Marqeta Inc (NASDAQ:MQ), a modern card issuing platform, saw its shares plummet over 36% after significantly cutting its fourth-quarter guidance.
The company reported a third-quarter adjusted loss of -$0.06 per share, $0.01 worse than the analyst estimate of -$0.05. Revenue for the quarter came in at $128 million, slightly below the consensus estimate of $128.09 million, representing an 18% increase YoY.
Marqeta's Total Processing Volume (TPV) grew 30% YoY to $74 billion, while Gross Profit increased 24% to $90 million.
However, the company cut its net revenue growth outlook to 10-12% from 16-18% previously, well below the consensus estimate of 17%.
Gross profit guidance was also slashed to 13-15% from 22-24%, with analysts estimating 23%. Marqeta also cut its adjusted EBITDA margin growth outlook to 5-7% from 6-8%, and compared to the consensus projection of 7%.
CEO Simon Khalaf commented, "In the third quarter our true growth trajectory was back on display as we lapped the Block contract renewal, while continuing to demonstrate operational discipline to fuel strong Adjusted EBITDA."
The company cited "heightened scrutiny of the banking environment and specific customer program changes" as factors impacting its fourth-quarter outlook. Marqeta expects Adjusted EBITDA margin to be between 5-7% for the fourth quarter.
In a post-earnings note, KeyBanc Capital Markets analysts downgraded Marqeta to Sector Weight from Overweight (OW), saying the stock is "taking a breather."
They note the revision comes "as a result of a structurally lower growth rate in FY25 resulting in large part from external factors and incremental pressure from
customer in-sourcing."
"While we still believe Marqeta to be a best-in-class asset, we do not see the need to be OW the stock while the regulatory/implementation headwinds (and the model) are resolved," they added.
Separately, Wells Fargo (NYSE:WFC) analysts said they see the print "as a meaningful set back to investor confidence," though they maintained an Overweight rating on MQ shares.
Senad Karaahmetovic contributed to this report.