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What changed in Marqeta, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Marqeta, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+426 added−352 removedSource: 10-K (2025-02-26) vs 10-K (2024-02-28)

Top changes in Marqeta, Inc.'s 2024 10-K

426 paragraphs added · 352 removed · 294 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

72 edited+22 added−18 removed42 unchanged
Biggest changeIt is seamless, and, to put it simply, you don't have to go to the bank. The bank comes to you where you already spend. With embedded finance, enterprises across industries can offer multiple financial services to their customers to improve the user experience, enhance loyalty, and add another monetization engine to their existing business.
Biggest changeIt starts with a company whose core business is not financial services, and that company offers financial services products in a manner that is natively embedded into their existing customer experience. It is seamless, and, to put it simply, you don't have to go to the bank. The bank comes to you where you already spend.
Our platform enables customers to reward users in real time with multiple redemption options, creating opportunities to drive engagement and usage. Underwriting Support : Our underwriting decisioning engine allows Issuing Banks and customers to implement custom fraud and credit decisioning criteria to help manage program fraud and delinquency risk.
Our comprehensive platform enables customers to reward users in real time with multiple redemption options, creating opportunities to drive engagement and usage. Underwriting Support : Our underwriting decisioning engine allows Issuing Banks and customers to implement custom fraud and credit decisioning criteria to help manage program fraud and delinquency risk.
Our programs are also designed to prevent our platform from being used to facilitate activity in violation of applicable sanctions laws and regulations, including conducting business in specified countries or with designated persons or entities, including those on lists promulgated by the U.S. Department of the Treasury’s Office of Foreign Assets Controls and equivalent foreign authorities.
Our programs are also designed to prevent our platform from being used to facilitate activity in violation of applicable sanctions laws and regulations, including conducting business in specified countries or with designated persons or entities, including those on lists promulgated by the U.S. Department of the Treasury’s Office of Foreign Assets Control and equivalent foreign authorities.
For instance, due to our relationships with certain Issuing Banks and certain customers, we may be subject to indirect supervision and examination by the Federal Deposit Insurance Corporation (the “FDIC”), state banking regulators (such as the California Department of Financial Protection and Innovation), and the Office of the Comptroller of the Currency in connection with our platform and certain of our products and services.
For instance, due to our relationships with certain Issuing Banks and certain customers, we may be subject to indirect supervision and examination by the Federal Deposit Insurance Corporation (the “FDIC”), state banking regulators (such as the California Department of Financial Protection and Innovation), the Office of the Comptroller of the Currency, and the Federal Reserve Bank in connection with our platform and certain of our products and services.
The contents of our websites are not intended to be incorporated by reference into this Annual Report on Form 10-K or in any other report or document we file with the SEC, and any references to our websites are intended to be inactive textual references only. 16 Table of Contents
The contents of our websites are not intended to be incorporated by reference into this Annual Report on Form 10-K or in any other report or document we file with the SEC, and any references to our websites are intended to be inactive textual references only. 15 Table of Contents
Anti-Money Laundering Although we are not a “money services business” or otherwise subject to anti-money laundering (“AML”) registration requirements under U.S. federal or state law, we are subject to certain AML laws and regulations in various jurisdictions.
Anti-Money Laundering and Sanctions Compliance Although we are not a “money services business” or otherwise subject to anti-money laundering (“AML”) registration requirements under U.S. federal or state law, we are subject to certain AML laws and regulations in various jurisdictions.
Privacy, Data Protection, and Information Security Regulations We provide services that are subject to various laws and regulations relating to privacy, data protection, and information security, including, among others, the Gramm-Leach Bliley Act, the EU General Data Protection Regulation, and the California Consumer Protection Act.
Privacy, Data Protection, and Information Security Regulations We provide services that are subject to various laws and regulations relating to privacy, data protection, and information security, including, among others, the Gramm-Leach-Bliley Act, the EU General Data Protection Regulation, the United Kingdom General Data Protection Regulation, and the California Consumer Protection Act.
Given our ability to direct MxM processing volume to specific Card Networks, we are able to negotiate certain incentive rebates that effectively reduce the overall Card Network fees. With the scale of the transactions we process on behalf of our customers, we believe we can continue to negotiate favorable incentive rebates.
Given our ability to direct the processing volume to specific Card Networks for these customers, we are able to negotiate certain incentive rebates that effectively reduce the overall Card Network fees. With the scale of the transactions we process on behalf of our customers, we believe we can continue to negotiate favorable incentive rebates.
International Regulation The conduct of our business and the use of our products and services outside the United States are subject to various foreign laws and regulations administered by government entities and agencies in the countries and territories where we operate and where our customers and their cardholders use our products and services.
International Regulation 14 Table of Contents The conduct of our business and the use of our products and services outside the United States are subject to various foreign laws and regulations administered by government entities and agencies in the countries and territories where we operate and where our customers and their cardholders use our products and services.
Real-Time Decisioning : Customers can mitigate fraud using Marqeta’s Real-Time Decisioning solution, which provides fine-tuned control over card transactions. Customer Identification Program : Customers can verify the identity of cardholder applicants. 3D Secure : Customers can authenticate cardholders and authorize online transactions.
Real-Time Decisioning : Customers can mitigate fraud using Marqeta’s Real-Time Decisioning solution, which provides fine-tuned control over card transactions. 6 Table of Contents Customer Identification Program : Customers can verify the identity of cardholder applicants. 3D Secure : Customers can authenticate cardholders and authorize online transactions.
We are subject to various federal consumer protection regimes as a result of our credit platform and relationship with originating Issuing Banks, including, among others: • the Equal Credit Opportunity Act and Regulation B promulgated thereunder, which prohibit creditors from discriminating against credit applicants on the basis of race, color, sex, age, religion, national origin, marital status, the fact that all or part of the applicant’s income derives from any public assistance program, or the fact that the applicant has in good faith exercised any right under the Federal Consumer Credit Protection Act or any applicable state law; • the Fair Credit Reporting Act, as amended by the Fair and Accurate Credit Transactions Act, and Regulation V promulgated thereunder, which promote the accuracy, fairness, and privacy of information in the files of consumer reporting agencies; • the Truth-in-Lending Act and Regulation Z promulgated thereunder, which require certain disclosures to consumers regarding the terms and conditions of loans and credit transactions; • the Military Lending Act and similar state laws, which provide disclosure requirements, interest rate limitations, substantive conduct obligations, and prohibitions on certain behavior relating to loans made to covered borrowers, which include both servicemembers and their dependents; and • the Servicemembers Civil Relief Act and similar state laws, which allows active duty military members to suspend or postpone certain civil obligations so that the military member can devote his or her full attention to military duties.
Similarly, we may directly or indirectly be subject to various federal and state consumer credit protection regimes as a result of our credit platform and relationship with originating Issuing Banks, including, among others: • the Equal Credit Opportunity Act and Regulation B promulgated thereunder, which prohibit creditors from discriminating against credit applicants on the basis of race, color, sex, age, religion, national origin, marital status, the fact that all or part of the applicant’s income derives from any public assistance program, or the fact that the applicant has in good faith exercised any right under the Federal Consumer Credit Protection Act or any applicable state law; • the Fair Credit Reporting Act, as amended by the Fair and Accurate Credit Transactions Act, and Regulation V promulgated thereunder, which promote the accuracy, fairness, and privacy of information in the files of consumer reporting agencies; • the Truth-in-Lending Act, as amended by the Credit Card Accountability, Responsibility, and Disclosure Act of 2009, and Regulation Z promulgated thereunder, which require certain disclosures to consumers regarding the terms and conditions of loans, credit cards, and credit transactions; • the Military Lending Act and similar state laws, which provide disclosure requirements, interest rate limitations, substantive conduct obligations, and prohibitions on certain behavior relating to loans made to covered borrowers, which include both servicemembers and their dependents; and 13 Table of Contents • the Servicemembers Civil Relief Act and similar state laws, which allows active duty military members to suspend or postpone certain civil obligations so that the military member can devote his or her full attention to military duties.
These services enable customers to drive additional engagement and spend by making it easy for their users to fund accounts and manage money. 7 Table of Contents RiskControl With Marqeta’s RiskControl product, certain risk and compliance concerns are mitigated while reducing friction across the cardholder lifecycle.
These services enable customers to drive additional engagement and spend by making it easy for their users to fund accounts and manage money. RiskControl With Marqeta’s RiskControl product, certain risk and compliance concerns are mitigated while reducing friction across the cardholder lifecycle.
In the years ended December 31, 2023, 2022, and 2021, total processing volume (“TPV”) on the Marqeta Platform was $222.3 billion, $166.3 billion, and $111.1 billion, respectively, which reflected year-over-year growth of 34% and 50%, respectively. TPV is the total dollar amount of payments processed through the Marqeta platform, net of returns and chargebacks.
In the years ended December 31, 2024, 2023, and 2022, total processing volume (“TPV”) on the Marqeta Platform was $291.1 billion, $222.3 billion, and $166.3 billion, respectively, which reflected year-over-year growth of 31% and 34%, respectively. TPV is the total dollar amount of payments processed through the Marqeta platform, net of returns and chargebacks.
We believe that the principal competitive factors in our market include: • pricing; • multiple program types (debit, prepaid, credit); • multinational reach; • complete solutions at scale; • flexibility and configurability; • reliability; • compliance solutions; • program management; • brand recognition and reputation; and • industry expertise and customer service.
We believe that the principal competitive factors in our market include: • pricing; • multiple program types (debit, prepaid, credit); • multiple solutions (issuer-processing, banking & money movement); • multinational reach; • complete solutions at scale; • flexibility and configurability; • reliability; • compliance solutions; • program management; • brand recognition and reputation; and • industry expertise and customer service.
We completed our initial public offering (“IPO”) in June 2021 and our Class A common stock is listed on the Nasdaq Global Select Market (“Nasdaq”), under the symbol “MQ.” Our principal executive offices are located at 180 Grand Avenue, 6th Floor, Oakland, CA 94612, and our telephone number is (877) 962-7738.
We completed our initial public offering (“IPO”) in June 2021 and our Class A common stock is listed on the Nasdaq Global Select Market (“Nasdaq”), under the symbol “MQ.” Our principal executive offices are located at 180 Grand Avenue, 6th Floor, Oakland, CA 94612, and our telephone number is (510) 671-5437.
We are also subject to audit by certain Issuing Banks. Further, certain of our customers are financial institutions or non-bank regulated entities and, as a result, we may be indirectly subject to examination and obligated to assist those customers in complying with certain regulations to which they are subject or with responses to audits of such customers.
Further, certain of our customers are financial institutions or non-bank regulated entities and, as a result, we may be indirectly subject to examination and obligated to assist those customers in complying with certain regulations to which they are subject or with responses to audits of such customers.
Our contracts with Issuing Banks entitle Marqeta to all of the Interchange Fees generated from our customers’ card programs, which we then share with our MxM customers through Revenue Share payments, and obligate us to pay all Card Network fees associated with our MxM customers’ card transactions.
Our contracts with Issuing Banks entitle Marqeta to all of the Interchange Fees generated from our customers’ card programs, which we then share with our customers through Revenue Share payments, and obligate us to pay all Card Network fees as well as certain Issuing Bank fees associated with our customers’ card transactions.
With the Marqeta credit platform, our customers have the tools to design, launch, and scale , and can work directly with us rather than managing several different providers. Customers can customize the user experience and embed the card within their brands.
Credit Capabilities With Marqeta’s credit products, our customers have the tools to design, launch, and scale, and can work directly with us rather than managing several different providers. Customers can customize the user experience and embed the card within their brands.
The regulatory environment in which we operate is rapidly evolving, and the most significant government regulations that impact our business are discussed below.
The regulatory environment in which we operate is rapidly evolving, and some of the most significant government regulations in the U.S. that impact our business are discussed below.
Our customers can focus on their areas of expertise, with more control over their card programs, while we manage the complexity of running the card programs with our Issuing Bank and Card Network partners (each as defined below).
Our customers can focus on their areas of expertise, with more control over their card programs, while we manage the complexity of running the card programs with Issuing Banks and Card Networks (each as defined below).
Unlike under our MxM card programs, our PxM customers are responsible for other elements of the card program, including defining and managing the program with the Card Networks and Issuing Bank as well as managing compliance with applicable regulations, the Issuing Bank, and Card Network rules.
Generally, our PxM customers are responsible for other elements of the card program, including defining and managing the program with the Card Networks and Issuing Bank as well as managing compliance with applicable regulations, the Issuing Bank, and Card Network rules.
Marqeta makes it easy for our customers to completely integrate the card experience into any app or website. For our credit customers, they can select a fully bank-approved UI template that's purpose-built for managing a credit card. Marqeta’s Credit Platform We announced our credit platform in October 2023.
Marqeta makes it easy for our customers to completely integrate the card experience into any app or website. For our credit customers, they can select a fully bank-approved UI template that's purpose-built for managing a credit card.
Relationship and Agreements with Issuing Banks When our customers engage us for MxM services, we provide an Issuing Bank to act as the BIN sponsor for the customer’s card program and are responsible for managing compliance with the Issuing Bank’s requirements and Card Network rules.
Relationship and Agreements with Issuing Banks When our customers engage us to do so, we connect them with an Issuing Bank to act as the BIN sponsor for the customer’s card program and we are responsible for managing compliance with the Issuing Bank’s requirements and Card Network rules.
Depending on a customer’s desired level of control and responsibility, Marqeta can work with companies in a range of different configurations: 8 Table of Contents Managed By Marqeta : With Managed By Marqeta (“MxM”), Marqeta provides an Issuing Bank partner to act as the Bank Identification Number (“BIN”) sponsor for the customer’s card program, manages the customer’s card program on behalf of the Issuing Bank, and provides a full range of services including configuring many of the critical resources required by a customer’s production environment.
Depending on a customer’s desired level of control and responsibility, Marqeta can work with companies in a range of different configurations, but generally provide the following offerings: Managed By Marqeta : With Managed By Marqeta (“MxM”), Marqeta typically connects customers to an Issuing Bank to act as the Bank Identification Number (“BIN”) sponsor for the customer’s card program, manages the customer’s card program on behalf of the Issuing Bank, and provides a full range of services including configuring many of the critical resources required by a customer’s production environment.
Marqeta arranges for our MxM customers to use one or more of the available Card Networks, and we generally include the standard Card Network fees in the pricing arrangements with our MxM customers, which are reflected in our costs of revenue.
When engaged by our customers to do so, Marqeta arranges for our customers to use one or more of the available Card Networks. We generally include the standard Card Network fees in the pricing arrangements with these customers, which are reflected in our costs of revenue.
Tokenization & Digital Wallets : Customers can instantly issue branded payment cards that are ready to use immediately in app or in mobile wallets, which provides for continuity if the physical cards are lost or stolen.
Physical cards can be magstripe, EMV-chip, and/or tap-to-pay enabled. Tokenization & Digital Wallets : Customers can instantly issue branded payment cards that are ready to use immediately in app or in mobile wallets, which provides for continuity if the physical cards are lost or stolen.
Acquiring Banks may work with an Acquirer Processor to provide access to the Card Networks. • The “Card Networks” provide the infrastructure for settlement and card payment information that flows between an Issuer Processor and an Acquirer Processor. • “Issuer Processors” provides a technology platform, ledger, and infrastructure to support a card issuer and connects with a Card Network to facilitate payment transactions. • “Issuing Banks” are the financial institution that issue a payment card (debit, prepaid, or credit) either on its own behalf or on behalf of a business.
Acquiring Banks may work with an Acquirer Processor to provide access to the Card Networks. • “Card Networks” provide the infrastructure for settlement and card payment information that flows between an Issuer Processor and an Acquirer Processor. • “Issuer Processors” provide a technology platform, ledger, and infrastructure to support a card issuer and connects with a Card Network to facilitate payment transactions. • “Issuing Banks” are the financial institution that issue a payment card (debit, prepaid, or credit) either on its own behalf or on behalf of a business. 4 Table of Contents Our Platform and Products Marqeta provides a single, global, cloud-based, open API platform for modern card issuing and transaction processing.
Under this agreement we are entitled to receive 100% of the Interchange Fees for processing our customers’ card transactions. Our agreement with Sutton Bank requires us to indemnify Sutton Bank for certain losses, subject to specific enumerated exceptions.
The agreement provides that we pay Sutton Bank a fee based on a percentage of the value of transactions processed. Under this agreement we are entitled to receive 100% of the Interchange Fees for processing our customers’ card transactions. Our agreement with Sutton Bank requires us to indemnify Sutton Bank for certain losses, subject to specific enumerated exceptions.
The CFPB also regulates prepaid accounts, including certain accounts that are capable of being loaded with funds and whose primary function is to conduct transactions with multiple, unaffiliated merchants, at ATMs, or for person-to-person transfers.
Regulation E includes requirements specific to consumer prepaid accounts, including certain accounts that are capable of being loaded with funds and whose primary function is to conduct transactions with multiple, unaffiliated merchants, at ATMs, or for person-to-person transfers.
For example, a retail company could use Marqeta to create a debit program to offer wage solutions to its hourly workers, a consumer credit program to its most loyal shoppers, and a commercial credit program to key suppliers to meet its working capital needs.
For example, a retail company could use Marqeta to create a debit program to offer wage solutions to its hourly workers, a consumer credit program to its most loyal shoppers, and a commercial credit program to key suppliers to meet its working capital needs. These programs can all exist on Marqeta’s single, global, modern platform.
We maintain privacy policies and terms of service, which describe our practices concerning the use, transmission, and disclosure of certain information. Additionally, our platform hosts, transmits, processes, and stores payment card data and is therefore required to comply with the PCI DSS. As a result, we are subject to PCI DSS audits and must comply with related security requirements.
We maintain privacy policies and terms of service, which describe our practices concerning the use, transmission, and disclosure of certain information. 12 Table of Contents Additionally, our platform hosts, transmits, processes, and stores payment card data and is therefore required to comply with the PCI DSS.
Upon approval, Marqeta automatically moves funds from an identified funding source into the appropriate account. Digital Banking Marqeta for Banking provides our customers with a suite of bank account and money movement features offered through our Issuing Bank partners, including demand deposit accounts, direct deposit with early pay, ACH, cash loads, and fee-free ATMs, bill pay, and instant funding capabilities.
