Marqeta's founder and current Chief Executive Jason Gardner plans to step down, the company said when reporting June-quarter earnings. MQ stock tumbled as revenue guidance just met expectations.
The Oakland, Calif.-based fintech company released Marqeta earnings after the market close on Wednesday. Marqeta said Gardner will become executive chairman of the board of directors.
For the current September quarter, the company forecast revenue growth of 37% for Marqeta stock at the midpoint of guidance. Analysts had predicted sales growth of 37% to $180 million.
"Despite strong first-half growth, Marqeta was cautious about the second half outlook given macro uncertainty and potential investment slowdown by fintech companies," said KeyBanc Capital Markets analyst Josh Beck in a report.
Marqeta Stock: Quarterly Loss Narrows
He added: "Marqeta also announced a CEO succession plan, as founder and current CEO Jason Gardner decided that it was in the best long-term interest of the company to begin a CEO search to help maximize value creation during Marqeta's next phase of scaling."
MQ stock tumbled 24.5% to close at 8.34 on the stock market today.
In addition to the CEO change, Marqeta said Chief Operating Officer Vidya Peters is leaving. Simon Khalaf, who recently joined Marqeta as chief product officer, will be COO on an interim basis.
In the quarter that ended June 30, Marqeta narrowed its loss to 8 cents a share from a 29-cent loss a year earlier. Revenue rose 53% to $186.7 million, said Marqeta.
Meanwhile, analysts had estimated an 11-cent per-share loss on revenue of $180.1 million.
In Q2, total payment volume rose 53% to $40 billion, the company said. Analysts had projected TPV of $39.8 billion.
"While we're cognizant of Marqeta's cautious back-half commentary, particularly with regards to select customers taking a measured approach to product development and challenging Q4 comparisons, we're closely monitoring exit velocity entering 2023 as indicative of the platform's growth cadence," said Morgan Stanley analyst James Faucette in a report.
MQ Stock: Square-Parent Block Biggest Customer
Marqeta's primary customers include Square-parent Block, Instacart and DoorDash. Square accounted for 69% of Q2 revenue.
"Following a turbulent week, which included a knee-jerk 30% down move due to fear of losing SQ volumes following confusing commentary by Fidelity National Information Services, Q2 results should offer a sigh of relief," said Mizuho analyst Dan Dolev in a report.
He added: "While results were strong especially on revenue, take rates and adjusted EBITDA, a somewhat softer-than-hoped Q3 guide is unlikely to be met with a cheer. We continue to await the much anticipated Square re-negotiation, which remains the No. 1, No. 2 and No. 3 overhangs on the stock."
Marqeta's payment platform enables customers to issue physical and virtual credit and debit cards.
Also, Marqeta's technology authorizes and settles transactions. Marqeta earns volume-related fees generated with card use and processed transactions.
In addition, some analysts are cautious on MQ stock, citing exposure to lower-end consumers if the economy weakens.
Heading into the Marqeta earnings report, MQ stock had retreated 39% in 2022. Marqeta stock owned a Relative Strength Rating of 52 out of a best-possible 99, according to IBD Stock Checkup.
Marqeta launched its initial public offering in June 2021, with shares priced at 27. The Marqeta IPO raised $1.2 billion.
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