Marqeta, Inc.
For the period ended Jun 30, 2025. Filed Aug 6, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 6, 2025
MQ$18.59+0.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-07.
0001628280-25-023249
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-06.
0001522540-25-000022
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 103 previous paragraphs and 119 current paragraphs.
54 unchanged; 36 reworded; 23 added; 13 removed; 0 previous and 6 current paragraphs rearranged.
Tables are not compared: 8 previous and 12 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (23)
Current report
Prior to the second quarter of fiscal year 2025, we recognized network incentives in the period when cumulative transaction volume thresholds were met, due to insufficient data to reliably estimate the amount of incentives Card Networks would ultimately earn over the respective annual period. This approach resulted in fluctuations in Card Network incentives, particularly when thresholds were reached, as higher incentive rates were applied retroactively to the entire measurement period. Historically, we have earned the highest incentive rates in the first quarter of our fiscal year, when annual measurement periods are nearing completion and higher cumulative transaction volume thresholds are achieved. Conversely, the second quarter generally reflected the lowest incentive rates, as the annual measurement periods and cumulative transaction volume thresholds reset to lower levels.
Current report
Effective in the second quarter of fiscal year 2025, we revised our accounting policy for estimating and recognizing network incentives. We now estimate and recognize network incentives based on the cumulative incentive rate we expect to earn over the annual measurement period. We estimate the cumulative incentive rates based on our forecasts for the annual measurement periods, which incorporates both historical experience and our expectations of future events, in addition to other qualitative considerations. The estimated cumulative incentive rates are applied to the volume and/or number of transactions processed during the reporting period to calculate the quarterly network incentives recognized. As a result of this policy revision, the Card Network incentives recognized during the three months ended June 30, 2025 were $6.8 million higher compared to the amount that would have been recognized under the previous policy.
Current report
In July 2025, the One Big Beautiful Bill Act (H.R. 1, the “Tax Act”) was signed into law, reinstating certain provisions from the 2017 Tax Cuts and Jobs Act, including 100% bonus depreciation under Section 168(k) and immediate expensing of U.S.-based research costs under Section 174. We are currently evaluating the impact of these tax law changes on our financial condition and results of operations. Based on our preliminary assessment, we do not expect the Tax Act to have a material impact on our overall tax expense or effective tax rate for the year ending December 31, 2025.
Current report
As the increase in costs of revenue was outpaced by the net revenue growth discussed above, gross profit increased by $24.7 million, or 31%, and gross margin improved by approximately 6 percentage points for the three months ended June 30, 2025, compared to the same period in 2024.
Current report
Operating Expenses (Benefit)
Current report
Comparison of the Six Months Ended June 30, 2025 and 2024
Current report
Total platform services, net revenue increased by $41.8 million, or 18%, for the six months ended June 30, 2025, compared to the same period in 2024. The overall increase in platform services revenue was primarily driven by a 28% increase in TPV, partially offset by unfavorable shifts in our card program mix, particularly the expansion of programs where we provide processing services with minimal or no program management.
Current report
Other services revenue increased $4.4 million, or 44% in the six months ended June 30, 2025, compared to the same period in 2024, driven by higher card-related fulfillment, including one-time card replacements and increased customer card shipments.
Current report
Costs of revenue increased by $7.0 million for the six months ended June 30, 2025, compared to the same period in 2024. This increase was primarily driven by a 28% increase in TPV, but was partially offset by $6.8 million of higher network incentives recognized during the second quarter as a result of the revised accounting policy. Card Network fees are presented net of monetary incentives from Card Networks for processing volume during the period.
Current report
As the increase in costs of revenue was outpaced by the net revenue growth discussed above, gross profit increased by $39.2 million, or 24%, and gross margin improved by 3 percentage points for the six months ended June 30, 2025, compared to the same period in 2024.
Current report
Operating Expenses (Benefit)
Current report
Salaries, bonus, benefits, and payroll taxes decreased by $16.1 million, or 12%, for the six months ended June 30, 2025, compared to the same period in 2024. This decrease was primarily driven by lower year-over-year post-combination compensation expenses for former Power Finance employees and an increase in capitalized salaries, bonus, and benefits costs related to internal-use software development during six months ended June 30, 2025. These savings were partially offset by expenses incurred during the six months ended June 30, 2025 associated with restructuring and one-time retention bonuses given to certain key employees following the departure of our former CEO in the first quarter of 2025, which were not incurred in the same period in 2024.
Current report
Technology expenses increased by $3.0 million, or 11%, for the six months ended June 30, 2025, compared to the same period in 2024, mainly driven by higher licensing and hosting costs to support system and tool implementations amid ongoing business growth.
Current report
Professional services expenses increased by $1.2 million, or 14%, for the six months ended June 30, 2025, compared to the same period in 2024, primarily due to higher consulting fees.
Current report
Depreciation and amortization increased by $4.5 million, or 60%, for the six months ended June 30, 2025, compared to the same period in 2024. This increase was primarily driven by higher amortization of internally developed software as additional projects were capitalized and placed into service.