Digital Banking Marqeta for Banking provides our customers with access to a suite of bank account and money movement features offered through our Issuing Bank partners, including demand deposit accounts, direct deposit with early pay, ACH, cash loads, and fee-free ATMs, bill pay, and instant funding capabilities.
Software development is primarily executed by our team of professionals across design, product management, and engineering disciplines. We intend to continue to invest in our research and development capabilities to extend our platform offerings. Government Regulation We are subject, directly, or indirectly through our relationships with our Issuing Banks, customers, or Card Networks, to a number of laws and regulations.
We intend to continue to invest in our research and development capabilities to extend our platform offerings. Government Regulation We are subject, directly, or indirectly through our relationships with our Issuing Banks, customers, or Card Networks, to a number of laws and regulations.
For instance, we are subject to processing fee and transaction fee regulation where our cards are used and may in the future be subject to Interchange Fee regulations in other countries where our cards are used.
For instance, we are subject to processing fee and transaction fee regulation where our cards are used and may in the future be subject to Interchange Fee regulations in other countries where our cards are used. Privacy and Data Protection Privacy and data protection is a shared responsibility amongst all our employees.
Agreements with Large Customers Block On April 19, 2016, we entered into a master services agreement with Block, Inc., formerly known as Square, Inc., subsequently amended (the “Block Agreement”), which includes agreements that provide for the commercial terms of our relationship with Block.
Customers can also combine solutions across different use cases. 8 Table of Contents Agreements with Large Customers Block On April 19, 2016, we entered into a master services agreement with Block, Inc., formerly known as Square, Inc., as subsequently amended (the “Block Agreement”), which includes the commercial terms of our relationship with Block.
We generally partner with Issuing Banks who are exempt from the Interchange Fee caps in the Durbin Amendment to provide MxM services for prepaid and debit card programs. We continue to monitor proposed changes to the Durbin Amendment.
We generally work with Issuing Banks that are exempt from the Interchange Fee caps in the Durbin Amendment to provide services for prepaid and debit card programs. We continue to monitor proposed changes to the Durbin Amendment as well as state level regulation of Interchange Fees.
Issuing Banks provide services for our MxM solutions that can include card issuance, Card Network sponsorship, establishing a line of credit and underwriting standards, and creating deposit accounts used to settle our customers’ transactions.
Issuing Banks provide services for these customers that can include, among other things, card issuance, Card Network sponsorship, establishing a line of credit, and creating deposit accounts used to settle transactions.
We also have an ongoing trademark and service mark registration program pursuant to which we register our brand names and product names, taglines, and logos in the United States and internationally to the extent we determine appropriate and cost-effective.
We also have an ongoing trademark and service mark registration program pursuant to which we register our brand names and product names, taglines, and logos in the United States and internationally to the extent we determine appropriate and cost-effective. We have also registered domain names for websites that we use in our business, such as www.marqeta.com and other similar variations.
Association and Card Network Rules Our Issuing Banks must comply with the bylaws, regulations, and requirements that are set forth by the Card Networks, including the PCI DSS and other applicable data security program requirements. In providing services through our platform, we are certified and registered with certain Card Networks as a processor for member institutions.
As a result, we are subject to PCI DSS audits and must comply with related security requirements. Association and Card Network Rules Our Issuing Banks must comply with the bylaws, regulations, and requirements that are set forth by the Card Networks, including the PCI DSS and other applicable data security program requirements.
Powered By Marqeta : With Powered By Marqeta (“PxM”), Marqeta also provides customers access to the Marqeta dashboard via our APIs, provides payment processing, and assists with certain configuration elements that enable the customer to use the platform independently.
Also available are a variety of managed services, including dispute management, fraud scoring, card fulfillment, reconciliation, and cardholder support services. Powered By Marqeta : With Powered By Marqeta (“PxM”), Marqeta also provides customers access to the Marqeta dashboard via our APIs, provides payment processing, and assists with certain configuration elements that enable the customer to use the platform independently.
When our customers engage us for PxM services, we do not manage the customer’s relationships with the Issuing Banks and Card Networks and the customer is responsible for managing compliance with the Issuing Bank’s requirements and Card Network rules. Certain customers engage us for PxM+ services, where they can combine different aspects of our MxM and PxM services.
These fees are reflected in our costs of revenue. When our customers engage us for PxM services, we do not manage the customer’s relationships with the Issuing Banks or Card Networks and the customer is responsible for managing compliance with, among other things, the Issuing Bank’s requirements and Card Network rules.
The Card Networks routinely update and modify their requirements and we, in turn, must work to comply with such updates to continue processing transactions on their networks. 13 Table of Contents Further, we are subject to network operating rules promulgated by the National Automated Clearing House Association relating to payment transactions processed on our platform using the Automated Clearing House Network and to various federal and state laws regarding such operations.
Further, we are subject to network operating rules promulgated by the National Automated Clearing House Association relating to payment transactions processed on our platform using the Automated Clearing House Network and to various federal and state laws regarding such operations.
See the section titled “Risk Factors—Risks Relating to Our Business and Industry—We participate in markets that are competitive and continuously evolving, and if we do not compete successfully with established companies and new market entrants, our business, results of operations, financial condition, and future prospects could be materially and adversely affected” for additional information regarding the competitive environment in which we operate.
See the section titled “Risk Factors—Risks Relating to Our Business and Industry—We participate in markets that are competitive and continuously evolving, and if we do not compete successfully with established companies and new market entrants, our business, results of operations, financial condition, and future prospects could be materially and adversely affected” for additional information regarding the competitive environment in which we operate. 11 Table of Contents Intellectual Property We seek to protect our intellectual property by relying on a combination of patents, trademarks, copyrights, trade secrets, license agreements, confidentiality procedures, non-disclosure agreements, and employee confidential information and invention assignment agreements, as well as other legal and contractual rights.
Pursuant to the terms of the 2023 Block Amendments, the term of the Cash App and the Square Debit Card programs will expire on June 30, 2028 and automatically renew thereafter for successive one-year periods, unless terminated earlier by either party. 9 Table of Contents The August 2023 Block Amendment provides that we will continue to provide various services to Block, though Block will be responsible for defining and managing the Cash App program with respect to the primary Card Network going forward, including being responsible for managing the financial relationship between the Cash App program and the primary Card Network, choosing the card brand, determining the product type, and meeting program parameters.
The August 2023 Block Amendment provides that we will continue to provide various services to Block, though Block will be responsible for defining and managing the Cash App program with respect to the primary Card Network going forward, including being responsible for managing the financial relationship between the Cash App program and the primary Card Network, choosing the card brand, determining the product type, and meeting program parameters.
The current term of the strategic relationship agreement expires in 2028 or at an earlier date if Marqeta achieves a certain processing volume milestone through the Mastercard network. Either party may terminate the agreements under specified circumstances, including upon a material breach that remains uncured for a specified period of time.
The current term of the strategic relationship agreement expires in 2028 or at an earlier date if Marqeta achieves a certain processing volume milestone through the Mastercard network.
We have a separate agreement with Afterpay that provides for the commercial terms of our relationship; however, we now aggregate Afterpay as part of our Block business.
We have a separate agreement with Afterpay that provides for the commercial terms of our relationship; however, we now aggregate Afterpay as part of our Block business for purposes of financial reporting in this Annual Report on Form 10-K and other filings we make with the SEC.
As such, we are subject to applicable Card Network rules that could subject us to fines or penalties for certain acts or omissions.
In providing services through our platform, we are certified and registered with certain Card Networks as a processor for member institutions. As such, we are subject to applicable Card Network rules that could subject us to fines or penalties for certain acts or omissions.
Trust : We comply with applicable obligations under the Payment Card Industry Data Security Standard (“PCI DSS”) and provide a trusted environment for card issuing and payment processing with security, transparency, and real-time information. Card Issuing Our customers can issue debit, prepaid, and credit cards, including instant provision of a tokenized card to a digital wallet.
Configurable : Highly configurable capabilities empower our customers to build native solutions tailored to their customer needs. Trust : We comply with applicable obligations under the Payment Card Industry Data Security Standard (“PCI DSS”) and provide a trusted environment for card issuing and payment processing with security, transparency, and real-time information.
These programs can all exist on Marqeta’s single, global, modern platform. 6 Table of Contents Our platform has a number of key attributes, including: Control : Dynamic spend controls and Just-in-Time Funding (“JIT Funding”) provide customers with control over the payments flow.
Our platform has a number of key attributes, including: Control : Dynamic spend controls and Just-in-Time Funding (“JIT Funding”) provide customers with control over the payments flow. 5 Table of Contents Scale : Global platform built on a cloud-native infrastructure and a suite of APIs to support our customers worldwide with a build-once, deploy-anywhere model.
Marqeta provides all of its customers with issuer processor services, and for most of its customers it also acts as a card program manager.
Our Programs Marqeta’s innovative products are developed with deep domain expertise and a customer-first mindset to launch, scale, and manage card programs. Marqeta provides all of its customers with issuer processor services, and for most of its customers it also acts as a card program manager.
Visa In 2017, we entered into a strategic alliance framework agreement with Visa. The agreement has been periodically amended. We have also entered into a number of subsequent arrangements with Visa, as governed by the strategic alliance framework agreement, including a service evaluation agreement, card partner agreement, and certain brand agreements.
We have also entered into a number of subsequent arrangements with Visa, as governed by the strategic alliance framework agreement, including a card partner agreement, and certain brand agreements. Under these agreements, we have agreed to cooperate with Visa on a number of initiatives, including international expansion, product, marketing, and business development collaboration.
Either we or Sutton Bank may terminate the agreement under certain specified circumstances, including if the other party commits a material breach that is not cured within 30 days. Agreements with Card Networks The Card Networks oversee their worldwide payment networks, through which debit, credit, and prepaid card payments are authorized, processed, and settled, and set Interchange Fee rates.
Either we or Sutton Bank may terminate the agreement under certain specified circumstances, including if the other party commits a material breach that is not cured within 30 days.
Treasury Department require certain financial institutions to establish AML programs, to not engage in terrorist financing, to report suspicious activity, and to maintain a number of related records. 14 Table of Contents Due to our relationships with Issuing Banks that are directly regulated for AML purposes, we have implemented an AML program designed to prevent our platform from being used to facilitate money laundering, terrorist financing, and other illicit activity.
Due to our relationships with Issuing Banks that are directly regulated for AML purposes, we have implemented an AML program designed to prevent our platform from being used to facilitate money laundering, terrorist financing, and other illicit activity. When providing program management services, we design our AML program to meet the requirements of our Issuing Banks.
To our knowledge, none of our employees is represented by a labor union or covered by a collective bargaining agreement. We have not experienced any work stoppages, and we consider our relations with our employees to be good. Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing, and integrating our existing and prospective employees.
We have not experienced any work stoppages, and we consider our relations with our employees to be good. Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing, and integrating our existing and prospective employees. Corporate Information We were incorporated in 2010 under the name Marqeta, Inc. as a Delaware corporation.
Research and Development Our research and development efforts focus on building enterprise-grade product and service capabilities for our customers and their cardholders. Our design, product, engineering, and customer success teams collaborate to design, build, deploy and monitor our platform. We enable our customers to build solutions on our platform, which connects to our Issuing Banks and Card Networks.
Our design, product, engineering, and customer success teams collaborate to design, build, deploy and monitor our platform. We enable our customers to build solutions on our platform, which connects to our Issuing Banks and Card Networks. Software development is primarily executed by our team of professionals across design, product management, and engineering disciplines.
Marqeta’s platform operates across a number of use cases for customers to capitalize on, including consumer credit cards, point-of-sale lending, accelerated/earned wage access, expense management, on-demand delivery, and spend management. Customers can also combine solutions across different use cases.
With embedded finance, enterprises across industries can offer multiple financial services to their customers to improve the user experience, enhance loyalty, and add another monetization engine to their existing business. Marqeta’s platform operates across a number of use cases for customers, including consumer credit cards, point-of-sale lending, accelerated/earned wage access, expense management, on-demand delivery, and spend management.
While an Issuing Bank ultimately approves each card program, Marqeta configures the program design, negotiates key program terms, and selects the Issuing Bank. Marqeta actively works to find the most appropriate Issuing Bank partner for the potential card program based on the customer’s needs and program design. We pay volume-based and transaction-based fees to the Issuing Banks.
Marqeta actively works to find the most appropriate Issuing Bank partner for the potential card program based on the customer’s needs and program design. We pay volume-based and transaction-based fees to the Issuing Banks. The fees are typically structured based on volume tiers; as our processing volumes grow, these fees as a percentage of processing volume decline.
As of February 2023, the parties have entered into an extension of the card partner agreement under the strategic alliance framework agreement for a term of five years. Either party may terminate the agreements under specified circumstances, including upon a material breach that remains uncured for a specified period of time.
Either party may terminate the agreements under specified circumstances, including upon a material breach that remains uncured for a specified period of time. 10 Table of Contents Visa In 2017, we entered into a strategic alliance framework agreement with Visa. The agreement has been periodically amended.
We compete primarily on the basis of our platform’s depth and breadth, offering a more configurable and complete solution for innovators.
Our competitors fall into three primary categories: (1) providers with legacy technology platforms, (2) modern API-based providers, and (3) emerging providers. We compete primarily on the basis of our platform’s depth and breadth, offering a more configurable and complete solution for innovators.
Credit : Customers can create customized consumer and commercial credit programs with innovative rewards structures, leveraging pre-integrated partners for underwriting, mobile app design, and customer service. Virtual : Customers can instantly issue one-time or multi-use branded payment cards that are ready to use immediately and enable faster funds disbursement with easier tracking of funds by unique virtual card numbers.
Virtual : Customers can instantly issue one-time or multi-use branded payment cards that are ready to use immediately and enable faster funds disbursement with easier tracking of funds by unique virtual card numbers. Physical : Customers can customize the look and feel, graphics, and messaging of physical cards to reinforce their brand.
Our Relationships with Issuing Banks and Card Networks Marqeta works on its customers’ behalf with Card Networks and Issuing Banks to issue cards, authorize transactions, and communicate with settlement entities. Our contractual relationships with Issuing Banks and Card Networks contribute to Marqeta’s ability to create and manage customized card programs for our customers.
Our contractual relationships with Issuing Banks and Card Networks underpin Marqeta’s ability to design and manage customized card programs for our customers.
Even if any such third-party technology did not continue to be available to us on commercially reasonable terms, we believe that alternative technologies would be available as needed in every case. See the section titled “Risk Factors—Risks Relating to Intellectual Property” for a more comprehensive description of risks related to our intellectual property and proprietary rights.
From time to time, we also incorporate certain intellectual property licensed from third parties, including under certain open source licenses. Even if any such third-party technology did not continue to be available to us on commercially reasonable terms, we believe that alternative technologies would be available as needed in every case.
Debit : Customers can link card products to a primary bank account for their users to fund and spend from. Prepaid : Customers can create single- or multi-use custom card experiences with dynamic spend controls and fund transactions in real time based upon business criteria.
Prepaid : Customers can create single- or multi-use custom card experiences with dynamic spend controls and fund transactions in real time based upon business criteria. Credit : Customers can create customized consumer and commercial credit programs with innovative rewards structures, leveraging pre-integrated partners for underwriting, mobile app design, and customer service.
Either party may terminate the agreement under specified circumstances, including upon a material breach that remains uncured for a specified period of time. Our Competitors We compete in a large and evolving market. Our competitors fall into three primary categories: (1) providers with legacy technology platforms, (2) modern API-based providers, and (3) emerging providers.
The current term of the contract expires in 2028 and automatically renews annually thereafter, unless either party provides written notice of its intent not to renew. Either party may terminate the agreement under specified circumstances, including upon a material breach that remains uncured for a specified period of time. Our Competitors We compete in a large and evolving market.
We currently partner with a number of Card Networks, including Visa, Mastercard, and PULSE, to process our customers’ transactions on our platform.
Agreements with Card Networks The Card Networks oversee their worldwide payment networks, through which debit, credit, and prepaid card payments are authorized, processed, and settled, and, except as limited by applicable law, set Interchange Fee rates. We currently partner with a number of Card Networks, including Visa, Mastercard, and PULSE, to process our customers’ transactions on our platform.
The involvement of our Issuing Banks in a specific PxM+ program will depend on each program’s design. 10 Table of Contents Sutton Bank On April 1, 2016, we entered into a prepaid card program manager agreement with Sutton Bank, our largest Issuing Bank partner by processing volume.
Sutton Bank On April 1, 2016, we entered into a prepaid card program manager agreement with Sutton Bank, our largest Issuing Bank partner by processing volume. Under the terms of the agreement, as amended, Sutton Bank, among other things, issues cards and settles payment transactions for Marqeta’s customers’ approved card programs.
We see embedded finance as a significant contributor to our next wave of growth. There are two critical components to embedded finance: native integration and non-financial services businesses. It starts with a company whose core business is not financial services, and that company offers financial services products in a manner that is natively embedded into their existing customer experience.
Our Customers Marqeta serves customers in multiple industry verticals including financial services, on-demand services, BNPL, expense management, and e-commerce enablement. We see embedded finance as a significant contributor to our next wave of growth. There are two critical components to embedded finance: native integration and non-financial services businesses.
Under these agreements, we have agreed to cooperate with Visa on a number of initiatives, including international expansion, product, marketing, and business development collaboration. The contracts provide Marqeta with tiered incentives based on the processing volume of our customers’ transactions routed through Visa and its affiliated networks.
The contracts provide Marqeta with tiered incentives based on the processing volume of our customers’ transactions routed through Visa and its affiliated networks. As of February 2023, the parties have entered into an extension of the card partner agreement under the strategic alliance framework agreement for a term of five years.
The contract provides Marqeta with tiered incentives based on the processing volume of our customers’ transactions routed through PULSE and its affiliated networks. The current term of the contract expires in 2028 and automatically renews annually thereafter, unless either party provides written notice of its intent not to renew.
PULSE Network In 2013, we entered into a direct processor agreement with PULSE Network LLC, which has been subsequently amended. The contract provides Marqeta with tiered incentives based on the processing volume of our customers’ transactions routed through PULSE and its affiliated networks.
The card programs that we manage for our customers are subject to various federal and state laws and regulations, including the Credit Card Accountability, Responsibility, and Disclosure Act of 2009 and the CFPB’s Regulation E, which impose requirements on general-use prepaid cards, store gift cards, and electronic gift certificates.
