Marqeta, Inc.

Good afternoon, ladies and gentlemen, and thank you for standing by. Welcome to Marquetta's third quarter 2021 earnings conference call. At this time, lines have been placed on mute to prevent any background noise. After the speaker's remarks, we will open the lines for your questions. As a reminder, this conference call is being recorded. I would now like to turn the call over to Stacey Fireman, Vice President of Investor Relations, to begin.

Thanks, Operator. Before we begin, I would like to remind everyone that today's call may contain forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties, including those set forth in our filings with the SEC, which are available on our Investor Relations website, including our quarterly report on Form 10-Q for the quarter ended September 30, 2021, and our subsequent periodic filings with the SEC. Actual results may differ materially from any forward-looking statements we make today. These forward-looking statements speak only as of the time of this call, and the company does not assume any obligation or intent to update them, except as required by law. In addition, today's call includes non-GAAP financial measures. These measures should be considered as a supplement to, and not a substitute for, GAAP financial measures. Reconciliations to the most directly comparable GAAP measures can be found in today's earnings press release or earnings release supplement materials, which are available on our investor relations website. Hosting today's call are Jason Gardner, Marketta's founder and CEO, Vidya Peters, Marketta's chief operating officer, and Trip J, Marketta's chief financial officer. With that, I'd like to turn the call over to Jason to begin.

