What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-02-24 compared with 2025-02-26 · 162 added, 146 removed, 251 unchanged (55% of the section changed)

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Customers can launch and manage their own card programs, issue cards, and authorize and settle payment transactions quickly using our platform.

We also deliver robust card program management, allowing our customers to embed Marqeta in their offering without having to build certain complex compliance elements or customer support services.

We also deliver robust bank, network, and card program management and value added services, allowing our customers to embed Marqeta in their offering without having to build certain complex compliance elements or customer support services.

Marqeta’s innovative products are developed with deep domain expertise and a customer-first mindset to launch, scale, and manage card programs.

Marqeta provides all of its customers with issuer processor services, and for most of its customers it also acts as a card program manager.

Depending on a customer’s desired level of control and responsibility, Marqeta can work with companies in a range of different configurations, but generally provides the following offerings:

• Managed By Marqeta:

With Managed By Marqeta, Marqeta typically connects customers to an Issuing Bank partner to act as the BIN sponsor for the customer’s card program, manages the customer’s card program on behalf of the Issuing Bank, and provides a full range of services including configuring many of the critical resources required by a customer’s production environment.

In addition to providing the customer access to the Marqeta dashboard via our APIs, Marqeta also manages a number of the primary tasks related to launching a card program, such as defining and managing the program with the Card Networks and Issuing Bank, operating the program and managing certain profitability components, and managing compliance with applicable regulations, the Issuing Bank, and Card Network rules.

Also available are a variety of managed services, including dispute management, fraud scoring, card fulfillment, reconciliation, and cardholder support services.

• Powered By Marqeta:

With Powered By Marqeta, Marqeta also provides customers access to the Marqeta dashboard via our APIs, provides payment processing, and assists with certain configuration elements that enable the customer to use the platform independently.

Generally, our PxM customers are responsible for other elements of the card program, including defining and managing the program with the Card Networks and Issuing Bank as well as managing compliance with applicable regulations, the Issuing Bank, and Card Network rules.

Given the modularity of the Marqeta platform, certain customers can also opt to incorporate some elements of MxM into their card program to create a custom solution.

Many customers adopt some combination of the MxM managed services even when not adopting the full MxM offering.

Marqeta provides the following offerings based on a customer’s desired level of control and responsibility:

• Processing:

Marqeta provides all of its customers with issuer processor services as our core offering.

Payment processing provides customers with access to the Marqeta dashboard via our APIs and webhooks, our JIT Funding feature, and assists with certain configuration elements that enable customers to use the platform independently.

• Bank and Network Management:

Marqeta provides a service option to connect customers to an Issuing Bank partner to act as the BIN sponsor for the customer’s card program, define and manage a number of the primary tasks related to launching a card program, and can provide a full range of services including configuring many of the critical resources required by a customer’s production environment and managing the applicable regulations and the Issuing Bank.

In addition, Marqeta provides another service offering to manage compliance with applicable Card Network rules.

• Program Management:

Marqeta provides additional program management services that are required as part of a card program, including chargebacks and dispute resolution, reconciliation, and card fulfillment.

• Value Added Services:

Marqeta provides value added services that provide a more seamless experience for our customers, which include tokenization, real-time decisioning and fraud management, digital banking, and other customer experience services.

See the section titled “Business” under Part I, Item 1 of this Annual Report on Form 10-K for further discussion of our business and products.

Impact of Macroeconomic Factors

We are unable to predict the impact macroeconomic factors, including various geopolitical conflicts, uncertainty related to global elections, changes in inflation and interest rates, and uncertainty in global economic conditions, will have on our processing volumes and on our future results of operations.

A deterioration in macroeconomic conditions could increase the risk of lower consumer spending, consumer and merchant bankruptcy, insolvency, business failure, higher credit losses, foreign currency fluctuations, or other business interruption, which may adversely impact our business.

We are unable to predict the impact macroeconomic factors, including various geopolitical conflicts, uncertainty related to global elections, changes in inflation and interest rates, and uncertainty in global regulatory and economic conditions, including as a result of uncertainty in global trade from potential

tariffs and counter tariffs, will have on our processing volumes and on our future results of operations.

