Marqeta, Inc.

Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to the Marketa Second 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 conference call over to Stacey Finelman, Vice President of Investor Relations, to begin. Please go ahead, Ma'am.

Ma' 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 period 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 at 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 are Jason Gardner, Marketta's founder and CEO, and Mike Miletic, Marketta'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 Marketa's second quarter of 2022 earnings call. I'll start with an overview of our results for the quarter, and then I'll discuss an update on our three strategic priorities. Total processing volume, or TPV, was $40 billion in the quarter, representing a 53% increase in alignment with the rise we posted in the first quarter. The scale of our platform continues to increase dramatically. Our TPV for the three months ending June of 2022 exceeds our TPV for the 12 months ending June of 2020. Our net revenue of $187 million in the quarter represents a 53% increase from the previous year. The main drivers of growth throughout 2021 and into the start of 2022 continue to propel our business. Payment habits that gained traction during the pandemic are still popular with consumers and driving our top line growth, including digital banking, buy now pay later, and on demand delivery. Expense management continues to scale as businesses look for efficiencies in business travel returns. Block accounted for 69% of our net revenue, up from 66% in the first quarter with after pay included in the entire quarter and cash out volumes continuing to grow meaningfully post-tax season. This percentage represents a decline in concentration from 72% of net revenues in the second quarter of 2021. TPV from customers outside our top five grew at three times the pace of our top five customers. The revenue associated with customers outside the top five more than doubled compared with the comparable quarter of 2021. This continues to be a testament to the impact of the Marketa platform in enabling business growth for our customers. We have again made significant progress on our three critical growth pillars in the quarter, fueling our customers' success, broadening the ways we support our customers, increasing our global platform's resiliency, reliability, and scalability. First and foremost, We want our customers to succeed. We are always looking to support our customers' businesses as they grow and diversify their revenue streams. In June, we announced our partnership with Western Union, a global leader in cross-border, cross-currency, money movement and payments. In Europe, demonstrating again the appeal of our offering for established market leaders looking to innovate at scale. Marketa's modern card issuing platform will allow funds held by Western Union's digital banking customers to be available via a physical or virtual debit card. This will enable Western Union to extend its relationship with its customers with additional flexibility to roll out new features and deliver a wide range of digital banking services. We look forward to growing our partnership with Western Union. We see its scale and commitment to digital banking innovation as a strong match for Marketo. We continue to leverage an innovative ecosystem of partners to unlock value for our customers' businesses. Last October, we announced a partnership with our customer branch to power faster payouts for Uber freight carriers, serving as a connection between our customers to help power net new payments innovation. After a successful launch, we've shown the potential for what we can build together and are excited to work alongside Branch to support the launch of the Uber Pro Card for drivers. We see the combination of Marketo's modern card issuing platform and Branch's digital wallet as a natural fit to bring faster payments and flexible rewards to Uber drivers. Enabling Branch to unlock this innovation is another excellent example of how Marketo adds value for a customer of Uber's scope as they launched new car programs with us across the breadth of their business. Providing customer support, our second focus area, means expanding the Marketa platform to support our customers with new products, services, and geographies. Marketa initially prioritized debit and prepaid innovation to help commerce disruptors bring new offerings to the market, ushering in a wave of innovation for these car types. Credit. which represents the other half of total card spend in the market, has not yet experienced the same amount of modernization. Given the massive opportunity to modernize credit, this is a logical step for our product roadmap. Our goal is to enable our customers, leading fintechs, consumer brands, and banks to offer their end consumer experiences that are currently unavailable. We initially launched our credit platform in 2021, allowing us to support any card type through our modern card issuing platform. And we recently launched more than 40 new credit APIs, which will power innovations in credit and enable our customers to more quickly design, test, and launch new card experiences. Our flexible rewards engine allows our customers to create programs that reimagine hyper-customized rewards based on merchant category spend and various cardholder behaviors. For example, our customers can offer instant gratification to their end users by supporting the ability to provide the reward as soon as the transaction is cleared, rather than at the end of a billing period. Our customers can now provide their users with an instant credit decision via Marketa's API connection to FBO's decisioning engine. In other words, when a user applies for a card, they will get a decision instantly rather than waiting days for the bank to assess their credit history. This encourages users to apply and start using their card immediately, helping card programs cement coveted top of wallet status with their customers. We have deepened the capabilities of our credit platform, and that in turn has deepened the experiences that our customers can create. We have also broadened the verticals we support by expanding into transit for the first time, Recently, the New South Wales government in Australia announced its commitment to upgrade its transit card system. Marketo was named the payment processor of choice for Opal Plus, the new transit program for transport for New South Wales in partnership with MasterCard. The result will be a mobility as a service app, allowing subscribers to plan, book and pay for a tailored community experience directly from their mobile devices. This deal is another example of our platform's adaptability to service an ever-broadening array of use cases. Our third focus area, increasing our global platform's resiliency, reliability, and scalability is critical, giving the increased demand placed on our platform year after year with exponential growth. As a significant area of investment, we want our platform to keep pace with our growing customers, to also provide strength and support for our customers' future business goals and innovations. Our resiliency at scale is a key differentiating factor when customers choose the Marketo platform. Uptime and latency are of the utmost importance in our business. We have delivered at least four nines across all of Marketo's customers weekly this year. This is even more impressive given that our volume increased 50% year over year. We also worked diligently in the first half of 2022 to bring faster API connections to our customers and partners to improve their platform experience further. As a result of scalability and resiliency improvements made in May, we saw our API latency improve up to 60% across all endpoints on the Marketo platform in the following months. In conclusion, Our Q2 results demonstrate the increased breadth and depth of the Marketa platform. We continue to enable this digital disruption and modern money movement with a base of customers who work on the cutting edge of payments. We believe we are the go-to choice for payments innovation at scale. When paired with our solid financial footing, we are very well positioned to capitalize on the market opportunity and modern money movement in the coming years. I will now turn the call over to Mike.