The debit and prepaid card programs that we manage for our customers may be subject to various federal and state laws and regulations, including, but not limited to, the Electronic Fund Transfer Act and its implementing Regulation E, which establishes the basic rights, liabilities, and responsibilities of consumers who use electronic fund transfer services and of financial institutions that offer these services.
Visa may also elect to terminate the agreements prior to the natural expiration of the then-current term due to our failure to meet certain performance requirements. 11 Table of Contents PULSE Network In 2013, we entered into a direct processor agreement with PULSE Network LLC, which has been subsequently amended.
Either party may terminate the agreements under specified circumstances, including upon a material breach that remains uncured for a specified period of time. Visa may also elect to terminate the agreements prior to the natural expiration of the then-current term due to our failure to meet certain performance requirements.
Given the modularity of the Marqeta platform, certain customers can also opt to incorporate elements of MxM into their PxM card program to create a custom Powered By Plus (“PxM+”) solution. Our Customers Marqeta serves customers in multiple industry verticals including financial services, on-demand services, buy now, pay later (“BNPL”), expense management, and e-commerce enablement.
Given the modularity of the Marqeta platform, certain customers can also opt to incorporate elements of MxM into their card program to create a custom solution. Many customers adopt some combination of the MxM managed services even when not adopting the full MxM offering.
Removed
The legacy payments ecosystem has historically been inflexible, with Issuing Banks delivering the entire value chain: the regulated entity and balance sheet, the product, and the customer experience.
Added
Card Issuing Our customers can issue debit, prepaid, and credit cards, including instant provision of a tokenized card to a digital wallet. Debit : Customers can link card products to a primary bank account for their users to fund and spend from.
Removed
In the legacy payments ecosystem, the customer must contract with an Issuing Bank, who leverages an Issuer Processor to connect with a Card Network and facilitate payment transactions. 5 Table of Contents At Marqeta, we are modernizing the Issuer Processor side of the payments ecosystem. Issuing Banks continue to provide the chartered banking entity, treasury, and balance sheet.
Added
Upon approval, Marqeta automatically moves funds from an identified funding source into the appropriate account.
Removed
Marqeta provides innovation, accessibility, flexibility, control, and scale by delivering all of these benefits in one easy-to-use platform, full of applications and services, along with an Issuing Bank partner. The customer controls its customers’ experience, leveraging the Marqeta platform. Our Platform and Products Marqeta provides a single, global, cloud-based, open API platform for modern card issuing and transaction processing.
Added
In 2024, we introduced the UX Toolkit, which allows customers to create branded front-end experiences using a comprehensive set of pre-built UI components optimized for Marqeta's APIs. It enables customers to build Marqeta-powered debit and credit programs with fewer development resources.
Removed
Scale : Global platform built on a cloud-native infrastructure and a suite of APIs to support our customers worldwide with a build-once, deploy-anywhere model. Configurable : Highly configurable capabilities empower our customers to build native solutions tailored to their customer needs.
Added
Our comprehensive platform allows for automated decisioning using a variety of data sources and custom logic. Portfolio Migration In 2024, we launched Portfolio Migration, a new service that simplifies upgrading existing card programs onto our platform, reducing complexity and minimizing disruption during the transition.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIf we fail to meet the expectations of financial analysts or investors, our stock price and the value of your investment could decline. • We rely on our relationships with Issuing Banks and Card Networks, and if we are unable to maintain these relationships, our business may be adversely affected. • If our credit platform is inaccurate or does not perform as intended, our business may be adversely affected. • Litigation, disputes, regulatory actions, and government or legal investigations could be costly and time-consuming to defend, and our business may be adversely affected by our involvement or the outcome of such litigation, disputes, actions, or investigations. • If we fail to maintain an effective system of disclosure controls and procedures or internal control over financial reporting, or remediate our existing material weaknesses, our ability to report timely and accurate financial results or comply with applicable regulations could be impaired, and our business, operating results, and the price of our Class A common stock may be adversely affected. • The trading price of our Class A common stock has been and is likely to continue to be volatile, which could cause the value of your investment to decline. • The dual class structure of our common stock has the effect of concentrating voting control with those stockholders who hold shares of our Class B common stock, including our directors, executive officers, and their affiliates.
Biggest changeCompliance with such laws and regulations could result in additional costs and any failure to comply could materially harm our business and financial condition. • If we fail to maintain an effective system of disclosure controls and procedures or internal control over financial reporting, our ability to report timely and accurate financial results or comply with applicable regulations could be impaired, and our business, operating results, and the price of our Class A common stock may be adversely affected. • The trading price of our Class A common stock has been and is likely to continue to be volatile, which could cause the value of your investment to decline. • The dual class structure of our common stock has the effect of concentrating voting control with those stockholders who hold shares of our Class B common stock, including our directors, executive officers, and their affiliates.
If we fail to manage growth effectively, our business and financial results may be adversely affected. • Future net revenue growth depends on our ability to attract new customers and retain existing customers in a cost-effective manner. • We participate in markets that are competitive and continuously evolving, and, if we do not compete successfully, our business, results of operations, financial condition, and future prospects may be adversely affected. • We currently generate significant net revenue from a small number of customers, including our largest customer, Block, and the loss of any of these significant relationships or decline in net revenue from these customers, including as a result of renewals on less favorable terms, could adversely affect our business and financial results. • We have a history of net losses and we may not be able to achieve or sustain profitability. • Our results may fluctuate significantly and may not fully reflect the underlying performance of our business, making it difficult to accurately forecast future results.
If we fail to manage growth effectively, our business and financial results may be adversely affected. • Future net revenue growth depends on our ability to attract new customers and retain existing customers in a cost-effective manner. • We participate in markets that are competitive and continuously evolving, and, if we do not compete successfully, our business, results of operations, financial condition, and future prospects may be adversely affected. • We currently generate significant net revenue from a small number of customers, including our largest customer, Block, and the loss of any of these significant relationships or decline in net revenue from these customers, including as a result of renewals on less favorable terms, could adversely affect our business and financial results. • We have a history of net losses and we may not be able to achieve or sustain profitability. • Our results fluctuate significantly and may not fully reflect the underlying performance of our business, making it difficult to accurately forecast future results.
We participate in markets that are competitive and continuously evolving, and, if we do not compete successfully, our business, results of operations, and financial condition, and future prospects may be adversely affected.
We participate in markets that are competitive and continuously evolving, and, if we do not compete successfully, our business, results of operations, financial condition, and future prospects may be adversely affected.
These decisions may not be consistent with investors’ expectations and may not produce the long-term benefits that we expect, and this may materially and adversely affect our business. Our results may fluctuate significantly and may not fully reflect the underlying performance of our business, making it difficult to accurately forecast future results.
These decisions may not be consistent with investors’ expectations and may not produce the long-term benefits that we expect, and this may materially and adversely affect our business. Our results fluctuate significantly and may not fully reflect the underlying performance of our business, making it difficult to accurately forecast future results.
If we are unable to timely and accurately identify at-risk vendors or if a service provider fails to properly safeguard our data or intellectual property, fails to meet contractual requirements (including compliance with applicable laws and regulations), suffers a cyberattack, security breach or incident, or other system outage or interruption, or terminates its contract with us, we could be subject to claims from customers and other third parties or regulatory enforcement actions, and such incidents may also put information we process at risk which could in turn adversely affect our business, reputation, financial condition, or results of operations.
If we are unable to timely and accurately identify at-risk vendors or if a service provider fails to properly safeguard our data or intellectual property, fails to meet contractual requirements (including compliance with applicable laws and regulations), suffers a cyberattack, security breach or incident, or other system outage or interruption, or terminates its contract with us, we could be subject to claims from customers or other third parties or regulatory enforcement actions, and such incidents may also put information we process at risk which could in turn adversely affect our business, reputation, financial condition, or results of operations.
We believe our net revenue growth depends on several factors, including, but not limited to, our ability to: • acquire new customers and retain existing customers on favorable terms; • achieve widespread acceptance and use of our platform and the products and services we offer, including in markets outside of the United States; • increase our offerings, TPV, and the number of customers and transactions on our platform; • effectively scale our operations, including successfully integrating acquired businesses and technology; • expand our product and service offerings; • diversify our customer base; • maintain and grow our network of vendors and partners, including Issuing Banks and Card Networks; • maintain the security and reliability of our platform; • adjust for the impact of the anticipated accounting treatment of our customer agreements and the risk that such accounting treatment may be subject to further changes or developments; • adapt to changes in laws and regulations applicable to our business; • adapt to changing macroeconomic conditions and evolving conditions in the payments industry; and • successfully compete against established companies and new market entrants.
We believe our net revenue growth depends on several factors, including, but not limited to, our ability to: • acquire new customers and retain existing customers on favorable terms; • achieve widespread acceptance and use of our platform and the products and services we offer, including in markets outside of the United States; • increase our offerings, TPV, and the number of customers and transactions on our platform; • effectively scale our operations, including successfully integrating acquired businesses and technology; • expand our product and service offerings; • diversify our customer base; • maintain and grow our network of vendors, Issuing Banks, and Card Networks; • maintain the security and reliability of our platform; • adjust for the impact of the anticipated accounting treatment of our customer agreements and the risk that such accounting treatment may be subject to further changes or developments; • adapt to changes in laws and regulations applicable to our business; • adapt to changing macroeconomic conditions and evolving conditions in the payments industry; and • successfully compete against established companies and new market entrants.
Our amended and restated certificate of incorporation and amended and restated bylaws include provisions that: • provide that our board of directors will be classified into three classes of directors with staggered three-year terms; • permit our board of directors to establish the number of directors and fill any vacancies and newly-created directorships; • require super-majority voting to amend some provisions in our amended and restated certificate of incorporation and amended and restated bylaws; • authorize the issuance of “blank check” preferred stock that our board of directors could use to implement a stockholder rights plan; • provide that only the chairperson of our board of directors, our chief executive officer, or a majority of our board of directors will be authorized to call a special meeting of stockholders; • provide for a dual class common stock structure where holders of our Class B common stock are able to control the outcome of matters requiring stockholder approval, even if they own significantly less than a majority of the outstanding shares of our Class A and Class B common stock, including the election of directors and significant corporate transactions, such as a merger or other sale of our company or its assets; 39 Table of Contents • prohibit stockholder action by written consent, thereby requiring all stockholder actions to be taken at a meeting of our stockholders; • provide that the board of directors is expressly authorized to make, alter, or repeal our amended and restated bylaws; and • contain advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted upon by stockholders at annual stockholder meetings.
Our amended and restated certificate of incorporation and amended and restated bylaws include provisions that: • provide that our board of directors will be classified into three classes of directors with staggered three-year terms; • permit our board of directors to establish the number of directors and fill any vacancies and newly-created directorships; • require super-majority voting to amend some provisions in our amended and restated certificate of incorporation and amended and restated bylaws; • authorize the issuance of “blank check” preferred stock that our board of directors could use to implement a stockholder rights plan; • provide that only the chairperson of our board of directors, our chief executive officer, or a majority of our board of directors will be authorized to call a special meeting of stockholders; • provide for a dual class common stock structure where holders of our Class B common stock are able to control the outcome of matters requiring stockholder approval, even if they own significantly less than a majority of the outstanding shares of our Class A and Class B common stock, including the election of directors and significant corporate transactions, such as a merger or other sale of our company or its assets; • prohibit stockholder action by written consent, thereby requiring all stockholder actions to be taken at a meeting of our stockholders; • provide that the board of directors is expressly authorized to make, alter, or repeal our amended and restated bylaws; and 41 Table of Contents • contain advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted upon by stockholders at annual stockholder meetings.
In general, under Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), a corporation that undergoes an “ownership change” (generally defined as a greater than 50-percentage-point cumulative change (by value) in the equity ownership of certain stockholders over a rolling three-year period) is subject to limitations on a company’s ability to utilize its NOLs and other tax attributes to offset taxable income.
In general, under Section 382 of the Internal Revenue Code of 1986, as amended, a corporation that undergoes an “ownership change” (generally defined as a greater than 50-percentage-point cumulative change (by value) in the equity ownership of certain stockholders over a rolling three-year period) is subject to limitations on a company’s ability to utilize its NOLs and other tax attributes to offset taxable income.
If we fail or are alleged to have failed to comply with these laws, regulations, frameworks, or other actual or asserted obligations, we may be subject to regulatory investigations, enforcement actions, and other proceedings, civil litigation, claims, and demands, and fines and other penalties, all of which may result in additional cost and liability to us, damage our reputation, and adversely affect our business.
If we fail or are alleged to have failed to comply with any of these laws, regulations, frameworks, or other actual or asserted obligations, we may be subject to regulatory investigations, enforcement actions, and other proceedings, civil litigation, claims, and demands, and fines and other penalties, all of which may result in additional cost and liability to us, damage our reputation, and adversely affect our business.
They might also take actions that could degrade the functionality of our platform, impose additional costs or requirements on us, or give preferential treatment to competitive services, including their own. If we are unsuccessful in establishing, renegotiating, or maintaining relationships with Issuing Banks and Card Networks, our business may be adversely affected.
They might also take actions that could degrade the functionality of our platform, impose additional costs or requirements on us, or give preferential treatment to competitive services, including their own. If we are unsuccessful in establishing, renegotiating, or maintaining relationships with Issuing Banks or Card Networks, our business may be adversely affected.
We conduct vendor due diligence and manage such vendors using a risk-based approach intended to determine if relevant vendors have the ability to implement and maintain appropriate security measures, consistent with all applicable laws, to implement and maintain reasonable security measures in connection with their work with us, and to promptly report to us any suspected breach of their security measures that may affect our business.
We conduct vendor due diligence and manage such vendors using a risk-based approach intended to determine if relevant vendors have the ability, consistent with all applicable laws, to implement and maintain reasonable security measures in connection with their work with us, and to promptly report to us any suspected breach of their security measures that may affect our business.
A successful assertion by one or more states, or foreign jurisdictions, requiring us to collect sales, value added, or similar indirect taxes where we presently do not do so, or to collect more of such indirect taxes in a jurisdiction in which we currently do collect some indirect taxes, could result in substantial tax liabilities, including taxes on past sales, as well as penalties and interest.
Additionally, successful assertion by one or more states, or foreign jurisdictions, requiring us to collect sales, value added, or similar indirect taxes where we presently do not do so, or to collect more of such indirect taxes in a jurisdiction in which we currently do collect some indirect taxes, could result in substantial tax liabilities, including taxes on past sales, as well as penalties and interest.
We have offices in the United States and United Kingdom (“U.K.”), and legal entities in various other global jurisdictions, and we may pursue further international expansion of our business in new international markets where we have limited or no experience in marketing, selling, employing personnel, and deploying our platform, products, and services.
We have offices in the United States, Poland, and the United Kingdom (“U.K.”), and legal entities in various other global jurisdictions, and we may pursue further international expansion of our business in new international markets where we have limited or no experience in marketing, selling, employing personnel, and deploying our platform, products, and services.
Our results of operations for a given period may not fully reflect the underlying performance of our business and may fluctuate as a result of a number of factors, many of which are outside of our control and may be difficult to predict, including, but not limited to the risk factors included in this section.
Our results of operations for a given period may not fully reflect the underlying performance of our business and fluctuate as a result of a number of factors, many of which are outside of our control and are difficult to predict, including, but not limited to the risk factors included in this section.
Future adverse developments with respect to specific financial institutions or the broader financial services industry may lead to market-wide liquidity shortages, impair the ability of companies to access near-term working capital needs, and create additional market and economic uncertainty. 41 Table of Contents Our business is subject to the risks of earthquakes, fire, floods, pandemics, and other natural catastrophic events, and to interruption by man-made issues such as power disruptions and strikes.
Future adverse developments with respect to specific financial institutions or the broader financial services industry may lead to market-wide liquidity shortages, impair the ability of companies to access near-term working capital needs, and create additional market and economic uncertainty. 43 Table of Contents Our business is subject to the risks of earthquakes, fire, floods, pandemics, and other natural catastrophic events, and to interruption by man-made issues such as power disruptions and strikes.
The Court of Chancery of the State of Delaware and the United States District Court for the District of Delaware may also reach different judgments or results than would other courts, including courts where a stockholder considering an action may be located or would otherwise choose to bring the action, and such judgments may be more or less favorable to us than our stockholders. 40 Table of Contents We cannot guarantee that our share repurchase program will enhance long-term stockholder value.
The Court of Chancery of the State of Delaware and the United States District Court for the District of Delaware may also reach different judgments or results than would other courts, including courts where a stockholder considering an action may be located or would otherwise choose to bring the action, and such judgments may be more or less favorable to us than our stockholders. 42 Table of Contents We cannot guarantee that our share repurchase program will enhance long-term stockholder value.
As our business and platform continue to develop and expand, we may become subject to additional laws, rules, regulations, and industry standards, including possible additional examination and supervision, in the United States and internationally.
As our business and platform continue to develop and expand, we continue to become subject to additional laws, rules, regulations, and industry standards, including possible additional examination and supervision, in the United States and internationally.
It may take a significant amount of time to address such vulnerabilities, defects, or errors once we are aware of them, which could negatively impact our products and services and result in liability to us, our vendors and service providers. 36 Table of Contents We may be accused of infringing the intellectual property rights of third parties.
It may take a significant amount of time to address such vulnerabilities, defects, or errors once we are aware of them, which could negatively impact our products and services and result in liability to us, our vendors and service providers. 38 Table of Contents We may be accused of infringing the intellectual property rights of third parties.
For example, we could issue shares of our Class A common stock or securities convertible into our Class A common stock or debt or other securities in connection with acquisitions or other strategic transactions or in an attempt to obtain financing or to further increase our capital resources. 38 Table of Contents Additionally, we expect to grant equity awards to employees and directors under our stock incentive plan.
For example, we could issue shares of our Class A common stock or securities convertible into our Class A common stock or debt or other securities in connection with acquisitions or other strategic transactions or in an attempt to obtain financing or to further increase our capital resources. 40 Table of Contents Additionally, we expect to grant equity awards to employees and directors under our stock incentive plan.
We may not have sufficient protection or recovery plans in certain circumstances, such as a significant natural disaster, and our business interruption insurance may be insufficient to compensate us for losses that may occur. 42 Table of Contents Item 1B. Unresolved Staff Comments None.