Current report
Marketing and advertising expenses remained relatively flat for the six months ended June 30, 2025, compared to the same period in 2024.
Current report
Other operating expenses remained relatively flat for the six months ended June 30, 2025, compared to the same period in 2024.
Current report
The Executive chairman long-term performance award decreased by 100% for the six months ended June 30, 2025, compared to the same period in 2024, due to the forfeiture in the second quarter of 2024 following the Executive Chairman’s transition to a non-employee director role on the Board of Directors.
Current report
Other income, net decreased by $8.8 million, or 31%, for the six months ended June 30, 2025, compared to the same period in 2024. This decrease was primarily driven by lower interest income from our short-term investment portfolio and cash balances, as average balances were lower due to $193.1 million of share repurchases completed during the six months ended June 30, 2025. We also realized lower average yields during the six months ended June 30, 2025 compared to the same period in 2024.
Current report
Customer Concentration
Current report
Our transaction with Neptune International Ltd to acquire TransactPay was completed on July 31, 2025 in accordance with the terms in the merger agreement, and we paid €46.0 million in cash. The agreement also includes up to €5.0 million of contingent consideration that could be paid post-closing.
Current report
Net cash provided by operating activities was $22.5 million for the six months ended June 30, 2025, a decrease from $26.1 million for the same period in 2024. The year-over-year decrease was primarily driven by the unfavorable timing of settlements for network incentive receivables and accrued expenses and other liabilities, which was partially offset by higher gross profit and lower operating expenses.
Current report
Net cash provided by investing activities increased to $75.7 million for the six months ended June 30, 2025, from $27.3 million in the same period in 2024. This increase was primarily driven by higher proceeds from maturities of short-term investments during the six months ended June 30, 2025, partially offset by ongoing investments in property, equipment, and internal-use software.
Removed paragraphs (13)
Previous report
Net Revenue
Previous report
We record network incentives in the period we attain the contractual volume thresholds, given the uncertainty in the ultimate annual attainment of incentives. As such, unusual fluctuations in Card Network fees can occur in the quarter in which volume thresholds are attained as higher incentive rates are applied to volumes over the entire measurement periods, which can span six or twelve months. Generally, we earn a higher rate of monetary incentives during the first quarter of our fiscal year, as the annual measurement period is closest to completion and higher volume thresholds have been reached. In the second quarter of the fiscal year, we generally earn the lowest rate of monetary incentives as the annual measurement period and volume thresholds have reset.
Previous report
As we continue to enhance our processes and improve our ability to estimate these annual incentives with increasing precision, the fluctuation in recognition of these network incentives throughout the year is expected to diminish.
Previous report
Other Income, net
Previous report
Income Tax Expense
Previous report
Net Revenue
Previous report
As a result of the increases in costs of revenue being less than the increases in net revenue explained above, our gross profit increased by $14.5 million, or 17%, in the three months ended March 31, 2025 compared to the same period in 2024. Gross margin remained flat in the three months ended March 31, 2025 compared to the same period in 2024.
Previous report
Operating Expenses
Previous report
Other Income, net
Previous report
Income Tax Expense
Previous report
(1) Prior period amounts related to our Executive Chairman Long-Term Performance Award have been reclassified to conform to the current period presentation.
Previous report
Net cash provided by operating activities was $10.0 million in the three months ended March 31, 2025 compared to cash provided by operating activities of $0.4 million in the same period in 2024. The increase in net cash provided by operating activities during the three months ended March 31, 2025 was largely due to higher gross profit and lower operating expenses, which lowered our net loss period-over-period, and favorable timing of settlements and accounts receivable collections. These benefits were partially offset by the unfavorable timing of accrued expenses and other liabilities.
Previous report
Net cash provided by investing activities in the three months ended March 31, 2025 was $14.9 million compared to net cash provided by investing activities in the same period in 2024 of $33.5 million. The decrease in net cash provided by investing activities is primarily due to fewer maturities of short-term investments during the three months ended March 31, 2025.