Thank you, Stacey. Thank you, everyone, for joining us for Marketta's third quarter earnings call. Tripp and I are excited to share Marketa's third quarter results and the exciting ways we are using modern card issuing to power the digital economy. First of all, this afternoon, I will cover off financial highlights for the quarter. I will then discuss how modern card issuing, an industry that Marketa pioneered, is powering the digital economy. Before I discuss our strategic approach to deepen our moat in this industry, Later, Tripp will discuss the financial results in greater detail. With that, let's begin. Our third quarter results show the impact of modern card issuing is already having a Marquetta's momentum in this market. $28 billion in total processing volume or TPV, a 60% increase compared to the same quarter of 2020. $132 million in net revenue, a 56% increase compared to the same quarter of 2020. We believe modern card issuing is at the heart of global money movement. When I look back at Marketa's third quarter, I see a wealth of examples that highlight the breadth and power of modern card issuing. Marketa's modern card issuing platform enables unique new payments use cases for companies of all types from digital disruptors who are looking for scale to legacy payment providers looking to launch cutting edge solutions to stay competitive. Similar to how we've seen our just-in-time, or JIT, funding technology enable on-demand delivery and buy-now-pay-later services, we're now seeing JIT play a key role enabling a new wave of innovative cryptocurrency card products. Just-in-time funding, used in tandem with our open API, allows fiat currency to be spent at the point of sale from a crypto wallet. and for consumers to earn cryptocurrency rewards on traditional spending highlighted by companies like Coinbase, Bakkt, Fold, and Shakepay. For Coinbase users, swiping a Marketa PowerCard at the point of sale and having a transaction funded in fiat currency in real time based on their cryptocurrency balance is an exciting application of our technology. When you put this side by side with our recently announced partnership with Bill.com, it demonstrates the huge possibility for our technology in the market. Our work with Bill.com is an innovative application of minor card issuing in the payments landscape. Small and medium businesses represent the engine room of the global economy, but have had little access to innovation to streamline their payment processes before companies like Bill.com came along. Using our best-in-class open API payment solutions, Bill.com plans to offer virtual card payment capabilities to its financial institution partners and their customers. This will give small and mid-sized businesses access to enterprise-level tools, which can save time and money. We see our third quarter results as yet another proof point of the tremendous progress and the impact we are already having in global money movements. And we are only scratching the surface when it comes to the many ways Marketa enables modern card issuing, a market we estimate at $30 trillion globally. As we look at this ocean of opportunity, we see four key strategic pillars to growth, which will help us service this large addressable market in card issuing, as well as deepen our competitive mode. Our first pillar, adding new customers. Our value proposition for new customers is as strong as it's ever been. We have a proven track record of executing large and innovative payment programs. We've also shown how we can deliver innovation for large financial institutions that legacy card issuers cannot. Simply put, Marketo can outscale new entrants to this market and out-innovate legacy platforms. We recently added several major new customers to our platform. I've already highlighted our new partnership with Bill.com. The Marketa platform is also powering Figure's new FigurePay product, a digital payments account with native buy-now-pay-later functionality. And as spotlighted this quarter, a range of crypto innovators, Coinbase, ShakePay, Bakkt, and Fold chose Marketa to build great card products. Our second pillar, expanding and growing our relationships with our existing customer base. Uber has been a Marketa customer since 2019, and we recently expanded our relationship. In partnership with Branch, we launched a new car product to power a unique driver car for Uber freight carriers, which lets them get paid in two hours instead of 30 days. Our third pillar, broadening our global reach. Marketa is enabled in 36 countries worldwide. We successfully launched our Australian office in Q2 of this year and in Q3 announced our partnership with Zipco in the market. Our European business launched in 2018 continues to see considerable growth and momentum in the market. We've seen over 340% year over year growth in the number of transaction process by our European customers in the third quarter. In addition, We've doubled the number of Marketa's European customers since September 30th of 2020. Our fourth pillar, expanding our ecosystem, product offering, and partnership network. This is a critical strategic priority for Marketa to ensure we're properly attacking our total addressable market and continuing to deepen our competitive moat in modern card issuing. Earlier in the year, we announced the launch of our credit product, which we believe makes us the first modern platform to offer prepaid, debit, and credit card issuing services. After launching our first credit program in Q2 of this year, we continued to onboard new credit card programs with our partner, Deserve. The Owner's Rewards Card by M1 went to live last month. It is a unique credit product that offers its clients up to 10% cash back when they transact at brands they own stock in through their M1 or investment portfolio and offers them the ability to reinvest the rewards in their portfolio. It's the flexible and innovative card experience we're excited to enable. Given that credit is a new offering for Marketa, I'd like to highlight this for a moment. With 52% of card spend happening on credit in the U.S., This is a massive market opportunity that is underserved by current technology, which has done little to modernize the credit card experience. Therefore, our credit card issuing platform is a critical strategic priority for Marketo. To bring our vision to market, we are working with an ecosystem of partners who have a similar commitment to disrupting the status quo in the credit industry. Our first being Deserve, a modern mobile-first credit card platform. Through this ecosystem of partners, all car programs launched through Marketo will be powered by modern underwriting models that incorporate non-traditional signals and mobile-first consumer experiences. In addition to new products, a robust ecosystem of partners is crucial to Marketo to capture the significant market opportunity in front of us and embed Marketo technology into a greater range of use cases. In Q3, we were named as a launch partner for MasterCard's new installments program, which leverages the power of MasterCard's merchant network to build in the infrastructure to support buy now, pay later payments. This allows banks and fintechs to more easily tap into a new payment type. Alongside this, we recently announced partnerships with Payfair, Syncara, and Amount. helping us have better payments technology and to drive a payout in community banking as a service programs. In addition to our great Q3 results, I would like to inform you of a leadership change at Marketa. Darren Morey is resigning his position as Chief Revenue Officer effective November 30th, 2021. Darren has decided to return to enterprise cloud software sales where he worked for 10 years prior to joining Marketa in June. We thank Darren for his contributions and wish him the greatest of success. With Darren's departure, we feel it's time to combine our entire customer go-to-market functions under one operational leader. I am very excited to announce that Vidya Peters will become Marketta's Chief Operating Officer. Vidya's professional experience is extraordinary and her success at Marketta has led us to new heights. Vidya will lead our marketing, revenue, and program management teams. Combining these three functions will lead to a superior customer experience overall. The positions of Chief Revenue Officer and Chief Marketing Officer will be eliminated. I will now turn it over to Vidya for some brief remarks.