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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2022
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File Number: 001-40465
Marqeta, Inc.
(Exact name of registrant as specified in its charter)
Delaware27-4306690
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification Number)
180 Grand Avenue, 6th Floor, Oakland, California
94612
(Address of principal executive offices)(Zip Code)

(888) 462-7738
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A common stock, $0.0001 par value per shareMQ
The Nasdaq Stock Market LLC
(Nasdaq Global Select Market)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No ☒
As of May 6, 2022, there were 432,784,327 shares of the registrant's Class A common stock, par value $0.0001 per share, outstanding and 111,656,849 shares of the registrant's Class B common stock, par value $0.0001 per share, outstanding.



TABLE OF CONTENTS

Page
2


Note About Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the federal securities laws, which are statements that involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “shall,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:
the effect of the COVID-19 pandemic on global economies, our business, results of operations, financial condition, demand for our Platform, sales cycles and Customer retention;
our future financial performance, including our net revenue, costs of revenue and operating expenses and our ability to achieve future profitability;
our ability to effectively manage or sustain our growth and expand our operations;
our ability to enhance our Platform and develop and expand its capabilities;
our ability to further attract, retain, diversify, and expand our Customer base;
our expectations as to live events in 2022;
our ability to maintain our relationships with our Issuing Banks and Card Networks;
our strategies, plans, objectives, and goals;
our plans to expand internationally;
our ability to compete in existing and new markets and offerings;
our estimated market opportunity;
economic and industry trends, projected growth, or trend analysis;
our ability to develop and protect our brand;
our ability to comply with laws and regulations;
our ability to successfully defend litigation brought against us;
our ability to attract and retain qualified employees and key personnel;
our ability to maintain effective disclosure controls and internal controls over financial reporting; and
the increased expenses associated with being a public company.
We caution you that the foregoing list may not contain all of the forward-looking statements made in this Quarterly Report on Form 10-Q. You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, results of operations, financial condition, and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, and other factors described in the section titled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. The results, events, and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events, or circumstances could differ materially from those described in the forward-looking statements. The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law. Unless otherwise indicated or unless the context requires otherwise, all references in this document to “Marqeta”, the “Company”, the “Registrant,” “we”, “us”, “our”, or similar references are to Marqeta, Inc. Capitalized terms used and not defined above are defined elsewhere within this Quarterly Report on Form 10-Q.
3

PART I - Financial Information
Item 1. Financial Statements
Marqeta, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except share and per share amounts)
(unaudited)
March 31,
2022
December 31,
2021
Assets
Current assets:
Cash and cash equivalents$1,197,257 $1,247,581 
Restricted cash7,800 7,800 
Marketable securities 447,046 452,875 
Accounts receivable, net9,017 13,187 
Settlements receivable, net9,093 11,266 
Network incentives receivable45,721 30,399 
Prepaid expenses and other current assets43,789 35,617 
Total current assets1,759,723 1,798,725 
Property and equipment, net9,120 9,687 
Operating lease right-of-use assets, net10,748 11,296 
Equity method investment8,036 8,384 
Other assets5,856 2,286 
Total assets$1,793,483 $1,830,378 
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable$1,698 $2,693 
Revenue share payable130,045 121,179 
Accrued expenses and other current liabilities102,146 114,096 
Total current liabilities233,889 237,968 
Operating lease liabilities, net of current portion11,618 12,427 
Other liabilities4,344 6,557 
Total liabilities249,851 256,952 
Commitments and contingencies (Note 7)
Stockholders’ equity:
Preferred stock, $0.0001 par value; 100,000,000 and 100,000,000 shares authorized, no shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively
  
Common stock, $0.0001 par value: 1,500,000,000 and 1,500,000,000 Class A shares authorized, 431,305,181 and 421,792,153 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively. 600,000,000 and 600,000,000 Class B shares authorized, 112,302,435 and 119,591,365 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively
54 54 
Additional paid-in capital2,029,745 1,993,055 
Accumulated other comprehensive loss(8,116)(2,230)
Accumulated deficit(478,051)(417,453)
Total stockholders’ equity1,543,632 1,573,426 
Total liabilities and stockholders’ equity$1,793,483 $1,830,378 
See accompanying notes to condensed consolidated financial statements.
4