Reworded paragraphs (36)
Previous wording
We are unable to predict the impact macroeconomic factors, including various geopolitical conflicts, uncertainty related to global elections, changes in inflation and interest rates, and uncertainty in global regulatory and economic conditions, including as a result of uncertainty in global trade from potential tariffs and countertariffs, will have on our processing volumes, and on our future results of operations. A deterioration in macroeconomic conditions could increase the risk of lower consumer spending, including discretionary spending, consumer and merchant bankruptcy, insolvency, business failure, higher credit losses, foreign currency fluctuations, or other business interruption, which may adversely impact our business. We continue to monitor these situations and may take actions that alter our operations and business practices as may be required by federal, state, or local authorities or that we determine are in the best interests of our customers, vendors, and employees. See the section titled “Risk Factors” in this
Current wording
We are unable to predict the impact macroeconomic factors, including various geopolitical conflicts, uncertainty related to global elections, changes in inflation and interest rates, and uncertainty in global regulatory and economic conditions, including as a result of uncertainty in global trade from potential tariffs and counter tariffs, will have on our processing volumes, and on our future results of operations. A deterioration in macroeconomic conditions could increase the risk of lower consumer spending, including discretionary spending, consumer and merchant bankruptcy, insolvency, business failure, higher credit losses, foreign currency fluctuations, or other business interruption, which may adversely impact our business. We continue to monitor these situations and may take actions that alter our operations and business practices as may be required by federal, state, or local authorities or that we determine are in the best interests of our customers, vendors, and employees. See the section titled “Risk Factors” in this
Previous wording
Adjusted EBITDA -Adjusted EBITDA is a non-GAAP financial measure that is calculated as Net loss adjusted to exclude depreciation and amortization; share-based compensation expense; executive chairman long-term performance award; payroll tax related to share-based compensation; restructuring and other one-time costs; acquisition related expenses which consist of due diligence costs, transaction costs and integration costs related to potential or successful acquisitions and cash and non-cash postcombination compensation expenses; income tax expense; and other income, net, which consists primarily of interest income from our short-term investments and cash deposits, impairment of financial instruments, and realized foreign currency gains and losses. We believe that Adjusted EBITDA is an important measure of operating performance because it allows management and our Board of Directors to evaluate and compare our core operating results, including our operating efficiencies, from period to period. Additionally, we utilize Adjusted EBITDA as an input into our calculation of our annual employee bonus plans and performance-based restricted stock units. See the section below titled “Use of Non-GAAP Financial Measures” for a discussion of the use of non-GAAP measures, a change in presentation, and a reconciliation of Net loss to Adjusted EBITDA.
Current wording
Adjusted EBITDA -Adjusted EBITDA is a non-GAAP financial measure that is calculated as Net (loss) income adjusted to exclude depreciation and amortization; share-based compensation expense; executive chairman long-term performance award; payroll tax related to share-based compensation; restructuring and other one-time costs; acquisition related expenses which consist of due diligence costs, transaction costs and integration costs related to potential or successful acquisitions and cash and non-cash postcombination compensation expenses; income tax expense; and other income, net, which consists primarily of interest income from our short-term investments and cash deposits, impairment of financial instruments, and realized foreign currency gains and losses. We believe that Adjusted EBITDA is an important measure of operating performance because it allows management and our Board of Directors to evaluate and compare our core operating results, including our operating efficiencies, from period to period. Additionally, we utilize Adjusted EBITDA as an input into our calculation of our annual employee bonus plans and performance-based restricted stock units. See the section below titled “Use of Non-GAAP Financial Measures” for a discussion of the use of non-GAAP measures, a change in presentation, and a reconciliation of Net (loss) income to Adjusted EBITDA.
Previous wording
Adjusted EBITDA Margin -Adjusted EBITDA Margin is a non-GAAP financial measure that is calculated as Adjusted EBITDA divided by Net revenue. This measure is used by management and our Board of Directors to evaluate our operating efficiency. See the section below titled “Use of Non-GAAP Financial Measures” for a discussion of the use of non-GAAP measures and a reconciliation of Net loss to Adjusted EBITDA Margin.
Current wording
Adjusted EBITDA Margin -Adjusted EBITDA Margin is a non-GAAP financial measure that is calculated as Adjusted EBITDA divided by Net revenue. This measure is used by management and our Board of Directors to evaluate our operating efficiency. See the section below titled “Use of Non-GAAP Financial Measures” for a discussion of the use of non-GAAP measures and a reconciliation of Net (loss) income to Adjusted EBITDA Margin.
Previous wording
Non-GAAP operating expenses -Non-GAAP operating expenses is a non-GAAP financial measure that is calculated as Total operating expenses adjusted to exclude depreciation and amortization; share-based compensation expense; executive chairman long-term performance award; payroll tax related to share-based compensation; restructuring and other one-time costs; and acquisition-related expenses which consists of due diligence costs, transaction cost and integration costs related to potential or successful acquisitions, and cash and non-cash postcombination compensation expenses. We believe that non-GAAP operating expenses is an important measure of operating performance because it allows management and our Board of Directors to evaluate and compare our core operating results, including our operating efficiencies, from period to period. See the section below titled “Use of Non-GAAP Financial Measures” for a discussion of the use of non-GAAP measures, a change in presentation, and a reconciliation of total operating expenses to non-GAAP operating expenses.
Current wording
Adjusted operating expenses -Adjusted operating expenses is a non-GAAP financial measure that is calculated as Total operating expenses adjusted to exclude depreciation and amortization; share-based compensation expense; executive chairman long-term performance award; payroll tax related to share-based compensation; restructuring and other one-time costs; and acquisition-related expenses which consists of due diligence costs, transaction cost and integration costs related to potential or successful acquisitions, and cash and non-cash postcombination compensation expenses. We believe that Adjusted operating expenses is an important measure of operating performance because it allows management and our Board of Directors to evaluate and compare our core operating results, including our operating efficiencies, from period to period. See the section below titled “Use of Non-GAAP Financial Measures” for a discussion of the use of non-GAAP measures, a change in presentation, and a reconciliation of total operating expenses to Adjusted operating expenses.
