Payment technology company Marqeta (NASDAQ: MQ) announced better-than-expected revenue in Q4 CY2025, with sales up 26.7% year on year to $172.1 million. The company expects next quarter’s revenue to be around $164.1 million, close to analysts’ estimates. Its GAAP loss of $0 per share was $0.01 above analysts’ consensus estimates.

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Company Overview

Powering the cards behind innovative fintech services like Block's Cash App, Marqeta (NASDAQ: MQ) provides a cloud-based platform that allows businesses to create customized payment card programs and process card transactions.

Revenue Growth

Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Over the last five years, Marqeta grew its sales at a 16.6% annual rate. Though this growth is acceptable on an absolute basis, we need to see more than just topline growth for the software sector, which can display significant earnings volatility. This means our bar for the sector is particularly high, reflecting the non-essential and hit-driven nature of the products and services offered. Additionally, five-year CAGR starts around Covid, when revenue was depressed then rebounded.

Long-term growth is the most important, but within software, a half-decade historical view may miss new innovations or demand cycles. Marqeta’s performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 3.9% annually.

This quarter, Marqeta reported robust year-on-year revenue growth of 26.7%, and its $172.1 million of revenue topped Wall Street estimates by 3%. Company management is currently guiding for a 18% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 17% over the next 12 months, an improvement versus the last two years. This projection is commendable and implies its newer products and services will spur better top-line performance.

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Total Payment Volume

TPV, or total processing volume, is the aggregate dollar value of transactions flowing through Marqeta’s platform. This is the number from which the company will ultimately collect fees, and the higher it is, the more chances Marqeta has to upsell additional services (like banking).

Marqeta’s TPV punched in at $108.7 billion in Q4, and over the last four quarters, its growth was fantastic as it averaged 32.7% year-on-year increases. This alternate topline metric grew faster than total sales, which could mean that take rates have declined. However, we can’t automatically assume the company is reducing its fees because take rates can also vary depending on the type of products sold on its platform.

Customer Acquisition Efficiency

The customer acquisition cost (CAC) payback period represents the months required to recover the cost of acquiring a new customer. Essentially, it’s the break-even point for sales and marketing investments. A shorter CAC payback period is ideal, as it implies better returns on investment and business scalability.

Marqeta is extremely efficient at acquiring new customers, and its CAC payback period checked in at 0.6 months this quarter. The company’s rapid recovery of its customer acquisition costs indicates it has a highly differentiated product offering and a strong brand reputation. These dynamics give Marqeta more resources to pursue new product initiatives while maintaining the flexibility to increase its sales and marketing investments.

Key Takeaways from Marqeta’s Q4 Results

We were impressed by how significantly Marqeta blew past analysts’ EBITDA expectations this quarter. We were also happy its revenue outperformed Wall Street’s estimates. On the other hand, its revenue guidance for next quarter was just in line. Investors were likely hoping for more, and shares traded down 7.5% to $3.84 immediately following the results.

Should you buy the stock or not? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here (it’s free).