Marqeta, Inc.

2. Summary of Significant Accounting Policies

Business Combinations

The Company allocates the purchase consideration for acquired companies to tangible and intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date, with the excess recorded to goodwill. These estimates are inherently uncertain and subject to refinement. Based on information not available at the acquisition date but received during the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the fair value of these tangible and intangible assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the fair value of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the Consolidated Statements of Operations and Comprehensive (Loss) Income. Acquisition-related expenses and postcombination integration and employee compensation costs are recognized separately from the business combination and are expensed as incurred.

Cash and Cash Equivalents

Cash and cash equivalents consist primarily of cash deposits with certain financial institutions and highly liquid investments. The Company considers all highly liquid investments and investments with original maturities of three months or less from the date of purchase to be cash equivalents.

Restricted Cash

As of December 31, 2025, restricted cash primarily consisted of (i) cash used to secure a letter of credit for the Company’s office lease in Oakland, California, and (ii) funds held by TransactPay on behalf of its customers related to card and electronic money (“e-money”) wallet programs. The restricted cash associated with these customer funds arose from the Company’s acquisition of TransactPay on July 31, 2025 (see Note 4, “Business Combinations,” for further details). These funds represent program collateral, safeguarded funds, or settlement balances required to support timely transaction settlement. In the normal course of business, TransactPay receives customer funds in exchange for e-money issued or spent funds within the transaction settlement period for payments to the card networks. TransactPay must comply with applicable safeguarding requirements for customer funds, which are generally satisfied by maintaining cash or cash equivalents in segregated bank accounts. Accordingly, cash and cash equivalents held to meet TransactPay’s safeguarding, collateral, or settlement requirements are classified as restricted cash on the Company’s Consolidated Balance Sheet. Corresponding obligations to the TransactPay customers are recognized as funds payable and amounts due to customers within current liabilities on the Consolidated Balance Sheet, reflecting the Company's custodial role. The restricted cash acquired in the TransactPay acquisition is reflected as an investing inflow in the Consolidated Statement of Cash Flows.

Settlement of Payment Transactions

Generally, customers deposit a certain amount of pre-funding into accounts maintained at Issuing Banks to settle their payment transactions. For Marqeta's operations, these pre-funding amounts may only be used to settle customers' payment transactions and are not considered assets of the Company. Unlike TransactPay’s operations in Gibraltar and Malta, which are subject to safeguarding requirements for customer funds under the applicable jurisdictional regulations, Marqeta’s operations in other geographies, including the United States, are not required to comply with such regulations as there are no equivalent safeguarding rules. Accordingly, the funds held in customers’ accounts at Issuing Banks are not reflected on the Company’s Consolidated Balance Sheets.

Previously, the Company maintained cash balances as collateral with certain issuing bank partners in the event customers funds were not deposited at the Issuing Banks in time to settle customer transactions with the Card Networks. These deposits are no longer subject to such collateral requirements, and as such, the Company reclassified $7.0 million of cash held at Issuing Banks from restricted cash to cash and cash equivalents during the year ended December 31, 2025.

Funds payable and amounts due to customers

Following the acquisition of TransactPay on July 31, 2025, the Company recognizes liabilities related to the customer funds held in connection with card and e-money wallet programs that are classified as restricted cash.

Program managers and corporate customers prefund the prepaid cards issued by TransactPay. Upon receipt of the prefunding from these program managers and the issuance of e-money, TransactPay records a liability equal to the value of the prefunding and the e-money issued. This liability remains outstanding until the funds are redeemed or utilized by the end-users.

These obligations are presented as Funds payable and amounts due to customers in the Company’s Consolidated Balance Sheet. Prior to the TransactPay acquisition, the Company did not hold such customer funds or recognize the related liabilities.

Changes in funds payable and amounts due to customers are presented as cash flows from financing activities in the Company’s Consolidated Statement of Cash Flows. This classification aligns with the underlying nature of these balances, which represent funds received in exchange for electronic money and advances received by the Company on behalf of program managers and end-users.

Short-term Investments

The Company's short-term investments can include U.S. treasury securities, U.S. agency securities, commercial paper, asset-backed securities, certificates of deposits, and corporate debt securities. The Company's short-term investments are classified as available-for-sale securities. Although certain of these securities have stated maturities beyond one year, the Company classifies all available-for-sale investments within current assets in the Consolidated Balance Sheets. This classification reflects the Company’s ability and intent to sell these securities as needed to support ongoing operations, even prior to their contractual maturities.

The Company carries these short-term investments at fair value and periodically evaluates them for unrealized losses. For securities in an unrealized loss position that the Company intends to hold and believes it is more likely than not that the securities will not be required to be sold before recovery, the Company further evaluates whether declines in fair value below amortized cost are due to credit or non-credit related factors. In making this assessment, the Company considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and any adverse conditions specifically related to the security, among other factors.

The Company considers credit related impairments to be changes in value that are driven by a change in the creditor’s ability to meet its payment obligations, and records an allowance in the Consolidated Balance Sheets with a corresponding loss in Other income, net in the Consolidated Statements of Operations and Comprehensive (Loss) Income when the impairment is incurred.

Unrealized non-credit related losses and unrealized gains are recorded as a separate component in Accumulated other comprehensive income (loss), a component of stockholders’ equity, until realized.

The Company records any realized gains or losses on the sale of short-term investments in Other income, net in the Consolidated Statements of Operations and Comprehensive (Loss) Income.

Accounts Receivable

Accounts receivable are recorded at the invoiced amount, net of an allowance for credit losses and do not earn interest. The Company estimates an allowance for accounts receivable based on its assessment of the collectability of accounts by considering its historical accounts receivable collection experience for each customer, the age of each outstanding invoice, and an evaluation of current expected risk of credit loss based on current economic conditions and reasonable and supportable forecasts of future economic conditions over the life of the receivable. The Company assesses collectability on an individual basis when it identifies specific customers with collectability issues, and on an aggregated basis by reviewing accounts receivable where similar characteristics exist. As of December 31, 2025 and 2024, the combined general and specific allowance for accounts receivable was $2.9 million and $2.4 million, respectively.

Settlements Receivable

Settlements receivable represent Interchange Fees earned on customers’ card transactions, net of pass through Card Network fees, that are due from Issuing Banks. Interchange Fees are typically received within one or two business days of the transaction date. The Company has not experienced any historical collection issues with the Issuing Banks, and as such, no allowance has been established. The Company does not generate revenue from Issuing Banks.

Lease Obligations

The Company measures lease liabilities based on the present value of the total lease payments not yet paid discounted based on the Company’s incremental borrowing rate, which is the estimated rate the Company would be required to pay for a collateralized borrowing equal to the total lease payments over the term of the lease.

The Company measures right-of-use assets based on the corresponding lease liability adjusted for (i) payments made to the lessor at or before the commencement date, (ii) initial direct costs the Company incurs and (iii) tenant incentives under the lease. The Company begins to recognize rent expense when the lessor makes the underlying asset available to the Company.

For short-term leases, the Company records rent expense in the Consolidated Statements of Operations and Comprehensive (Loss) Income on a straight-line basis over the lease term and records variable lease payments as incurred. The Company has no finance leases.

Property and Equipment

Property and equipment is stated at cost, less accumulated depreciation and amortization. The Company uses the straight-line method of depreciation and amortization over the estimated useful lives of the assets; generally three tofive years for computer equipment, and furniture and fixtures. Leasehold improvements are amortized over the shorter of the lease term, excluding renewal periods, or the estimated useful life of the leasehold improvement.

The Company capitalizes internal and external direct costs incurred related to obtaining or developing internal-use software. Costs incurred during the application development stage are capitalized and are amortized using the straight-line method over the estimated useful lives of the software, generally three years commencing on the first day of the month following when the software is ready for its intended use. Costs related to planning and other preliminary project activities and post-implementation activities are expensed as incurred.

The depreciation and amortization of property and equipment is recorded within Depreciation and amortization expense in the Consolidated Statements of Operations and Comprehensive (Loss) Income.

The excess purchase price over the fair value of identifiable net assets acquired is recorded as goodwill. Goodwill amounts are not amortized.

Intangible Assets

Intangible assets are carried at cost less accumulated amortization and impairment losses, if any. Intangible assets with finite useful lives are amortized over their estimated useful lives on a straight-line basis. The amortization of these assets is recorded within Depreciation and amortization expense on the Consolidated Statements of Operations and Comprehensive (Loss) Income. Intangible assets with indefinite useful lives, consisting primarily of acquired electronic money institution (“EMI”) licenses, are not amortized, but are tested for impairment annually, or more frequently if events or changes in circumstances indicate that the asset might be impaired.

