read more: Marqeta, Plaid Team on ACH Transfers for Marqeta Customer Accounts
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More