Previous wording
Platform services revenue, net. Platform services revenue includes Interchange Fees, net of Revenue Share and other service-level payments to customers, and Card Network and Issuing Bank costs for certain customer arrangements where the Company is an agent in the delivery of services to the customer. Platform services revenue also includes processing and other fees. “Interchange Fees” are transaction-based and volume-based fees set by a Card Network and paid by a merchant bank to the Issuing Bank that issued the payment card used to purchase goods or services from a merchant. The Company earns Interchange Fees on card transactions we process for our customers and are based on a percentage of the transaction amount plus a fixed amount per transaction. Interchange Fees are recognized when the associated transactions are settled.
Current wording
Platform services revenue, net. Platform services revenue includes Interchange Fees, net of Revenue Share and other service-level payments to customers, and Card Network and Issuing Bank costs for certain customer arrangements where the Company is an agent in the delivery of services to the customer. Platform services revenue also includes processing and other fees. “Interchange Fees” are transaction-based and volume-based fees set by a Card Network and paid by a merchant bank to the Issuing Bank that issued the payment card used to purchase goods or services from a merchant. We earn Interchange Fees on card transactions we process for our customers and are based on a percentage of the transaction amount plus a fixed amount per transaction. Interchange Fees are recognized when the associated transactions are settled.
Previous wording
Costs of revenue consist of Card Network fees, Issuing Bank fees, and card fulfillment costs for customer arrangements where the Company is the principal in providing services to the customer and excludes depreciation and amortization, which is reported separately within the Condensed Consolidated Statements of Operations and Comprehensive Loss. Card Network fees are equal to a specified percentage of processing volume or a fixed amount per transaction routed through the respective Card Network. Issuing Bank fees compensate our Issuing Banks for issuing cards to our customers and sponsoring our card programs with the Card Networks and are typically equal to a specified percentage of processing volume or a fixed amount per transaction. Card fulfillment costs include physical cards, packaging, and other fulfillment costs.
Current wording
Costs of revenue consist of Card Network fees, Issuing Bank fees, and card fulfillment costs for customer arrangements where we are the principal in providing services to the customer and excludes depreciation and amortization, which is reported separately within the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). Card Network fees are equal to a specified percentage of processing volume or a fixed amount per transaction routed through the respective Card Network. Issuing Bank fees compensate our Issuing Banks for issuing cards to our customers and sponsoring our card programs with the Card Networks and are typically equal to a specified percentage of processing volume or a fixed amount per transaction. Card fulfillment costs include physical cards, packaging, and other fulfillment costs.
Previous wording
We have separate marketing and incentive arrangements with Card Networks that provide us with monetary incentives for establishing customer card programs with, and routing volume through, the respective Card Network. The amount of the incentives is generally determined based on a percentage of the processing volume or the number of transactions routed over the Card Network. We record these incentives as a reduction of Card Network fees in customer arrangements where the Company is the principal. Generally, as processing volumes increase, we earn a higher rate of monetary incentives from these arrangements, subject to attaining certain volume thresholds during an annual measurement period. For certain incentive arrangements with an annual measurement period, the one-year period may not align with our fiscal year.
Current wording
We have marketing and incentive arrangements with Card Networks, that provide us with monetary incentives for establishing customer card programs with and routing transaction volume through the respective Card Networks. These incentives are typically calculated as a percentage of the processed transaction volume or the number of transactions routed through the Card Network. We account for these incentives as a reduction of Card Network fees within Costs of Revenue in customer arrangements where we act as the principal. As processing volumes increase, we earn a higher cumulative incentive rate, subject to achieving specific cumulative volume thresholds within an annual measurement period. For certain incentive arrangements, the annual measurement period may not align with our fiscal year.
Previous wording
Total platform services, net revenue increased by $17.9 million, or 16%, for the three months ended March 31, 2025 compared to the same period in 2024. The overall increase in platform services revenue was primarily driven by a 27% increase in TPV, which was partially offset by unfavorable changes in the mix of our card programs, particularly the growth of programs where we provide processing services but very little or no program management.
Current wording
Total platform services, net revenue increased by $23.9 million, or 20%, for the three months ended June 30, 2025, compared to the same period in 2024. The overall increase in platform services revenue was primarily driven by a 29% increase in TPV, partially offset by unfavorable shifts in our card program mix, particularly the expansion of programs where we provide processing services with minimal or no program management.
Previous wording
Other services revenue increased $3.2 million, or 79%, in the three months ended March 31, 2025 compared to the same period in 2024. This growth was driven by a rise in card-related fulfillment, which included both one-time card replacements and increased customer card shipments compared to the same period in 2024.
Current wording
Other services revenue increased $1.3 million, or 21%, in the three months ended June 30, 2025, compared to the same period in 2024, driven by higher card-related fulfillment, including one-time card replacements and increased customer card shipments.