Impairment

The Company reviews the valuation of long-lived assets, including property and equipment and finite and indefinite-lived intangible assets, whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. An asset is considered impaired if its carrying amount exceeds the future undiscounted cash flow the asset is expected to generate.

Impairment testing for goodwill is performed annually in the fourth quarter or more frequently whenever events or changes in circumstances indicate its carrying value may not be recoverable. Such testing is performed at the reporting unit level. Management has the option to first perform a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than the carrying amount, including goodwill. If it is determined that it is more likely than not that the fair value of the reporting unit is less than the carrying amount, a quantitative assessment is performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value, not to exceed the total amount of goodwill allocated to that reporting unit. The Company also has the option to bypass the qualitative assessment and perform the quantitative assessment.

Based on management's assessment, the Company did not recognize any material impairment losses on its goodwill or finite and indefinite-lived intangible assets during the periods presented herein. See Note 9 for discussion of the Company’s operating lease impairment recorded during the year ended December 31, 2024.

Revenue Recognition

Revenue is recognized when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services.

Contracts with customers are evaluated on a contract-by-contract basis as contracts may include the transfer of multiple services. The Company’s contracts with customers typically include multiple performance obligations: 1)providing access to the Company's payment processing platform, 2) providing program management or value added services, or 3) providing card fulfillment services. The Company accounts for individual services as a separate performance obligation if they are distinct because the service is separately identifiable from other items in the arrangement and a customer can benefit from the good or service on its own or with other resources that are readily available to the customer. If these criteria are not met, the promised goods or services are accounted for as a combined performance obligation. Certain customer contracts require the Company to allocate the transaction price of the contract based on the relative stand-alone selling price of the performance obligations which are based on prices at which the Company separately sells each service or estimated using an analysis of the Company’s historical contract pricing and costs incurred to fulfill its services.

The Company generates revenue from providing platform services and other services as described below.

Platform Services

The Company delivers an integrated payment processing platform to its customers. The Company’s primary performance obligation is to provide customers continuous access to the Company’s platform used to process all customers’ transactions as needed. This obligation includes authorizing, settling, clearing, and reconciling all transactions. Additionally, for certain customer arrangements, the performance obligations also include managing the interactions with Card Networks and/or the Issuing Banks on behalf of its customers, or other value added services, including dispute management, fraud scoring, and cardholder support services.

The Company’s platform services revenue is derived from Interchange Fees generated by customer card transactions. The Company accounts for these Interchange Fees as revenue earned from its customers for performance obligations where the Company controls the services before delivery to the customer. The Company’s platform services revenue also includes processing and other transaction fees from transactions that are based on either a percentage of processing volume or a fee per transaction basis.

The Company’s platform services revenue primarily consists of stand-ready obligations which are satisfied over time and are accounted for as a series of distinct services that are substantially the same and have the same pattern of transfer to customers.

The Company recognizes revenue when the promised services are complete, and its performance obligations are satisfied. Platform services are considered complete when the Company has authorized the transaction, validated that the transaction has no errors, and accepted and posted the data to its records.

The Company allocates variable consideration to the distinct period in which the platform services are delivered. When pricing terms are not consistent throughout the entire term of the contract, the Company estimates variable consideration in its customer contracts primarily using the expected value method. The standard term of the customer contracts ranges from three tofive years, with automatic renewal for successiveone-year periods thereafter unless either party provides written notice of its intent not to renew. The Company develops estimates of variable consideration on the basis of both historical information and current trends and does not expect or anticipate significant reversal of revenue in the future periods.

For net revenue generated from customer arrangements that involve third parties, the Company determines whether it has promised to provide the specified service itself (as principal) or to arrange for the specified service to be provided by another party (as an agent). This determination depends on the facts and circumstance of each arrangement, and in some instances, involves significant judgment. In order to deliver an integrated payment processing platform to its customers, the Company works with Issuing Banks and Card Networks in various capacities. The Company is considered the principal in customer arrangements where the Company controls the services performed by the Issuing Banks and Card Networks before delivery of the promised services to its customers, it is primarily responsible for the delivery of the services to customers, and it has discretion in vendor selection. As such, the Company records fees paid to the Issuing Banks and Card Networks as Costs of Revenue within the Consolidated Statements of Operations and Comprehensive (Loss) Income. In instances where the Company is considered an agent in providing services to the customer, fees for services paid to Issuing Banks and Card Networks, if any, are recorded within Net Revenue such that Net Revenue in the Consolidated Statements of Operations and Comprehensive (Loss) Income reflects the net amount of consideration that the Company retains.

Revenue Share

The Company’s contracts with customers typically include provisions under which the Company shares a portion of the Interchange Fees as consideration payable to its customers, referred to as Revenue Share. Revenue Share payments are incentives paid monthly to customers to increase their processing volume on the Company’s platform. These payments are computed as a percentage of the Interchange Fees earned or processing volume.

The Company records Revenue Share as a reduction to net revenue in the Consolidated Statements of Operations and Comprehensive (Loss) Income. The Company records the amount due to the customer as Revenue Share payable on the Consolidated Balance Sheets.

Other Services Revenue

The Company earns revenue from customers through card fulfillment services. Card fulfillment fees are generally billed to customers upon ordering card inventory and recognized as revenue when the ordered cards are shipped to customers. The Company offers certain customers the option to purchase physical cards at a discount. The Company has concluded that the discount does not constitute a future material right because the discount is within a range typically offered to the class of customers. Therefore, the Company accounts for the discount as a reduction to revenue when the Company delivers the ordered cards to the customers.

Contract Assets and Deferred Revenue

Contract assets are reported in Prepaid expenses and other current assets and Other assets in the Consolidated Balance Sheets. The Company records contract assets primarily due to upfront payments provided to certain customers or variable consideration from customer contracts, where pricing terms are not consistent throughout the entire term of the contract.

Deferred revenue is reported within Accrued expenses and other current liabilities and Other liabilities in the Consolidated Balance Sheets, and arises when customers pay for services in advance of the Company's revenue recognition. The Company recognizes deferred revenue primarily due to undelivered card fulfillment services, variable consideration from customer contracts where pricing terms are not consistent throughout the entire term of the contract, or non-refundable upfront setup fees are billed at contract inception.

Arrangements that include rights to additional goods or services that are exercisable at a customer’s discretion are generally considered options. The Company assesses if these options provide a material right to the customer and if so, they are considered performance obligations. This material right is valued by estimating the discount that will be redeemed by the customer during the optional renewal period.

Costs of Revenue

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 Consolidated Statements of Operations and Comprehensive (Loss) Income. 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.

The Company has marketing and incentive arrangements with Card Networks that provide the Company 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. The Company accounts for these incentives as a reduction of Card Network fees within Costs of Revenue in customer arrangements where the Company acts as the principal. As processing volumes increase, the Company earns 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 the Company’s fiscal year.

Prior to the second quarter of fiscal year 2025, the Company recognized network incentives in the period when cumulative transaction volume thresholds were met, which was due to insufficient data to reliably estimate the incentives the Card Networks would ultimately earn over the respective annual period. This approach resulted in fluctuations in Card Network fees, particularly when thresholds were reached, as higher incentive rates were applied retroactively to the entire measurement period. Historically, the Company has earned the highest incentive rates in the first quarter of its 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.

Effective in the second quarter of fiscal year 2025, the Company revised its accounting policy for estimating and recognizing network incentives. The Company now estimates and recognizes network incentives based on the cumulative incentive rates it expects to earn over the annual measurement period. The Company estimates the cumulative incentive rates based on its forecasts for the annual measurement periods, which incorporate both historical experience and our expectations of future events, in addition to other qualitative considerations. The 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 year ended December 31, 2025 were $1.5 million higher compared to the amount that would have been recognized under the previous policy.

Uncollected incentives are included in Network incentives receivable in the Consolidated Balance Sheets. The Company's contracts with Card Networks and Issuing Banks typically have terms ranging from three tofive years, which may be renewed inone-year totwo-year increments as agreed by both parties.

Advertising Costs

The Company expenses advertising costs as they are incurred. Advertising expenses for the years ended December 31, 2025, 2024, and 2023, were $4.2 million, $2.3 million, and $1.5 million, respectively.