We may not have sufficient protection or recovery plans in certain circumstances, such as a significant natural disaster, and our business interruption insurance may be insufficient to compensate us for losses that may occur. 44 Table of Contents Item 1B. Unresolved Staff Comments None.
We also had in the past, have currently, and may have in the future indemnification obligations as a result of our contracts with customers and partners that may require us to reimburse or pay for damages, fees, or other expenses associated with claims, lawsuits, proceedings, and investigations such customers and partners face.
We also had in the past, have currently, and may have in the future indemnification obligations as a result of our contracts with customers and other counterparties that may require us to reimburse or pay for damages, fees, or other expenses associated with claims, lawsuits, proceedings, and investigations such customers and other counterparties face.
Any of these results could harm our brand and adversely affect our results of operations. 37 Table of Contents Risks Relating to Ownership of Our Class A Common Stock The trading price of our Class A common stock has been and is likely to continue to be volatile, which could cause the value of your investment to decline.
Any of these results could harm our brand and adversely affect our results of operations. 39 Table of Contents Risks Relating to Ownership of Our Class A Common Stock The trading price of our Class A common stock has been and is likely to continue to be volatile, which could cause the value of your investment to decline.
If Sutton Bank terminates our agreement with them or is unable or unwilling to settle our transactions for any reason, we may be required to switch some or all of our processing volume to one or more other Issuing Banks, including to any of the other Issuing Banks that we currently contract with.
If Sutton Bank terminates our agreement with them or is unable or unwilling to settle our transactions for any reason, we may be required to switch some or all of our processing volume to one or more other Issuing Banks, including to any of the other Issuing Banks with which we currently contract.
Share repurchases could also affect the trading price of our stock and may reduce working capital. 17 Table of Contents Risks Relating to Our Business and Industry We have experienced rapid growth and our past growth rates may not be indicative of future growth rates.
Share repurchases could also affect the trading price of our stock and may reduce working capital. 16 Table of Contents Risks Relating to Our Business and Industry We have experienced rapid growth and our past growth rates may not be indicative of future growth rates.
New products and technologies are inherently risky, due to, among other things, risks associated with: the product or technology not working, or not working as expected; customer acceptance; technological outages or failures; increased regulatory scrutiny; and the failure to meet customer expectations.
New products, technologies, and businesses are inherently risky, due to, among other things, risks associated with: the product, technology, or business not working, or not working as expected; customer acceptance; technological outages or failures; increased regulatory scrutiny; and the failure to meet customer expectations.
We have agreed to defend, indemnify, and hold harmless certain of our customers and other partners from damages and costs arising from the infringement or claimed infringement by our products of third-party intellectual property rights. The scope of these indemnity obligations varies.
We have agreed to defend, indemnify, and hold harmless certain of our customers and other counterparties from damages and costs arising from the infringement or claimed infringement by our products of third-party intellectual property rights. The scope of these indemnity obligations varies.
Any loss of any of these services could adversely affect our business and we may incur additional costs to resolve the issue. 28 Table of Contents Indemnity provisions in various agreements potentially expose us to substantial liability and risk of loss.
Any loss of any of these services could adversely affect our business and we may incur additional costs to resolve the issue. 29 Table of Contents Indemnity provisions in various agreements potentially expose us to substantial liability and risk of loss.
Our results of operations may also be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our results of operations to fall below the expectations of securities analysts and investors, resulting in a decline in the trading price of our Class A common stock. 29 Table of Contents Risks Relating to Regulation Our business is subject to extensive regulation and oversight in a variety of areas, directly and indirectly through our relationships with Issuing Banks and Card Networks, which regulations are subject to change and to uncertain interpretation.
Our results of operations may also be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our results of operations to fall below the expectations of securities analysts and investors, resulting in a decline in the trading price of our Class A common stock. 30 Table of Contents Risks Relating to Regulation Our business is subject to regulation and oversight in a variety of areas, directly and indirectly through our relationships with customers, Issuing Banks, and Card Networks, which regulations are subject to change and to uncertain interpretation.
Fraudulent activity could also result in the imposition of regulatory sanctions, including significant monetary fines, or other operating losses, all of which could have a material adverse effect on our business, results of operations, and financial condition. Failure to attract and retain key personnel, including senior management and other highly skilled employees, could adversely affect our business.
Fraudulent activity could also result in the imposition of regulatory sanctions, including significant monetary fines, or other operating losses, all of which could have a material adverse effect on our business, results of operations, and financial condition. 26 Table of Contents Failure to attract and retain key personnel, including senior management and other highly skilled employees, could adversely affect our business.
In addition, we may become subject to audits, inquiries, whistleblower complaints, adverse media coverage, investigations, or criminal or civil sanctions, all of which may have an adverse effect on our reputation, business, results of operations, and financial condition. As a result of our business relationships, we may also be subject to direct or indirect supervision and examination by various authorities.
In addition, we may become subject to audits, inquiries, whistleblower complaints, adverse media coverage, investigations, or criminal or civil complaints or sanctions, all of which may have an adverse effect on our reputation, business, results of operations, and financial condition. 31 Table of Contents As a result of our business relationships, we may also be subject to direct or indirect supervision and examination by various authorities.
If we fail to manage growth effectively, our business and financial results may be adversely affected. While we have experienced rapid net revenue growth in prior periods, our net revenue decreased in the year ended December 31, 2023.
If we fail to manage growth effectively, our business and financial results may be adversely affected. While we have experienced rapid net revenue growth in prior periods, our net revenue decreased in the year ended December 31, 2024.
We could also become subject to investigations by Nasdaq, the SEC, or other regulatory authorities, which could require additional financial and management resources, and we may not be able to remain listed on Nasdaq. Changes in financial accounting standards or practices may cause adverse, unexpected financial reporting fluctuations and affect our results of operations.
We could also become subject to investigations by Nasdaq, the SEC, or other regulatory authorities, which could require additional financial and management resources, and we may not be able to remain listed on Nasdaq. 35 Table of Contents Changes in financial accounting standards or practices may cause adverse, unexpected financial reporting fluctuations and affect our results of operations.
While we have programs and controls designed to comply with applicable AML, AB&C, and sanctions laws and regulations, we cannot assure you that our programs and controls will be effective in ensuring compliance and that none of our third-party intermediaries or employees, representatives, contractors, partners, and agents will take actions in violation of those controls and laws.
While we have programs and controls designed to comply with applicable AML, AB&C, and sanctions laws and regulations, we cannot guarantee that our programs and controls will be effective in ensuring compliance and that none of our third-party intermediaries or employees, representatives, contractors, partners, and agents will take actions in violation of those controls and laws.
For example, our corporate headquarters are located in the San Francisco Bay Area, a region known for seismic activity and wildfires, and a significant natural disaster in that area or any other location in which we have offices or facilities or employees working remotely, such as an earthquake, fire, or flood, could have a material adverse effect on our business, results of operations financial condition, and future prospects.
For example, our principle executive offices are located in the San Francisco Bay Area, a region known for seismic activity and wildfires, and a significant natural disaster in that area or any other location in which we have offices or facilities or employees working remotely, such as an earthquake, fire, or flood, could have a material adverse effect on our business, results of operations financial condition, and future prospects.
We release regular updates to our platform, which have in the past contained, and may in the future contain, undetected errors, failures, and bugs. Any platform performance issues could lead to claims by customers, Card Networks, Issuing Banks, or other partners or vendors, or other claims, regulatory fines, or proceedings.
We release regular updates to our platform, which have in the past contained, and may in the future contain, undetected errors, failures, and bugs. Any platform performance issues could lead to claims by customers, vendors, Card Networks, Issuing Banks, or other third parties, or other claims, regulatory fines, or proceedings.
We have experienced such performance incidents in the past and expect that we will continue to periodically experience such performance issues in the future. Our platform is designed to process a high number of transactions and deliver reports and other information related to those transactions at high processing speeds.
We have experienced such performance incidents in the past and expect that we will continue to periodically experience such performance issues in the future. 20 Table of Contents Our platform is designed to process a high number of transactions and deliver reports and other information related to those transactions at high processing speeds.
Switching processing volume to another Issuing Bank would take time and could result in additional costs, which may adversely affect our business. We also have agreements with Card Networks that, among other things, provide us certain monetary incentives based on the processing volume of our customers’ transactions routed through the respective Card Network.
Switching processing volume to another Issuing Bank would take time and could result in additional costs or loss of revenue or customers, which may adversely affect our business. We also have agreements with Card Networks that, among other things, provide us certain monetary incentives based on the processing volume of our customers’ transactions routed through the respective Card Network.
We intend to make all repurchases in compliance with applicable regulatory guidelines and to administer the plan in accordance with applicable laws, including Rule 10b-8 of the Exchange Act.
We intend to make all repurchases in compliance with applicable regulatory guidelines and to administer the plans in accordance with applicable laws, including Rule 10b-8 of the Exchange Act.
Accordingly, we may need to engage in equity or debt financings to secure additional funds. Any new equity securities we issue could have rights, preferences, and privileges superior to those of holders of our Class A common stock and Class B common stock.
Accordingly, we may need to engage in equity or debt financings to secure additional funds. 27 Table of Contents Any new equity securities we issue could have rights, preferences, and privileges superior to those of holders of our Class A common stock and Class B common stock.
Any real or perceived improper or unauthorized use of, disclosure of, or access to our or our customers’ and partners’ confidential, proprietary, or sensitive data, including by cyberattacks, security breaches or incidents, or employee or other misconduct, could expose us to liability and damage our reputation.
Any real or perceived improper or unauthorized use of, disclosure of, or access to our or our customers’ and other third parties’ confidential, proprietary, or sensitive data, including by cyberattacks, security breaches or incidents, or employee or other misconduct, could expose us to liability and damage our reputation.
Further, if our credit platform does not operate as intended or is inaccurate, it may be alleged that we and/or our bank partners have failed to comply with applicable laws and regulations, we and/or our bank partners may be subject to litigation or regulatory investigations or other proceedings, we and/or our bank partner may have to pay fines and penalties or become subject to civil or criminal liability or have additional obligations or restrictions imposed upon our respective businesses, and our customer relationships and reputation may be adversely affected, which could have a material adverse effect on our business, results of operations, and financial condition.
Further, if our platform does not operate as intended or is inaccurate, it may be alleged that we and/or our Issuing Banks have failed to comply with applicable laws and regulations, we and/or our Issuing Banks may be subject to litigation or regulatory investigations or other proceedings, we and/or our Issuing Banks may have to pay fines and penalties or become subject to civil or criminal liability or have additional obligations or restrictions imposed upon our respective businesses, and our customer relationships and reputation may be adversely affected, which could have a material adverse effect on our business, results of operations, and financial condition.
If we fail to maintain an effective system of disclosure controls and procedures or internal control over financial reporting, or remediate our existing material weaknesses, our ability to report timely and accurate financial results or comply with applicable regulations could be impaired, and our business, operating results, and the price of our Class A common stock may be adversely affected.
If we fail to maintain an effective system of disclosure controls and procedures or internal control over financial reporting, our ability to report timely and accurate financial results or comply with applicable regulations could be impaired, and our business, operating results, and the price of our Class A common stock may be adversely affected.
I nternational expansion subjects our business to additional risks, including: • failure to anticipate competitive conditions and competition with market players that have greater experience in the local markets than we do or that have pre-existing relationships with potential customers and investors in those markets; • conforming our platform with applicable business customs and languages; • increased costs and difficulty in protecting intellectual property and sensitive data; • increased costs from local Card Networks, BIN sponsors, vendors, and other local providers; • potential changes to our established business and pricing models; • the ability to support and integrate with local BIN sponsors and other service providers; • difficulties in managing foreign operations; • increased travel, infrastructure, and legal and compliance costs; • difficulties in recruiting and retaining qualified personnel; • difficulties in gaining acceptance from industry self-regulatory bodies; • risks related to government regulations in and related to foreign jurisdictions, including compliance with multiple, potentially conflicting, and changing laws and regulations; • Interchange Fee regulation in foreign jurisdictions; • exchange rate risk and global market volatility; • potential restrictions on repatriation of earnings; • management of tax consequences; and • political, social, and/or economic instability or military conflict.
I nternational expansion subjects our business to additional risks, including: • failure to anticipate competitive conditions and competition with market players that have greater experience in the local markets than we do or that have pre-existing relationships with potential customers and investors in those markets; • conforming our platform with applicable business customs and languages; • increased costs and difficulty in protecting intellectual property and sensitive data, including compliance with data residency requirements or commitments; • increased costs from local Card Networks, BIN sponsors, vendors, and other local providers; • potential changes to our established business and pricing models; • the ability to support and integrate with local BIN sponsors and other service providers; • difficulties in managing foreign operations; • increased travel, infrastructure, and legal and compliance costs; • difficulties in recruiting and retaining qualified personnel; • difficulties in gaining acceptance from industry self-regulatory bodies; • risks related to government regulations in and related to foreign jurisdictions, including compliance with multiple, potentially conflicting, and changing laws, regulations, and industry standards, and related penalties or fines for non-compliance; • Interchange Fee regulation in foreign jurisdictions; • exchange rate risk and global market volatility; • potential restrictions on repatriation of earnings; • management of tax consequences; and 25 Table of Contents • political, social, and/or economic instability or military conflict.
While we currently operate our business in an effort to ensure our business itself is not subject to the same level of regulation as the Issuing Banks and Card Networks that we partner with, Issuing Banks and Card Networks operate in a highly regulated environment, and there is a risk that those regulations could become applicable to or impact us.
While we currently operate our business in an effort to ensure our business itself is not subject to the same level of regulation or licensing as the Issuing Banks and Card Networks that we contract with, Issuing Banks and Card Networks operate in a highly regulated environment, and there is a risk that those regulations could become directly applicable to or directly impact us.
Supply chain disruption, a global labor shortage, increased inflation, and higher interest rates have adversely affected our business, results of operations, and business outlook and may continue to create uncertainty as to our and our customers’, partners’, and vendors’ financial results, operations, and business outlook.
Supply chain disruption, a global labor shortage, increased inflation, and higher interest rates have adversely affected our business, results of operations, and business outlook and may continue to create uncertainty as to our and our customers’, vendors’ and other counterparties’ financial results, operations, and business outlook.
Any disruptions in these services, including as a result of actions outside of our control, would significantly impact the continued performance of our platform.
Any disruptions in these services, including as a result of actions outside of our control, could significantly impact the continued performance of our platform.
A small number of customers account for a large percentage of our net revenue. As discussed further in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” for the years ended December 31, 2023, 2022, and 2021, Block accounted for 68%, 71%, and 69% of our net revenue, respectively.
A small number of customers account for a large percentage of our net revenue. As discussed further in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” for the years ended December 31, 2024, 2023, and 2022, Block accounted for 47%, 68%, and 71% of our net revenue, respectively.
The holders of our Class B common stock collectively continue to control a majority of the combined voting power of our common stock and therefore control all matters submitted to our stockholders for approval and may continue to control such matters until the tenth anniversary of our initial public offering, when all outstanding shares of Class A common stock and Class B common stock will convert automatically into shares of a single class of common stock.
The holders of our Class B common stock collectively continue to control a majority of the combined voting power of our common stock and therefore control all matters submitted to our stockholders for approval and may continue to control such matters until the tenth anniversary of our IPO, when all outstanding shares of Class A common stock and Class B common stock will convert automatically into shares of a single class of common stock.
We are directly, and indirectly through our contractual relationships with customers, Issuing Banks, and Card Networks, subject to regulation in areas which may include privacy, data protection and information security, global sanctions regimes and export controls, and anti-bribery, and those relating to payments services (such as payment processing and settlement services), AI, consumer protection, AML, escheatment, and compliance with PCI DSS.
We are directly, and indirectly through our contractual relationships with customers, Issuing Banks, and Card Networks, subject to regulation in areas which may include, but are not limited to, privacy, data protection and information security, global sanctions regimes and export controls, and anti-bribery, and those relating to payments services (such as payment processing and settlement services), AI, consumer protection, AML, and escheatment, as well as compliance with industry standards, such as PCI DSS.
Our ability to use our net operating losses and other tax attributes to offset future taxable income may be subject to certain limitations. 34 Table of Contents We have incurred substantial net operating losses (“NOLs”) and other tax attributes, including research & development (“R&D”) credits, during our history.
Our ability to use our net operating losses and other tax attributes to offset future taxable income may be subject to certain limitations. We have incurred substantial net operating losses (“NOLs”) and other tax attributes, including research & development (“R&D”) credits, during our history.
Our TPV was $222.3 billion, $166.3 billion, and $111.1 billion for the years ended December 31, 2023, 2022, and 2021, respectively, an increase of 34% and 50% from the prior years, respectively. Net revenue and TPV for any prior period should not be relied on as an indication of our future performance.
Our TPV was $291.1 billion, $222.3 billion, and $166.3 billion for the years ended December 31, 2024, 2023, and 2022, respectively, an increase of 31% and 34% from the prior years, respectively. Net revenue and TPV for any prior period should not be relied on as an indication of our future performance.
The share repurchase program may be suspended, modified or discontinued at any time and we have no obligation to repurchase any amount of our Class A common stock under the program. The share repurchase program has no set expiration date.
The Active Share Repurchase Programs may be suspended, modified, or discontinued at any time and we have no obligation to repurchase any amount of our Class A common stock under the programs. The Active Share Repurchase Programs have no set expiration date.
Some of these agreements provide for uncapped liability for indemnification claims and some indemnity provisions survive termination or expiration of the applicable agreement. In some cases, we have in the past and could continue to be exposed to liability or indemnification claims from our customers or partners in connection with the services we provide.
Some of these agreements provide for uncapped liability for indemnification claims and some indemnity provisions survive termination or expiration of the applicable agreement. In some cases, we have in the past and could continue to be exposed to liability or indemnification claims from our customers, Card Networks, or Issuing Banks in connection with the services we provide.
We, our vendors, our partners, and our customers are subject to a wide variety of laws, regulations, and industry standards, including supervision and examination with respect to the foregoing by multiple authorities and governing bodies and in multiple countries, which govern numerous areas important to our business.
We, our customers, our vendors, and other third parties we do business with are subject to a wide variety of laws, regulations, and industry standards, including supervision and examination with respect to the foregoing by multiple authorities and governing bodies and in multiple countries, which govern numerous areas important to our business.
