Marqeta, Inc. (MQ) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to the Marqeta CEO announcement call. [Operator Instructions] As a reminder, this conference is being recorded. I'd now like to turn the call over to Stacey Finerman, Vice President of Investor Relations, to begin.

Thanks, operator. Before we begin, I would like to remind everyone that today's call may contain forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties, including those outlined in our filings with the SEC, which are available on our Investor Relations website, including on our annual report Form 10-K for the period ended December 31, 2021, and our subsequent periodic filings with the SEC. Actual results may differ materially from any forward-looking statements we make today. These forward-looking statements speak only as of the time of this call, and the company does not assume any obligation or intent to update them, except as required by law. On today's call are Jason Gardner, Marqeta's CEO and Founder; Simon Khalaf, Marqeta's incoming CEO; and Mike Milotich, Marqeta's Chief Financial Officer. Please note, this will be a brief 15-minute call focused on the CEO announcement only. We won't be addressing any questions regarding the company's fourth quarter results during today's call. We will provide a business update and details about our results during our call on February 28. With that, I'd like to turn the call over to Jason to begin.

Thank you, Stacey. Good afternoon, everyone, and thank you for joining us on such short notice to discuss our announcement that Simon Khalaf will be our new CEO starting January 31. Simon will also be joining Marqeta's Board of Directors. As I have previously discussed, my goal was to find a leader who would take Marqeta to the next level after I have taken the company from zero to one. That meant finding a leader with experience in building and operating a global business at scale while also focusing on a path to profitability. Over the past 6 months, we led an extensive search and met with many outstanding candidates. We are deliberate in our pursuit to ensure we have the right candidate. Notably, I did consider Simon for the role early on, but due to family obligations, he decided to take himself out of the running. Yet during this time, Simon took on increased responsibility at Marqeta, including leading our go-to-market efforts, who is instrumental in making many significant positive changes to this organization that is already bearing fruit, all the while proving himself to be someone Marqetans and customers responded to. Fortunately, for Marqeta, in December, Simon expressed interest in being considered for the role. I will let Simon explain more in his remarks. Our Board of Directors concluded that Simon was the clear choice to be Marqeta's next CEO. His previous CEO experience and decades of experience scaling large technology organizations such as Twilio, Verizon, Yahoo! and Novell, his product insight and his relentless focus on customer experience will serve us well as we look to enter the next phase of growth. Most of all, Simon proved early on in his tenure with Marqeta that his leadership accelerates positive change and delivers results, all while working in lockstep with other members of senior leadership. We are fortunate that Simon has clearly demonstrated these traits and will hit the ground running as CEO with a deep understanding of the business, our platform and our customer needs. In my new role as Executive Chairman, I look forward to supporting Simon and the rest of the executive team in delivering the next phase of growth. With that, I will now turn the call over to Simon to say a few words.

Thank you, Jason, and good afternoon, everyone. I'm thrilled and humbled to become Marqeta's CEO, and totally appreciate the Board's confidence in me. I'm also honored to be continuing Jason's vision for modern card issuing and working to redefine what cards can do for consumers and businesses on a global basis. When I first joined the company in June, I was excited about the opportunities ahead for us. First and foremost, the emerging trend of embedded finance where nonbanks provide a suite of financial services baked into everyday experiences that consumers simply love. Second, the enablement of new commerce flows, as we've seen with on-demand delivery, buy now pay later, and expense management. And last but not least, large financial institutions modernizing their technology stack to compete and be relevant with tech-first and mobile-first new entrants. Within weeks, my assumptions were quickly proven correct, and I was energized by our talented team, our strong competitive position and our incredible product market fit. In addition, I was impressed with the quality and reach of Marqeta's customers. As Jason mentioned, when he first shared his intention to find a new CEO and move to Executive Chairman, the opportunity was something that resonated with me, given my experience as both a scaled operator in practice and an entrepreneur at heart. However, I initially took myself out of consideration set as a result of the prior obligation to my family. In the meantime, I worked across the organization in an expanded capacity. This only fueled my enthusiasm for the opportunity and the position we have in the market. While working together with Marqeta senior leaders, I was able to make significant contributions to our go-to-market strategy, build relationships with existing and potential customers and help shape the product road map based on customer input. Fortunately, my obligation to my family were completed in December. At that time, I discussed with Jason my desire to be considered for the CEO position. I'm grateful the Board and the executive team have the confidence in me to take Marqeta to new heights. Looking ahead, my goal is to build upon the great work the team has accomplished over the last 13 years. This means transitioning the company from the hyper growth phase to the sustainable and profitable growth phase through a combination of laser-focused, crystal clear operating cadences and continued fiscal responsibility. This is something I've been doing for the past decade of my career. I've already spent time with Mike, our CFO; Randy, our Chief Technology Officer; and the rest of the company leadership, working on a long-range plan late last year and more recently, our 2023 operating plan and budget. Based on those efforts, I am confident we can capture many of the opportunities ahead while also moving towards profitability. As a team, we will talk about more this year. I look forward to speaking with you all at that time in my new role. With that, I'll turn the call over to the operator for a couple of questions.

[Operator Instructions] Our first question comes from the line on Tien-Tsin Huang with JPMorgan.

Congrats on the announcements everyone here. I just want to ask you, Simon, just you talked a little bit about your experience at Marqeta so far. I'm curious about your experience at prior organizations and how that's going to prepare you here for this role and some of the goals that you've set about. And I know Jason has talked about, right, being a fintech nerd or whatever and how deep this is within fintech. So have you sort of ramped up on that as well to prepare you for this seat?

Sure. Thank you, Tien-Tsin, for the questions, really appreciate it. So I have to say my experience at Marqeta has been phenomenal. I was impressed with the quality of our team, the dedication of our team, and then the immense experience the team has assembled in fintech, but also scaling companies. So from my experience, if you look at my -- the last decade, I'm a skilled operator, but also, I'm an innovator. And if I look at what Marqeta needs is innovate at scale. We have reached phenomenal product market fit. And we just need to continue scaling and continue innovating because we're at the first inning of a long game and a prosperous game. So I'm very well equipped given what I've done before. This is not the first time I've seen hyper growth, and this is not the first time we've transitioned hyper growth into sustainable growth. But in terms of being a fintech nerd, I don't think I can beat Jason on this one. So that's why I'm very excited that he's going to be hanging around, so -- because we do need that fintech nerd around.

Our next question comes from the line of Darrin Peller with Wolfe Research.