Research and Development Costs

Research and development costs, which consist primarily of salaries, employee benefits, share-based compensation, third-party hosting fees, and software licenses were $144.5 million, $141.4 million, and $148.0 million for the years ended December 31, 2025, 2024, and 2023, respectively. Research and development costs are expensed as incurred, and are included in Compensation and benefits and Technology expenses in the Consolidated Statements of Operations and Comprehensive (Loss) Income.

Share-based Compensation

The primary types of share-based compensation utilized by the Company are restricted share units (“RSUs”), stock options, performance-based restricted stock units (“PSUs”), and the use of the employee stock purchase plan (“ESPP”). The Company determines compensation expense associated with RSUs based on the estimated fair value of its common stock on the date of grant. The compensation expense associated with stock options is determined based on the estimated grant date fair value using the Black-Scholes option pricing model. The Company generally recognizes compensation expense using a straight-line amortization method over the respective vesting period. The PSUs granted vest over three years and have aone year performance period with one-third of the PSUs subject to cliff vesting following the completion of the performance period, then vesting in equal quarterly installments thereafter. Over the performance period, the number of PSUs that may be issued and the related share-based compensation expense that is recognized is adjusted upward or downward based upon the probability of achieving the approved performance targets against the performance metrics. Depending on the probability of achieving the pre-established performance targets, the number of PSUs issued could range from 0% to 200% of the target amount. The Company accounts for forfeitures as they occur.

Defined Contribution Plans

The Company maintains defined contribution plans for eligible employees, including a 401(k) plan that covers substantially all of its U.S. based employees and to which the Company provides a matching contribution of 50% of the first 6% of compensation that an employee contributes. The matching contribution vests immediately.

Restructuring

Restructuring costs arise from employee related severance charges and include both cash and non-cash compensation. The Company generally recognizes restructuring costs when it is committed to a restructuring plan and the related liabilities are probable and can be reasonably estimated, or pursuant to an established plan for ongoing benefit arrangements. For one-time termination benefits, recognition generally occurs upon communication of the plan details to the affected employees, in accordance with the plan’s specific terms. Timing of recognition may vary depending on the region in which an employee works and appliable local laws. Restructuring liabilities are classified in Accrued expenses and other current liabilities in the Consolidated Balance Sheets as these liabilities are generally settled within less than one year of recognition.

Income Taxes

The Company accounts for income taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

The Company recognizes deferred tax assets to the extent that it believes these assets are more likely than not to be realized. In making such a determination, the Company considers the available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts that are more likely than not expected to be realized. If the Company determines that it is able to realize its deferred tax assets in the future in excess of the net recorded amount, the Company decreases the deferred tax asset valuation allowance, which reduces the income tax expense.

Uncertain tax positions are recognized only when the Company believes it is more likely than not that the tax position will be upheld on examination by the taxing authorities based on the merits of the position. The Company recognizes interest and penalties, if any, related to uncertain tax positions in Income tax expense (benefit) in the Consolidated Statements of Operations and Comprehensive (Loss) Income.

Net (Loss) Income Per Share Attributable to Common Stockholders

The Company presents basic and diluted net (loss) income per share attributable to common stockholders in conformity with the two-class method. The Company calculates basic net (loss) income per share attributable to common stockholders by dividing net (loss) income attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted net (loss) income per share attributable to common stockholders gives effect to all potential shares of common stock, including common stock issuable upon conversion of redeemable convertible preferred stock and redeemable convertible preferred stock warrants, stock options, RSUs, PSUs and common stock warrants to the extent these are dilutive.

Loss Contingencies

The Company may be involved in various lawsuits, claims, and proceedings that arise in the ordinary course of business. The Company records a liability for these when it believes it is probable that it has incurred a loss, and the Company can reasonably estimate the loss. The Company regularly evaluates current information to determine whether it should adjust a recorded liability or record a new one. If a loss is reasonably possible and the loss or range of loss can be reasonably estimated, the Company discloses the possible loss in the accompanying notes to the Consolidated Financial Statements. Judgment is required to determine both the probability and the estimated amount.

Fair Value Measurements

Fair value is an exit price, representing the price that would be received to sell the financial asset or paid to transfer the financial liability in an orderly transaction between market participants at the measurement date.

The fair value hierarchy includes a three-level classification, which is based on whether the inputs to the valuation methodology used for measurement are observable:

•Level 1 ‑ Inputs are quoted prices in active markets for identical assets as of the reporting date;

•Level 2 ‑ Inputs other than Level 1 that are observable, either directly or indirectly; or

•Level 3 ‑ Unobservable pricing inputs in the market.

When developing fair value measurements, the Company maximizes the use of observable inputs and minimizes the use of unobservable inputs. In instances where the Company lacks observable inputs in the market to measure the fair value of an asset or liability, the Company may use unobservable inputs which requires greater judgment in measuring fair value. In instances where there is limited or no observable market data, fair value measurements for assets and liabilities are based primarily upon the Company’s own estimates, and the measurements reflect information and assumptions that management believes a market participant would use in pricing the asset or liability.

The Company’s financial instruments consist of cash equivalents, restricted cash, short-term investments, accounts receivable, settlements receivable, accounts payable, revenue share payable, contingent consideration liability, and accrued liabilities. Cash equivalents are stated at amortized cost, which approximates fair value at the balance sheet dates, due to the short period of time to maturity. Short-term investments and contingent consideration liability are carried at fair value. Accounts receivable, settlements receivable, accounts payable, revenue share payable, and accrued liabilities are stated at their carrying value, which approximates fair value due to the short period of time to the expected receipt or payment date.

Foreign Currency

The functional currency of the Company’s foreign subsidiaries is its respective local currency. For these foreign entities, the Company translates the financial statements into U.S. dollars using average exchange rates for the period for income statement amounts and using end-of-period exchange rates for assets and liabilities. There translation adjustments are included in Accumulated other comprehensive income (loss) in the Consolidated Balance Sheets and the Consolidated Statements of Stockholders’ Equity. Foreign currency transaction gains and losses are included in Other income, net in the Consolidated Statements of Operations and Comprehensive (Loss) Income.

Recently Adopted Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”, which modifies the rules on income tax disclosures to require entities to disclose (1) specific categories in the rate reconciliation, (2) the income or loss from continuing operations before income tax expense or benefit (separated between domestic and foreign) and (3) income tax expense or benefit from continuing operations (separated by federal, state and foreign). ASU 2023-09 also requires entities to disclose their income tax payments to international, federal, state and local jurisdictions, among other changes. The Company adopted the standard prospectively for the year ended December 31, 2025, resulting in expanded disclosures related to the effective tax rate reconciliation and income taxes paid by jurisdiction in Note 15.

Recently Issued Accounting Pronouncements

In November 2024, the FASB issued Accounting Standards Update No. 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures” (“ASU 2024-03”). ASU 2024-03 is intended to improve disclosures about a public business entity's expenses and provide more detailed information to investors about the types of expenses in commonly presented expense captions. The amendments in this ASU are effective for the Company in fiscal 2027 on a retrospective basis, with early adoption permitted. The Company is currently evaluating the operational and financial reporting implications of this standard.

In September 2025, the FASB issued Accounting Standards Update No. 2025-06, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software” ("ASU 2025-06"). ASU 2025-06 modernizes the accounting for internal-use software costs by increasing the operability of the recognition guidance considering different methods of software development. ASU 2025-06 can be applied prospectively, retrospectively, or with a modified transition approach, and is effective for the Company for annual reporting as well as interim period reporting beginning in fiscal year 2028 with early adoption permitted. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements and disclosures.

3. Revenue

Disaggregation of Revenue

The following table provides information about disaggregated revenue from customers:

Contract Balances

The following table provides information about contract assets and deferred revenue:

Net revenue recognized during the years ended December 31, 2025 and 2024 that was included in the deferred revenue balances at the beginning of the respective periods was $13.2 million and $9.0 million, respectively.

Remaining Performance Obligations

The Company has performance obligations associated with commitments in customer contracts for future stand-ready obligations to process transactions throughout the contractual term. As of December 31, 2025, the aggregate amount of the transaction price allocated to our remaining performance obligations was $42.2 million. The Company expects to recognize approximately 70% withintwo years and the remaining 30% over the next three tofive years.

4. Business Combinations

TransactPay

On July 31, 2025, the Company completed its acquisition of Transact Payments Limited (collectively, with its affiliates “TransactPay”). TransactPay provides BIN sponsorship, E-money Licensing, and virtual Account services in the UK, Gibraltar, and the EEA. The Company’s acquisition of TransactPay strengthens its card program management in Europe and bolsters its digital payment capabilities in the UK, Gibraltar, and the EEA, where EMI licenses are required for issuing and managing electronic money.