Previous wording
Costs of revenue increased by $6.6 million, or 19%, for the three months ended March 31, 2025 compared to the same period in 2024. The increase in costs is attributed to higher Card Network and Issuing Bank fees stemming from the 27% increase in TPV, which was partially offset by higher network incentives earned during the current year. Card Network fees are presented net of monetary incentives from Card Networks for processing volume through the respective Card Networks during the period.
Current wording
Costs of revenue increased by $0.4 million, or 1%, for the three months ended June 30, 2025, compared to the same period in 2024. This increase was driven by higher Card Network and Issuing Bank fees related to the 29% increase in TPV, but was mostly offset by $6.8 million higher network incentives recognized during the three months ended June 30, 2025 as a result of the revised accounting policy. Card Network fees are reported net of monetary incentives from Card Networks for processing volume during the period.
Previous wording
Salaries, bonus, benefits, and payroll taxes decreased by $3.5 million, or 6%, for the three months ended March 31, 2025 compared to the same period in 2024. The decrease was driven by lower postcombination compensation costs to former employees of Power Finance and an increase in salaries, bonus, and benefits costs capitalized for internal-use software development in 2025. Partially offsetting the decrease in salaries, bonus, benefits, and payroll taxes was restructuring and other one-time retention bonus costs associated with the departure of the Company’s CEO that were recognized during the three months ended March 31, 2025 that did not occur in the same period in 2024.
Current wording
Salaries, bonus, benefits, and payroll taxes decreased by $12.5 million, or 19%, for the three months ended June 30, 2025, compared to the same period in 2024. This decrease was primarily driven by lower post-combination compensation expenses for former Power Finance employees and an increase in capitalized salaries, bonus, and benefits costs related to internal-use software development in 2025. These savings were partially offset by the expense incurred during the three months ended June 30, 2025 associated with the one-time retention bonuses given to certain key employees following the departure of our former CEO in the first quarter of 2025, which were not incurred in the same period in 2024.
Previous wording
Technology expenses increased by $1.7 million, or 13% for the three months ended March 31, 2025 compared to the same period in 2024. The increase was due to higher licensing and hosting costs to support our continued growth as we implement and support our systems and tools.
Current wording
Technology expenses increased by $1.3 million, or 9%, for the three months ended June 30, 2025, compared to the same period in 2024. This increase was primarily driven by higher licensing and hosting costs to support system and tool implementations amid ongoing business growth.
Previous wording
Professional services expenses increased by $1.8 million or 47% for the three months ended March 31, 2025 compared to the same period in 2024 due to an increase in legal and consulting fees.
Current wording
Professional services expenses decreased by $0.6 million or 12%, for the three months ended June 30, 2025, compared to the same period in 2024 due to lower legal and consulting fees.
Previous wording
Occupancy expense decreased by $0.2 million or 16% for the three months ended March 31, 2025 compared to the same period in 2024. The decrease is due to the impairment of the right-of-use asset associated with the Company's Oakland office recorded during the fourth quarter of 2024.
Current wording
Occupancy expense decreased by $0.4 million or 30%, for the three months ended June 30, 2025, compared to the same period in 2024. The decrease is due to the impairment of the right-of-use asset associated with our Oakland office recorded during the fourth quarter of 2024.
Previous wording
Depreciation and amortization expense increased by $1.8 million, or 51%, for the three months ended March 31, 2025 compared to the same period in 2024. The increase was primarily due to an increase in the amortization of internally developed software as more projects have been capitalized and placed into service.
Current wording
Depreciation and amortization expense increased by $2.7 million, or 68%, for the three months ended June 30, 2025 compared to the same period in 2024. This increase was primarily driven by higher amortization of internally developed software as additional projects were capitalized and placed into service.
Previous wording
Marketing and advertising expenses increased by $0.1 million, or 24% for the three months ended March 31, 2025 compared to the same period in 2024 due to an increase in branding spend.
Current wording
Marketing and advertising expenses remained relatively flat for the three months ended June 30, 2025 compared to the same period in 2024.
Previous wording
Executive chairman long-term performance award decreased by 100% for the three months ended March 31, 2025 compared to the same period in 2024 as the Executive Chairman Long-Term Performance Award was forfeited in the second quarter of 2024 as a result of the Company’s Executive Chairman transitioning to a non-employee director role on the Board of Directors.
Current wording
Executive chairman long-term performance award decreased by 100% for the three months ended June 30, 2025, compared to the same period in 2024, due to the forfeiture in the second quarter of 2024 following the Executive Chairman transitioning to a non-employee director role on the Board of Directors.
Previous wording
Other income, net decreased by $3.4 million, or 25%, for the three months ended March 31, 2025 compared to the same period in 2024. The decrease was primarily due to a decrease in interest income earned on our short-term investment portfolio and cash balances as we had smaller portfolio balances and recognized lower average yields during the first quarter of 2025 compared to the same period in 2024.
Current wording
Other income, net decreased by $5.4 million, or 38%, for the three months ended June 30, 2025, compared to the same period in 2024. This decrease was primarily driven by lower interest income from our short-term investment portfolio and cash balances, as average balances were lower due to $162.9 million of share repurchases completed in the quarter. We also realized lower average yields during the second quarter of 2025 compared to the same period in 2024.