Marqeta, Inc.
Condensed Consolidated Statements of Operations and Comprehensive Loss
(in thousands, except share and per share amounts)
(unaudited)
Three Months Ended March 31,
20222021
Net revenue$166,102 $107,983 
Costs of revenue91,376 58,126 
Gross profit74,726 49,857 
Operating expenses:
Compensation and benefits100,348 46,904 
Technology11,384 5,626 
Professional services4,770 4,196 
Occupancy1,115 1,086 
Depreciation and amortization979 907 
Marketing and advertising559 495 
Other operating expenses4,843 1,295 
Total operating expenses123,998 60,509 
Loss from operations(49,272)(10,652)
Other income (expense), net(11,677)(2,167)
Loss before income tax expense(60,949)(12,819)
Income tax expense (benefit)(351)19 
Net loss$(60,598)$(12,838)
Other comprehensive income (loss), net of taxes:
Change in foreign currency translation adjustment(19)(14)
Change in unrealized gain (loss) on marketable securities(5,867)(31)
Net other comprehensive income (loss)(5,886)(45)
Comprehensive loss$(66,484)$(12,883)
Net loss per share attributable to common stockholders, basic and diluted$(0.11)$(0.10)
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted542,565,992 130,841,306 
See accompanying notes to condensed consolidated financial statements.
5

Marqeta, Inc.
Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit)
(in thousands, except share amounts)
(unaudited)

Preferred StockCommon Stock
Additional
Paid-in
Capital
Accumulated Other
Comprehensive Income (loss)
Accumulated
Deficit
Total
Stockholders’
 Equity
SharesAmountSharesAmount
Balance as of December 31, 2021 $ 541,383,518 $54 $1,993,055 $(2,230)$(417,453)$1,573,426 
Issuance of common stock upon exercise of options— — 1,604,022 — 2,285 — — 2,285 
Repurchase of early exercised stock options— — (22,751)— — — — — 
Issuance of common stock upon net settlement of restricted stock units— — 642,827 — (4,702)— — (4,702)
Vesting of common stock warrants— — — — 2,102 — — 2,102 
Share-based compensation expense— — — — 37,005 — — 37,005 
Change in other comprehensive income (loss)— — — — — (5,886)— (5,886)
Net loss— — — — — — (60,598)(60,598)
Balance as of March 31, 2022 $ 543,607,616 $54 $2,029,745 $(8,116)$(478,051)$1,543,632 


Redeemable Convertible
Preferred Stock
Common Stock
Additional
Paid-in
Capital
Accumulated Other
Comprehensive Income (loss)
Accumulated
Deficit
Total
Stockholders’
Deficit
SharesAmountSharesAmount
Balance as of December 31, 2020351,844,340 $501,881 130,312,838 $13 $39,769 $25 $(253,524)$(213,717)
Issuance of common stock upon exercise of vested options— — 1,904,186 — 1,410 — — 1,410 
Issuance of common stock upon early exercise of unvested options— — 319,883 — — — — — 
Repurchase of early exercised stock options— — (18,567)— — — — — 
Vesting of early exercised stock options— — — — 223 — — 223 
Share-based compensation expense— — — — 11,392 — — 11,392 
Change in other comprehensive income (loss)— — — — — (45)— (45)
Net loss— — — — — — (12,838)(12,838)
Balance as of March 31, 2021351,844,340 $501,881 132,518,340 $13 $52,794 $(20)$(266,362)$(213,575)
See accompanying notes to condensed consolidated financial statements.
6