The preliminary purchase price was denominated in euros and translated into U.S. dollars using the exchange rate in effect on the acquisition date. Subsequent changes to the preliminary purchase price and its components reflect cash payments and net working capital adjustments made from the acquisition date through December 31, 2025. The preliminary purchase price consisted the following:

(1) Cash paid includes a $1.1 million cash payment to the sellers during the quarter ended December 31, 2025 in accordance with the merger agreement for post-closing adjustments.

Holdback Consideration

Pursuant to the terms of the merger agreement, the Company retained $3.5 million in holdback consideration, with $2.3 million for indemnification purposes and $1.2 million for post-closing adjustments, collectively, the “Holdbacks”. These Holdbacks serve to secure the sellers’ obligations with respect to pre-closing representations and warranties, potential indemnification claims, and post-closing purchase price adjustments.

In November 2025, upon finalization of the post-closing purchase price adjustment procedures, the Company paid the sellers approximately $1.1 million of the $1.2 million originally retained for post-closing adjustments. As of December 31, 2025, $2.4 million of the original holdbacks remains outstanding, retained solely for general indemnification purposes. The Company has recorded the remaining holdback consideration within accrued expenses and other current liabilities on the Consolidated Balance Sheet. The increase in the remaining general indemnification holdback from the $2.3 million retained at the closing date to $2.4 million as of December 31, 2025 is due to changes in foreign currency exchange rates. This amount is expected to be settled in the third quarter of fiscal 2026, subject to any valid indemnification claims asserted prior to the scheduled release date.

Contingent Consideration

As part of the acquisition, the Company agreed to provide additional contingent consideration in the form oftwo earn-out arrangements (collectively “the earn-outs”), which would be payable to the sellers upon satisfaction of specified post-closing performance conditions through December 31, 2025:

•Regulatory Improvement Earn-out- $2.3 million payable on an all or nothing basis if no enforcement actions, investigations, or proceedings are pending against TransactPay by any relevant regulatory authorities in Malta, Gibraltar, and/or the United States as of December 31, 2025.

•Digital Products Earn-out - Up to $3.4 million payable based on the achievement of escalating gross profit thresholds for TransactPay’s digital products in the year ended December 31, 2025.

In determining the fair value of the Earn-out liabilities at Closing, the Company evaluated the probability of achieving the respective performance conditions, considering the short time frame from closing to the December 31, 2025 measurement date, along with historical and projected operational metrics. For the Regulatory Improvement Earn-Out, a high probability of success was assigned based on the lack of material regulatory issues resulting in inclusion of the full $2.3 million in the purchase price. For the Digital Products Earn-Out, a Monte Carlo simulation model was utilized, incorporating actual digital products gross profit performance through the quarter ended September 30, 2025, and forward-looking projections for the remainder of 2025, which yielded an estimated fair value of $1.3 million.

As the performance period concluded on December 31, 2025, the earn-out liabilities were remeasured based on actual results achieved. The aggregate fair value of the earn-outs was $3.7 million as of December 31, 2025, reflecting insignificant changes from the initial fair value measurement that were recorded in the Consolidated Statements of Operations and Comprehensive (Loss) Income. The earn-outs are recorded in accrued expenses and other current liabilities in the Consolidated Balance Sheet. With the performance conditions now resolved, no significant further adjustments to the fair value of the earn-outs are expected.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed as of the acquisition date. Amounts are presented in U.S. dollars, translated from euros using the exchange rate in effect on the acquisition date. This preliminary purchase price allocation reflects the measurement period adjustments recorded from the acquisition date through December 31, 2025:

The purchase price allocation for the TransactPay acquisition remains preliminary as of December 31, 2025, and is subject to revision for certain acquired assets and assumed liabilities. In particular, the Company continues to evaluate facts and circumstances that existed as of the closing date, which may result in adjustments to provisional amounts for identifiable intangible assets, deferred tax assets and/or liabilities, and purchase consideration. Any measurement period adjustments will be recognized prospectively in the period in which the adjustments are determined, with the measurement period ending as soon as sufficient information is obtained or no later than one year from the closing date.

Restricted cash and Funds payable and amounts due to customers

The restricted cash acquired consists of funds held on behalf of customers in segregated accounts as part of program management activities for card and e-money wallet programs. These funds function as collateral or settlement balances to facilitate timely transaction processing, and the Company is subject to restrictions on their use to ensure compliance with regulatory safeguarding requirements. Notwithstanding these restrictions, the Company bears the associated credit risk and retains the right to earn interest on the balances. Accordingly, the Company has concluded that these funds qualify as its assets and are classified as restricted cash on the Consolidated Balance Sheet. Corresponding obligations to the customers are recognized as funds payable and amounts due to customers within current liabilities on the Consolidated Balance Sheet, reflecting the Company's custodial role.

Customer Relationships

The customer relationships intangible asset, which represents established relationships with program managers and end-users, was determined to have an estimated useful life oftwo years. The fair value was estimated using the replacement cost method, which considers the hypothetical costs to recreate these relationships.

EMI Licenses

The EMI licenses, which permit the issuance of e-money in relevant jurisdictions, have no fixed expiration date and can be renewed indefinitely, provided ongoing regulatory requirements, such as periodic filings and payment of required fees, are met. Accordingly, these are classified as indefinite-lived intangible assets and are not subject to amortization but will be tested for impairment annually or more frequently if indicators exist. The fair value of the EMI licenses was determined using the income approach, specifically the “with-and-without” method, which estimates the incremental economic benefit attributable to the licenses by comparing the present value of projected cash flows with and without the licenses in place.

The goodwill is attributable to expected synergies. The acquisition is a non-taxable business combination and goodwill recognized in the acquisition is not deductible for tax purposes.

Acquisition Costs

The Company incurred approximately $4.0 million acquisition related costs, of which $1.0 million was recognized during the year ended December 31, 2024 and $3.0 million was recognized during the year ended December 31, 2025, respectively, and are primarily included in professional services on the Consolidated Statements of Operations and Comprehensive (Loss) Income.

The results of operations of TransactPay have been included in the Company’s Consolidated Statements of Operations and Comprehensive (Loss) Income from the acquisition date of July 31, 2025, through December 31, 2025. The results of operations of TransactPay for periods prior to the acquisition date were not material to the Company’s consolidated statements of operations. Accordingly, supplemental pro forma financial information has not been presented.

Power Finance Inc.

On February 3, 2023, the Company acquired all outstanding stock of Power Finance Inc. (“Power Finance”) for a base cash purchase price of $221.9 million. The purchase price does not include $53.1 million of contingent consideration tied to performance-based goals which were expected to be achieved within 12 months from the date of acquisition. The Company determined the acquisition-date fair value of the contingent consideration liability, based on the likelihood of payment related to the contingent earn-out clauses, as part of the consideration transferred.

Power Finance’s cloud-based platform offers credit card program management services for companies creating new credit card programs. The acquisition of Power Finance will accelerate the Company’s credit product capabilities and allow the Company’s customers to launch a wide range of credit products and constructs.

The following table summarizes the components of the purchase consideration transferred:

Of the $117.6 million postcombination compensation excluded from purchase consideration, approximately $32.4 million was recognized as non-cash postcombination compensation cost at closing as a result of the vesting provisions of the employee replacement awards on the acquisition date. The remaining $85.1 million is subject to continuous employment and will be recognized as postcombination cash compensation cost over a weighted-average period of 2.2 years. Postcombination expense recognized was $7.1 million, $39.7 million and $36.4 million for the years ended December 31, 2025, 2024 and 2023, respectively, and is included within Compensation and benefits in the Consolidated Statements of Operations and Comprehensive (Loss) Income. As of December 31, 2025, approximately $1.0 million of this post-combination compensation remained unrecognized and is expected to be fully recognized during the year ending December 31, 2026.

The assets acquired and liabilities assumed were recorded at fair value as of the acquisition date. The final $163.6 million purchase consideration was attributed to $41.0 million of developed technology intangible assets (to be amortized over an estimated useful life of 7 years), $8.0 million of deferred tax liabilities, and $7.1 million of net assets acquired, with the $123.5 million excess of purchase consideration over the fair value of assets acquired and liabilities assumed recorded as goodwill. The fair value of the developed technology intangible assets was estimated using the multi-period excess earnings method (“MPEEM”), a form of the income approach. The principle behind this method is that the value of the intangible asset is equal to the present value of the after-tax cash flows attributable to the intangible asset. The Company applied judgment which involved the use of certain assumptions with respect of the revenue and EBITDA forecasts, obsolescence rate, and discount rate. The goodwill recognized was primarily attributable to the expected synergies from integrating Power Finance’s technology into the Company’s platform. Goodwill was not considered deductible for tax purposes.

