Marqeta (MQ) Q3 Earnings: What To Expect

Jabin Bastian /
2023/11/06 2:03 am EST

Leading edge card issuer Marqeta (NASDAQ: MQ) will be announcing earnings results tomorrow after market hours. Here's what to expect.

Last quarter Marqeta reported revenues of $231.1 million, up 23.8% year on year, beating analyst revenue expectations by 5.1%. It was a solid quarter for the company, with TPV (total processing volume) and revenue surpassing Wall Street's expectations. Adjusted EBITDA also beat by a meaningful amount. On the other hand, its deteriorating gross margin was a minor negative.

Is Marqeta buy or sell heading into the earnings? Read our full analysis here.

This quarter analysts are expecting Marqeta's revenue to decline 50.2% year on year to $95.4 million, a further deceleration on the 45.7% year-over-year decrease in revenue the company had recorded in the same quarter last year. Adjusted loss is expected to come in at -$0.06 per share.

Marqeta Total Revenue

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company has a history of exceeding Wall St's expectations, beating revenue estimates every single time over the past two years on average by 5.5%.

Looking at Marqeta's peers in the finance and HR software segment, some of them have already reported Q3 earnings results, giving us a hint what we can expect. Paychex delivered top-line growth of 6.6% year on year, beating analyst estimates by 1% and Paylocity reported revenues up 25.4% year on year, exceeding estimates by 0.4%. Paychex traded flat on the results, Paylocity was down 5.4%.

Read our full analysis of Paychex's results here and Paylocity's results here.

There has been a stampede out of high valuation technology stocks and while some of the finance and HR software stocks have fared somewhat better, they have not been spared, with share price declining 2.7% over the last month. Marqeta is down 6.4% during the same time, and is heading into the earnings with analyst price target of $6.7, compared to share price of $5.4.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

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The author has no position in any of the stocks mentioned.