Marqeta, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Three Months Ended March 31,
20222021
Cash flows from operating activities:
Net loss$(60,598)$(12,838)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization979 907 
Share-based compensation expense37,005 11,392 
Non-cash operating leases expense548 522 
Amortization of premium on marketable securities184 360 
Impairment of other financial instruments11,616  
Other282 2,324 
Changes in operating assets and liabilities:
Accounts receivable4,223 5,032 
Settlements receivable2,173 1,509 
Network incentives receivable(15,322)(12,055)
Prepaid expenses and other assets(21,256)(426)
Accounts payable(801)(43)
Revenue share payable8,866 14,122 
Accrued expenses and other liabilities(13,937)7,750 
Operating lease liabilities(721)(686)
Net cash (used in) provided by operating activities(46,759)17,870 
Cash flows from investing activities:
Purchases of property and equipment(612)(604)
Purchases of marketable securities(10,022)(7,002)
Maturities of marketable securities9,800 16,366 
Net cash (used in) provided by investing activities(834)8,760 
Cash flows from financing activities:
Proceeds from exercise of stock options, including early exercised stock options, net of repurchase of early exercised unvested options1,971 1,711 
Taxes paid related to net share settlement of restricted stock units(4,702) 
Payment of deferred offering costs (1,144)
Net cash (used in) provided by financing activities(2,731)567 
Net (decrease) increase in cash, cash equivalents, and restricted cash(50,324)27,197 
Cash, cash equivalents, and restricted cash- Beginning of period1,255,381 228,233 
Cash, cash equivalents, and restricted cash - End of period$1,205,057 $255,430 
See accompanying notes to condensed consolidated financial statements.
7

Marqeta, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Three Months Ended March 31,
20222021
Reconciliation of cash, cash equivalents, and restricted cash
Cash and cash equivalents$1,197,257 $247,630 
Restricted cash7,800 7,800 
Total cash, cash equivalents, and restricted cash$1,205,057 $255,430 
Supplemental disclosures of cash flow information:
Cash paid for income taxes$9 $ 
Supplemental disclosures of non-cash investing and financing activities:
Purchase of property and equipment accrued and not yet paid$997 $140 
Deferred offering costs not yet paid$ $894 
See accompanying notes to condensed consolidated financial statements.
8

Marqeta, Inc.
Notes to Condensed Consolidated Financial Statements
(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)
(unaudited)

1.    Business Overview and Basis of Presentation
Marqeta, Inc., or the Company, creates digital payment technology for innovation leaders. The Company's modern card issuing platform, or the Platform, places control over payment transactions into the hands of its customers, or Customers, enabling them to develop modern, state-of-the-art product experiences.
The Company provides all of its Customers with issuer processor services and for most of its Customers it also acts as a card program manager. The Company primarily earns revenue from processing card transactions for its Customers.
The Company was incorporated in the state of Delaware in 2010 and is headquartered in Oakland, California, with offices in the United States, United Kingdom, and Australia and a presence in Singapore as of March 31, 2022.
Initial Public Offering
In June 2021, the Company completed an initial public offering, or the IPO, in which the Company issued and sold 52,272,727 shares of its newly authorized Class A common stock, which included 6,818,181 shares that were offered and sold pursuant to the full exercise of the underwriters’ option to purchase additional shares at a price of $27.00 per share. The Company received aggregate net proceeds of $1.3 billion after deducting underwriting discounts and commissions of $91.6 million and offering costs of $7.5 million.
Immediately prior to the completion of the IPO, the Company filed its Amended and Restated Certificate of Incorporation authorizing a total of 1,500,000,000 shares of Class A common stock which entitles holders to one vote per share, 600,000,000 shares of Class B common stock which entitles holders to 10 votes per share, and 100,000,000 shares of undesignated preferred stock. All shares of common stock then outstanding were reclassified as Class B common stock and all redeemable convertible preferred stock then outstanding were converted into 351,844,340 shares of common stock on a one-for-one basis and reclassified into Class B common stock. In addition, 2,569,528 shares of common stock warrants were converted to an equivalent number of shares of Class B common stock warrants and 203,610 shares of convertible preferred stock warrants were converted to an equivalent number of shares of Class B common stock warrants.
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America, or GAAP, and the applicable rules and regulations of the Securities and Exchange Commission, or the SEC, for interim reporting. Certain information and note disclosures included in our annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. The condensed consolidated balance sheet as of December 31, 2021 has been derived from our audited consolidated financial statements, which are included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, which was filed with the SEC on March 11, 2022. The accompanying condensed consolidated financial statements should be read in conjunction with our consolidated financial statements and notes thereto included in the Annual Report on Form 10-K.
The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. In the opinion of management, the accompanying condensed consolidated financial statements reflect all adjustments of a normal, recurring nature considered necessary for a fair presentation of the Company's consolidated financial position, results of operations, comprehensive loss, and cash flows for the interim periods presented. The interim results for the three months ended March 31, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022, or for any other future annual or interim period.
9