The actual timing, manner, number, and value of shares repurchased under the program will depend on a number of factors, including the availability of cash, the market price of our Class A common stock, general market and economic conditions, applicable requirements, and other business considerations.
The actual timing, manner, number, and value of shares repurchased under the Active Share Repurchase Programs will depend on a number of factors, including the availability of cash, the market price of our Class A common stock, general market and economic conditions, applicable requirements, and other business considerations.
Even if we are not a party to any litigation between a customer and a third party relating to infringement by our products, an adverse outcome in any such litigation could make it more difficult for us to defend our solutions against intellectual property infringement claims in any subsequent litigation where we are a named party.
Even if we are not a party to any litigation between a customer or other counterparty and a third party relating to alleged infringement in relation to our products, an adverse outcome in any such litigation could make it more difficult for us to defend our solutions against intellectual property infringement claims in any subsequent litigation where we are a named party.
Accordingly, these customers may have, or may enter into in the future, similar agreements with our competitors, which could adversely affect our ability to drive the processing volume and revenue growth that we seek to achieve.
Accordingly, our legacy customers that do not have these contractual obligations may have, or may enter into in the future, similar agreements with our competitors, which could adversely affect our ability to drive the processing volume and revenue growth that we seek to achieve.
As of December 31, 2023 and December 31, 2022, our accumulated deficit was approximately $825.2 million and $602.2 million, respectively. We expect to continue to incur net losses for the foreseeable future and we may not achieve profitability.
As of December 31, 2024 and December 31, 2023, our accumulated deficit was approximately $797.9 million and $825.2 million, respectively. We expect to continue to incur net losses for the foreseeable future and we may not achieve profitability.
The information we use in our credit platform may be inaccurate or incomplete as a result of error or fraud, both of which may be difficult to detect and avoid.
The information we use in processing credit transactions may be inaccurate or incomplete as a result of error or fraud, both of which may be difficult to detect and avoid.
If transactions or settlement reconciliations are not performed timely or are inaccurate due to human or processing error, we could incur losses.
If transactions or settlement reconciliations are not performed timely or accurately due to human or other processing error, we could incur losses.
Current or future laws, regulations, contractual obligations, and industry standards or other frameworks may impose, or be asserted to impose, requirements that are inconsistent with our data management and processing practices or the operation of our products and services.
Current or future laws, regulations, contractual obligations, and industry standards or other frameworks relating to privacy and data governance may impose, or be asserted to impose, requirements that are inconsistent with our practices or the operation of our products and services.
Our agreements with Issuing Bank partners and customers include indemnification provisions under which we agree to indemnify them for losses or expenses suffered or incurred in certain circumstances, including, for example, in relation to claims arising out of the breach of such agreements, services to be provided by us, or from intellectual property infringement claims made by third parties.
Our agreements with Issuing Banks, Card Networks, customers, vendors, lessors, and other third parties include indemnification provisions under which we agree to indemnify them for losses or expenses suffered or incurred in certain circumstances, including, for example, in relation to claims arising out of the breach of such agreements, services to be provided by us, or from intellectual property infringement claims made by third parties.
Any attempted, perceived or actual breach or incident could disrupt our systems and other aspects of our operations, result in unauthorized or unlawful access to or loss, modification, unavailability, misuse, or other unauthorized processing of our and our customers’ data, have a significant impact on our reputation as a trusted brand, and expose us to legal risk and potential liability, and costs associated with remediation.
Any attempted, perceived or actual breach or incident could disrupt our systems and other aspects of our operations, result in unauthorized or unlawful access to or loss, modification, unavailability, misuse, or other unauthorized processing of ours and our employees’ data and the data of third parties with which we work, have a significant impact on our reputation as a trusted brand, and expose us to legal risk and potential liability, and costs associated with remediation.
Illegitimate transactions or illegal activities such as money laundering or terrorist funding can expose us to governmental and regulatory enforcement actions and potentially prevent us from satisfying our contractual obligations to our third-party partners, which may cause us to be in breach of our obligations.
Illegitimate transactions or illegal activities such as money laundering or terrorist funding can expose us to governmental and regulatory enforcement actions and potentially prevent us from satisfying our contractual obligations to our Issuing Banks and other counterparties, which may cause us to be in breach of our obligations.
If any of our controls and systems do not perform as expected, we may experience additional material weaknesses or we may be unable to remediate the existing material weaknesses. In addition, testing and maintaining internal controls and disclosure controls may divert management’s attention from other matters that are important to our business.
If any of our controls and systems do not perform as expected, we may experience material weaknesses. In addition, testing and maintaining internal controls and disclosure controls may divert management’s attention from other matters that are important to our business.
Share repurchases could also affect the trading price of our stock and may reduce working capital. In May 2023, our board of directors approved a $200 million share repurchase program for shares of our Class A common stock (the “2023 Share Repurchase Program”).
Share repurchases could also affect the trading price of our stock and may reduce working capital. In May 2023, our board of directors approved a $200 million share repurchase program for shares of our Class A common stock (the “2023 Share Repurchase Program”). Repurchases under the 2023 Share Repurchase Program were completed as of March 31, 2024.
We have in the past, and may in the future, experience high attrition and turnover rates across the Company, including executive officers and other key personnel. The loss of these employees may lead to a decrease in institutional knowledge which may adversely affect our business.
We have in the past, and may in the future, experience high attrition and turnover rates across the Company, including executive officers and other key personnel. The loss of these employees may lead to a decrease in institutional knowledge which may adversely affect our business. Additionally, we do not maintain any key person insurance policies.
While we have incurred and expect to continue to incur substantial expense in complying with new and evolving privacy and data protection laws and frameworks, we may not be successful in our efforts to achieve compliance.
Although we have incurred and expect to continue to incur substantial expense in complying with certain new and evolving privacy and data governance laws and frameworks, we may not be successful in our efforts to achieve and maintain compliance.
The termination of the card association registrations held by us or any of our Issuing Banks or any changes to these Card Network rules or their interpretation could have a significant impact on our business and financial condition.
We are required to comply with the rules set by the Card Networks. The termination of the card association registrations held by us or any of our Issuing Banks or any changes to these Card Network rules or their interpretation could have a significant impact on our business and financial condition.
There is a risk that due to legislative or regulatory changes, or other unforeseen reasons, our existing NOLs and other tax attributes could expire or otherwise be unavailable to offset future income tax liabilities. 35 Table of Contents Risks Relating to Intellectual Property If we fail to adequately protect our intellectual property rights, our business could be adversely affected and we could incur additional expenses to protect our rights.
As a result of this or other legislative or regulatory changes, or other unforeseen reasons, our existing NOLs and other tax attributes could expire or otherwise be unavailable to offset future income tax liabilities. 37 Table of Contents Risks Relating to Intellectual Property If we fail to adequately protect our intellectual property rights, our business could be adversely affected and we could incur additional expenses to protect our rights.
Interchange Fees are the subject of intense legal and regulatory scrutiny and competitive pressures in the electronic payments industry. For example, the Durbin Amendment may restrict or otherwise impact the way we do business or limit our ability to charge certain fees to customers.
Interchange Fees have historically been, and continue be, the subject of intense legal and regulatory scrutiny and competitive pressures in the electronic payments industry in the United States and internationally. For example, in the United States, the Durbin Amendment may restrict or otherwise impact the way we do business or limit our ability to charge certain fees to customers.
We may not accurately forecast the financial impact of an acquisition transaction. Moreover, the anticipated benefits, growth, or synergies of any acquisition, investment, or business relationship may not be realized or we may be exposed to unknown risks or liabilities.
Moreover, the anticipated benefits, growth, or synergies of any acquisition, investment, or business relationship may not be realized or we may be exposed to unknown risks or liabilities.
In addition, job candidates and existing employees often consider the value of the equity awards they receive in connection with their employment. If the value of our equity awards declines, it may impair our ability to recruit and retain highly skilled employees.
Job candidates and existing employees often consider the value of the equity awards they receive in connection with their employment. If the value of our equity awards continues to decline or does not improve, it may impair our ability to recruit and retain highly skilled employees.
We have in the past and may in the future acquire or invest in businesses, products, or technologies that we believe could complement our platform, products, and services, expand our geographic reach or customer base, or otherwise offer growth opportunities. For example, we acquired Power Finance Inc. in February 2023.
We have in the past and may in the future acquire or invest in businesses, products, or technologies that we believe could complement our platform, products, and services, expand our geographic reach or customer base, or otherwise offer growth opportunities.
The timing and extent of amendments or new contracts related to our volume incentive arrangements with Card Networks could result in incentive payments that are recorded in a current period and based on volume processed in a prior period. We currently include Card Network fees in the pricing arrangements with the majority of our MxM customers.
The timing and extent of amendments or new contracts related to our volume incentive arrangements with Card Networks could result in incentive payments that are recorded in a current period and based on volume processed in a prior period.
It could also damage ours and our customers’ businesses and, in turn, hurt our brand and reputation. 21 Table of Contents The performance and availability of the data centers and cloud-based solutions that provide computing and storage infrastructure for our platform is outside of our control.
It could also damage ours and our customers’ businesses and, in turn, hurt our brand and reputation. The performance, availability, and connectivity of the data centers, cloud-based solutions, and other third parties that provide computing and storage infrastructure for our platform are outside of our control.
If we are unable to attract new customers, retain existing customers on favorable terms, and grow and develop those relationships to drive increased processing volumes, our business, results of operations, financial condition, and future prospects would be adversely affected.
If we are unable to attract new customers, retain existing customers on favorable terms, grow and develop those relationships, and expand our platform in a way that serves the needs of these customers to drive increased processing volumes, our business, results of operations, financial condition, and future prospects would be adversely affected.
We could also be fined and our registrations or certifications could be suspended or terminated which could limit our ability to process transactions and could have a material adverse effect on our business and results of operations.
If we fail to comply with such Card Network rules, we could also be fined and our registrations or certifications could be suspended or terminated which could limit our ability to process transactions and could have a material adverse effect on our business and results of operations.
Issuing Banks that are exempt from the Interchange Fee restrictions in the Durbin Amendment are able to access higher interchange rates. As a result, to maximize our Interchange Fees, we generally only contract with Issuing Banks that are subject to this exemption from the Durbin Amendment when we provide MxM services for debit and prepaid card programs.
As a result, to maximize our Interchange Fees in the United States, we generally only contract with Issuing Banks that are subject to this exemption from the Durbin Amendment when we provide services for debit and prepaid card programs.
Our directors, executive officers, and their affiliates, beneficially own in the aggregate 52.4% of the voting power of our capital stock as of December 31, 2023.
Our directors, executive officers, and their affiliates, beneficially own in the aggregate 46.23% of the voting power of our capital stock as of December 31, 2024.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeFollowing these risk assessments, we develop strategies, policies, standards, and action plans to minimize identified risks and reasonably address any identified gaps in existing safeguards. These steps include vulnerability management, shift-left secure product design, data encryption, endpoint security, network security, limiting and authorizing access controls, and multi-factor authentication for access to systems with data.
Biggest changeThese safeguards include vulnerability management, shift-left secure product design, data encryption, endpoint security, network security, limiting and authorizing access controls, and multi-factor authentication for access to systems with data. We also employ limited system monitoring, logging, and alerting to retain and analyze the security state of our corporate and production infrastructure.
We believe our CISO is qualified to assess and manage our material risks from cybersecurity threats based on 15 years of cybersecurity and risk management expertise as a security and risk management leader at various public and private companies and as a cyber threat intelligence analyst for a branch of the United States military.
We believe our CISO is qualified to assess and manage our material risks from cybersecurity threats based on over 15 years of cybersecurity and risk management expertise as a security and risk management leader at various public and private companies and as a cyber threat intelligence analyst for a branch of the United States military.
Our CISO reports to our Chief Product and Technology Officer and oversees a team of cybersecurity professionals in areas including Governance, Risk, and Compliance, Product and Infrastructure Security, Security Operations, and Identity Security.
Our CISO reports to our Chief Technology and AI Officer and oversees a team of cybersecurity professionals in areas including Governance, Risk, and Compliance, Product and Infrastructure Security, Security Operations, and Identity Security.
The maturation and scaling of our cybersecurity program is ongoing and despite our investments in our cybersecurity program, there will always be residual risk and the potential for control failure or bypass by a determined cyber threat actor. 43 Table of Contents
The maturation and scaling of our cybersecurity program is ongoing and despite our investments in our cybersecurity program, there will always be residual risk and the potential for control failure or bypass by a determined cyber threat actor. 45 Table of Contents
See Item 1A, “Risk Factors,” in this Annual Report on Form 10-K, including the section titled “Risk Factors—Risks Relating to Regulation” for additional information regarding the risks related to cybersecurity threats. Our Chief Information Security Officer (“CISO”) is responsible for Marqeta’s information security posture and cybersecurity program.
See Item 1A, “Risk Factors,” in this Annual Report on Form 10-K for additional information regarding the risks related to cybersecurity threats. Our Chief Information Security Officer (“CISO”) is responsible for Marqeta’s information security posture and cybersecurity program.
We conduct periodic risk assessments to identify reasonably foreseeable internal and external cybersecurity risks, the likelihood and potential damage that could result from such risks, and the sufficiency of existing policies, procedures, systems, and safeguards in place to manage such risks.
We conduct periodic risk assessments to identify reasonably foreseeable internal and external cybersecurity risks, the criticality of such risks, and the sufficiency of existing policies, procedures, systems, and safeguards in place to manage such risks. Following these risk assessments, we develop strategies, policies, standards, and action plans to minimize identified risks and reasonably address identified gaps in existing safeguards.
We engage consultants in connection with our risk assessment processes to help us design and implement our cybersecurity policies and procedures, as well as to monitor and test our safeguards.
As part of our overall risk management system, all employees are required to complete annual cybersecurity training and relevant employees are trained at least annually on applicable safeguards. We periodically engage consultants in connection with our risk assessment processes to help us design and implement our cybersecurity policies and procedures, as well as to monitor and test our safeguards.
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We also employ system monitoring, logging, and alerting to retain and analyze the security state of our corporate and production infrastructure. As part of our overall risk management system, all employees are required to complete annual cybersecurity training and relevant employees are trained at least annually on applicable safeguards.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties Our corporate headquarters is located in Oakland, California, where we currently lease approximately 63,284 square feet pursuant to a lease agreement that expires in 2026. We also lease an additional facility in London, United Kingdom. We believe that our facilities are suitable to meet our current needs.
Biggest changeItem 2. Properties Our principal executive office is located in Oakland, California, where we currently have a lease agreement that expires in 2026. We also lease additional facilities in London, United Kingdom and Warsaw, Poland. We believe that our facilities are suitable to meet our current needs.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings From time to time, we may be subject to legal proceedings and claims arising in the ordinary course of business. We are currently involved in the following matter: On August 24, 2023, a putative class action and shareholder derivative lawsuit was filed in the case captioned Stephanie Smith v. Jason Gardner, et al.
Biggest changeItem 3. Legal Proceedings From time to time, we may be subject to legal proceedings and claims arising in the ordinary course of business. We are currently involved in the following matter: On December 9, 2024, a putative securities class action lawsuit, captioned Wai v. Marqeta, Inc., et al. , Case No. 24-cv-08874 (N.D.
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(Case No. 2023-0872-MTZ) in the Court of Chancery for the State of Delaware against each of the members of our board of directors and naming Marqeta as a nominal defendant.
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Cal.), was filed in federal court in the Northern District of California (“Court”) against the Company, its Chief Executive Officer, and its Chief Financial Officer (“Defendants”) alleging violations of federal securities laws.
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The complaint alleges that the individual defendants breached fiduciary duties in approving the 2023 Share Repurchase Program by failing to implement measures to prevent Marqeta founder Jason Gardner from acquiring control of the Company or to ensure that unaffiliated stockholders receive a control premium. The plaintiff seeks damages and injunctive relief in the case, among other relief.
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The lawsuit asserts that during the putative class period of between August 7, 2024 and November 4, 2024, Defendants made false or misleading statements relating to the Company’s performance or revenue and gross profit expectations in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.
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On February 24, 2024 the parties entered into a Standstill and Release Agreement (the “Standstill Agreement”) in which (i) the plaintiff agreed to file a stipulation of dismissal of the lawsuit, (ii) Mr.
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On December 10, 2024, a second putative securities class action lawsuit, captioned Ford v. Marqeta, Inc., et al. , Case No. 24-cv-08892 (N.D. Cal.), was filed in the same Court against the same Defendants alleging violations of the same federal securities laws.
Removed
Gardner agreed not to take unilateral, affirmative action to increase his voting power above 49.99% of the total voting power of the Company’s outstanding stock for the period of time between and including February 24, 2024 and September 11, 2024, and (iii) the parties agreed to releases and related provisions. The stipulation of dismissal has received court approval.
Added
The second lawsuit asserts similar theories of liability as the first lawsuit but alleges a broader putative class period of between May 7, 2024 and November 4, 2024 and some additional and/or different allegations on which the claims are based.
Removed
The summary of the Standstill Agreement is qualified in its entirety by reference to the full text, which is filed as Exhibit 99.1 to this Form 10-K and is incorporated herein by reference. Item 4. Mine Safety Not applicable. 44 Table of Contents PART II
Added
Both lawsuits (collectively, the “Securities Actions”) seek to recover damages on behalf of shareholders who acquired shares of the Company’s common stock during their respective putative class periods. Several individuals filed motions to consolidate the Securities Actions and for appointment as lead plaintiff, which are scheduled for a hearing on March 18, 2025.
Added
We expect that the Securities Actions will be consolidated and proceed as one lawsuit after the Court appoints a lead plaintiff for the putative class. On February 4, 2025, a putative shareholder derivative lawsuit, captioned Smith v. Khalaf, et al. , Case No. 25-cv-01174 (N.D.
Added
Cal.), was filed in the same Court against the Company’s Chief Executive Officer, its Chief Financial Officer, and its Board of Directors, and names the Company as a nominal defendant.
Added
This lawsuit asserts claims for breach of fiduciary duties and violations of federal securities laws, among other claims, between the time period of May 7, 2024 and November 4, 2024 under similar theories as the Securities Actions. Another substantially similar putative shareholder derivative lawsuit, captioned Ojserkis v. Khalaf, et al. , Case No. 25-cv-01883 (N.D.
