Marqeta, Inc.

Ladies and gentlemen, thank you for standing by. Welcome to the Markada first quarter 2022 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 line for your questions. As a reminder, this conference call is being recorded. I would now like to turn the call over to Stacey Fineman, 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 annual report on Form 10-K for the year ended December 31st, 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 gap measures can be found in today's earnings press release or earnings release supplemental materials, which are available on our investor relations website. Hosting today's call today are Jason Gardner, Marketa's founder and CEO, and Mike Miletic, Marketa's chief financial officer. With that, I'd like to turn the call over to Jason to begin.

Thank you, Stacey. Good afternoon, everyone, and thank you for joining us for Marketo's first quarter of 2022 earnings call. I'll start with a brief overview of our results for the quarter, and then I'll dive into a few of our key focus areas as we diversify and grow our business. Total processing volume for TPV was $37 billion in the quarter, representing a 53% year-over-year increase. This growth rate is notable given that the first quarter of 2021 benefited from stimulus payments. Our 53% growth rate also represents an 11% growth on a sequential basis from the fourth quarter of 2021, an exceptionally strong quarter. Our growth is being driven by a more diverse set of customers as the number of customers with over $500 million and TPV doubled from the first quarter of 2021. Our net revenue of $166 million in the quarter represents a 54% increase from the previous year. The main drivers of growth we saw throughout 2021 are still intact. Consumers continue to trust neobanks to manage more and more aspects of their financial lives, as evidenced by the increased tax refunds we saw deposited in Cash App. We also witnessed continued strength in Buy Now, Pay Later, despite Q1 being a seasonally weaker quarter for retail sales. Expense management also continues to show momentum as corporate travel begins to bounce back and companies look for more innovative and efficient ways of handling their operating expenses. Newer customers signed in 2019 contributed to more than 20% of our growth in the quarter. These customers are growing over five times as fast as customers signed prior to 2019. As a result, these newer customers now account for about 20% of our total TPV, which is double the comparable quarter of 2021. Block accounted for 66% of our net revenue, which include two months of after pay volume based on the timing of the deal closing, a decline from 73% in the first quarter of 2021. This is slightly up from 63% in the fourth quarter of 2021, primarily due to increased tax refund deposits, driving growth in cash out spending and strong buy now pay later volume in the fourth quarter. The strong first quarter reflects our continued success in diversifying and growing our business by focusing on three critical factors. One, fueling our customers' success. Two, broadening the ways we support our customers. And three, increasing our global platform's resiliency, reliability, and scalability. First and foremost, we want our customers to thrive. Our success is our customers' success. we are always looking to fuel customers' growth on our platform by giving them the tools they need to diversify and broaden their businesses. This is enabled by Marketta's single-stack platform, which our customers can easily configure. Marketta's best-in-class platform allows our customers to code once and quickly deploy programs across multiple markets. We have spoken many times about our U.S.-based customers expanding abroad. Our European business also represents the tremendous value our single stack provides. Across Europe, we have a growing number of customers that use the Marketa platform to launch in other countries quickly, including the U.S. PayHawk, Bulgaria's first startup to achieve unicorn status, has been live in our platform for the past two years. The Marketa platform enables PayHawk and expense management company to expand throughout Europe quickly, and they plan to launch in the United States shortly their first market outside of Europe. Capital on Tap, which provides a small business credit card and spend management platform to over 100,000 small businesses in the U.S.K., recently used Marketa's platform to launch their product in the U.S. These are just two examples of more than half of our top 10 and more than one-third of our top 20 customers that use Marketa in multiple geographies. Another customer that has leveraged our platform to drive tremendous growth is Upgrade Card. Upgrade Card offers a disruptive version of credit cards, turning monthly balances into low-cost installment plans and offering unique rewards. Their partnership with Marketa and our ability as a modern card issuer to leverage multiple APIs and configurations facilitates the launch of new products and rewards. As a result, Upgrade has launched four reward card programs, broadening its total addressable market to cover a larger target audience. From millennials looking for crypto rewards to savers looking for cash back, Upgrade Card was recently named the fastest growing U.S. credit card in 2021 by Nielsen and the only FinTech featured in Nielsen's top list of the top 50 U.S. credit card issuers. Our second focus area, providing broad support for our customers. This is evidenced by our program management capabilities, which we offer as managed by Marketo solution. These capabilities serve as a core competitive advantage for Marketo. Our managed by customers rely on us to manage the complexity of card network rules, obtain bank sponsorship, and navigate the legal and regulatory landscape while allowing for innovation. This enables our customers to leverage our deep payments expertise, reducing the burdens of running a card program. Hence, they are free to focus their precious engineering resources. This makes it significantly easier for our customers to bring entirely new and distinct programs to market. For example, we recently helped one of our Buy Now, Pay Later customers launch a new type of virtual card that could be used for multiple purchases at different merchants. Marketo was able to handle complexities and nuances of this card program in a relatively short amount of time with our expertise in managed buy capabilities. We also offer value-added services such as management, KYC, or Know Your Customer, and card fulfillment to broaden the many ways we support our managed by customers. Let me share an example. Card issuers have to balance risk and growth effectively. Airing too conservative or aggressive can derail a new card program. Therefore, To help our customers grow in a risk-aware way, we recently launched Risk Control. This comprehensive product suite gives our customers end-to-end control over risk management to solve significant pain points. One of the products within the suite, real-time decisioning, lets our customers fine-tune controls for which transactions are approved. We built this product from the ground up, and it was created exclusively for card issuers. While the networks and other issuer processors offer similar products, we believe our real-time decisioning solution is more comprehensive, using the most relevant data from the issuing point of view rather than the acquiring point of view. By enhancing the card network's risk scores with our own industry and customer data points, we can run multiple rules simultaneously, and our customers can change these rules on the fly. Our solutions, other solutions, typically have a review process for creating new rules, which are not helpful when there's a new fraud attack. Our solution allows our customers to implement risk rules based on a cardholder's spending history, making it a strong fit for verticals like expense management. Our third area of focus, increasing the resiliency, reliability, and scalability of our global platform that builds redundancy and scale for the future. We recently added another bank partner to our platform, Evolve Bank & Trust, who will support the full range of Marketo's program management capabilities. With Evolve, we have four different bank partners in the U.S. that can provide this service, which allows us to find the best match for our customers. For example, Evolve's dedicated open banking division offers innovative banking-as-a-service payments and technology solutions to a large, diverse portfolio of fintechs. This, combined with our focus on financial services, makes Evolve a great partner for us and us a great partner for Evolve. In closing, our Q1 results demonstrate a continuation of solid performance in 2021. Our business delivered very strong growth against a backdrop of global and economic uncertainty and a tough year-over-year comparison. Looking out at the remainder of 2022, I'm thrilled by the many exciting customer developments in our pipeline and the additional money movement tools we're building for our customers. I'll now turn the call over to Mike.