Marqeta, Inc.
Notes to Condensed Consolidated Financial Statements
(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)
(unaudited)
Use of Estimates
The preparation of the financial statements requires management to make estimates and assumptions relating to reported amounts of assets and liabilities, disclosure of contingent liabilities, and reported amounts of revenue and expenses. Significant estimates and assumptions relate to the fair value of equity awards and warrants, share-based compensation, the estimation of variable consideration in contracts with Customers, the reserve for contract contingencies and processing errors, the fair value of equity method investments and a purchase call option to acquire the remaining interest in the equity method investee, the incremental borrowing rate used to determine operating lease liabilities, the useful lives of property and equipment, and the collectability of accounts receivable. Actual results could differ materially from these estimates.
Business Risks and Uncertainties
The Company has incurred net losses since its inception. For the three months ended March 31, 2022, the Company incurred net losses of $60.6 million, and had an accumulated deficit of $478.1 million as of March 31, 2022. The Company expects losses from operations to continue for the foreseeable future as it incurs costs and expenses related to creating new products for Customers, acquiring new Customers, developing its brand, expanding into new geographies and developing the existing Platform infrastructure. The Company believes that its cash and cash equivalents of $1.2 billion and marketable securities of $447.0 million as of March 31, 2022 are sufficient to fund its operations through at least the next twelve months from the issuance of these financial statements.
In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID-19) as a pandemic. Since then, the COVID-19 pandemic has continued to spread throughout the United States and the world. The prolonged disruption to the economy and the long-term financial impact of the pandemic cannot be reasonably estimated. The Company continues to monitor the situation and may take actions that alter its operations and business practices as may be required by federal, state, or local authorities or that the Company determines are in the best interests of its Customers, vendors, and employees.
2.    Summary of Significant Accounting Policies
The Company’s significant accounting policies are discussed in “Consolidated Financial Statements — Note 2. Summary of Significant Accounting Policies” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021. There have been no significant changes to these policies during the three months ended March 31, 2022.
Segment Information
The Company operates as a single operating segment. The Company's chief operating decision maker is its Chief Executive Officer, who reviews financial information presented on a consolidated basis for purposes of making operating decisions, assessing financial performance, allocating resources, and evaluating the Company's financial performance.
For the three months ended March 31, 2022 and 2021, revenue outside of the United States, based on the billing address of the Customer, was not material. As of March 31, 2022 and December 31, 2021, long-lived assets located outside of the United States were not material.
Restricted Cash
Restricted cash consists of deposits with financial institutions that issue payment cards (credit, debit, or prepaid) either on their own behalf or on behalf of businesses that issue customized card products to their end users, or Issuing Banks, to provide the Issuing Bank collateral in the event that Customers’ funds are not deposited at the Issuing Banks in time to settle Customers’ transactions with the networks that provide the infrastructure for settlement and card payment information flows, or Card Networks. Restricted cash also includes cash used to secure a letter of credit for the Company’s lease of its office headquarters in Oakland, California.
10

Marqeta, Inc.
Notes to Condensed Consolidated Financial Statements
(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)
(unaudited)
New Accounting Standards Not Yet Adopted
As an emerging growth company, the Jumpstart Our Business Startups Act, or the JOBS Act, allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. The Company has elected to use this extended transition period under the JOBS Act. The adoption date discussed below reflects this election.
In June 2016, the FASB issued ASU No. 2016-13, Financial instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 replaces the incurred loss model with the current expected credit loss, or CECL, model to estimate credit losses for financial assets measured at amortized cost and certain off-balance sheet credit exposures. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to available-for-sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. The CECL model requires a company to estimate credit losses expected over the life of the financial assets based on historical experience, current conditions, and reasonable and supportable forecasts. The guidance will be effective for the Company beginning January 1, 2023. The amendment requires a modified retrospective approach by recording a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. Early adoption is permitted. The Company is still evaluating the impact this ASU will have on its condensed consolidated financial statements.
3.    Revenue
Disaggregation of Revenue
The following table provides information about disaggregated revenue from Customers:
Three Months Ended March 31,
20222021
Platform services revenue, net$160,999 $106,453 
Other services revenue5,103 1,530 
Total net revenue$166,102 $107,983 
Contract Balances
The following table provides information about contract assets and deferred revenue:
Contract balanceBalance sheet line referenceMarch 31,
2022
December 31,
2021
Contract assets - currentPrepaid expenses and other current assets$627 $950 
Contract assets - non-currentOther assets827 927 
Total contract assets$1,454 $1,877 
Deferred revenue - currentAccrued expenses and other current liabilities$18,839 $19,060 
Deferred revenue - non-currentOther liabilities3,894 6,107 
Total deferred revenue$22,733 $25,167 
Net revenue recognized during the three months ended March 31, 2022 and 2021 that was included in the deferred revenue balances at the beginning of the respective periods was $4.5 million and $0.8 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.
11