Previous wording
We generated 45% and 49% of our net revenue from our largest customer, Block, during the three months ended March 31, 2025 and 2024, respectively.
Current wording
We generated 46% and 47% of our net revenue from our largest customer, Block, during the three months ended June 30, 2025 and 2024, respectively.
Previous wording
The increase in TPV was driven by growth across all our major verticals, particularly financial services, with PxM customers outperforming MxM customers. The growth in TPV for our top five customers, as determined by their individual processing volume in each respective period, was 18% in the three months ended March 31, 2025 compared to the same period in 2024, while TPV from all other customers, as a group, grew by 64% in the three months ended March 31, 2025 compared to the same period in 2024. Note that the top five customers may differ between the two periods.
Current wording
The TPV increase was driven by robust growth across all major use cases, particularly financial services, lending including buy-now-pay later, and expense management. TPV for our top five customers, based on their individual processing volumes in each respective period, grew by 19% for the six months ended June 30, 2025, compared to the same period in 2024. TPV from all other customers, as a group, increased by 67% in the six months ended June 30, 2025, compared to the same period in 2024. Note that the composition of the top five customers may differ between the two periods.
Previous wording
Share-based compensation decreased by $5.4 million in the three months ended March 31, 2025 compared to the same period in 2024 mainly due to the forfeitures of stock based awards as a result of the Company’s CEO departure during the first quarter of 2025.
Current wording
Share-based compensation decreased by $14.6 million, 22%, for the six months ended June 30, 2025, compared to the same period in 2024, mainly due to the forfeitures of stock based awards, including those related to the CEO’s departure during the first quarter of 2025.
Previous wording
Our non-GAAP measures have limitations as analytical tools and you should not consider them in isolation. These non-GAAP measures should not be viewed as a substitute for, or superior to, measures prepared in accordance with GAAP. In evaluating these non-GAAP measures, you should be aware that in the future we will incur expenses similar to the adjustments in the presentation of our non-GAAP measures set forth under “Key Operating Metric and Non-GAAP Financial Measures”. There are a number of limitations related to the use of these non-GAAP measures versus their most directly comparable GAAP measures, including the following:
Current wording
Our non-GAAP financial measures, such as adjusted EBITDA and Adjusted operating expenses, have limitations as analytical tools and should not be considered in isolation or as substitutes for, or superior to, financial measures prepared in accordance with GAAP. When evaluating these non-GAAP measures, note that we will likely incur expenses in the future similar to the adjustments in the presentation of our non-GAAP measures set forth under “Key Operating Metric and Non-GAAP Financial Measures”. There are a number of key limitations related to the use of these non-GAAP measures compared to their most directly comparable GAAP measures including the following:
Previous wording
•other companies, including companies in our industry, may calculate adjusted EBITDA and non-GAAP operating expenses differently than how we calculate this measure or not at all; this reduces its usefulness as a comparative measure;
Current wording
•other companies, including companies in our industry, may calculate adjusted EBITDA and Adjusted operating expenses differently or not at all, limiting their usefulness as comparative measures;
Previous wording
•although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditures; and
Current wording
•although depreciation and amortization are non-cash charges, the assets being depreciated or amortized may require future replacement, and adjusted EBITDA does not reflect cash requirements for such replacements or new capital expenditures; and
Previous wording
A reconciliation of Net loss to adjusted EBITDA and GAAP operating expenses to non-GAAP operating expenses for the periods presented is as follows:
Current wording
A reconciliation of Net (loss) income to adjusted EBITDA and GAAP operating expenses to Adjusted operating expenses for the periods presented is as follows:
Previous wording
As of March 31, 2025, our principal sources of liquidity included cash, cash equivalents, and short-term investments totaling $988.4 million, with such amounts held for working capital purposes. Our cash equivalents and short-term investments were comprised primarily of bank deposits, money market funds, U.S. treasury bills, U.S. treasury securities, U.S. agency securities, asset-backed securities, commercial paper, certificates of deposit, and corporate debt securities. We have generated significant operating losses as reflected in our accumulated deficit. We expect to continue to incur operating losses for the foreseeable future.
Current wording
As of June 30, 2025, our primary sources of liquidity consisted of cash, cash equivalents, and short-term investments totaling $821.6 million, held primarily for working capital purposes. Our cash equivalents and short-term investments were comprised primarily of bank deposits, money market funds, U.S. treasury bills, U.S. treasury securities, U.S. agency securities, asset-backed securities, commercial paper, certificates of deposit, and corporate debt securities. We have historically incurred significant operating losses, as reflected in our accumulated deficit, and anticipate continued operating losses for the foreseeable future.
