Marqeta Earnings: Strong Volume Growth as Marqeta Signs New Contracts

No-moat-rated Marqeta reported second-quarter results that were largely in line with our expectations. While net revenue decreased 46% from last year to $125.3 million, the intensity of the decline was exaggerated by Marqeta’s new revenue recognition methodology for its relationship with Block. Gross profit, which controls for this change decreased 6% from last year to $79.4 million. The decline was entirely due to weaker pricing from the agreements with Block, as underlying processing volume growth has been strong in the first half of 2024. On the other hand, earnings per share increased to $0.23 from a loss of $0.07, though the company’s profitability during the quarter can be entirely attributed to a $158 million one-time reversal of share-based compensation.