A deterioration in macroeconomic conditions could increase the risk of lower consumer spending, including discretionary spending, consumer and merchant bankruptcy, insolvency, business failure, higher credit losses, foreign currency fluctuations, or other business interruption, which may adversely impact our business.

We continue to monitor these situations and may take actions that alter our operations and business practices as may be required by federal, state, or local authorities or that we determine are in the best interests of our customers, vendors, and employees.

See the section titled “Risk Factors” under Part I, Item 1A of this Annual Report on Form 10-K for further discussion of the possible impact of these macroeconomic factors on our business .

Key Operating Metric and Non-GAAP Financial Measures

Key Operating Metrics and Non-GAAP Financial Measures

We review a number of operating and financial metrics, including the key operating metric set forth below, to help us evaluate our business and growth trends, establish budgets, evaluate the effectiveness of our investments, and assess operational efficiencies.

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Gross margin 70 % 69 % 49 %

Net income (loss) (in thousands)

Net (loss) income (in thousands)

$ (13,925) $ 27,287 $ (222,962)

Net income (loss) margin

Net (loss) income margin

(2) % 5 % (33) %

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Adjusted EBITDA margin 18 % 6 % — %

Non-GAAP operating expenses (in thousands) $ 322,756 $ 331,804 $ 361,797

Adjusted operating expenses (in thousands)

$ 327,694 $ 322,756 $ 331,804

Total Processing Volume (“TPV”) - TPV represents the total dollar amount of payments processed through our platform, net of returns and chargebacks.

We believe that TPV is a key operating metric and a principal indicator of the market adoption of our platform, growth of our brand, growth of our customers' businesses and scale of our business.

Adjusted EBITDA - Adjusted EBITDA is a non-GAAP financial measure that is calculated as Net income (loss) adjusted to exclude depreciation and amortization;

Adjusted EBITDA - Adjusted EBITDA is a non-GAAP financial measure that is calculated as Net (loss) income adjusted to exclude depreciation and amortization;

share-based compensation expense;

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payroll tax related to share-based compensation;

restructuring charges;

restructuring and other one-time costs;

acquisition related expenses which consist of due diligence costs, transaction costs and integration costs related to potential or successful acquisitions and cash and non-cash postcombination compensation expenses;

non-recurring litigation expense;

income tax expense (benefit);

and other income, net, which consists of interest income from our short-term investments, realized foreign currency gains and losses, our share of equity method investments’ profit or loss, impairment of equity method investments or other financial instruments, and gain from sale of equity method investments.

and other income, net, which consists primarily of interest income from our short-term investments and cash deposits, impairment of financial instruments and realized foreign currency gains and losses.

We believe that Adjusted EBITDA is an important measure of operating performance because it allows management and our Board of Directors to evaluate and compare our core operating results, including our operating efficiencies, from period to period.

Additionally, we utilize Adjusted EBITDA as an input into our calculation of our annual employee bonus plans and performance-based restricted stock units.

See the section below titled “Use of Non-GAAP Financial Measures” for a discussion of the use of non-GAAP measures, a change in presentation, and a reconciliation of Net income (loss) to Adjusted EBITDA.

See the section below titled “Use of Non-GAAP Financial Measures” for a discussion of the use of non-GAAP measures, a change in presentation, and a reconciliation of Net (loss) income to Adjusted EBITDA.

Adjusted EBITDA Margin - Adjusted EBITDA Margin is a non-GAAP financial measure that is calculated as Adjusted EBITDA divided by Net revenue.

This measure is used by management and our Board of Directors to evaluate our operating efficiency.

See the section below titled “Use of Non-GAAP Financial Measures” for a discussion of the use of non-GAAP measures and a reconciliation of Net income (loss) to Adjusted EBITDA Margin.

Non-GAAP operating expenses - Non-GAAP operating expenses is a non-GAAP financial measure that is calculated as Total operating expenses adjusted to exclude depreciation and amortization;

See the section below titled “Use of Non-GAAP Financial Measures” for a discussion of the use of non-GAAP measures and a reconciliation of Net (loss) income to Adjusted EBITDA Margin.

Adjusted operating expenses - Adjusted operating expenses is a non-GAAP financial measure that is calculated as Total operating expenses adjusted to exclude depreciation and amortization;

share-based compensation expense;

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payroll tax related to share-based compensation;

restructuring charges;

restructuring and other one-time costs;

non-recurring litigation expense;

and acquisition-related expenses which consists of due diligence costs, transaction cost and integration costs related to potential or successful acquisitions, and cash and non-cash postcombination compensation expenses.