Marqeta, Inc.
Notes to Condensed Consolidated Financial Statements
(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)
(unaudited)
As of March 31, 2022 and December 31, 2021, $4.4 million and $4.2 million of the deferred revenue balance represents a material right for discounted revenue share rates provided to a Customer as part of a contractual renewal option, respectively.
4.    Marketable Securities
The amortized cost, unrealized gain (loss), and estimated fair value of the Company's investments in securities available for sale consisted of the following:
March 31, 2022
Amortized CostUnrealized GainUnrealized LossEstimated Fair Value
Marketable securities
U.S. government securities$420,277 $ $(7,824)$412,453 
Commercial paper15,972 15,972
Asset-backed securities 
Corporate debt securities18,793(172)18,621
Total marketable securities$455,042 $ $(7,996)$447,046 

December 31, 2021
Amortized CostUnrealized GainUnrealized LossEstimated Fair Value
Marketable securities
U.S. government securities$420,392 $ $(2,107)$418,285 
Commercial paper13,878 13,878
Asset-backed securities2,003(1)2,002
Corporate debt securities18,7313(24)18,710
Total marketable securities$455,004 $3 $(2,132)$452,875 
The Company had nineteen and eight separate marketable securities in unrealized loss positions as of March 31, 2022 and December 31, 2021, respectively. The Company did not identify any marketable securities that were other-than-temporarily impaired as of March 31, 2022 and December 31, 2021. The Company does not intend to sell any marketable securities that have unrealized losses on March 31, 2022 and it is not more likely than not that the Company will be required to sell such securities before any anticipated recovery.
The following table summarizes the stated maturities of the Company’s marketable securities:
March 31, 2022December 31, 2021
Amortized CostEstimated Fair ValueAmortized CostEstimated Fair Value
Due within one year$167,575 $165,767 $64,914 $64,879 
Due after one year through two years287,467281,279390,090387,996
Total$455,042 $447,046 $455,004 $452,875 
12

Marqeta, Inc.
Notes to Condensed Consolidated Financial Statements
(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)
(unaudited)
5.    Fair Value Measurements
The Company’s financial instruments consist of cash equivalents, marketable securities, accounts receivable, unbilled Customers' receivable, settlements receivable, accounts payable, 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. Marketable securities are carried at fair value. Accounts receivable, unbilled Customers' receivable, settlements receivable, accounts payable, and accrued liabilities are stated at their carrying value, which approximates fair value due to the short time to the expected receipt or payment date.
The following tables present the fair value hierarchy for assets and liabilities measured at fair value:
March 31, 2022
Level 1Level 2Level 3Total Fair Value
Cash equivalents
Money market funds$1,155,612 $ $ $1,155,612 
Marketable securities
U.S. government securities412,453   412,453 
Commercial paper 15,972  15,972 
Asset-backed securities    
Corporate debt securities 18,621  18,621 
Total assets$1,568,065 $34,593 $ $1,602,658 

December 31, 2021
Level 1Level 2Level 3Total Fair Value
Cash equivalents
Money market funds$1,213,543 $ $ $1,213,543 
Marketable securities
U.S. government securities418,284   418,284 
Commercial paper 13,878  13,878 
Asset-backed securities 2,002  2,002 
Corporate debt securities 18,711  18,711 
Total assets$1,631,827 $34,591 $ $1,666,418 
The Company classifies money market funds, commercial paper, U.S. government securities, asset-backed securities and corporate 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 three months ended March 31, 2022 and the year ended December 31, 2021.
13