Previous wording
On February 25, 2025, the Company’s Board of Directors authorized an additional share repurchase program of up to $300 million of the Company’s Class A common stock (the “2025 Share Repurchase Program”). Under the 2025 Share Repurchase Program, the Company is authorized to repurchase shares through open market purchases, in privately negotiated transactions, or by other means, in accordance with applicable federal securities laws, including through trading plans under Rule 10b5-1 of the Exchange Act. The number of shares repurchased and the timing of purchases are based on general business and market conditions, and other factors, including legal requirements. The 2025 Share Repurchase Program has no set expiration date. During the three months ended March 31, 2025, the Company repurchased approximately 7.1 million shares for $30.3 million under the 2025 Share Repurchase Program. As of March 31, 2025, $269.7 million remained available for future share repurchases under the 2025 Share Repurchase Program.
Current wording
On February 25, 2025, our Board of Directors authorized a new share repurchase program for up to $300 million of our Class A common stock (the “2025 Share Repurchase Program”). Repurchases may be executed through open market purchases, privately negotiated transactions, or other methods, in compliance with applicable federal securities laws, including Rule 10b5-1 trading plans under the Exchange Act. Repurchase decisions are based on general business and market conditions, legal requirements, and other relevant factors. The 2025 Share Repurchase Program has no set expiration date. During the six months ended June 30, 2025, we repurchased approximately 42.3 million shares for $193.1 million under this program. As of June 30, 2025, $106.9 million remained available for future share repurchases.
Previous wording
On May 6, 2024, the Company’s Board of Directors unanimously authorized the repurchase of up to $200 million of the Company’s Class A common stock (the "2024 Share Repurchase Program") as the prior program (the "2023 Share Repurchase Program," authorized for $200 million on May 8, 2023) had been exhausted during the first quarter of 2024. Under the 2024 Share Repurchase Program, the Company was authorized to repurchase shares through open market purchases, in privately negotiated transactions or by other means, in accordance with applicable federal securities laws, including through trading plans under Rule 10b5-1 of the Exchange Act. The number of shares repurchased and the timing of purchases was based on general business and market conditions, and other factors, including legal requirements. During the three months ended March 31, 2025, we repurchased approximately 19.2 million shares for $80.5 million under the 2024 Share Repurchase Program, which exhausted the authorization under the 2024 Share Repurchase Program.
Current wording
On May 6, 2024, the our Board of Directors authorized a $200 million share repurchase program for our Class A common stock (the "2024 Share Repurchase Program"), following the exhaustion of the $200 million 2023 Share Repurchase Program in the first quarter of fiscal year 2024. Repurchases under the 2024 Share Repurchase Program were made through open market purchases, privately negotiated transactions, or other methods, in accordance with applicable federal securities laws, including Rule 10b5-1 trading plans of the Exchange Act. Repurchase decisions were based on general business and market conditions, legal requirements, and other factors. During the six months ended June 30, 2025, we repurchased approximately 19.2 million shares for $80.5 million, fully utilizing the 2024 Share Repurchase Program authorization.
Previous wording
On February 3, 2023, we acquired all outstanding stock of Power Finance Inc. (“Power Finance”). As part of the terms of the acquisition, we entered into postcombination cash compensation arrangements with certain key acquired employees whereby we shall pay them $85.1 million of cash over a weighted average 2.2 year service period following the acquisition date (subject to forfeiture upon termination). As of March 31, 2025, $4.3 million of the postcombination cash compensation arrangements remained outstanding.
Current wording
On February 3, 2023, we acquired all outstanding stock of Power Finance Inc. (“Power Finance”). As part of the terms of the acquisition, we entered into postcombination cash compensation arrangements with certain key acquired employees whereby we agreed to pay them $85.1 million of cash over a weighted average service period of 2.2 years from the acquisition date, subject to forfeiture upon termination. As of June 30, 2025, $3.2 million of the postcombination cash compensation arrangements remained outstanding.
Previous wording
We believe our existing cash and cash equivalents, and our short-term investments will be sufficient to meet our working capital and capital expenditure needs for more than the next 12 months. As of the date of filing this Quarterly Report on Form 10-Q, we have access to and control over all our cash, cash equivalents and short-term investments, except amounts held as restricted cash. Our future capital requirements will depend on many factors, including our planned continuing investment in product development, platform infrastructure, share repurchases, and global expansion. We will use our cash for a variety of needs, including for ongoing investments in our business, potential strategic acquisitions, capital expenditures and investment in our infrastructure, including our non-cancellable purchase commitments with cloud-computing service providers and certain Issuing Banks.
Current wording
We believe our existing cash and cash equivalents, and short-term investments of $821.6 million as of June 30, 2025, will be sufficient to meet our working capital and capital expenditure needs for at least the next 12 months. As of the date of filing this Quarterly Report on Form 10-Q, we maintain full access to and control over all our cash, cash equivalents and short-term investments, except amounts held as restricted cash. Our future capital requirements will depend on many factors, such as continued investment in product development, platform infrastructure, share repurchases, potential strategic acquisitions, capital expenditures, and global expansion. We plan to allocate cash to support ongoing business investments, infrastructure enhancements, and non-cancellable purchase commitments with cloud-computing service providers and certain Issuing Banks.