We believe that non-GAAP operating expenses is an important measure of operating performance because it allows management and our board of directors to evaluate and compare our core operating results, including our operating efficiencies, from period to period.

See the section below titled “Use of Non-GAAP Financial Measures” for a discussion of the use of non-GAAP measures, a change in presentation, and a reconciliation of total operation expenses to non-GAAP operating expenses.

We believe that adjusted operating expenses is an important measure of operating performance because it allows management and our board of directors to evaluate and compare our core operating results, including our operating efficiencies, from period to period.

Components of Results of Operations

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“Interchange Fees” are transaction-based and volume-based fees set by a Card Network and paid by a merchant bank to the Issuing Bank that issued the payment card used to purchase goods or services from a merchant.

The Company earns Interchange Fees on card transactions we process for our customers and are based on a percentage of the transaction amount plus a fixed amount per transaction.

We earn Interchange Fees on card transactions we process for our customers and the fees are based on a percentage of the transaction amount plus a fixed amount per transaction.

Interchange Fees are recognized when the associated transactions are settled.

Revenue Share payments are incentives to our customers to increase their processing volumes on our platform.

Revenue Share is generally computed as a percentage of the Interchange Fees earned or processing volume and is paid to our MxM customers monthly.

Revenue Share is generally computed as a percentage of the Interchange Fees earned or processing volume and is paid to our customers monthly.

Revenue Share payments are recorded as a reduction to net revenue.

Generally, as customers' processing volumes increase, the rates at which we share revenue increase.

Processing and other fees are priced as either a percentage of processing volume or on a fee per transaction basis and are earned when payment cards are used at automated teller machines or to make cross-border purchases.

Minimum processing fees, where customers' processing volumes fall below certain thresholds, are also included in processing and other fees.

Processing and other fees are priced as either a percentage of processing volume or on a fee per transaction basis and are earned, for example, when payment cards are used at automated teller machines or to make cross-border purchases.

Minimum processing fees, where customers' processing volumes fall below certain thresholds, as well as transaction fees for utilizing other value-added services and program management features, are also included in processing and other fees.

We recognize revenue when the promised services are complete, and our performance obligations are satisfied.

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Costs of Revenue

Costs of revenue consist of Card Network fees, Issuing Bank fees, and card fulfillment costs for customer arrangements where the Company is the principal in providing services to the customer and excludes depreciation and amortization, which is reported separately within the Consolidated Statements of Operations and Comprehensive Income (Loss).

Costs of revenue consist of Card Network fees, Issuing Bank fees, and card fulfillment costs for customer arrangements where we are the principal in providing services to the customer and excludes depreciation and amortization, which is reported separately within the Consolidated Statements of Operations and Comprehensive (Loss) Income.

Card Network fees are equal to a specified percentage of processing volume or a fixed amount per transaction routed through the respective Card Network.

Issuing Bank fees compensate our Issuing Banks for issuing cards to our customers and sponsoring our card programs with the Card Networks and are typically equal to a specified percentage of processing volume or a fixed amount per transaction.

amount per transaction.

Card fulfillment costs include physical cards, packaging, and other fulfillment costs.

We have separate marketing and incentive arrangements with Card Networks that provide us with monetary incentives for establishing customer card programs with, and routing volume through, the respective Card Network.

The amount of the incentives is generally determined based on a percentage of the processing volume or the number of transactions routed over the Card Network.

We record these incentives as a reduction of Card Network fees in customer arrangements where the Company is the principal.

Generally, as processing volumes increase, we earn a higher rate of monetary incentives from these arrangements, subject to attaining certain volume thresholds during an annual measurement period.

For certain incentive arrangements with an annual measurement period, the one-year period may not align with our fiscal year.

We record network incentives in the period we attain the contractual volume thresholds, given the uncertainty in the ultimate annual attainment of incentives.

As such, unusual fluctuations in Card Network fees can occur in the quarter in which volume thresholds are attained as higher incentive rates are applied to volumes over the entire measurement periods, which can span six or twelve months.