Added
Cal.), was filed on February 21, 2025. Given the inherent uncertainty of litigation, the Company cannot reasonably estimate the likelihood of an unfavorable outcome or the amount or range of any potential loss.
Added
The Company and the other Defendants intend to file a motion to dismiss the Securities Actions after the Court-appointed lead plaintiff files a consolidated amended complaint or otherwise designates the operative complaint for the Securities Actions. Item 4. Mine Safety Not applicable. 46 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

6 edited+1 added−3 removed6 unchanged
Biggest changeAll of the shares issued and sold in our IPO were registered under the Securities Act pursuant to a registration statement on Form S-1 (File No. 333-256154), which was declared effective by the SEC on June 8, 2021. Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC acted as representatives of the underwriters for the offering.
Biggest changeUse of Proceeds The IPO of our Class A common stock was effected pursuant to a registration statement on Form S-1 (File No. 333-256154), which was declared effective by the SEC on June 8, 2021.
The following stock performance graph depicts the cumulative total return on our Class A common stock relative to the cumulative total returns of the Nasdaq Composite Index and the S&P Information Technology Index during each monthly period from June 9, 2021 (the date our Class A common stock began trading on the Nasdaq Global Select Market) through December 31, 2023.
The following stock performance graph depicts the cumulative total return on our Class A common stock relative to the cumulative total returns of the Nasdaq Composite Index and the S&P Information Technology Index during each monthly period from June 9, 2021 (the date our Class A common stock began trading on the Nasdaq Global Select Market) through December 31, 2024.
There has been no material change in the planned use of the IPO proceeds as discussed in our final prospectus filed with the SEC on June 10, 2021, pursuant to Rule 424(b) of the Securities Act. Item 6. Reserved 46 Table of Contents
There has been no material change in the planned use of proceeds from our IPO as discussed in our final prospectus filed with the SEC on June 10, 2021, pursuant to Rule 424(b) of the Securities Act. Item 6. Reserved 48 Table of Contents
Under the repurchase program, we are authorized to repurchase shares through open market purchases, in privately negotiated transactions or by other means, in accordance with applicable federal securities laws, including through trading plans under Rule 10b5-1 of the Exchange Act. The share repurchase program has no set expiration date.
Under the 2024 Share Repurchase Program, the Company is authorized to repurchase shares through open market purchases, in privately negotiated transactions or by other means, in accordance with applicable federal securities laws, including through trading plans under Rule 10b5-1 of the Exchange Act.
There is no public trading market for our Class B common stock. Stockholders As of February 23, 2024, we had 43 holders of record of our Class A common stock and 57 holders of record of our Class B common stock.
There is no public trading market for our Class B common stock. Stockholders As of February 21, 2025, we had 37 holders of record of our Class A common stock and 48 holders of record of our Class B common stock.
The returns shown are based on historical results and are not intended to be indicative of future performance. 45 Table of Contents Purchase of Equity Securities by the Issuer The following table contains information relating to the repurchases of our common stock made by us in the three months ended December 31, 2023: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2) October 1 - October 31, 2023 3,804,287 $ 5.47 3,804,287 67,271,767 November 1 - November 30, 2023 4,091,046 $ 5.72 4,091,046 43,858,299 December 1 - December 31, 2023 1,779,177 $ 6.53 1,779,177 32,244,882 Total 9,674,510 9,674,510 (1) On May 8, 2023, our board of directors authorized a share repurchase program of up to $200 million of our Class A common stock beginning May 11, 2023.
The returns shown are based on historical results and are not intended to be indicative of future performance. 47 Table of Contents Purchase of Equity Securities by the Issuer The following table contains information relating to the repurchases of our common stock made by us in the three months ended December 31, 2024: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1) October 1 - October 31, 2024 1,797,349 $ 4.74 1,797,349 83,995,650 November 1 - November 30, 2024 1,000,000 $ 3.47 1,000,000 80,525,650 December 1 - December 31, 2024 — $ — — 80,525,650 Total 2,797,349 2,797,349 (1) On May 6, 2024, the Company’s board of directors authorized a share repurchase program of up to $200 million of the Company’s Class A common stock (the “2024 Share Repurchase Program”).
Removed
Use of Proceeds On June 11, 2021, we closed our IPO, of 52,272,727 shares of our Class A common stock at an offering price of $27.00 per share, including 6,818,181 shares pursuant to the exercise of the underwriters’ option to purchase additional shares of our Class A common stock, resulting in aggregate net proceeds to us of $1.3 billion after deducting underwriting discounts and commissions of $91.6 million, and offering costs of $7.5 million.
Added
The number of shares repurchased and the timing of purchases are based on general business and market conditions, and other factors, including legal requirements. The 2024 Share Repurchase Program has no set expiration date.
Removed
We also used $10.9 million of the net proceeds from our IPO to satisfy the tax withholding and remittance obligations related to the settlement of our outstanding restricted stock units in connection with the offering.
Removed
No payments were made to our directors or officers or their associates, holders of 10% or more of any class of our equity securities, or to our affiliates in connection with the issuance and sale of the securities registered.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

64 edited+30 added−7 removed32 unchanged
Biggest changeWe encourage investors to review the related GAAP financial measures and the reconciliation of the non-GAAP financial measures to their most directly comparable GAAP financial measures. 55 Table of Contents A reconciliation of net loss to adjusted EBITDA and GAAP operating expenses to non-GAAP operating expenses for the periods presented is as follows: Year Ended December 31, 2023 2022 2021 (dollars in thousands) Net revenue $ 676,171 $ 748,206 $ 517,175 Net loss $ (222,962) $ (184,780) $ (163,929) Net loss margin (33) % (25) % (32) % Total operating expenses $ 612,529 $ 529,809 $ 393,711 Net loss $ (222,962) $ (184,780) $ (163,929) Depreciation and amortization expense 10,741 3,853 3,534 Share-based compensation expense 183,630 160,743 142,660 Payroll tax expense related to share-based compensation 2,211 1,977 1,956 Acquisition-related expenses (1) 75,473 1,439 1,089 Restructuring 8,670 — — Other (income) expense, net (52,440) (24,926) 2,563 Income tax benefit (7,613) (102) (640) Adjusted EBITDA $ (2,290) $ (41,796) $ (12,767) Adjusted EBITDA Margin (0.3) % (6) % (2) % Total operating expenses $ 612,529 $ 529,809 $ 393,711 Depreciation and amortization expense (10,741) (3,853) (3,534) Share-based compensation expense (183,630) (160,743) (142,660) Payroll tax expense related to share-based compensation (2,211) (1,977) (1,956) Restructuring (8,670) — — Acquisition-related expenses (1) (75,473) (1,439) (1,089) Non-GAAP operating expenses $ 331,804 $ 361,797 $ 244,472 _______________ (1) Acquisition-related expenses, which include transaction costs, integration costs, and cash and non-cash postcombination compensation expense, have been excluded from adjusted EBITDA as such expenses are not reflective of our ongoing core operations and are not representative of the ongoing costs necessary to operate our business; instead, these are costs specifically associated with a discrete transaction. 56 Table of Contents Liquidity and Capital Resources Since our inception through June 30, 2021, we financed our operations primarily through sales of equity securities and payments received from our customers.
Biggest changeWe encourage investors to review the related GAAP financial measures and the reconciliation of the non-GAAP financial measures to their most directly comparable GAAP financial measures. 58 Table of Contents A reconciliation of net income (loss) to adjusted EBITDA and GAAP operating expenses to non-GAAP operating expenses for the periods presented is as follows: Year Ended December 31, 2024 2023 2022 (dollars in thousands) Net revenue $ 506,995 $ 676,171 $ 748,206 Net income (loss) $ 27,287 $ (222,962) $ (184,780) Net income (loss) margin 5 % (33) % (25) % Total operating expenses $ 376,315 $ 612,529 $ 529,809 Net income (loss) $ 27,287 $ (222,962) $ (184,780) Depreciation and amortization expense 17,460 10,741 3,853 Share-based compensation expense (1) (2) 136,562 130,416 107,529 Executive chairman long-term performance award (1) (144,617) 53,214 53,214 Payroll tax expense related to share-based compensation 2,570 2,211 1,977 Acquisition-related expenses (3) 41,584 75,473 1,439 Restructuring (2) — 8,670 — Other income, net (52,546) (52,440) (24,926) Income tax expense (benefit) 793 (7,613) (102) Adjusted EBITDA $ 29,093 $ (2,290) $ (41,796) Adjusted EBITDA Margin 6 % — % (6) % Total operating expenses $ 376,315 $ 612,529 $ 529,809 Depreciation and amortization expense (17,460) (10,741) (3,853) Share-based compensation expense (1) (2) (136,562) (130,416) (107,529) Executive chairman long-term performance award (1) 144,617 (53,214) (53,214) Payroll tax expense related to share-based compensation (2,570) (2,211) (1,977) Restructuring (2) — (8,670) — Acquisition-related expenses (3) (41,584) (75,473) (1,439) Non-GAAP operating expenses $ 322,756 $ 331,804 $ 361,797 _______________ (1) Prior period amounts related to our Executive Chairman Long-Term Performance Award have been reclassified to conform to the current period presentation.
Income Tax Benefit Income tax expense consists of U.S. federal and state income taxes, and income taxes related to certain foreign jurisdictions.
Income Tax Expense (Benefit) Income tax expense (benefit) consists of U.S. federal and state income taxes, and income taxes related to certain foreign jurisdictions.
On September 14, 2022, our board of directors authorized a share repurchase program (the “2022 Share Repurchase Program”) of up to $100 million of our Class A common stock beginning September 15, 2022.
Share Repurchase On September 14, 2022, our board of directors authorized a share repurchase program (the “2022 Share Repurchase Program”) of up to $100 million of our Class A common stock beginning September 15, 2022.
In this assessment, we consider if we obtain control of the specified goods or services before they are transferred to the customer. The assessment of whether we are considered the principal or the agent in a transaction could impact our Net revenue and Cost of revenue recognized on the Consolidated Statements of Operations and Comprehensive Loss.
In this assessment, we consider if we obtain control of the specified goods or services before they are transferred to the customer. The assessment of whether we are considered the principal or the agent in a transaction could impact our Net revenue and Cost of revenue recognized on the Consolidated Statements of Operations and Comprehensive Income (Loss).
This measure is used by management and our board of directors to evaluate our operating efficiency. See the section below titled “Use of Non-GAAP Financial Measures” for a discussion of the use of non-GAAP measures and a reconciliation of net loss to Adjusted EBITDA Margin.
This measure is used by management and our board of directors to evaluate our operating efficiency. See the section below titled “Use of Non-GAAP Financial Measures” for a discussion of the use of non-GAAP measures and a reconciliation of Net income (loss) to Adjusted EBITDA Margin.
Costs of Revenue Costs of revenue consist of Card Network fees, Issuing Bank fees, and card fulfillment costs for customer arrangements where the Company is the principal in providing services to the customer and excludes depreciation and amortization, which is reported separately within the Consolidated Statements of Operations and Comprehensive Loss.
Costs of Revenue Costs of revenue consist of Card Network fees, Issuing Bank fees, and card fulfillment costs for customer arrangements where the Company is the principal in providing services to the customer and excludes depreciation and amortization, which is reported separately within the Consolidated Statements of Operations and Comprehensive Income (Loss).
Revenue Share is generally computed as a percentage of the Interchange Fees earned or processing volume and is paid to our customers monthly. Revenue Share payments are recorded as a reduction to net revenue. Generally, as customers' processing volumes increase, the rates at which we share revenue increase.
Revenue Share is generally computed as a percentage of the Interchange Fees earned or processing volume and is paid to our MxM customers monthly. Revenue Share payments are recorded as a reduction to net revenue. Generally, as customers' processing volumes increase, the rates at which we share revenue increase.
A discussion regarding our liquidity, financial condition, and results of operations for the fiscal year ended December 31, 2022 compared to the fiscal year ended December 31, 2021 can be found in “Management's Discussion and Analysis of Financial Condition and Results of Operations” in in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 filed with the SEC on February 28, 2023, which is hereby incorporated by reference.
A discussion regarding our liquidity, financial condition, and results of operations for the fiscal year ended December 31, 2023 compared to the fiscal year ended December 31, 2022 can be found in “Management's Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed with the SEC on February 28, 2024, which is hereby incorporated by reference.
At December 31, 2023, we had $8.5 million in restricted cash which included a deposit held at an Issuing Bank to provide the Issuing Bank collateral in the event that our customers' funds are not deposited at the Issuing Bank in time to settle our customers' transactions with the Card Networks.
Restricted Cash At December 31, 2024, we had $8.5 million in restricted cash which included a deposit held at an Issuing Bank to provide the Issuing Bank collateral in the event that our customers' funds are not deposited at the Issuing Bank in time to settle our customers' transactions with the Card Networks.
A discussion regarding our liquidity, financial condition, and results of operations for the fiscal year ended December 31, 2023 compared to the fiscal year ended December 31, 2022 is presented below.
A discussion regarding our liquidity, financial condition, and results of operations for the fiscal year ended December 31, 2024 compared to the fiscal year ended December 31, 2023 is presented below.
We also entered into postcombination cash compensation arrangements with certain key acquired employees whereby we agreed to pay them $85.1 million of cash over a weighted average 2.2 year service period following the acquisition date (subject to forfeiture upon termination). As of December 31, 2023, $54.1 million of the postcombination cash compensation arrangements remained outstanding.
We also entered into postcombination cash compensation arrangements with certain key acquired employees whereby we agreed to pay them $85.1 million of cash over a weighted average 2.2 year service period following the acquisition date (subject to forfeiture upon termination). As of December 31, 2024, $14.2 million of the postcombination cash compensation arrangements remained outstanding.
Upon the conclusion of the measurement period or final determination of the fair value of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the Consolidated Statements of Operations and Comprehensive Loss. 59 Table of Contents
Upon the conclusion of the measurement period or final determination of the fair value of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the Consolidated Statements of Operations and Comprehensive Income (Loss). 63 Table of Contents
We believe that Adjusted EBITDA is an important measure of operating performance because it allows management and our board of directors to evaluate and compare our core operating results, including our operating efficiencies, from period to period. Additionally, we utilize Adjusted EBITDA as an input into our calculation of our annual employee bonus plans.
We believe that Adjusted EBITDA is an important measure of operating performance because it allows management and our board of directors to evaluate and compare our core operating results, including our operating efficiencies, from period to period. Additionally, we utilize Adjusted EBITDA as an input into our calculation of our annual employee bonus plans and performance-based restricted stock units.
The timing of settlement of certain operating liabilities, including Revenue Share payments, bonus payments and prepayments made to cloud-computing service providers, can affect the amounts reported as Net cash used in or provided by operating activities on the Consolidated Statement of Cash Flows.
The timing of settlement of certain operating assets and liabilities, including revenue share payments, bonus payments, prepayments made to cloud-computing service providers, settlement receivables, and network incentive receivables can affect the amounts reported as Net cash used in or provided by operating activities on the Consolidated Statement of Cash Flows.
See the section below titled “Use of Non-GAAP Financial Measures” for a discussion of the use of non-GAAP measures and a reconciliation of net loss to Adjusted EBITDA. Adjusted EBITDA Margin - Adjusted EBITDA Margin is a non-GAAP financial measure that is calculated as Adjusted EBITDA divided by net revenue.
See the section below titled “Use of Non-GAAP Financial Measures” for a discussion of the use of non-GAAP measures, a change in presentation, and a reconciliation of Net income (loss) to Adjusted EBITDA. Adjusted EBITDA Margin - Adjusted EBITDA Margin is a non-GAAP financial measure that is calculated as Adjusted EBITDA divided by Net revenue.
Under the 2023 Share Repurchase Program, we are authorized to repurchase shares through open market purchases, in privately negotiated transactions or by other means, in accordance with applicable federal securities laws, including through trading plans under Rule 10b5-1 of the Exchange Act. The 2023 Share Repurchase Program has no set expiration date.
Under the 2023 Share Repurchase Program, we are authorized to repurchase shares through open market purchases, in privately negotiated transactions or by other means, in accordance with applicable federal securities laws, including through trading plans under Rule 10b5-1 of the Exchange Act.
See the section below titled “Use of Non-GAAP Financial Measures” for a discussion of the use of non-GAAP measures and a reconciliation of total operation expenses to non-GAAP operating expenses. 48 Table of Contents Components of Results of Operations Net Revenue We have two components of net revenue: platform services revenue, net and other services revenue.
See the section below titled “Use of Non-GAAP Financial Measures” for a discussion of the use of non-GAAP measures, a change in presentation, and a reconciliation of total operation expenses to non-GAAP operating expenses. 51 Table of Contents Components of Results of Operations Net Revenue We have two components of net revenue: platform services revenue, net and other services revenue.
Non-GAAP operating expenses - Non-GAAP operating expenses is a non-GAAP financial measure that is calculated as total operating expenses adjusted to exclude depreciation and amortization; share-based compensation expense; payroll tax related to share-based compensation; restructuring charges; and acquisition related expenses which consists of due diligence costs, transaction cost and integration costs related to potential or successful acquisitions, and cash and non-cash postcombination compensation expenses.
Non-GAAP operating expenses - Non-GAAP operating expenses is a non-GAAP financial measure that is calculated as Total operating expenses adjusted to exclude depreciation and amortization; share-based compensation expense; executive chairman long-term performance award; payroll tax related to share-based compensation; restructuring charges; and acquisition-related expenses which consists of due diligence costs, transaction cost and integration costs related to potential or successful acquisitions, and cash and non-cash postcombination compensation expenses.
Customer Concentration We generated 68% and 71% of our net revenue from our largest customer, Block, during the years ended December 31, 2023 and 2022, respectively. 54 Table of Contents Use of Non-GAAP Financial Measures Our non-GAAP measures have limitations as analytical tools and you should not consider them in isolation.
Customer Concentration We generated 47% and 68% of our net revenue from our largest customer, Block, during the years ended December 31, 2024 and 2023, respectively. 57 Table of Contents Use of Non-GAAP Financial Measures Our non-GAAP measures have limitations as analytical tools and you should not consider them in isolation.
Our significant accounting policies, including recent accounting pronouncements, are described in “ Note 2 - Summary of Significant Accounting Policies” in the accompanying notes to our Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K.