The financial results of Power Finance are included in the Company’s Consolidated Financial Statements from the date of acquisition. Separate operating results and pro forma results of operations for Power Finance have not been presented as the effect of this acquisition was not material to the Company’s financial results. Acquisition-related third-party transaction costs were $3.3 million for the year ended December 31, 2023 and were included in Professional services in the Consolidated Statement of Operations and Comprehensive (Loss) Income. Transaction costs for the Power Finance acquisition were immaterial for the year ended December 31, 2024.

During the third quarter of 2023, the Company paid $53.1 million in contingent consideration upon achievement of the related performance-based milestones during the second quarter of 2023.

5. Goodwill and Intangible Assets

Goodwill consisted of the following:

There wereno changes to goodwill during the year ended December 31, 2024.

Intangibles Assets, net

Intangible assets consisted of the following as of the dates presented:

(1) The customer relationships and EMI licenses acquired in the TransactPay acquisition are denominated in euros. The difference between the U.S. dollar amounts initially recorded at the acquisition date as disclosed in Note 4, Business Combinations, and the balances reported as of December 31, 2025 is attributable to changes in the foreign currency exchange rate.

The amortization period for developed technology intangible assets is 7 years. Amortization expense for developed technology was $5.9 million for the years ended December 31, 2025 and 2024 and $5.4 million for the year ended December 31, 2023. The amortization period for customer relationships is 2 years. Amortization expense for customer relationships was $1.5 million for the year ended December 31, 2025.

Expected future amortization expense for intangible assets was as follows as of December 31, 2025:

6. Short-term Investments

The amortized cost, unrealized gain, and estimated fair value of the Company's short-term investments consisted of the following:

The Company didnot have any short-term investments in unrealized loss positions as of December 31, 2025 and 2024. Generally, the Company does not intend to sell any short-term investments that have unrealized losses, and it is not more likely than not that the Company will be required to sell such securities before any anticipated recovery of the entire amortized cost basis.

There wereno material realized gains or losses from short-term investments that were reclassified out of accumulated other comprehensive income (loss) for the years ended December 31, 2025 and 2024. The Company determined that for its short-term investments, there were no material credit or non-credit related impairments as of December 31, 2025 and 2024.

The following table summarizes the stated maturities of the Company’s short-term investments:

7. Fair Value Measurements

The following tables present the fair value hierarchy for assets and liabilities measured at fair value on a recurring basis:

The Company classifies money market funds, U.S. treasury bills, U.S. treasury securities, U.S. agency securities, asset-backed securities, certificates of deposit, commercial paper and corporate debt securities within Level 1 or Level 2 of the fair value hierarchy because the Company values these investments using quoted market prices or alternative pricing sources and models utilizing market observable inputs.

There were no transfers of financial instruments between the fair value hierarchy levels during the years ended December 31, 2025 and 2024.

8. Certain Balance Sheet Components

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following:

Property and Equipment, net

Property and equipment consisted of the following:

Depreciation and amortization expense related to property and equipment was $19.8 million, $11.6 million, and $5.4 million for the years ended December 31, 2025, 2024, and 2023, respectively.

The Company capitalized $39.8 million and $25.9 million as internal-use software development costs during the years ended December 31, 2025 and 2024, respectively.

Other Assets

Other assets consisted of the following:

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following:

Other Liabilities

Other liabilities consisted of the following:

9. Leases

The Company leases office space under non-cancelable operating lease agreements, which are classified as operating leases. The most significant lease relates to the Company’s headquarters in Oakland, California (the “Oakland Lease”). Lease payments consist primarily of fixed rental payments for the right to use the underlying leased assets over the lease terms. The Company is responsible for operating expenses that exceed the amount of base operating expenses as defined in the original lease agreement.

Oakland Headquarters Lease

In the fourth quarter of 2024, the Company decided to permanently cease usingtwo leased floors of its Oakland headquarters. This decision represented a triggering event that required the Company to test the related asset group, consisting primarily of the right-of-use asset and leasehold improvements, for impairment. As a result of this assessment, the Company recognized an impairment charge of $1.4 million, which was included within Occupancy expense in the Consolidated Statement of Operations and Comprehensive (Loss) Income for the year ended December 31, 2024. The estimated fair value of the right-of-use asset was measured on a nonrecurring basis determined using Level 3 inputs under the income approach, incorporating probability-weighted discounted cash flow projections over the remaining lease term.

In the second quarter of 2025, the Company amended its Oakland Lease, extending the term for certain retained floors by 24 months. The lease modification was not accounted for as a separate contract, and the extension has been accounted for as an operating lease. Accordingly, the Company recorded an increase to the Operating lease right-of-use assets, net and Operating lease liabilities, net of current portion in the Consolidated Balance Sheet of approximately $3.5 million, representing the present value of the additional lease payments associated with the 24-month extension.

TransactPay Assumed Leases

In connection with the acquisition of TransactPay (see Note 4, “Business Combinations,” for further details), the Company assumedtwo operating leases for office space in Malta and Gibraltar expiring in October 2029 and October 2035, respectively. These lease arrangements consist primarily of fixed rental payments in exchange for the right to use the underlying leased assets over the respective lease terms, with no significant variable lease payments or purchase options. As of the acquisition date, the Company recognized right-of-use assets and corresponding operating lease liabilities of $2.5 million based on the present value of the remaining lease payments.

The Company's operating lease costs are as follows:

The Company does not have any sublease income and the Company’s lease agreements do not contain any residual value guarantees or material restrictive covenants.

The weighted average remaining operating lease term and the weighted average discount rate used in the calculation of the Company's lease assets and lease liabilities were as follows:

Maturities of operating lease liabilities by year are as follows as of December 31, 2025:

10. Commitments and Contingencies

Letters of Credit and Restricted Cash

In connection with the Oakland lease, the Company is required to provide the landlord a letter of credit in the amount of $1.5 million. The Company has secured this letter of credit by depositing $1.5 million with the issuing financial institution. In April 2025, the lease was amended, which extended the lease for a reduced amount of office space bytwo years. As part of the extension, the letter of credit will be reduced to $0.9 million effective on March 1, 2026, with an expiration date of February 2028. As of December 31, 2025, $0.9 million of restricted cash is recorded in other assets on the Consolidated Balance Sheet to reflect the extended obligation, while the remaining $0.6 million, not required after February 2026, is recorded in current assets as restricted cash.

As previously disclosed in Note 2, “Summary of Significant Accounting Policies” and Note 4, “Business Combinations”, restricted cash also includes customer funds held by TransactPay in segregated accounts held to meet its safeguarding, collateral, or settlement requirements. As of December 31, 2025, the balance of restricted cash associated with these customer funds was $306.9 million, of which $45.8 million is invested in money market funds.

Purchase Obligations

As of December 31, 2025, the Company had non-cancellable purchase commitments with certain service providers and Issuing Banks of $107.1 million, payable over the next 3 years. These purchase obligations include $92.4 million related to minimum commitments as part of a cloud-computing service agreement. The remaining obligations are related to various service providers and Issuing Banks processing fees over the fixed, non-cancellable respective contract terms.

Defined Contribution Plans

During the years ended December 31, 2025, 2024, and 2023, the Company contributed a total of $5.5 million, $5.0 million, and $5.5 million to its defined contribution plans, respectively.

Legal Contingencies

From time to time in the normal course of business, the Company may be subject to various legal matters such as threatened or pending claims or proceedings. Given the unpredictable nature of legal proceedings, the Company bases its assessment on the information available at the time the financials are available to be issued. As additional information becomes available, the Company reassesses the probability of the loss contingency and the potential liability, and may revise the estimate. The Company is currently involved in the following matters:

On December 9, 2024, a putative securities class action lawsuit, captioned Wai v. Marqeta, Inc., et al., Case No. 24-cv-08874 (N.D. Cal.), was filed in federal court in the Northern District of California (“Court”) against the Company and certain of its current and former officers (“Defendants”) alleging violations of federal securities laws. The lawsuit asserts that during the putative class period of between August 7, 2024 and November 4, 2024, Defendants made false or misleading statements relating to the Company’s performance or revenue and gross profit expectations in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.

