Marqeta, Inc.

Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to the Marketa Fourth Quarter 2021 Earnings Conference Call. At this time, lines have been placed on mute to prevent any background noise. After the speakers' remarks, we will open the lines for your questions. As a reminder, this conference call is being recorded. I'd now like to turn the call over to Stacey Feinerman, 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 quarterly period ended September 30th, 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 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 supplemental materials, which are available on the Investor Relations website. Hosting today's call are Jason Gardner, Marquetta's founder and CEO, and Mike Miletic, Marquetta'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 Marquetta's fourth quarter of 2021 earnings call. We are excited to share our strong fourth quarter and full year results as well as our plans for 2022. I'd like to begin with our fourth quarter results. We ended the year in a position of strength with financial results that serve as a true reflection of everything Marketa accomplished in 2021. As a result of the strong execution and continued customer focus of all Marketans across the world. Total processing volume or TPV was $33 billion in the fourth quarter, a 76% increase compared to the same quarter of 2020. An acceleration from the 60% growth rate in the third quarter. This represents the achievement of a significant milestone. In December, we saw our TPV for the first year across the $100 billion threshold for the first time. as we process $111 billion for all of 2021. This demonstrates our ability to provide modern infrastructure that enables fast-growing companies to deliver innovative, high-volume car programs globally. Our net revenue of $155 million in the quarter was a 76% increase from the previous year, representing acceleration from the 56% growth rate in the third quarter. We saw significant outperformance from the buy now, pay later vertical as this mode of payment was extremely popular during the holidays. We witnessed another decline in our block concentration from 68% of total net revenue in the third quarter to 63% in the fourth quarter of 2021. Our phenomenal fourth quarter is a testament to the outstanding growth Arquetta has demonstrated over the last three years. as our TPV grew over 400% from 2019 to 2021. Much of this growth was fueled by digital commerce disruptors that grew significantly due to shifts in consumer behavior during the pandemic. Our platform and products helped make much of this growth possible, enabling our customers to offer experiences that have changed commerce in remarkable ways. Our ability to help our customers scale successfully admit This unprecedented growth has earned us valuable trust. With 2022 underway, we are starting to see some stabilization regarding the pandemic. It is clear that the new commerce experiences, like on-demand delivery and buy-now-pay-later, are here to stay, and customers' trust in financial services offered by neobanks is increasingly on par with their trust in typical financial institutions. These commerce experiences play to Marketo's strength. We have already built trusted relationships with companies that have become household names like Karna and Clash App that have a track record of expanding on our platform. For the next set of disruptors looking for a trusted partner who can help them scale, this serves as a proof point. Importantly, we have a foothold into large FIs like Marcus by Goldman Sachs, JP Morgan, and Now City that need a technology partner to deliver solutions consumers want. As we look forward to the remainder of 2022, the remarkable growth we took part in during the pandemic required significant focus to help our customers scale. As a result, our newer solutions like credit and digital banking did not get as much focus as we would have liked because of how fast our existing customers were growing. We began to significantly ramp up hiring for these efforts towards the latter part of 2021. Our approach in 2022 will be more balanced between fueling our existing customers' success and building for the future. Therefore, our focus areas in 2022 will be threefold. We will continue to fuel our customers' success. While we are focused on broadening our base, our existing customers still represent Marketo's core and a significant source of future growth. These customers can tap into our modern card issuing expertise that allows them to build customized and contemporary payment solutions when paired with our platform's agility and scale. Our dollar-based net revenue retention rate of 175% for 2021 demonstrates how our customers grow in our platform. Let me share two examples. After a competitive process, Divi, a bill.com company, began using Marketa in late 2020. Divi was in hyper growth mode and it was important for the company to have a card issuing partner that could help them build best in class products and do so at scale. Once on board the Marketa platform, Divi was able to ramp quickly. As a result, Divi rapidly added new customers to their program and extended their service to even more businesses and cardholders. Divi is one of the reasons We have seen the expense management vertical gain such significant traction, approaching $2 billion in TPV this quarter. In contrast, this segment was insignificant a year ago. After launching with Klarna in the US in 2018 and supporting its launch in Australia and New Zealand in 2020 and 2021, Klarna chose to extend its partnership with Marketa into 13 new European markets last November. Klarna is a digital disruptor experiencing tremendous market traction in the last few years, and Marketo has provided vital support to their growth trajectory globally. As a result of their success on our platform in the U.S. and APAC, the company recently expanded its partnership with Marketo by moving over volume from another provider. Klarna has seen firsthand how they've been able to quickly make program improvements or launch new card products. often within complex markets and environments working with Marketa. This expansion, especially in European markets where Klarna has a long track record of success, is a testament to the maturity of our European business and the strength of our partnership. We will continue to build a resilient and reliable global platform. 