Our significant accounting policies, including recently issued and adopted accounting pronouncements, are described in “ Note 2 - Summary of Significant Accounting Policies” in the accompanying notes to our Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K.
Share-based compensation increased by $20.0 million, or 12% in the year ended December 31, 2023 compared to the year ended December 31, 2022 mainly due to the increase in the number of RSU awards granted to employees, partially offset by higher share-based compensation capitalized for internal-use development.
Share-based compensation increased by $9.0 million, or 7%, in the year ended December 31, 2024 compared to the year ended December 31, 2023 mainly due to the increase in the number of RSU awards granted to employees, partially offset by higher share-based compensation capitalized for internal-use development.
In June 2021, we completed our IPO in which we received aggregate net proceeds of $1.3 billion after deducting underwriting discounts and commissions of $91.6 million and offering costs of $7.5 million. At December 31, 2023, our principal sources of liquidity included cash, cash equivalents, and short-term investments totaling $1.2 billion, with such amounts held for working capital purposes.
In June 2021, we completed our IPO in which we received aggregate net proceeds of $1.3 billion after deducting underwriting discounts and commissions of $91.6 million and offering costs of $7.5 million. 59 Table of Contents Sources of Cash At December 31, 2024, our principal sources of liquidity included cash, cash equivalents, and short-term investments totaling $1.1 billion, with such amounts held for working capital purposes, and cash provided by operations.
Interchange Fees are earned on card transactions we process for our customers and are based on a percentage of the transaction amount plus a fixed amount per transaction. Interchange Fees are recognized when the associated transactions are settled. Revenue Share payments are incentives to our customers to increase their processing volumes on our platform.
The Company earns Interchange Fees on card transactions we process for our customers and are based on a percentage of the transaction amount plus a fixed amount per transaction. Interchange Fees are recognized when the associated transactions are settled. “Revenue Share” payments are incentives to our customers to increase their processing volumes on our platform.
Our cash equivalents and short-term investments were comprised primarily of bank deposits, money market funds, U.S. treasury bills, U.S. treasury securities, U.S. agency securities, asset-backed securities and corporate debt securities. We have generated significant operating losses as reflected in our accumulated deficit. We expect to continue to incur operating losses for the foreseeable future.
Our cash equivalents and short-term investments were comprised primarily of bank deposits, money market funds, U.S. treasury bills, U.S. treasury securities, U.S. agency securities, asset-backed securities, and corporate debt securities. We have generated significant operating losses as reflected in our accumulated deficit, which is a trend we expect to continue.
The decrease was primarily due to the revenue presentation change for our fees owed to Issuing Banks and Card Networks related to the Cash App primary Card Network volume which are now reflected within net revenue as a result of the August 2023 Block Amendment. In addition, the Company realized improved economics with Issuing Bank partners.
The decrease was primarily due to the revenue presentation change for our fees owed to Issuing Banks and Card Networks related to the Cash App primary Card Network volume which are now reflected within net revenue as a result of the August 2023 Block Amendment.
The increase was due to higher software as a service costs to support our continued growth and higher software licensing costs as we implement new internal systems and tools. Professional services expenses decreased by $1.8 million, or 8%, for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Technology expenses increased by $4.4 million, or 8%, for the year ended December 31, 2024 compared to the year ended December 31, 2023. The increase was due to higher software as a service costs to support our continued growth and higher software licensing costs as we implement new internal systems and tools.
In prior periods, these costs were included within Costs of revenue. The impact of these fees for the year ended December 31, 2023 was a $234.4 million reduction to net revenue, negatively impacting the growth rate by 31 percentage points. These decreases in net revenue were partially offset by increased TPV from Block’s programs.
In prior periods, these costs were included within Costs of revenue. The impact of these fees for the year ended December 31, 2024 was a $264.7 million reduction to Net revenue, negatively impacting the growth rate by 39 ppts. These decreases in net revenue were partially offset by increased TPV from Block’s programs.
Operating Expenses Compensation and Benefits. Compensation and benefits consist primarily of salaries, employee benefits, severance and other termination benefits, incentive compensation, contractors’ cost, and share-based compensation. 49 Table of Contents Technology. Technology consists primarily of third-party hosting fees, software licenses, and hardware purchases below our capitalization threshold, and support and maintenance costs. Professional Services.
Compensation and benefits consist primarily of salaries, employee benefits, severance and other termination benefits, incentive compensation, contractors’ cost, and share-based compensation. Technology. Technology consists primarily of third-party hosting fees, software licenses, and hardware purchases below our capitalization threshold, and support and maintenance costs. Professional Services. Professional services consist primarily of consulting, legal, audit, and recruiting fees. Occupancy.
Our gross margin increased to 49% during the year ended December 31, 2023 from 43% during the year ended December 31, 2022.
Our gross margin increased to 69% during the year ended December 31, 2024 from 49% during the year ended December 31, 2023.
Adjusted EBITDA - Adjusted EBITDA is a non-GAAP financial measure that is calculated as net income (loss) adjusted to exclude depreciation and amortization; share-based compensation expense; payroll tax related to share-based compensation; restructuring charges; acquisition related expenses which consist of due diligence costs, transaction costs and integration costs related to potential or successful acquisitions and cash and non-cash postcombination compensation expenses; income tax expense (benefit); and other income (expense) net, which consists of changes in the fair value of redeemable convertible preferred stock warrant liabilities (for periods prior to the IPO), interest income from our short-term investments, realized foreign currency gains and losses, our share of equity method investments’ profit or loss, impairment of equity method investments or other financial instruments, and gain from sale of equity method investments.
Adjusted EBITDA - Adjusted EBITDA is a non-GAAP financial measure that is calculated as Net income (loss) adjusted to exclude depreciation and amortization; share-based compensation expense; executive chairman long-term performance award; payroll tax related to share-based compensation; restructuring charges; acquisition related expenses which consist of due diligence costs, transaction costs and integration costs related to potential or successful acquisitions and cash and non-cash postcombination compensation expenses; income tax expense (benefit); and other income, net, which consists of interest income from our short-term investments, realized foreign currency gains and losses, our share of equity method investments’ profit or loss, impairment of equity method investments or other financial instruments, and gain from sale of equity method investments.
These estimates can include, but are not limited to: • future expected cash flows from acquired developed technologies; • obsolescence curves and other useful life assumptions, such as the period of time and intended use of acquired intangible assets in our product offerings; • discount rates; • uncertain tax positions and tax-related valuation allowances; and • fair value of assumed equity awards.
These estimates can include, but are not limited to: • future expected cash flows from acquired developed technologies; • obsolescence curves and other useful life assumptions, such as the period of time and intended use of acquired intangible assets in our product offerings; • discount rates; • uncertain tax positions and tax-related valuation allowances; and • fair value of assumed equity awards. 62 Table of Contents These estimates are inherently uncertain and unpredictable, and unanticipated events and circumstances may occur that could affect the accuracy or validity of such assumptions, estimates, or actual results.
As part of the terms of the acquisition, we paid additional cash of $53.1 million for contingent consideration tied to performance-based goals that were achieved.
Upon the closure of the acquisition, we paid $135.8 million to the shareholders of Power Finance Inc, net of cash acquired. As part of the terms of the acquisition, we paid additional cash of $53.1 million for contingent consideration tied to performance-based goals that were achieved.
Professional services consist primarily of consulting, legal, audit, and recruiting fees. Occupancy. Occupancy consists primarily of rent expense, repairs, maintenance, and other building related costs. Depreciation and Amortization. Depreciation and amortization consist primarily of depreciation of our fixed assets and amortization of capitalized Internal-use software and developed technology intangible assets. Marketing and Advertising.
Occupancy consists primarily of rent expense, repairs, maintenance, and other building related costs. Depreciation and Amortization. Depreciation and amortization consist primarily of depreciation of our fixed assets and amortization of capitalized internal-use software and developed technology intangible assets. Marketing and Advertising. Marketing and advertising consist primarily of costs of general marketing and promotional activities. Other Operating Expenses.
Income Tax Benefit Income tax benefit increased by $7.5 million for the year ended December 31, 2023 compared to the year ended December 31, 2022 primarily attributable to a $8.0 million partial valuation allowance release due to the Power Finance acquisition, offset by income tax expenses resulting from profitable foreign operations.
Income Tax Expense (Benefit) We recognized income tax expense of $0.8 million for the year ended December 31, 2024 compared to an income tax benefit of $7.6 million for the year ended December 31, 2023, which was primarily attributable to an $8.0 million partial valuation allowance release during 2023 due to the Power Finance acquisition, partially offset by income tax expenses resulting from profitable foreign operations.
Net cash provided by operating activities was $21.1 million for the year ended December 31, 2023 compared to a net cash used of $13.0 million in the year ended December 31, 2022.
Net cash provided by operating activities was $58.2 million for the year ended December 31, 2024 compared to $21.1 million in the year ended December 31, 2023.
For certain incentive arrangements with an annual measurement period, the one-year period may not align with our fiscal year. Additionally, unusual fluctuations in Card Network fees can occur in the quarter in which volume thresholds are attained as higher incentive rates are applied to volumes over the entire measurement periods, which can span six or twelve months.
As such, unusual fluctuations in Card Network fees can occur in the quarter in which volume thresholds are attained as higher incentive rates are applied to volumes over the entire measurement periods, which can span six or twelve months.
Other Income (Expense), net Other income (expense), net consists primarily of interest income from our short-term investments and cash deposits, gain from sale of equity method investments, impairment of equity method investments or other financial instruments, equity method investment share of loss, realized foreign currency gains and losses, and changes in the fair value of the redeemable convertible preferred stock warrant liabilities (for periods prior to the IPO).
Other Income, net Other income, net consists primarily of interest income from our short-term investments and cash deposits, gain from sale of equity method investments, impairment of equity method investments or other financial instruments, equity method investment share of loss, and realized foreign currency gains and losses.
Revenue from other customers decreased $3.4 million, primarily driven by one customer migrating a portion of one of their programs to a competitor starting in Q3 2022, unfavorable changes in the mix of our card programs, particularly the growth of our PxM offering, and the impact of contract renewals partially offset by a 33% increase in TPV.
Net revenue from other customers increased $52.4 million primarily driven by an increase in TPV partially offset by the impact of contract renewals and unfavorable changes in the mix of our card programs, particularly the growth of our PxM offering.
We believe our existing cash and cash equivalents, and our short-term investments will be sufficient to meet our working capital and capital expenditure needs for more than the next 12 months.
We believe our existing cash and cash equivalents and our short-term investments will be sufficient to meet our working capital and capital expenditure needs for more than the next 12 months, including the funding of our planned acquisition. For additional information about our planned acquisition, see Note 4 “Business Combinations” to our Consolidated Financial Statements.
The increase in net cash provided by investing activities during fiscal year 2023 was primarily due to sale and maturities in short-term investments, partially offset by the purchase of short-term investments, the Power Finance acquisition in 2023, the sale of equity method investments in 2022, and capitalization of internal-use software.
The increase in net cash provided by investing activities is primarily due to the Power Finance acquisition which occurred in 2023, partially offset by a decrease in cash inflows from the maturities and sales of short-term investments and higher capitalization of internal-use-software in the current year.
Restricted cash also includes cash held at a bank to secure our payments under a lease agreement for our office space. 57 Table of Contents Cash Flows The following table summarizes our cash flows for the periods indicated: Year Ended December 31, 2023 2022 2021 (in thousands) Net cash provided by (used in) operating activities $ 21,104 $ (12,966) $ 56,972 Net cash provided by (used in) investing activities 38,516 28,718 (329,121) Net cash (used in) provided by financing activities (261,794) (79,487) 1,299,297 (Decrease) Increase in cash, cash equivalents, and restricted cash $ (202,174) $ (63,735) $ 1,027,148 Operating Activities Our largest source of cash provided by our operating activities is our net revenue.
Cash Flows The following table summarizes our cash flows for the periods indicated: Year Ended December 31, 2024 2023 2022 (in thousands) Net cash provided by (used in) operating activities $ 58,170 $ 21,104 $ (12,966) Net cash provided by investing activities 70,788 38,516 28,718 Net cash used in financing activities (186,914) (261,794) (79,487) Decrease in cash, cash equivalents, and restricted cash $ (57,956) $ (202,174) $ (63,735) Operating Activities Our largest source of cash provided by our operating activities is our net revenue.
We maintain a full valuation allowance against our U.S. federal and state net deferred tax assets as we have concluded that it is not more likely than not that we will realize our net deferred tax assets. 50 Table of Contents Results of Operations The following table sets forth our results of operations for the periods presented: Year Ended December 31, (dollars in thousands) 2023 2022 2021 Net revenue $ 676,171 $ 748,206 $ 517,175 Costs of revenue 346,657 428,205 285,470 Gross profit 329,514 320,001 231,705 Operating expenses: Compensation and benefits 499,595 415,094 318,116 Technology 55,612 52,361 33,637 Professional services 21,679 23,479 18,443 Occupancy 4,361 4,514 4,181 Depreciation and amortization 10,741 3,853 3,534 Marketing and advertising 2,566 3,995 2,284 Other operating expenses 17,975 26,513 13,516 Total operating expenses 612,529 529,809 393,711 Loss from operations (283,015) (209,808) (162,006) Other income (expense), net 52,440 24,926 (2,563) Loss before income tax expense (230,575) (184,882) (164,569) Income tax benefit (7,613) (102) (640) Net loss $ (222,962) $ (184,780) $ (163,929) 51 Table of Contents Comparison of the Fiscal Years Ended December 31, 2023 and 2022 Net Revenue Year Ended December 31, (dollars in thousands) 2023 2022 $ Change % Change Net revenue: Total platform services, net $ 654,553 $ 725,629 $ (71,076) (10) % Other services 21,618 22,577 (959) (4) % Total net revenue $ 676,171 $ 748,206 $ (72,035) (10) % Total Processing Volume (TPV) (in millions) $ 222,264 $ 166,260 $ 56,004 34 % Total net revenue decreased by $72.0 million, or 10%, for the year ended December 31, 2023 compared to the year ended December 31, 2022, of which $68.6 million was attributable to our largest customer, Block.
We maintain a full valuation allowance against our U.S. federal and state net deferred tax assets as we have concluded that it is not more likely than not that we will realize our net deferred tax assets. 53 Table of Contents Results of Operations The following table sets forth our results of operations for the periods presented: Year Ended December 31, (dollars in thousands) 2024 2023 2022 Net revenue $ 506,995 $ 676,171 $ 748,206 Costs of revenue 155,146 346,657 428,205 Gross profit 351,849 329,514 320,001 Operating expenses (benefit): Compensation and benefits 397,595 446,381 361,880 Technology 60,059 55,612 52,361 Professional services 20,057 21,679 23,479 Occupancy 5,995 4,361 4,514 Depreciation and amortization 17,460 10,741 3,853 Marketing and advertising 2,986 2,566 3,995 Other operating expenses 16,780 17,975 26,513 Executive chairman long-term performance award (144,617) 53,214 53,214 Total operating expenses 376,315 612,529 529,809 Loss from operations (24,466) (283,015) (209,808) Other income, net 52,546 52,440 24,926 Income (Loss) before income tax expense 28,080 (230,575) (184,882) Income tax expense (benefit) 793 (7,613) (102) Net income (loss) $ 27,287 $ (222,962) $ (184,780) 54 Table of Contents Comparison of the Fiscal Years Ended December 31, 2024 and 2023 Net Revenue Year Ended December 31, (dollars in thousands) 2024 2023 $ Change % Change Net revenue: Total platform services, net $ 481,665 $ 654,553 $ (172,888) (26) % Other services 25,330 21,618 3,712 17 % Total net revenue $ 506,995 $ 676,171 $ (169,176) (25) % Total Processing Volume (TPV) (in millions) $ 291,105 $ 222,264 $ 68,841 31 % Total net revenue decreased by $169.2 million, or 25%, for the year ended December 31, 2024 compared to the year ended December 31, 2023, of which $221.5 million was attributable to our largest customer, Block.
On May 8, 2023, our board of directors authorized a share repurchase program (the “2023 Share Repurchase Program” and together with the 2022 Share Repurchase Program, the “Share Repurchase Programs”) of up to $200 million of our Class A common stock.
The 2022 Share Repurchase Program had no set expiration date; however, the 2022 Share Repurchase Program was exhausted during the first quarter of 2023. On May 8, 2023, our board of directors authorized a share repurchase program (the “2023 Share Repurchase Program”) of up to $200 million of our Class A common stock.
These decreases were partially offset by increases in Issuing Bank and Network fees driven by increased TPV. 52 Table of Contents As a result of the decreases in costs of revenue being less than the decreases in net revenue explained above, our gross profit increased by $9.5 million, or 3%, for the year ended December 31, 2023 compared to the year ended December 31, 2022.
As a result of the decreases in costs of revenue being less than the decreases in net revenue explained above, our gross profit increased by $22.3 million, or 7%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Net cash used in financing activities was $261.8 million for the year ended December 31, 2023 compared to a net cash used of $79.5 million in the year ended December 31, 2022.
Net cash provided by investing activities was $70.8 million for the year ended December 31, 2024 compared to $38.5 million in the year ended December 31, 2023.
In addition to the results determined in accordance with GAAP, the following table sets forth a key operating metric and non-GAAP financial measures that we consider useful in evaluating our operating performance. 47 Table of Contents Year Ended December 31, 2023 2022 2021 Total Processing Volume (TPV) (in millions) $ 222,264 $ 166,260 $ 111,133 Net revenue (in thousands) $ 676,171 $ 748,206 $ 517,175 Gross profit (in thousands) $ 329,514 $ 320,001 $ 231,705 Gross margin 49 % 43 % 45 % Net loss (in thousands) $ (222,962) $ (184,780) $ (163,929) Net loss margin (33) % (25) % (32) % Total operating expenses (in thousands) $ 612,529 $ 529,809 $ 393,711 Non-GAAP Measures: Adjusted EBITDA (in thousands) $ (2,290) $ (41,796) $ (12,767) Adjusted EBITDA margin (0.3) % (6) % (3) % Non-GAAP operating expenses (in thousands) $ 331,804 $ 361,797 $ 244,472 Total Processing Volume (“TPV”) - TPV represents the total dollar amount of payments processed through our platform, net of returns and chargebacks.