Marqeta, Inc.
Notes to Condensed Consolidated Financial Statements
(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)
(unaudited)
6. Certain Balance Sheet Components
Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consisted of the following:
March 31,
2022
December 31,
2021
Prepaid hosting and data costs$22,599 $2,455 
Prepaid expenses7,408 6,492 
Inventory4,942 3,940 
Prepaid insurance1,955 3,546 
Card program deposits2,128 2,167 
Contract assets627 950 
Other financial instruments 11,616 
Other current assets4,130 4,451 
Prepaid expenses and other current assets$43,789 $35,617 
In 2021, the Company acquired a preferred equity interest in a private company that is accounted for under the equity method of accounting. Concurrent with this investment, the Company also acquired an option that gives the Company the right, but not the obligation, to purchase all of the remaining equity interests of the private company. During the three months ended March 31, 2022, the Company recorded an impairment of $11.6 million related to this option.
Property and Equipment, net
Property and equipment consisted of the following:
March 31,
2022
December 31,
2021
Leasehold improvements$8,110 $8,110 
Computer equipment8,921 8,581 
Furniture and fixtures2,459 2,459 
Internally developed and purchased software2,993 2,954 
22,483 22,104 
Accumulated depreciation and amortization(13,363)(12,417)
Property and equipment, net$9,120 $9,687 
Depreciation and amortization expense was $1.0 million and $0.9 million for the three months ended March 31, 2022 and 2021, respectively.
The Company did not capitalize any material internal-use software costs during the three months ended March 31, 2022 and 2021 because development costs meeting capitalization criteria were not material during the respective periods.

14

Marqeta, Inc.
Notes to Condensed Consolidated Financial Statements
(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)
(unaudited)
Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consisted of the following:
March 31,
2022
December 31,
2021
Accrued costs of revenue$46,726 $41,339 
Accrued compensation and benefits17,718 32,954 
Deferred revenue18,839 19,060 
Reserve for contract contingencies and processing errors3,764 3,386 
Operating lease liabilities, current portion3,109 3,021 
Accrued professional services3,785 2,454 
Other accrued liabilities8,205 11,882 
Accrued expenses and other current liabilities$102,146 $114,096 
Other Liabilities
Other liabilities consisted of the following:
March 31,
2022
December 31,
2021
Deferred revenue, net of current portion$3,894 $6,107 
Other long-term liabilities450 450 
Other liabilities$4,344 $6,557 
7.    Commitments and Contingencies
Operating Leases
In 2016, the Company entered into a lease agreement for its corporate headquarters in Oakland, California for 19,000 square feet of office space, which was subsequently amended in 2018 and 2019, resulting in a total of 63,000 square feet of office space being leased. The non-cancellable operating lease expires in February 2026 and includes options to extend the lease term, generally at the then-market rates. The Company excludes extension options that are not reasonably certain to be exercised from its lease terms. The Company’s 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.
The Company's operating lease costs are as follows:
Three Months Ended March 31,
20222021
Operating lease cost$843 $869 
Variable lease cost157 112 
Short-term lease cost113 72 
Total lease cost$1,113 $1,053 
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.
15

Marqeta, Inc.
Notes to Condensed Consolidated Financial Statements
(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)
(unaudited)
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:
March 31,
2022
December 31,
2021
Weighted average remaining operating lease term (in years)3.84.1
Weighted average discount rate7.7%7.7%
Maturities of operating lease liabilities by year are as follows as of March 31, 2022:
Remainder of 2022$3,096
20234,239
20244,472
20254,599
2026780
Total lease payments17,186
Less imputed interest(2,459)
Total operating lease liabilities$14,727
Supplemental cash flow information related to the Company's operating leases was as follows:
Three Months Ended March 31,
20222021
Cash paid for operating lease liabilities$1,016 $1,033 
Operating lease right-of-use assets obtained in exchange for new operating lease liabilities$ $ 
Letters of Credit
In connection with the lease for its corporate headquarters office space, 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, which deposit is classified as restricted cash in the condensed consolidated balance sheets.
Purchase Obligations
As of March 31, 2022, the Company had non-cancellable purchase commitments with certain service providers and Issuing Banks of $227.6 million, payable over the next 5 years. These purchase obligations include $219.0 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
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 after one year of service. During the three months ended March 31, 2022 and 2021, the Company contributed a total of $2.2 million and $0.8 million to its defined contribution plans, respectively.
16