On December 10, 2024, a second putative securities class action lawsuit, captioned Ford v. Marqeta, Inc., et al., Case No. 24-cv-08892 (N.D. Cal.), was filed in the same Court against the same Defendants alleging violations of the same federal securities laws. The second lawsuit asserts similar theories of liability as the first lawsuit but alleges a broader putative class period of between May 7, 2024 and November 4, 2024 and some additional and/or different allegations on which the claims are based. Both lawsuits (collectively, the “Securities Actions”) seek to recover damages on behalf of shareholders who acquired shares of the Company’s common stock during their respective putative class periods. The Securities Actions have been consolidated into one consolidated securities litigation captioned In re Marqeta, Inc. Securities Litigation, Case No. 24-08874-YGR (N.D. Cal) and the Court has appointed a lead plaintiff and lead plaintiff’s counsel in the matter. On April 10, 2025, the lead plaintiff filed a consolidated amended complaint, which alleges a putative class period of between February 28, 2024 and November 4, 2024. We and the other Defendants filed a motion to dismiss the consolidated amended complaint on May 15, 2025.

On November 3, 2025, a settlement was reached, in principle, with the lead plaintiff’s counsel to resolve the Securities Actions for payments totaling $13.0 million, subject to further documentation and judicial approvals. The Company’s Directors and Officers insurance policy includes a $5.0 million self-insured retention that applies to covered losses related to the Securities Actions, including legal defense fees and settlement payments. If finalized, the settlement will be funded by insurance less the self-insured retention.

For the year ended December 31, 2025, the Company recognized $5.0 million of legal and litigation expenses related to this matter, which are included in other operating expenses within the Consolidated Statement of Operations and Comprehensive (Loss) Income. This amount represents the Company’s probable loss corresponding to its $5.0 million self-insured retention.

As of December 31, 2025, the Company recorded a $13.0 million settlement liability within accrued expenses and other current liabilities and a corresponding $9.3 million insurance recovery receivable within prepaid expenses and other current assets on the Consolidated Balance Sheet. The receivable represents the portion of settlement expected to be covered by insurance, determined by applying legal fees incurred through December 31, 2025, toward the self-insured retention. As additional legal fees are incurred beyond this date, they will further reduce the remaining self-insured retention, resulting in a corresponding increase to the receivable balance.

On February 4, 2025, a putative shareholder derivative lawsuit, capti oned Smith v. Khalaf, et al., Case No. 25-cv-01174 (N.D. Cal.), was filed in the same Court against certain of the Company’s current and former officers and its Board of Directors (as then constituted), and named the Company as a nominal defendant. This lawsuit asserts claims for breach of fiduciary duties and violations of federal securities laws, among other claims, between the time period of May 7, 2024 and November 4, 2024 under similar theories as the Securities Actions. Two other substantially similar putative shareholder derivative lawsuit, captioned Ojserkis v. Khalaf, et al., Case No. 25-cv-01883 (N.D. Cal.) and Preciado v. Khalaf, et al., Case No. 3:25-cv-02100 (N.D. Cal.) were filed on February 21, 2025 and February 27, 2025, respectively. All three putative shareholder derivative suits have been consolidated into one lawsuit captioned In re Marqeta, Inc. Derivative Litigation, Case No. 4:25-cv-01174-YGR (N.D. Cal). The consolidated derivative action is currently stayed pending developments in the consolidated Securities Actions.

Settlement of Payment Transactions

As described in Note 2, “Summary of Significant Accounting Policies,” pre-funding amounts deposited by program management customers into accounts maintained at Issuing Banks may only be used to settle customers’ payment transactions, and are not subject to the same safeguarding regulations as TransactPay’s customer funds, and as such, are not considered assets of the Company. Accordingly, the funds held in customers’ accounts at Issuing Banks are not reflected on the Company’s Consolidated Balance Sheets. If a customer does not have sufficient funds to settle a transaction, the Company is liable to the Issuing Bank to settle the transaction and would therefore incur losses if such amounts cannot be subsequently recovered from the customer. The Company did not incur losses of this nature during the years ended December 31, 2025, 2024 and 2023.

Indemnifications

In the ordinary course of business, the Company enters into agreements of varying scope and terms pursuant to which it agrees to indemnify customers, Card Networks, Issuing Banks, vendors, lessors, and other parties with respect to certain matters, including, but not limited to, losses arising out of the breach of such agreements, services to be provided by the Company or from intellectual property infringement claims made by third parties. With respect to Issuing Banks, the Company has received requests for indemnification from time to time and may indemnify the Issuing Bank for losses such Issuing Bank may incur for non-compliance with applicable law and regulations, if those losses resulted from the Company’s failure to perform under its program agreement. No significant claims have been incurred during the years ended December 31, 2025, 2024 and 2023.

In addition, the Company has entered into indemnification agreements with its directors and certain officers and employees that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers, or employees. As of December 31, 2025 and 2024, no demands have been made upon the Company to provide indemnification under such agreements, and the Company is not aware of any claims that could have a material effect on its Consolidated Balance Sheets, Consolidated Statements of Operations and Comprehensive (Loss) Income, or Consolidated Statements of Cash Flows.

The Company also includes service level commitments to its customers, warranting certain levels of performance and permitting those customers to receive credits in the event the Company fails to meet those levels outlined in their respective agreements. No material credits were issued during the years ended December 31, 2025, 2024 and 2023.

11. Stock Incentive Plans

The Company grants share-based awards to employees, non-employee directors, and other service providers of the Company under the 2021 Stock Option and Incentive Plan (“2021 Plan”). The Amended and Restated 2011 Equity Incentive Plan (“2011 Plan”) had been terminated, and no new awards are granted under it. However, previously granted awards that remain outstanding continue to be governed by the terms of the 2011 Plan. Additionally, the Company offers an ESPP, which allows employees to purchase shares of common stock at 85% of the fair value of the Company’s Class A common stock on the first or last day of the offering period, whichever is lower. The offering periods are six months long and start in May and November of each year.

The following table presents the share-based compensation expense recognized within the following line items in the Consolidated Statements of Operations and Comprehensive (Loss) Income and Consolidated Balance Sheet in the periods presented:

Restricted Stock Units

Restricted Stock Units

The Company grants RSUs to employees, directors, and certain consultants. RSUs vest solely upon the satisfaction of service-based conditions and are generally subject to a vesting schedule ofthree orfour years.

All RSUs granted on or after the Company’s IPO in 2021, as well as any remaining pre-IPO RSU grants, contain only service-based vesting condition. The liquidity-based vesting condition that previously applied to RSUs granted before April 1, 2021 was fully satisfied upon the Company’s IPO in 2021.

The fair value of RSUs is based on the closing price of the Company’s Class A common stock on the grant date and is recognized as share-based compensation over the requisite service period on straight-line basis for awards with only a service vesting condition.

Performance Restricted Stock Units

The Company grants PSUs under the 2021 Plan to certain employees of the Company based on an initial target number. The final number of PSUs that may vest and settle depend upon the Company’s performance against pre-established performance metrics over a predefined performance period, contingent on the compensation committee’s approval of the level of achievement against the pre-established performance targets at the end of the fiscal year. The PSUs granted vest over three years and have aone year performance period with one-third of the PSUs subject to cliff vesting following the completion of the performance period then vesting in equal quarterly installments thereafter. Over the performance period, the number of PSUs that may be issued and the related share-based compensation expense that is recognized is adjusted upward or downward based upon the probability of achieving the approved performance targets against the performance metrics. Depending on the probability of achieving the pre-established performance targets, the number of PSUs issued could range from 0% to 200% of the target amount.

A summary of the Company's RSUs and PSUs activity under the Plans was as follows:

As of December 31, 2025, unrecognized compensation costs related to unvested RSUs and PSUs was $124.1 million. These costs are expected to be recognized over a weighted-average period of 1.7 years.

Stock Options

Under the Plans, the exercise price of a stock option shall not be less than the fair market value per share of the Company’s common stock on the date of grant (and not less than 110% of the fair market value per share of common stock for grants to stockholders owning more than 10% of the total combined voting power of all classes of stock of the Company, or a 10% stockholder). Options are exercisable over periods not to exceedten years from the date of grant (five years for incentive stock options granted to 10% stockholders).

A summary of the Company's stock option activity under the Plans is as follows:

(1) Intrinsic value is calculated based on the difference between the exercise price of in-the-money-stock options and the fair value of the common stock as of the respective balance sheet dates.

(2) The 2011 Plan allows for early exercise of stock options. Accordingly, options granted under this plan are included as exercisable stock options regardless of vesting status.

The total intrinsic value of options exercised during the years ended December 31, 2025, 2024, and 2023, was $0.7 million, $0.8 million, and $12.2 million, respectively.