Year Ended December 31, 2024 2023 2022 Total Processing Volume (TPV) (in millions) $ 291,105 $ 222,264 $ 166,260 Net revenue (in thousands) $ 506,995 $ 676,171 $ 748,206 Gross profit (in thousands) $ 351,849 $ 329,514 $ 320,001 Gross margin 69 % 49 % 43 % Net income (loss) (in thousands) $ 27,287 $ (222,962) $ (184,780) Net income (loss) margin 5 % (33) % (25) % Total operating expenses (in thousands) $ 376,315 $ 612,529 $ 529,809 Non-GAAP Measures: Adjusted EBITDA (in thousands) $ 29,093 $ (2,290) $ (41,796) Adjusted EBITDA margin 6 % — % (6) % Non-GAAP operating expenses (in thousands) $ 322,756 $ 331,804 $ 361,797 50 Table of Contents Total Processing Volume (“TPV”) - TPV represents the total dollar amount of payments processed through our platform, net of returns and chargebacks.
The growth in TPV for our top five customers, as determined by their individual TPV in each respective period, was 33% for the year ended December 31, 2023 compared to the year ended December 31, 2022. This growth was mirrored by a 37% increase in TPV from all other customers for the same period.
The increase in TPV was mainly driven by growth across all our major verticals, particularly financial services, and PxM customers. The growth in TPV for our top five customers, as determined by their individual processing volume in each respective period, was 24% for the year ended December 31, 2024 compared to the year ended December 31, 2023.
As of the date of filing this Annual Report on Form 10-K, we have access to and control over all our cash, cash equivalents and short-term investments, except amounts held as restricted cash. Our future capital requirements will depend on many factors, including our planned continuing investment in product development, platform infrastructure, share repurchases, and global expansion.
As of the date of filing this Annual Report on Form 10-K, we have access to and control over all our cash, cash equivalents, and short-term investments, except amounts held as restricted cash. On February 3, 2023, we acquired all outstanding stock of Power Finance.
Impact of Macroeconomic Factors We are unable to predict the impact macroeconomic factors, including various geopolitical conflicts, ongoing supply chain shortages, higher inflation and interest rates, and uncertainty in global economic conditions will have on our processing volumes, and on our future results of operations.
See the section titled “Business” under Part I, Item 1 of this Annual Report on Form 10-K for further discussion of our business and products. 49 Table of Contents Impact of Macroeconomic Factors We are unable to predict the impact macroeconomic factors, including various geopolitical conflicts, uncertainty related to global elections, changes in inflation and interest rates, and uncertainty in global economic conditions, will have on our processing volumes and on our future results of operations.
Net cash used in investing activities consists primarily of purchases of short-term investments, purchases of property and equipment, and equity method investments. Net cash provided by investing activities was $38.5 million for the year ended December 31, 2023 compared to $28.7 million in the year ended December 31, 2022.
Investing Activities Net cash provided by investing activities consists primarily of maturities and sales of our investments in short-term investments and sale of equity method investments. Net cash used in investing activities consists primarily of purchases of short-term investments, purchases of property and equipment, and equity method investments.
The preparation of these Consolidated Financial Statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs, and expenses, and related disclosures. On an ongoing basis, we evaluate our accounting estimates and assumptions. Our actual results may differ from these estimates under different assumptions or conditions.
Critical Accounting Policies and Estimates Our Consolidated Financial Statements are prepared in accordance with accounting principles generally accepted in the United States. The preparation of these Consolidated Financial Statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs, and expenses, and related disclosures.
The increase in employee salaries was driven by $68.9 million in postcombination compensation costs to former employees of Power Finance and $11.6 million in costs related to the restructuring announced in the second quarter of 2023, partially offset by higher salaries, bonus, and benefits costs capitalized for internal-use software development.
The decrease was largely driven by lower year-over-year postcombination compensation costs to former employees of Power Finance. To a lesser extent, lower year-over-year severance costs related to the restructuring that occurred in 2023, lower average headcount, and an increase in salaries, bonus, and benefits costs capitalized for internal-use software development in 2024 also contributed to the decrease.
Costs of Revenue and Gross Margin Year Ended December 31, (dollars in thousands) 2023 2022 $ Change % Change Costs of revenue: Card Network fees, net $ 309,453 $ 380,162 $ (70,709) (19) % Issuing Bank fees 21,549 30,160 (8,611) (29) % Other 15,655 17,883 (2,228) (12) % Total costs of revenue $ 346,657 $ 428,205 $ (81,548) (19) % Gross profit $ 329,514 $ 320,001 $ 9,513 3 % Gross margin 49 % 43 % Costs of revenue decreased by $81.5 million, or 19%, for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Costs of Revenue and Gross Margin Year Ended December 31, (dollars in thousands) 2024 2023 $ Change % Change Costs of revenue: Card Network fees, net $ 123,332 $ 309,453 $ (186,121) (60) % Issuing Bank fees 13,408 21,549 (8,141) (38) % Other 18,406 15,655 2,751 18 % Total costs of revenue $ 155,146 $ 346,657 $ (191,511) (55) % Gross profit $ 351,849 $ 329,514 $ 22,335 7 % Gross margin 69 % 49 % Costs of revenue decreased by $191.5 million, or 55%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Marketing and advertising consist primarily of costs of general marketing and promotional activities. Other Operating Expenses. Other operating expenses consist primarily of insurance costs, indemnification costs, travel-related expenses, indirect state and local taxes, and other general office expenses.
Other operating expenses consist primarily of insurance costs, indemnification costs, travel-related expenses, indirect state and local taxes, and other general office expenses. Executive Chairman Long-Term Performance Award. Executive Chairman Long-Term Performance Award consists of share-based compensation related to the Executive Chairman’s Long-Term Performance Award, including the impact of forfeiture.
The increase in net cash used in financing activities is primarily due to payments to repurchase shares under the Share Repurchase Programs, the payment of the contingent consideration from our Power Finance acquisition and share-based compensation activity. Obligations and Other Commitments Our principal commitments consist of obligations under our operating leases for office space and other non-cancellable purchase commitments.
The decrease in net cash used in financing activities is primarily due to the payment of the contingent consideration from our Power Finance acquisition in the prior year and lower payments to repurchase our Class A common stock under the 2024 and 2023 Share Repurchase Programs, partially offset by higher tax payments related to net share settlement of share-based compensation awards.
We also deliver robust card program management, allowing our customers to embed Marqeta in their offering without having to build certain complex compliance elements or customer support services. See the section titled “Business” under Part I, Item 1 of this Annual Report on Form 10-K for further discussion of our business and products.
We also deliver robust card program management, allowing our customers to embed Marqeta in their offering without having to build certain complex compliance elements or customer support services. Marqeta’s innovative products are developed with deep domain expertise and a customer-first mindset to launch, scale, and manage card programs.
The 2022 Share Repurchase Program had no set expiration date; however, the 2022 Share Repurchase Program was exhausted during the first quarter of 2023.
The 2023 Share Repurchase Program has no set expiration date; however, the 2023 Share Repurchase Program was exhausted during the first quarter of 2024. On May 6, 2024, our board of directors authorized a share repurchase program (the “2024 Share Repurchase Program”) of up to $200 million of our Class A common stock.
For additional information about our operating leases and non-cancellable purchase commitments, see Note 7 “Leases” and Note 8 “Commitments and Contingencies” to our Consolidated Financial Statements. 58 Table of Contents Critical Accounting Policies and Estimates Our Consolidated Financial Statements are prepared in accordance with accounting principles generally accepted in the United States.
Obligations and Other Commitments Our principal commitments consist of obligations under our operating leases for office space and other non-cancellable purchase commitments. For additional information about our operating leases and non-cancellable purchase commitments, see Note 9 “Leases” and Note 10 “Commitments and Contingencies” to our Consolidated Financial Statements.
Financing Activities Net cash provided by financing activities consists primarily of proceeds from the issuance of our equity securities. Net cash used in financing activities consists primarily of net payments related to the share-based compensation activity and share repurchase programs.
Financing Activities Net cash used in financing activities consists primarily of net payments related to the share-based compensation activities and share repurchase programs. 61 Table of Contents Net cash used in financing activities was $186.9 million for the year ended December 31, 2024 compared to $261.8 million in the year ended December 31, 2023.
Note that the top five customers may differ between the two periods.
This growth was mirrored by a 67% increase in TPV from all other customers for the same period. Note that the top five customers may differ between the two periods.
The decrease was due to the decreased consulting and recruiting fees. Occupancy expense remained relatively flat for the year ended December 31, 2023 compared to the year ended December 31, 2022. Depreciation and amortization increased by $6.9 million, or 179%, for the year ended December 31, 2023 compared to the year ended December 31, 2022.
The decrease was due to the lower consulting fees incurred year over year. 56 Table of Contents Occupancy expense increased by $1.6 million, or 37%, for the year ended December 31, 2024 compared to the year ended December 31, 2023. The increase was driven by the $1.4 million impairment of the right-of-use assets associated with the Company's Oakland office.
Operating Expenses Year Ended December 31, (dollars in thousands) 2023 2022 $ Change % Change Operating expenses: Salaries, bonus, benefits and payroll taxes $ 318,856 $ 254,351 $ 64,505 25 % Share-based compensation 180,739 160,743 19,996 12 % Total compensation and benefits 499,595 415,094 84,501 20 % Percentage of net revenue 74 % 55 % Technology 55,612 52,361 3,251 6 % Percentage of net revenue 8 % 7 % Professional services 21,679 23,479 (1,800) (8) % Percentage of net revenue 3 % 3 % Occupancy 4,361 4,514 (153) (3) % Percentage of net revenue 1 % 1 % Depreciation and amortization 10,741 3,853 6,888 179 % Percentage of net revenue 2 % 1 % Marketing and advertising 2,566 3,995 $ (1,429) (36) % Percentage of net revenue — % 1 % Other operating expenses 17,975 26,513 (8,538) (32) % Percentage of net revenue 3 % 4 % Total operating expenses $ 612,529 $ 529,809 $ 82,720 Percentage of net revenue 91% 71% Salaries, bonus, benefits, and payroll taxes increased by $64.5 million, or 25%, for the year ended December 31, 2023 compared to the year ended December 31, 2022, primarily due to a $74.7 million, or 38%, increase in employee salaries, partially offset by a $5.3 million, or 13%, decrease in employee bonuses and a $4.8 million, or 35%, decrease in contractor expense.
Operating Expenses (Benefit) Year Ended December 31, (dollars in thousands) 2024 2023 $ Change % Change Operating expenses (benefit): Salaries, bonus, benefits, and payroll taxes $ 261,033 $ 318,856 $ (57,823) (18) % Share-based compensation 136,562 127,525 9,037 7 % Total compensation and benefits 397,595 446,381 (48,786) (11) % Percentage of net revenue 78 % 66 % Technology 60,059 55,612 4,447 8 % Percentage of net revenue 12 % 8 % Professional services 20,057 21,679 (1,622) (7) % Percentage of net revenue 4 % 3 % Occupancy 5,995 4,361 1,634 37 % Percentage of net revenue 1 % 1 % Depreciation and amortization 17,460 10,741 6,719 63 % Percentage of net revenue 3 % 2 % Marketing and advertising 2,986 2,566 420 16 % Percentage of net revenue 1 % — % Other operating expenses 16,780 17,975 (1,195) (7) % Percentage of net revenue 3 % 3 % Executive chairman long-term performance award (144,617) 53,214 (197,831) (372) % Percentage of net revenue (29) % 8 % Total operating expenses $ 376,315 $ 612,529 $ (236,214) (39) % Percentage of net revenue 74% 91% Salaries, bonus, benefits, and payroll taxes decreased by $57.8 million, or 18%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
The increase was primarily due to the amortization of developed technology intangible assets originating from the Power Finance acquisition. Marketing and advertising expenses decreased by $1.4 million, or 36%, for the year ended December 31, 2023 compared to the year ended December 31, 2022 due to decreased conference and trade show costs incurred in the current year.
Marketing and advertising expenses increased by $0.4 million, or 16%, for the year ended December 31, 2024 compared to the year ended December 31, 2023. Other operating expenses decreased by $1.2 million, or 7%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Other services revenue decreased $1.0 million, or 4%, for the year ended December 31, 2023 compared to the year ended December 31, 2022 due primarily to a decrease in card fulfillment revenue. The increase in TPV was mainly driven by growth across all our major verticals, particularly financial services, and PxM customers.
Other services revenue increased $3.7 million, or 17%, for the year ended December 31, 2024 compared to the year ended December 31, 2023. This growth was driven by a rise in card-related fulfillments, which included both one-time replacements and an overall increase in customer card shipments compared to the prior period.
Removed
Year Ended December 31, (dollars in thousands) 2023 2022 $ Change % Change Share-based compensation: Restricted stock units $ 99,648 $ 76,094 $ 23,554 31 % Stock options 26,323 28,816 (2,493) (9) % Executive Chairman Long-Term Performance Award 53,214 53,214 — — % Employee Stock Purchase Plan 1,554 2,619 (1,065) (41) % Total share-based compensation $ 180,739 $ 160,743 $ 19,996 12 % 53 Table of Contents Technology expenses increased by $3.3 million, or 6%, for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Added
Marqeta provides all of its customers with issuer processor services, and for most of its customers it also acts as a card program manager.
Removed
Other operating expenses decreased by $8.5 million, or 32%, for the year ended December 31, 2023 compared to the year ended December 31, 2022. The decrease was primarily due to cost optimization initiatives and an indemnification cost of $5.9 million that was recognized in the prior year.
Added
Depending on a customer’s desired level of control and responsibility, Marqeta can work with companies in a range of different configurations, but generally provides the following offerings: • Managed By Marqeta: With Managed By Marqeta, Marqeta typically connects customers to an Issuing Bank partner to act as the BIN sponsor for the customer’s card program, manages the customer’s card program on behalf of the Issuing Bank, and provides a full range of services including configuring many of the critical resources required by a customer’s production environment.
Removed
Other Income (Expense), Net Year Ended December 31, (dollars in thousands) 2023 2022 $ Change % Change Other income (expense), net $ 52,440 $ 24,926 $ 27,514 110 % Percentage of net revenue 8 % 3 % Other income (expense), net increased by $27.5 million, or 110%, for the year ended December 31, 2023 compared to the year ended December 31, 2022 primarily due to an increase of $32.8 million in interest income earned on our short-term investments portfolio and cash deposit balances, offset by a gain of $17.9 million from the sale of the Company’s equity method investment in a private company paired with an impairment of $11.6 million of an option to purchase the remaining equity interests in an equity method investee incurred during the prior year.
Added
In addition to providing the customer access to the Marqeta dashboard via our APIs, Marqeta also manages a number of the primary tasks related to launching a card program, such as defining and managing the program with the Card Networks and Issuing Bank, operating the program and managing certain profitability components, and managing compliance with applicable regulations, the Issuing Bank, and Card Network rules.
Removed
As of December 31, 2023, $32.2 million remained available for future share repurchases under the 2023 Share Repurchase Program. On February 3, 2023, we acquired all outstanding stock of Power Finance. Upon the closure of the acquisition, we paid $135.8 million to the shareholders of Power Finance Inc, net of cash acquired.
Added
Also available are a variety of managed services, including dispute management, fraud scoring, card fulfillment, reconciliation, and cardholder support services. • Powered By Marqeta: With Powered By Marqeta, Marqeta also provides customers access to the Marqeta dashboard via our APIs, provides payment processing, and assists with certain configuration elements that enable the customer to use the platform independently.
Removed
During the second quarter of 2023, we announced a restructuring plan intended to reduce operating expenses and improve profitability by reducing the Company’s workforce. In connection with the restructuring plan, we have paid approximately $14.6 million to impacted employees primarily related to one-time severance and benefit payments as of December 31, 2023.
Added
Generally, our PxM customers are responsible for other elements of the card program, including defining and managing the program with the Card Networks and Issuing Bank as well as managing compliance with applicable regulations, the Issuing Bank, and Card Network rules.
Removed
The increase in net cash provided by operating activities during fiscal year 2023 was mainly due to increased non-cash expenses and the timing of payments for costs of our services and operating expenses. Investing Activities Net cash provided by investing activities consists primarily of maturities and sales of our investments in short-term investments and sale of equity method investments.
Added
Given the modularity of the Marqeta platform, certain customers can also opt to incorporate some elements of MxM into their card program to create a custom solution. Many customers adopt some combination of the MxM managed services even when not adopting the full MxM offering.
Removed
These estimates are inherently uncertain and unpredictable, and unanticipated events and circumstances may occur that may affect the accuracy or validity of such assumptions, estimates, or actual results.
Added
In addition to the results determined in accordance with GAAP, the following table sets forth a key operating metric and non-GAAP financial measures that we consider useful in evaluating our operating performance.
Added
“Interchange Fees” are transaction-based and volume-based fees set by a Card Network and paid by a merchant bank to the Issuing Bank that issued the payment card used to purchase goods or services from a merchant.
Added
For certain incentive arrangements with an annual measurement period, the one-year period may not align with our fiscal year. 52 Table of Contents We record network incentives in the period we attain the contractual volume thresholds, given the uncertainty in the ultimate annual attainment of incentives.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe fair value of our cash, cash equivalents, and short-term investments would not be significantly affected by either an i ncrease or decrease in interest rates due to the short-term maturities of the majority of these instruments.
Biggest changeInterest Rate Risk We had cash, cash equivalents, and short-term investments totaling $1.1 billion as of December 31, 2024. The fair value of our cash, cash equivalents, and short-term investments would not be significantly affected by either an i ncrease or decrease in interest rates due to the short-term maturities of the majority of these instruments.
As of December 31, 2023, a hypothetical 10% change in foreign currency exchange rates applicable to our business would not have had a material impact on our Consolidated Financial Statements. 60 Table of Contents
As of December 31, 2024, a hypothetical 10% change in foreign currency exchange rates applicable to our business would not have had a material impact on our Consolidated Financial Statements. 64 Table of Contents
Removed
Interest Rate Risk We had cash, cash equivalents, and short-term investments totaling $1.2 billion as of December 31, 2023. Such amounts included cash deposits, money market funds, U.S. treasury bills, U.S. treasury securities, U.S. agency securities , commercial paper, and corporate debt securities.

Other MQ 10-K year-over-year comparisons