Marqeta expects Q4 2026 gross profit growth of 5% to 7% while outlining 3% to 5% net revenue growth

• "Our third quarter results reflect strong fundamental trends. TPV was $126 billion and grew 29%, marking the first quarter where annualized TPV exceeded $500 billion." (CEO Mike Milotich)
• "The latest example is our recent announcement that Marqeta now enables the Square Credit Card on the American Express Network." (CEO Milotich)
• "We are now providing a new offering in Google Wallet for kids, an expansion of our long-standing relationship with Google." (CEO Milotich)
• "This quarter, we enabled Satispay...to launch its consumer debit card program" and Milotich noted Satispay has "over 6.5 million users and 450,000 affiliated stores across Italy." (CEO Milotich)
• "Following our strategic partnerships with BVNK and zerohash, we recently announced a similar collaboration with Coinbase, linking stablecoins directly to existing card rails" and Milotich added, "Coinbase's infrastructure and global reach strengthen network and reinforce our position at the intersection of crypto and fiat payments." (CEO Milotich)
• "Net revenue grew 8% and gross profit grew 7% on a year-over-year basis, both at the high end of our expectations driven by TPV growth of 29%." (CFO Patti Kangwankij)
• "GAAP net income of $115 million included $107 million noncash tax benefit related to the release of a significant portion of the valuation allowance on our deferred tax assets." (CFO Kangwankij)

Outlook

• "For the fourth quarter of 2026, we expect gross profit to grow between 5% and 7%, consistent with the third quarter." (CFO Kangwankij)
• "We now expect net revenue to grow between 3% and 5%, lower than we shared last quarter." (CFO Kangwankij)
• "In this case, one customer is choosing to contract directly with another issuing bank...Therefore, for this customer, net revenue and cost of revenue both come down by the same amount with no impact on gross profit." (CFO Kangwankij)
• "Adjusted EBITDA growth is expected to be in the mid-20s" and "We expect Q4 GAAP net income in the mid- to high single-digit millions." (CFO Kangwankij)
• "For the full year, we are maintaining our gross profit growth expectations of 11% to 12%" and "We are reducing our full year net revenue growth expectations by 1 point to a range of 11% to 12%." (CFO Kangwankij)

Financial Results

• "Q3 net revenue was $176 million" and "Q3 gross profit was $122 million." (CFO Kangwankij)
• "Q3 adjusted EBITDA was $39 million" and "This represented a margin of 22% based on net revenue and 32% based on gross profit." (CFO Kangwankij)
• "GAAP diluted EPS was $1.09 in Q3, including a benefit of $1.01 per share from the release of our tax valuation allowance." (CFO Kangwankij)
• "Block net revenue concentration was 41% in Q3, down from 44% a year ago and consistent with Q2" and "Non-Block TPV continued to grow more than twice as fast as Block TPV." (CFO Kangwankij)
• "In Q3, we repurchased 700,000 shares at an average price of $16.25" and "As of September 30, we had $140 million remaining under the $150 million share repurchase authorization." (CFO Kangwankij)

Q&A

• Sanjay Sakhrani, KBW: asked about the Square American Express credit win and whether interest is picking up; CEO Milotich said, "we're seeing more and more demand for...the optionality that our platform provides" and "a lot of customers -- existing customers and prospects are coming to us for" fewer integrations.
• Sanjay Sakhrani, KBW: asked about confidence in the underlying growth trajectory into 2027; CFO Kangwankij said, "we're not going to be giving expectations for 2027 today" and added, "Cash App's diversification of new business is still phasing in...and that will be a bigger drag next year."
• Connor Allen, JPMorgan: asked whether migrations are changing win rates; CEO Milotich said, "More than 90% of the card volume still runs on legacy platforms" and called the Square move "the fourth migration we've done in the last 24 months...And we have more signed that are underway."
• Connor Allen, JPMorgan: asked about the Q4 net revenue revision; CFO Kangwankij said, "We still have the same volume" but "the related bank and network fees no longer run through our P&L," while CEO Milotich added, "It's just creating some noise in our revenue."
• Holt Bashinsky, UBS: asked about Cash App program economics; CEO Milotich said "the overwhelming majority, high 90% of that business still remains on our platform" and "our share of new issuance has been going down for the last couple of months."
• Michael Infante, Morgan Stanley: asked about single-use virtual cards and agentic payments; CEO Milotich said, "the challenge is that it's being disconnected from the ultimate cardholder" and added, "we expect that issuers will play a critical role" given fraud and trust.
• Michael Infante, Morgan Stanley: asked about OpEx framework; CFO Kangwankij said expenses were "very consistent through the year at $83 million to $84 million" and CEO Milotich added, "we will be growing our expenses next year...We'll talk about more...in February."