Marqeta, Inc.
Notes to Condensed Consolidated Financial Statements
(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)
(unaudited)
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. As of March 31, 2022 and December 31, 2021, there were no legal contingency matters, either individually or in aggregate, that would have a material adverse effect on the Company’s financial position, results of operations, or cash flows. Given the unpredictable nature of legal proceedings, the Company bases its assessment on the information available at the time. As additional information becomes available, the Company reassesses the potential liability and may revise the estimate.
Settlement of Payment Transactions
Generally, Customers deposit a certain amount of pre-funding into accounts maintained at Issuing Banks to settle their payment transactions. Such pre-funding amounts may only be used to settle Customers’ payment transactions and are not considered assets of the Company. As such, the funds held in Customers’ accounts at Issuing Banks are not reflected on the Company’s condensed consolidated balance sheets. If a Customer fails to deposit 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.
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, vendors, lessors, business partners, 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 indemnifies the Issuing Bank for losses the Issuing Bank may incur for non-compliance with applicable law and regulation, if those losses resulted from the Company’s failure to perform under its program agreement with the Issuing Bank.
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. No demands have been made upon the Company to provide indemnification under such agreements and there are no claims that the Company is aware of that could have a material effect on its condensed consolidated balance sheets, condensed consolidated statements of operations and comprehensive loss, or condensed 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 the levels specified.

17

Marqeta, Inc.
Notes to Condensed Consolidated Financial Statements
(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)
(unaudited)
8.    Stock Incentive Plans
The Company has granted share-based awards to employees, non-employee directors, and other service providers of the Company under the Amended and Restated 2011 Equity Incentive Plan (2011 Plan) and the 2021 Stock Option and Incentive Plan (2021 Plan), collectively, the Plans. The 2011 Plan was terminated in June 2021 in connection with the IPO but continues to govern the terms of outstanding awards that were granted prior to the IPO. Additionally, the Company offers an employee stock purchase plan (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 in the periods presented:
Three Months Ended March 31,
20222021
Restricted stock units$15,345 $ 
Stock options7,659 5,505 
CEO Long-Term Performance Award13,121  
Employee Stock Purchase Plan880  
Secondary sales of common stock 5,887 
Total$37,005 $11,392 
Restricted Stock Units
Commencing in 2020, the Company began granting restricted stock units, or RSUs, to employees. RSUs granted prior to April 1, 2021 vest upon the satisfaction of both a service condition and a liquidity condition, which was deemed satisfied in connection with the Company’s IPO on June 8, 2021. The service condition for these awards is satisfied over four years. Because the liquidity condition had not been satisfied as of March 31, 2021, the Company had not recorded any share-based compensation expense for the RSUs at that date.
RSUs granted on or after April 1, 2021, vest upon the satisfaction of a service condition. The service condition for these awards is satisfied over four years. In the three months ended March 31, 2022, the Company recognized $15.3 million of share-based compensation expense related to these RSUs.
A summary of the Company's RSU activity under the Plans was as follows:
Number of Restricted Stock UnitsWeighted-average grant date fair value per share
Balance as of December 31, 2021
9,001,949$18.30 
Granted10,514,70910.70 
Vested(994,910)14.27 
Canceled and forfeited(1,854,776)15.43 
Balance as of March 31, 2022
16,666,972$14.07 
During the three months ended March 31, 2022, share-based compensation expense recognized for RSUs was $15.3 million. As of March 31, 2022, unrecognized compensation costs related to unvested RSUs was $204.5 million. These costs are expected to be recognized over a period of 3.3 years.