The total grant-date fair value of options vested during the years ended December 31, 2025, 2024, and 2023, was $25.2 million, $42.4 million, and $61.8 million, respectively.

As of December 31, 2025, aggregate unrecognized compensation costs related to unvested outstanding stock options was $2.3 million. These costs are expected to be recognized over a weighted-average period of 0.9 years.

The Company did not grant any stock options during the years ended December 31, 2025 and 2024.

Executive Chairman Long-Term Performance Award

In April and May 2021, the Company’s board of directors granted the Company’s Executive Chairman and then-Chief Executive Officer (“CEO”) performance-based stock options to purchase an aggregate of 19,740,923 and 47,267 shares of the Company’s Class B common stock with an exercise price of $21.49 and $23.40 per share, respectively, (collectively, the “Executive Chairman Long-Term Performance Award”). The Executive Chairman Long-Term Performance Award would vest only upon the satisfaction of both a service condition and the achievement of certain stock price hurdles over aseven-year performance period following the expiration of the lock-up period associated with the Company’s IPO in 2021.

In the second quarter of 2024, the Executive Chairman stepped down from his executive officer role and transitioned to a non-employee director role on the board of directors causing the Executive Chairman Long-Term Performance Award to be forfeited per its terms. As a result of the forfeiture, the Company reversed all previously recognized share-based compensation expense associated with the award, resulting in a one-time credit of $167.3 million, of which $144.6 million related to expense recognized in prior years. The Company accounts for forfeitures as they occur.

12. Stockholders’ Equity Transactions

Warrants to Purchase Common Stock

In 2021 and 2020, the Company issued warrants to certain customers to purchase up to 1.2 million and 0.8 million shares of the Company’s common stock, respectively. These warrants vest based on certain performance conditions that include issuing a specific percentage of new cards on the Company’s platform over a defined measurement period and reaching certain annual transaction count thresholds over the contract term, respectively. All warrants have an exercise price of $0.01 per share. These warrants are classified as equity instruments and are treated as consideration payable to a customer. The grant date fair values of these warrants were determined using Black-Scholes option-pricing model with key assumptions including the fair value of the underlying common stock on the grant date, expected term, expected volatility and risk-free rate. The grant date fair values are being recorded as a reduction to net revenue over the term of the respective customer contract based on the expected pattern of processing volume generated by the customer and the probability of vesting conditions being met.

As of December 31, 2025 and 2024,1.3 million and 1.2 million warrants were vested, respectively. The Company recorded $2.1 million and $1.7 million as a reduction of net revenue related to these warrants during the years ended December 31, 2025 and 2024, respectively. Upon vesting, the fair value of the vested warrants was recorded into the Company’s additional paid-in capital. Timing differences caused by the pattern of processing volume generated by the customer over the original terms of the contract and the vesting schedules of the warrants can cause differences in the amount of grant date fair value that is credited to additional paid in capital upon vesting and the amount recorded as a reduction in net revenue during any particular reporting period.

As of December 31, 2025, there were no warrants outstanding, as all previously issued warrants which fully vested had expired unexercised.

Share Repurchase Programs

On September 14, 2022, the Company’s Board of Directors authorized a share repurchase program of up to $100 million of the Company’s Class A common stock beginning September 15, 2022 (“2022 Share Repurchase Program”). Under the 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 Securities and Exchange Act of 1934, as amended (the “Exchange Act”). The number of shares repurchased and the timing of purchases were based on general business and market conditions, and other factors, including legal requirements. Repurchases under the program were completed as of March 31, 2023.

During the year ended December 31, 2023, the Company repurchased and subsequently retired 3.2 million shares for $21.0 million under the 2022 Share Repurchase Program, for an average price of $6.46.

On May 8, 2023, the Company’s board of directors authorized a share repurchase program of up to $200 million of the Company’s Class A common stock (“2023 Share Repurchase Program”). Under the 2023 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 were based on general business and market conditions, and other factors, including legal requirements.

During the year ended December 31, 2023, the Company repurchased 31.3 million shares in the open market for $169.4 million under the 2023 Share Repurchase Program, for an average price of $5.41. During the year ended December 31, 2024 the Company repurchased 5.2 million shares in the open market for $32.8 million, including transaction costs and excise taxes, at an average price of $6.27 under the 2023 Share Repurchase Program. Repurchases under the 2023 Share Repurchase Program were completed as of March 31, 2024.

On May 6, 2024, the Company’s board of directors authorized a share repurchase program of up to $200 million of the Company’s Class A common stock (the “2024 Share Repurchase Program”). 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 were based on general business and market conditions, and other factors, including legal requirements.

During the year ended December 31, 2024, the Company repurchased approximately 23.2 million shares in the open market and in privately negotiated transactions for $119.5 million under the 2024 Share Repurchase Program, for an average price of $5.16, respectively. The total price of the shares repurchased and the related transaction costs and excise taxes of $1.2 million during the year ended December 31, 2024 are reflected as a reduction to Common stock and Additional paid-in capital on the Company’s Consolidated Balance Sheets. During the year ended December 31, 2025, the Company repurchased approximately 19.2 million shares in the open market and in privately negotiated transactions for $80.5 million under the 2024 Share Repurchase Program, for an average price of $4.20, respectively. The total price of the shares repurchased and the related transaction costs and excise taxes of $1.1 million during the year ended December 31, 2025 are reflected as a reduction to Common stock and Additional paid-in capital on the Company’s Consolidated Balance Sheets. Repurchases under the 2024 Share Repurchase Program were completed as of March 31, 2025.

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 “February 2025 Share Repurchase Program”). Under the February 2025 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 were based on general business and market conditions, and other factors, including legal requirements. The February 2025 Share Repurchase Program had no set expiration date.

During the year ended December 31, 2025, the Company repurchased approximately 63.9 million shares under the February 2025 Share Repurchase Program for $300.0 million, at an average price of $4.69 per share. The aggregate cost of the shares repurchased and the related transaction costs and excise taxes of $3.8 million during the year ended December 31, 2025, respectively, are reflected as a reduction to Common stock and Additional paid-in capital on the Company’s Consolidated Balance Sheet. Repurchases under the February 2025 Share Repurchase Program were completed during the fourth quarter of 2025.

On December 4, 2025, the Company’s Board of Directors authorized an additional share repurchase program of up to $100 million of the Company’s Class A common stock (the “December 2025 Share Repurchase Program”). Under the December 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 December 2025 Share Repurchase Program has no set expiration date.

During the year ended December 31, 2025, the Company repurchased approximately 1.7 million shares under the December 2025 Share Repurchase Program for $8.5 million, at an average price of $4.89 per share. The aggregate cost of the shares repurchased and the related transaction costs and excise taxes of $0.1 million during the year ended December 31, 2025, respectively, are reflected as a reduction to Common stock and Additional paid-in capital on the Company’s Consolidated Balance Sheet. As of December 31, 2025, $91.5 million remained available for future share repurchases under the December 2025 Share Repurchase Program.

13. Restructuring

During the second quarter of 2023, the Company approved a restructuring plan (the “Restructuring Plan”) intended to reduce operating expenses and improve profitability by reducing the Company’s workforce. The net restructuring charges incurred in connection with the Restructuring Plan was approximately $8.7 million, which was completed as of December 31, 2023.

The Company recorded $8.7 million in restructuring charges during the year ended December 31, 2023, which consisted of $14.6 million primarily related to one-time severance and benefit payments, as well as a net reduction of stock-based compensation of $2.9 million related to the vesting of certain equity awards and the forfeiture of certain equity awards which were accounted for as it occurred. Additionally, the Company reduced previously accrued bonuses for impacted employees of $2.9 million due to the terms of the Restructuring Plan. These costs were included in Compensation and benefits in the Consolidated Statement of Operations and Comprehensive (Loss) Income.

As the Restructuring Plan was completed in 2023 and no further costs are expected, there were no material restructuring charges or related liabilities remaining as of December 31, 2025 or 2024.

14. Net (Loss) Income Per Share Attributable to Common Stockholders

Basic net (loss) income per share is computed by dividing the net (loss) income by the weighted-average number of shares of common stock outstanding during the period. Diluted net (loss) income per share is computed by dividing net (loss) income by the weighted-average number of shares of common stock outstanding adjusted for the dilutive effect of all potential shares of common stock. In periods when the Company reported a net loss, diluted net loss per share is the same as basic net loss per share because the effects of potentially dilutive items were anti-dilutive.