Sentiment Analysis

• Analysts were slightly negative to skeptical on revenue presentation and concentration-related items, pressing for mechanics and durability; JPMorgan asked for "a little bit more on this revenue revision dynamic" (Connor Allen, JPMorgan), and UBS probed Cash App economics (Holt Bashinsky, UBS).
• Management tone was slightly positive in prepared remarks and more explanatory in Q&A, repeatedly emphasizing gross profit and platform flexibility; CFO Kangwankij said, "This is another example of why we emphasize gross profit as the best measure of our performance," and CEO Milotich added, "It's just sort of unfortunate that then it can be disruptive to the revenue line."
• Versus Q2, the emphasis shifted from Q2’s higher growth figures and discrete headwinds to Q3’s "noise" in net revenue optics and continued discussion of Cash App issuance phase-down; management maintained confidence language such as "we continue to be very confident about the underlying business" (CFO Kangwankij).

Quarter-over-quarter Comparison

• Q3 highlighted a major commercial expansion with Block via "the Square Credit Card on the American Express Network" (CEO Milotich), a new item not discussed in Q2 prepared remarks.
• Q3 guidance language introduced a net revenue growth reduction for Q4 tied to a customer contracting change, while explicitly stating "no impact on gross profit" (CFO Kangwankij); Q2 guidance focused on second-half deceleration drivers like renewals, TransactPay lapping, lending comparisons, and Cash App issuance diversification.
• Q2 framed enterprise momentum through deal size ("up over 90% year-over-year" in Q2) and Europe expansion via Banking Circle and Expensify; Q3 continued Europe expansion with Satispay and added broader product bundling themes (straight-through processing, open banking partners).
• Q3 Q&A was more concentrated on revenue optics, migrations, and agentic payments, while Q2 Q&A centered on Cash App issuance mechanics, renewal cadence, and product growth vectors (credit, Europe, value-added services).

Risks and Concerns

• "We continue to expect little to no new issuance by the end of December" for Cash App, and management framed it as "a new issuance dynamic only" with "the large existing card base" remaining. (CEO Milotich)
• "We now expect net revenue to grow between 3% and 5%" for Q4 due to a bank-fee pass-through change, with management reiterating "no impact on gross profit." (CFO Kangwankij)
• On agentic commerce and fraud, CEO Milotich said, "with the rule still unsettled...we think it's good to be deliberate and then pick the right path," pointing to fraud-risk ownership as a gating factor.

Final Takeaway

Management characterized Q3 as a quarter of scale-driven profitability and expanding platform relevance, anchored by $126 billion TPV and a new Square credit program migration onto Marqeta’s platform that also marked its first live American Express program. For Q4, management kept gross profit growth expectations at 5% to 7% but lowered net revenue growth expectations to 3% to 5% due to a customer’s choice to contract directly with an issuing bank, emphasizing that this change reduces reported net revenue and cost of revenue equally with no gross profit impact. Management continued to position migrations, enterprise-ready product bundling, and new capabilities (including stablecoin partnerships and commercial payment automation) as central to the next phase of growth, while reiterating that Cash App new issuance is expected to taper to little to none by year-end.

Read the full Earnings Call Transcript

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