Generally, we earn a higher rate of monetary incentives during the first quarter of our fiscal year, as the annual measurement period is closest to completion and higher volume thresholds have been reached.

In the second quarter of the fiscal year, we generally earn the lowest rate of monetary incentives, as the annual measurement period and volume thresholds have reset.

As we continue to enhance our processes and improve our ability to estimate these annual incentives with increasing precision, the fluctuation in recognition of these network incentives throughout the year is expected to diminish.

We have marketing and incentive arrangements with Card Networks, that provide us with monetary incentives for establishing customer card programs with and routing transaction volume through the respective Card Networks.

These incentives are typically calculated as a percentage of the processed transaction volume or the number of transactions routed through the Card Network.

We account for these incentives as a reduction of Card Network fees within Costs of Revenue in customer arrangements where we act as the principal.

As processing volumes increase, we earn a higher cumulative incentive rate, subject to achieving specific cumulative volume thresholds within an annual measurement period.

For certain incentive arrangements, the annual measurement period may not align with our fiscal year.

Prior to the second quarter of fiscal year 2025, we recognized network incentives in the period when cumulative transaction volume thresholds were met, due to insufficient data to reliably estimate the amount of incentives Card Networks would ultimately earn over the respective annual period.

This approach resulted in fluctuations in Card Network incentives, particularly when thresholds were reached, as higher incentive rates were applied retroactively to the entire annual measurement period.

Historically, we have earned the highest incentive rates in the first quarter of our fiscal year, when annual measurement periods are nearing completion and higher cumulative transaction volume thresholds are achieved.

Conversely, the second quarter generally reflected the lowest incentive rates, as the annual measurement periods and cumulative transaction volume thresholds reset to lower levels.

Effective in the second quarter of fiscal year 2025, we revised our accounting policy for estimating and recognizing network incentives.

We now estimate and recognize network incentives based on the cumulative incentive rate we expect to earn over the annual measurement period.

We estimate the cumulative incentive rates based on our forecasts for the annual measurement periods, which incorporates both historical experience and our expectations of future events, in addition to other qualitative considerations.

The estimated cumulative incentive rates are applied to the volume and/or number of transactions processed during the reporting period to calculate the quarterly network incentives recognized.

As a result of this policy revision, the Card Network incentives recognized during the year ended December 31, 2025 were $1.5 million higher compared to the amount that would have been recognized under the previous policy.

Operating Expenses (Benefit)

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Executive Chairman Long-Term Performance Award consists of share-based compensation related to the Executive Chairman’s Long-Term Performance Award, including the impact of forfeiture.

The Executive Chairman Long-Term Performance Award was forfeited in the current year as a result of the Company’s Executive Chairman transitioning to a non-employee director role on the board of directors.

The Executive Chairman Long-Term Performance Award was forfeited in fiscal year 2024 as a result of the Company’s Executive Chairman transitioning to a non-employee director role on the Board of Directors.

Other Income, net

Other income, net consists primarily of interest income from our short-term investments and cash deposits, gain from sale of equity method investments, impairment of equity method investments or other financial instruments, equity method investment share of loss, and realized foreign currency gains and losses.

Other income, net consists primarily of interest income from our short-term investments and cash deposits, and realized foreign currency gains and losses.

Income Tax Expense (Benefit)

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federal and state net deferred tax assets as we have concluded that it is not more likely than not that we will realize our net deferred tax assets.

In July 2025, the One Big Beautiful Bill Act (H.R.

1, the “Tax Act”) was signed into law, reinstating certain provisions from the 2017 Tax Cuts and Jobs Act, including 100% bonus depreciation under Section 168(k) and immediate expensing of U.S.-based research costs under Section 174.

Due to the full valuation allowance on our deferred tax assets, the Tax Act did not have a material impact on our overall tax expense or effective tax rate for the year ended December 31, 2025.

Results of Operations

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Loss from operations (46,430) (24,466) (283,015)

(24,466) (283,015) (209,808)

Other income, net

33,101 52,546 52,440

Income (Loss) before income tax expense

(Loss) income before income tax expense (benefit)

(13,329) 28,080 (230,575)

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596 793 (7,613)

Net income (loss)

Net (loss) income

$ (13,925) $ 27,287 $ (222,962)

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Total Processing Volume (TPV) (in millions) $ 382,513 $ 291,105 $ 91,408 31 %

Total net revenue decreased by $169.2 million, or 25%, for the year ended December 31, 2024 compared to the year ended December 31, 2023, of which $221.5 million was attributable to our largest customer, Block.