The Company calculated basic and diluted net (loss) income per share attributable to common stockholders as follows:

As liquidation and dividend rights are identical for Class A common stock and Class B common stock, the undistributed earnings are allocated on a proportionate basis and the resulting income (loss) per share will, therefore, be the same for both Class A common stock and Class B common stock on an individual or combined basis.

The following potentially dilutive securities were excluded from the computation of diluted net loss per share during the years ended December 31, 2025 and 2023 because including them would have had an anti-dilutive effect as the Company was in a loss position during those periods:

Potentially dilutive securities that were excluded from the computation of diluted net income per share during the year ended December 31, 2024 because including them would have had an anti-dilutive effect were as follows:

15. Income Taxes

The components of (loss) income before income taxes by tax jurisdiction were as follows:

The components of income tax expense (benefit) were as follows:

The Company adopted ASU 2023-09, “Improvements to Income Tax Disclosures” as of December 31, 2025 and the Company applied this guidance prospectively. Accordingly, the effective tax rate reconciliation for the year ended December 31, 2025 is presented in accordance with the new standard, while those for the years ended December 31, 2024 and 2023 are presented under the previous guidance and have not been retrospectively adjusted.

The reconciliation of the U.S. federal statutory rate to the Company's effective income tax rate for the year ended December 31, 2025 under ASU 2023-09 is as follows:

(1) Presented net of related unrecognized tax benefits in the current year. Also includes immaterial changes in unrecognized tax benefits related to prior year tax positions.

(2) The tax effects attributable to state taxes in Oregon and Texas for the year ended December 31, 2025 represent the majority (greater than 50%) of the total in this category.

The reconciliation of the Company's effective tax rate to the statutory federal rate for the years ended December 31, 2024 and 2023 under the previous guidance is as follows:

Income taxes paid by jurisdiction for the year ended December 31, 2025 are summarized as follows:

Deferred tax assets and liabilities consist of the following:

In accordance with ASC 740 and based on all available evidence on a jurisdictional basis, the Company believes that it is more likely than not that its U.S. deferred tax assets will not be utilized and has recorded a full valuation allowance against its net deferred tax assets in the U.S. jurisdiction. The Company assesses on a periodic basis the likelihood that it will be able to recover its deferred tax assets. The Company considers all available evidence, both positive and negative, including historical levels of income or losses and expectations and risks associated with estimates of future taxable income in assessing the need for the valuation allowance. If it is not more likely than not that the Company expects to recover its deferred tax assets, the Company will increase its provision for taxes by recording a valuation allowance against the deferred tax assets that it estimates will not ultimately be recoverable. The available negative evidence at December 31, 2025 and 2024 included historical and projected future operating losses. As a result, the Company concluded that a decrease of $6.1 million and an increase of $7.5 million was required to reflect the change in its deferred tax assets prior to valuation allowance during 2025 and 2024, respectively. As of December 31, 2025 and 2024, the Company considered it more likely than not that substantially all of its deferred tax assets would not be realized.

As of December 31, 2025, the Company had net operating loss carryforwards of approximately $205.2 million and $172.9 million for federal and state tax purposes, respectively. Of the Company's federal net operating loss carryforwards as of December 31, 2025, $180.3 million can be carried forward indefinitely but are limited to 80% of taxable income. If not utilized, the federal and state net operating carryforwards will begin to expire in 2035 and 2025, respectively.

In addition, the Company had research and development tax credit carryforwards of approximately $39.7 million for federal income tax purposes and $16.9 million for California state tax purposes. If not utilized, the federal research and development tax credit carryforwards will begin to expire in 2031. The California state research credit can be carried forward indefinitely.

Under Section 382 of the Internal Revenue Code of 1986, as amended, the Company's ability to utilize net operating loss carryforwards or other tax attributes in any taxable year may be limited if the Company has experienced an ownership change. As of December 31, 2025, the Company has concluded that it has experienced ownership changes since inception and that its utilization of net operating loss carryforwards and other tax attributes will be subject to annual limitations.

The Company files federal, state, and foreign income tax returns in jurisdictions with varying statutes of limitations. To the extent the Company has tax attributes carryforwards, the tax years in which the attribute was generated may still be adjusted upon examination by the federal, state, or foreign tax authorities to the extent utilized in a future period.

The Company made an accounting policy election to provide for the Global Intangible Low-Taxed Income (GILTI) tax expense in the year the tax is incurred as a period cost. The Company elected and applied the tax law ordering approach when considering GILTI as part of its valuation allowance.

In July 2025, Congress passed and the President signed into law H.R. 1, the One Big Beautiful Bill Act (the "Tax Act"), which addresses certain business tax provisions enacted as a part of the 2017 Tax Cuts and Jobs Act including restoration of 100% bonus depreciation under Section 168(k) and Section 174 expensing for US-based research. Accounting Standards Codification Topic 740, Income Taxes, (“Topic 740”) requires the tax impacts to be included in the reporting period that includes the date the Tax Act was signed into law. As the Tax Act was enacted in the third quarter of fiscal year 2025, the Company reflected the impacts of the Tax Act in its income tax expense beginning in the third quarter of fiscal year 2025. Due to the Company's full valuation allowance on its deferred tax assets, these tax law changes did not have a significant effect on the Company's financial position or results of operations.

The Company recognizes tax benefits from uncertain tax positions only if the Company believes that it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The Company makes adjustments to the reserves in accordance with the income tax accounting guidance when facts and circumstances change, such as the closing of a tax audit or the refinement of an estimate.

A reconciliation of the total amounts of unrecognized tax benefits was as follows:

The Company’s policy is to include interest and penalties related to unrecognized tax benefits within the Company’s tax provision for income tax expenses. During the year ended December 31, 2025, the Company accrued $0.3 million of interest and penalties related to unrecognized tax benefits.

As of December 31, 2025, the Company had gross unrecognized tax benefits of $18.8 million. If recognized, $4.6 million of unrecognized tax benefits would affect the Company's effective tax rate. The remaining $14.2 million would not impact the effective tax rate due to the offsetting effect of the Company's valuation allowance.

16. Concentration Risks and Significant Customers

Financial instruments that potentially expose the Company to concentration of credit risk consist of cash and cash equivalents, short-term investments, and accounts receivable. Cash and cash equivalents held with financial institutions may exceed federally insured limits, posing potential credit risk.

As of December 31, 2025, short-term investments were $62.5 million, and there was no concentration of securities of the same issuer with an aggregate fair value greater than 5% of this total balance, except for U.S. Treasury securities, which amounted to $56.1 million, or 90%, of the short-term investments. As of December 31, 2025, all debt securities within the Company's portfolio were investment grade.

As of December 31, 2024, short-term investments were $179.4 million, and there was no concentration of securities of the same issuer with an aggregate fair value greater than 5% of the total balance, except for U.S. Treasuries, which amounted to $168.9 million, or 94% of the short-term investments. As of December 31, 2024, all debt securities within the Company's portfolio were investment grade.

A significant portion of the Company's payment transactions is settled throughone Issuing Bank, Sutton Bank. For the years ended December 31, 2025, 2024 and 2023,64%,70% and 76% of Total Processing Volume was settled through Sutton Bank, respectively.

A significant portion of the Company's revenue and accounts receivable is derived from a single customer. The following provides net revenue as a percentage of total net revenue and customers' receivables as a percentage of total customers receivables for our significant customers:

• • Did not exceed 10% in the reporting period presented

17. Segment Information

The Company's chief operating decision maker (“CODM”) is its Chief Executive Officer, who regularly reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance. The Company provides a single, global, cloud-based, open API platform for modern card issuing and transaction processing, and primarily earns revenue from processing card transactions for its customers. As such, the Company operates as a single operating segment and reporting unit.

The CODM assesses performance and decides how to allocate resources based on consolidated net (loss) income as the measure of profit and loss and consolidated total assets. The measure of segment assets is reported on the balance sheet as total assets. The CODM uses net (loss) income in the annual budgeting process and subsequent monitoring of budget versus actual results, as well as in assessing the return on consolidated total assets.

The following is the information used by the CODM in assessing segment performance:

(1) The Company operates as a single reportable segment that is managed on a consolidated basis, therefore the Company’s segment net (loss) income is the same as the Company’s consolidated net (loss) income.

For the years ended December 31, 2025, 2024, and 2023, net revenue outside of the United States, based on the billing address of the customer, was 14%,10%, and 5%, respectively.

As of December 31, 2025 and 2024, tangible long-lived assets located outside of the United States were not material and not used by the CODM in assessing and evaluating financial performance and allocating resources.