Previous wording
As of March 31, 2025, we had $8.5 million in restricted cash which included a deposit held at an Issuing Bank to provide the Issuing Bank collateral in the event that our customers' funds are not deposited at the Issuing Bank in time to settle our customers' transactions with the Card Networks. Restricted cash also includes cash held at a bank to secure our payments under a lease agreement for our office space.
Current wording
As of June 30, 2025, we had $8.5 million in restricted cash which included a $7.0 million deposit held at an Issuing Bank to serve as collateral to ensure settlement of our customers' transactions with the Card Networks, in the event that customer funds are not deposited in time. Restricted cash also includes $1.5 million cash held at a bank to secure our payments under a lease agreement for our office space, of which $0.9 million is recorded in Other assets in the June 30, 2025 Condensed Consolidated Balance Sheet.
Previous wording
Our largest source of cash provided by our operating activities is our net revenue. Our primary uses of cash in our operating activities are for Card Network and Issuing Bank fees, and employee-related compensation. The timing of settlement of certain operating assets and liabilities, including revenue share payments, bonus payments, prepayments made to cloud-computing service providers, settlement receivables and network incentive receivables can affect the amounts reported as Net cash provided by or used in operating activities in the Condensed Consolidated Statement of Cash Flows.
Current wording
Our primary source of cash from operating activities is net revenue. The primary uses of cash in operating activities include Card Network and Issuing Bank fees and employee-related compensation. The timing of settlements of certain operating assets and liabilities, such as revenue share payments, bonus payments, prepayments to cloud-computing service providers, settlements receivable and network incentives receivable, may impact the amounts reported as net cash provided by or used in operating activities in the Condensed Consolidated Statements of Cash Flows.
Previous wording
Net cash provided by investing activities consists primarily of maturities of our short-term investments. Net cash used in investing activities consists primarily of purchases of short-term investments, purchases of property and equipment, and capitalization of internal-use software.
Current wording
Net cash provided by investing activities primarily consists of proceeds from maturities of short-term investments, while net cash used in investing activities primarily includes purchases of short-term investments, purchases of property and equipment, and capitalized costs for internal-use software development.
Previous wording
Net cash used in financing activities in the three months ended March 31, 2025 was $117.0 million compared to $44.5 million in the same period in 2024. The increase in net cash used in financing activities is primarily due to increased payments to repurchase our Class A common stock under the 2024 and 2025 Share Repurchase Programs, partially offset by a decrease in tax withholdings related to net share settlement of share-based compensation awards and cash received from stock option exercises.
Current wording
Net cash used in financing activities increased to $288.5 million for the six months ended June 30, 2025, from $109.7 million in the same period in 2024. This increase was primarily due to repurchases of our Class A common stock under the 2024 and 2025 Share Repurchase Programs, partially offset by lower tax withholdings related to net share settlement of share-based compensation awards.
Previous wording
There were no material changes in our obligations and other commitments from those disclosed in our 2024 Annual Report.
Current wording
Except for the lease extension disclosed in Note 9 “Leases” to our condensed consolidated financial statements, there have been no other material changes to our obligations and other commitments from those reported in our 2024 Annual Report.
Previous wording
There have been no material changes to our critical accounting estimates as compared to the critical accounting estimates described in “Management's Discussion and Analysis of Financial Condition and Results of Operations” set forth in our 2024 Annual Report.
Current wording
Except for the revised accounting policy for estimating Card Network incentives, as detailed in Note 2 “Summary of Significant Accounting Policies,” to our condensed consolidated financial statements, no other changes have been made to our accounting policies. Additionally, there have been no material changes to our critical accounting estimates as compared to the critical accounting estimates described in “Management's Discussion and Analysis of Financial Condition and Results of Operations” set forth in our 2024 Annual Report.
Rearranged current paragraphs (6)
Current report — wording carried from elsewhere
The increase in TPV was driven by strong performance across all our major use cases, particularly financial services, lending including buy-now-pay later, and expense management. TPV for our top five customers, based on their individual processing volumes in each respective period, increased by 19% in the three months ended June 30, 2025, compared to the same period in 2024, while TPV from all other customers, as a group, grew by 70% over the same period. Note that the composition of the top five customers may differ between the two periods.
Current report — wording carried from elsewhere
Share-based compensation decreased by $9.2 million, or 25%, for the three months ended June 30, 2025, compared to the same period in 2024, mainly due to the forfeitures of stock based awards.
Current report — wording carried from elsewhere
Costs of Revenue and Gross Margin
Current report — wording carried from elsewhere
Occupancy expense decreased by $0.5 million, or 23%, for the six months ended June 30, 2025, compared to the same period in 2024, primarily due to the impairment of the right-of-use asset associated with our Oakland office recorded during the fourth quarter of 2024.
Current report — wording carried from elsewhere
Income tax expense remained relatively flat for the six months ended June 30, 2025 compared to the same period in 2024.
Current report — wording carried from elsewhere
We generated 45% and 48% of our net revenue from our largest customer, Block, during the six months ended June 30, 2025 and 2024, respectively.