The decrease in net revenue was primarily driven by the August 2023 Block Amendment which allowed for reduced pricing and impacted the revenue presentation for the Cash App program as fees owed to Issuing Banks and Card Networks related to the Cash App primary Card Network volume are recorded as a reduction to the revenue earned from the Cash App program within Net revenue effective as of July 1, 2023.

In prior periods, these costs were included within Costs of revenue.

The impact of these fees for the year ended December 31, 2024 was a $264.7 million reduction to Net revenue, negatively impacting the growth rate by 39 ppts.

These decreases in net revenue were partially offset by increased TPV from Block’s programs.

Net revenue from other customers increased $52.4 million primarily driven by an increase in TPV partially offset by the impact of contract renewals and unfavorable changes in the mix of our card programs, particularly the growth of our PxM offering.

Total platform services, net revenue increased by $112.5 million, or 23%, for the year ended December 31, 2025 compared to the year ended December 31, 2024.

The overall increase in platform services revenue was primarily driven by a 31% increase in TPV, partially offset by unfavorable shifts in our card program mix, particularly the expansion of programs where we provide processing services with minimal or no program management services.

Other services revenue increased $5.4 million, or 21%, for the year ended December 31, 2025 compared to the year ended December 31, 2024.

This growth was driven by a rise in card-related fulfillments, which included both one-time replacements and an overall increase in customer card shipments compared to the prior period.

The increase in TPV was mainly driven by growth across all our major verticals, particularly financial services, and PxM customers.

The growth in TPV for our top five customers, as determined by their individual processing volume in each respective period, was 24% for the year ended December 31, 2024 compared to the year ended December 31, 2023.

This growth was mirrored by a 67% increase in TPV from all other customers for the same period.

Note that the top five customers may differ between the two periods.

This growth was driven by a rise in card-related fulfillment activities, reflecting an overall increase in customer card shipments compared to the prior year.

The increase in TPV was driven by strong performance across all of our major use cases, particularly financial services, lending, including buy-now-pay later, and expense management.

TPV from our top five customers, as determined by their individual processing volume in each respective period, grew 21% for the year ended December 31, 2025 compared to the year ended December 31, 2024.

TPV from all other customers increased 69% over the same period.

Note that the composition of the top five customers may differ between the two periods.

Costs of Revenue and Gross Margin

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Gross margin 70 % 69 %

Costs of revenue decreased by $191.5 million, or 55%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.

The decrease was primarily due to the revenue presentation change for our fees owed to Issuing Banks and Card Networks related to the Cash App primary Card Network volume which are now reflected within net revenue as a result of the August 2023 Block Amendment.

addition, the Company realized improved economics with the Issuing Banks with which we work.

These decreases were partially offset by increases in Issuing Bank and Card Network fees driven by TPV growth.

As a result of the decreases in costs of revenue being less than the decreases in net revenue explained above, our gross profit increased by $22.3 million, or 7%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.

Our gross margin increased to 69% during the year ended December 31, 2024 from 49% during the year ended December 31, 2023.

Costs of revenue increased by $32.5 million, or 21%, for the year ended December 31, 2025 compared to the year ended December 31, 2024, primarily driven by higher Card Network and Issuing Bank fees related to the 31% growth in TPV.

This increase was partially offset by $1.5 million of higher network incentives recognized in 2025 due to the revised accounting policy for estimating incentives as Card Network fees are presented net of monetary incentives received from Card Networks.

Gross profit increased by $85.4 million, or 24%, for the year ended December 31, 2025 compared to the year ended December 31, 2024, as net revenue growth outpaced the increase in costs of revenue.

As a result, gross margin improved to 70% during the year ended December 31, 2025 from 69% in the prior year.

Operating Expenses (Benefit)

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Salaries, bonus, benefits, and payroll taxes decreased by $25.4 million, or 10%, for the year ended December 31, 2025 compared to the year ended December 31, 2024.

The decrease was largely driven by lower year-over-year postcombination compensation costs to former employees of Power Finance.

