Embedded Finance Briefing: What’s going on at Marqeta?
- In this week's Embedded Finance Briefing, we take a deep dive into Marqeta's performance in Q3 2021. We review analyst discussions and the key takeaways from the recent earnings call.
- We also look at the potential for embedded finance offerings in serving SMBs, and how incumbent banks might be under threat.
Last Friday, after the company’s earnings release, Marqeta’s stock closed the day down by more than 5%. Some analysts in the space decreased their target price for the firm, but without changing their buy recommendation for investors.
What’s going on with Marqeta?
More red
A red flag was raised when the firm published its Q3 2021 reports. The bottom line on Marqeta’s income statement remained red, with the company posting a net loss of $45.7 million in the quarter, as against $12.3 million in Q3 2020. When reviewed under the year-to-date lens, the firm’s losses mounted to $127.1 million in 2021, nearly quadrupling from its losses of $33.9 million in the same period in 2020.
Though the company attributed these losses to rising expenses, it nevertheless alarmed investors. As Marqeta pushes for expansion, these expenses were attributed to an increase in the firm’s headcount, as well as compensation and benefits for existing employees. Q3 2021 was Marqeta’s largest hiring quarter, adding a net 77 new people to its ranks.
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