The news: API issuer-processor Marqeta reported $26.5 billion in total processing volume (TPV) in Q2, up 76% year over year (YoY)—notching in one quarter almost half the $60 billion in TPV it took in last year.
What it does: Marqeta offers companies open APIs that they can plug into their platforms to issue digital cards, authorize transactions, and prevent fraud. It operates in 36 countries, and some of its biggest clients include Square, Affirm, and Instacart.
How we got here: In the company’s Q2 earnings call, CFO Tripp Faix described Marqeta as a usage- and transaction-based company—meaning its revenues depend heavily on how well clients’ Marqeta-powered products perform. Here are three areas Faix said contributed to Marqeta’s elevated Q2 TPV:
Things to watch: The company’s S-1 filing revealed that 70% of its net revenues in 2020 came from Square, and it likely remains a huge driver of Marqeta’s business.
This means any decline in or loss of Square’s business could have serious ramifications for Marqeta—although considering Square’s recent performance, a business contraction is unlikely in the foreseeable future. But Marqeta’s dependency on Square underscores the need to diversify its clients, which is something it’s working on:
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