To a lesser extent, lower year-over-year severance costs related to the restructuring that occurred in 2023, lower average headcount, and an increase in salaries, bonus, and benefits costs capitalized for internal-use software development in 2024 also contributed to the decrease.

Share-based compensation increased by $9.0 million, or 7%, in the year ended December 31, 2024 compared to the year ended December 31, 2023 mainly due to the increase in the number of RSU awards granted to employees, partially offset by higher share-based compensation capitalized for internal-use development.

This decrease was primarily driven by lower year-over-year post-combination compensation expenses for former Power Finance employees and higher capitalization of salaries, bonus, and benefits costs associated with internal-use software development activities during 2025.

These savings were partially offset by an increase in year-over-year bonus expense and severance and one-time retention bonuses awarded to certain key employees during the year ended December 31, 2025 for which there were no comparable expenses in 2024.

Share-based compensation decreased by $31.8 million, or 23%, for the year ended December 31, 2025 compared to the year ended December 31, 2024.

This decrease was mainly due to higher year-over-year forfeitures of stock based awards, including those related to the departure of our former CEO in the first quarter of 2025, as well as the full vesting of older stock option grants outpacing the expense from newer restricted stock unit awards.

Technology expenses increased by $4.9 million, or 8%, for the year ended December 31, 2025 compared to the year ended December 31, 2024.

The increase was due to higher software as a service costs to support our continued growth and higher software licensing costs as we implement new internal systems and tools.

Professional services expenses decreased by $1.6 million, or 7%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.

The decrease was due to the lower consulting fees incurred year over year.

Occupancy expense increased by $1.6 million, or 37%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.

The increase was driven by the $1.4 million impairment of the right-of-use assets associated with the Company's Oakland office.

This increase was mainly driven by higher software license and hosting costs to support system and tool implementations amid ongoing business growth.

Professional services expenses increased by $1.8 million, or 9%, for the year ended December 31, 2025 compared to the year ended December 31, 2024.

This increase was primarily due to an increase in administrative consulting services.

Occupancy expense decreased by $2.2 million, or 37%, for the year ended December 31, 2025 compared to the year ended December 31, 2024.

The decrease primarily resulted from a non-recurring impairment charge related to the right-of-use assets for our Oakland office recorded in the fourth quarter of 2024, with no comparable charge in 2025, as well as lower ongoing lease costs resulting from the downsizing of our operating lease footprint.

Depreciation and amortization increased by $9.7 million, or 56%, for the year ended December 31, 2025 compared to the year ended December 31, 2024.

The increase was primarily due to an increase in the amortization of internally developed software as more projects have been capitalized and placed into service.

Marketing and advertising expenses increased by $0.4 million, or 16%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.

Other operating expenses decreased by $1.2 million, or 7%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.

The decrease was primarily due to cost optimization initiatives in the current year.

Executive chairman long-term performance award decreased for the year ended December 31, 2024 compared to the same period in 2023 primarily due to a one-time reversal of share-based compensation expense of $167.3 million, of which $144.6 million related to expenses recognized in prior periods, as the Executive Chairman Long-Term Performance Award was forfeited in the current year as a result of the Company’s Executive Chairman transitioning to a non-employee director role on the board of directors.

The increase was primarily driven by higher amortization of internally developed software as additional projects were capitalized and placed into service during the year ended December 31, 2025.

To a lesser extent, amortization of the customer relationships intangible asset acquired from the TransactPay acquisition, which started in the third quarter of 2025, contributed to the increase.

Marketing and advertising expenses increased by $2.1 million, or 70%, for the year ended December 31, 2025 compared to the year ended December 31, 2024, which was driven by our continued investment in brand awareness and customer acquisition initiatives to support business growth.

Other operating expenses increased by $3.6 million, or 22%, for the year ended December 31, 2025 compared to the year ended December 31, 2024.

The increase was primarily due to legal contingency expense recognized during the year ended December 31, 2025 in connection with the Securities Actions.

The executive chairman long-term performance award decreased by 100% for the year ended December 31, 2025 compared to December 31, 2024 due to the forfeiture in the second quarter of 2024 following the Executive Chairman’s transition to a non-employee director role on the Board of Directors.