2021 TPV of $111 billion represents more than 50 times growth in four years. However, to truly connect the world through global money movement and unlock the potential in front of us, we must be thinking more extensively about the breadth and depth of what our platform can support. Eight months into his role, our CTO, Randy Kern, has already made significant strides towards building our scale and resiliency to handle the next wave of growth. Proactive capacity planning with our customers, organizing our internal teams around a mandate to scale, and new key infrastructure developments have had huge impacts on the degrees to which we can scale card programs. We expanded our platform globally by adding local network certification and card issuance capabilities in three new markets, the Philippines, Thailand, and Singapore. The Philippines and Thailand are large, high-growth markets where digital payments adoption is still well below 50%, and younger populations are urbanizing steadily. The Barketa platform is enabled in 39 countries, with more countries to come later this year. The geographic expansion is an integral part of our roadmap as we want to allow our customers to build once and launch anywhere. We will broaden our business in three ways. The customers we serve, the solutions we offer, and the verticals we support. To truly diversify our business, we need to target large customers focusing on additional credit, digital banking, and money movement offerings. Established financial institutions represent a large portion of the total issuer processing volume worldwide. While making significant inroads will likely take time, these customers are essential to achieving our goals of connecting the world through global money movement and achieving durable long-term growth. We are thrilled about our new partnership with Citi and their commercial cards team. Citi plans to use Marketa's unique tokenization as a service capabilities to power mobile wallet provisioning in more than 40 markets worldwide. Marketa's modern card issuing platform will integrate with Citi's existing systems and enable Citi's global commercial cardholder base to seamlessly provision corporate plastic cards and virtual cards into mobile wallets. Citi recognizes Marketa's leadership and card tokenization and the impact this can have on their commercial cardholders. especially against the backdrop of rapid change in payment preferences post-pandemic. We see this as an opening step of what we hope is a long and fruitful partnership. As discussed last quarter, we see partnerships as an efficient way to broaden our product offering. Our partnership with the First National Bank of Omaha, FNBO, expands our credit ecosystem and allows Marketo's customers to launch and design an embedded credit card program quickly. By partnering with FMBO, we combine FMBO's decades of deep experience in credit card programs with the flexibility and control of Marketo's modern card issuing platform. Similar to our partnership with Azure, FMBO will handle program management capabilities. At the same time, Marketo will act as the issuer processor, bringing the technology that allows customers to create customized card experiences lacking in credit. Our recent partnership with Plaid underscores our desire to move beyond moderate card issuing into enabling global money movement. This partnership will simplify ACH transfers, allowing customers to seamlessly and securely authenticate their bank accounts and fund their accounts to power more immediate card shopping. As a result, developers building on the Marketo platform can quickly and easily authenticate users' bank accounts versus the traditional cumbersome ACH process. Plaid worked with over 12,000 financial institutions. This scale, combined with its commitment to information security, makes them a perfect partner for Marketo. I am excited about our progress in 2021, especially how we ended the year on such a solid foundation. With over $500 million in yearly revenue, we are capitalizing on the changes in consumer preferences to ensure the performance of the business for years to come. Mike will touch on our growth and additional investment in his remarks, which brings me to the vital role of CFO. I want to take a moment to recognize the work of our outgoing CFO, Tripp Fay. Tripp led Marketta through a very successful IPO and two major fundraising rounds. His partnership and friendship have been important to me as a CEO and and our company as a whole. I wish him every success for his next chapter. I am also thrilled to welcome Mike Miletic as our new incoming CFO, who will shepherd us into the next phase of our growth. With that, I will turn the call over to Mike to discuss our results and outlook for 2022.