18

Marqeta, Inc.
Notes to Condensed Consolidated Financial Statements
(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)
(unaudited)
Stock Options
Under the 2011 Plan and the 2021 Plan, 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 exceed ten 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 both stock incentive plans was as follows:
Number of OptionsWeighted-Average Exercise Price per ShareWeighted-Average Remaining Contractual Life
Aggregate Intrinsic Value(1)
Balance as of December 31, 2021(2)
44,185,488 $13.31 8.46 years$279,242 
Granted2,326,800 10.55 
Exercised(1,604,022)1.25 
Canceled and forfeited(1,194,748)5.79 
Balance as of March 31, 2022(2)
43,713,518$13.81 8.32 years$140,555 
Vested as of March 31, 2022
9,629,103$1.98 6.44 years$89,837 
(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 and these balances include all exercisable stock options regardless of vesting status.
As of March 31, 2022, aggregate unrecognized compensation costs related to unvested outstanding stock options, excluding the CEO Long-Term Performance Award, was $88.6 million. These costs are expected to be recognized over a period of 2.6 years.
The fair value of stock options granted was estimated using the Black-Scholes option pricing model and the following weighted average assumptions:
Three Months Ended March 31,
20222021
Dividend yield0.0%0.0%
Expected volatility58.62%49.93%
Expected term (in years)6.086.02
Risk-free interest rate1.99%0.36%
Subsequent to the completion of the IPO, the fair value of the Company’s common stock is determined by the closing price, on the date of grant, of its Class A common stock, which is traded on the Nasdaq Global Select Market.
CEO Long-Term Performance Award
In April and May 2021, the Company’s board of directors granted the Company’s Chief Executive Officer equity incentive awards in the form of performance-based stock options covering 19,740,923 and 47,267 shares of our Class B common stock with an exercise price of $21.49 and $23.40 per share, respectively, or collectively, the CEO Long-Term Performance Award. The CEO Long-Term Performance Award vests upon the satisfaction of a service condition and the achievement of certain stock price hurdles over a seven year performance period following the expiration of the lock-up period associated with the IPO. The stock price hurdle will be achieved if the average closing price of a share of our Class A common stock during any 90 consecutive trading day period during the performance period equals or exceeds the Company stock price hurdle set forth in the table below.
19

Marqeta, Inc.
Notes to Condensed Consolidated Financial Statements
(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)
(unaudited)
The CEO Long-Term Performance Award is divided into seven equal tranches which vest upon the achievement of the following Company stock price hurdles:
TrancheCompany Stock Price HurdleNumber of Options Eligible to Vest
1$67.502,826,884
2$78.982,826,884
3$92.402,826,884
4$108.112,826,884
5$126.492,826,884
6$147.992,826,884
7$173.152,826,884
Total19,788,188
The grant date fair value of the CEO Long-Term Performance Award was estimated using a Monte Carlo simulation model that incorporated multiple stock price paths and probabilities that the Company stock price hurdles are met. The weighted-average grant date fair value of the seven tranches of the CEO Long-Term Performance Award was estimated to be $10.53 per option share.
As of March 31, 2022, the aggregate unrecognized compensation cost of the CEO Long-Term Performance Award was $157.1 million, which is expected to be recognized over the remaining derived service period of 3.8 years.
Secondary Sales of Common Stock
Prior to the completion of the IPO, certain economic interest holders acquired outstanding common stock from current or former employees for a purchase price greater than the Company's estimated fair value at the time of the transactions. During the three months ended March 31, 2022, the Company did not record any share-based compensation expense related to secondary sales of common stock. During the three months ended March 31, 2021, the Company recorded share-based compensation expense for the difference between the price paid and the estimated fair value on the date of the transaction of $5.9 million.
9.    Warrants to Purchase Common Stock
In 2021 and 2020, the Company issued warrants to Customers to purchase up to 1,150,000 and 750,000 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 are 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. The aggregate fair values of the warrants issued in 2021 and 2020 were $26.4 million and $5.7 million, respectively. As of March 31, 2022, 392,171 warrants were vested, and the Company recorded $1.6 million as a reduction of revenue during the three months then ended related to these warrants. The Company recorded an immaterial amount as a reduction of revenue during the three months ended March 31, 2021. Upon vesting, the fair value of the vested warrants are recorded into the Company’s additional paid-in capital. Timing differences caused by the pattern of processing volume generated by the Customer over the term 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.
20

Marqeta, Inc.
Notes to Condensed Consolidated Financial Statements
(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)
(unaudited)
The fair values of the warrants were estimated using the Black-Scholes option pricing model and the following assumptions as of the grant date of each warrant:
March 31, 2021September 30, 2020
Dividend yield0.0%0.0%
Expected volatility50.0%50.0%
Contract term (in years)4.0