Other Income, Net

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Percentage of net revenue 5 % 10 %

Other income, net is largely comprised of interest income, and remained relatively flat for the year ended December 31, 2024 compared to the year ended December 31, 2023, as higher average yields were largely offset by lower average investment balances.

Other income, net decreased by $19.4 million, or 37% for the year ended December 31, 2025 compared to the year ended December 31, 2024.

This decrease was primarily driven by lower interest income on our short-term investment portfolio and cash balances, reflecting lower average balances primarily due to $391.4 million of share repurchases completed during the year ended December 31, 2025, as well as lower average yields during the year ended December 31, 2025 compared to the prior year.

Income Tax Expense (Benefit)

We recognized income tax expense of $0.8 million for the year ended December 31, 2024 compared to an income tax benefit of $7.6 million for the year ended December 31, 2023, which was primarily attributable to an $8.0 million partial valuation allowance release during 2023 due to the Power Finance acquisition, partially offset by income tax expenses resulting from profitable foreign operations.

Income tax expense decreased by $0.2 million or 25% for the year ended December 31, 2025 compared to the year ended December 31, 2024 primarily due to an increase in research and development tax credits generated in Canada.

Customer Concentration

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There are a number of limitations related to the use of these non-GAAP measures versus their most directly comparable GAAP measures, including the following:

• other companies, including companies in our industry, may calculate adjusted EBITDA and non-GAAP operating expenses differently than how we calculate this measure or not at all;

this reduces its usefulness as a comparative measure;

• although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditures;

• other companies, including companies in our industry, may calculate adjusted EBITDA and operating expenses differently than how we calculate these measures or not at all;

limiting their usefulness as comparative measures;

• although depreciation and amortization are non-cash charges, the assets being depreciated or amortized may require future replacement, and adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditures;

• adjusted EBITDA does not reflect the effect of income taxes that may represent a reduction in cash available to us.

We encourage investors to review the related GAAP financial measures and the reconciliation of the non-GAAP financial measures to their most directly comparable GAAP financial measures.

A reconciliation of net income (loss) to adjusted EBITDA and GAAP operating expenses to non-GAAP operating expenses for the periods presented is as follows:

A reconciliation of Net (loss) income to adjusted EBITDA and GAAP operating expenses to Adjusted operating expenses for the periods presented is as follows:

Year Ended December 31,

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Net revenue $ 624,884 $ 506,995 $ 676,171

Net income (loss)

Net (loss) income

$ (13,925) $ 27,287 $ (222,962)

Net income (loss) margin

Net (loss) income margin

(2) % 5 % (33) %

Total operating expenses $ 483,702 $ 376,315 $ 612,529

Net income (loss)

Net (loss) income

$ (13,925) $ 27,287 $ (222,962)

Depreciation and amortization expense 17,460 10,741 3,853

Share-based compensation expense (1)

104,788 136,562 130,416

Executive chairman long-term performance award (1)

Depreciation and amortization expense 27,163 17,460 10,741

Acquisition-related expenses (2)

9,437 41,584 75,473

Restructuring and other one-time costs (3)

7,840 — 8,670

Non-recurring litigation expense (4)

Payroll tax expense related to share-based compensation 2,483 2,570 2,211

Acquisition-related expenses (3)

Executive chairman long-term performance award

— (144,617) 53,214

Restructuring (2)

Other income, net

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Total operating expenses $ 483,702 $ 376,315 $ 612,529

Depreciation and amortization expense (17,460) (10,741) (3,853)

Share-based compensation expense (1)

(104,788) (136,562) (130,416)

Executive chairman long-term performance award (1)

Depreciation and amortization expense (27,163) (17,460) (10,741)

Acquisition-related expenses (2)

(9,437) (41,584) (75,473)

Restructuring and other one-time costs (3)

(7,840) — (8,670)

Non-recurring litigation expenses (4)

Payroll tax expense related to share-based compensation (2,483) (2,570) (2,211)

Restructuring (2)

Acquisition-related expenses (3)

Executive chairman long-term performance award

— 144,617 (53,214)

Non-GAAP operating expenses $ 322,756 $ 331,804 $ 361,797

Adjusted operating expenses

$ 327,694 $ 322,756 $ 331,804

(1) Prior period amounts related to our Executive Chairman Long-Term Performance Award have been reclassified to conform to the current period presentation.

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(1) Restructuring includes a net reduction of $2.9 million of stock-based compensation related to the forfeiture of certain equity awards during the year ended December 31, 2023.

See Note 13, “Restructuring” for additional information.

(2) Acquisition-related expenses, which include transaction costs, integration costs and cash and non-cash postcombination compensation expense, have been excluded from adjusted EBITDA as such expenses are not reflective of our ongoing core operations and are not representative of the ongoing costs necessary to operate our business;

instead, these are costs specifically associated with a discrete transaction.

(3) Restructuring and other one-time costs consist primarily of severance expenses and other one-time expenses related to executive transitions.

For the year ended December 31, 2025, these costs were associated with the transition of our former CEO and other key executives and retention bonuses given to certain key employees.

Retention bonuses are subject to service requirements and are recognized as expense ratably over the requisite service period.

For the year ended December 31, 2023, these costs were incurred in connection with an approved restructuring plan.

See Note 13, “Restructuring” for additional information.

(4) Non-recurring litigation expense includes a legal contingency expense related to the Securities Actions.

See Note 10, “Commitments and Contingencies” for additional information.

Liquidity and Capital Resources

Since our inception through June 30, 2021, we financed our operations primarily through sales of equity securities and payments received from our customers.

In June 2021, we completed our IPO in which we 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.

We have historically financed our operations primarily through the issuance of equity securities, including net proceeds of approximately $1.3 billion from our IPO, and cash generated from operations.

In recent years, we have achieved positive cash flows from operations, and a significant portion of our current cash, cash equivalents and short-term investments consists of remaining IPO proceeds supplemented by cash generated from our ongoing business activities.

As of December 31, 2025, we had $771.9 million of cash, cash equivalents and short-term investments, a decrease of $330.5 million from December 31, 2024.

This decrease was primarily driven by cash used for share repurchases under our authorized repurchase programs, a business acquisition, and capital expenditures, partially offset by cash generated from operations.

Sources of Cash

At December 31, 2024, our principal sources of liquidity included cash, cash equivalents, and short-term investments totaling $1.1 billion, with such amounts held for working capital purposes, and cash provided by operations.

Our cash equivalents and short-term investments were comprised primarily of bank deposits, money market funds, U.S.

At December 31, 2025, our principal sources of liquidity included cash, cash equivalents, and short-term investments totaling $771.9 million, with such amounts held for working capital purposes, and cash provided by operations.

Our cash and cash equivalents and short-term investments were comprised primarily of bank deposits, money market funds, U.S.

treasury bills, U.S.

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agency securities, asset-backed securities, and corporate debt securities.

We have generated significant operating losses as reflected in our accumulated deficit, which is a trend we expect to continue.

Our primary uses of cash include operating costs such as compensation and benefits, technology costs, professional services, lease obligations, and other expenditures necessary to support our business.

Our future capital requirements will depend on many factors, including our planned continuing investment in product development, platform infrastructure, share repurchases, and global expansion.

We will use our cash for a variety of needs, including for ongoing investments in our business, potential strategic acquisitions, capital expenditures, and investment in our infrastructure, including our non-cancellable purchase commitments with cloud-computing service providers and certain Issuing Banks.

We believe our existing cash and cash equivalents and our short-term investments will be sufficient to meet our working capital and capital expenditure needs for more than the next 12 months, including the funding of our planned acquisition.

For additional information about our planned acquisition, see Note 4 “Business Combinations” to our Consolidated Financial Statements.

As of the date of filing this Annual Report on Form 10-K, we have access to and control over all our cash, cash equivalents, and short-term investments, except amounts held as restricted cash.

We have generated significant operating losses as reflected in our accumulated deficit.

Our future capital requirements will depend on many factors, including our continued investments in product development, platform infrastructure, share repurchases, and global expansion.

We intend to allocate our cash toward ongoing business investments, potential strategic acquisitions, capital expenditures, share repurchases, and investment in our infrastructure, including our non-cancellable purchase commitments with cloud-computing service providers and certain Issuing Banks.

We believe our existing cash and cash equivalents and our short-term investments will be sufficient to meet our working capital and capital expenditure needs for more than the next 12 months.

As of the date of filing this Annual Report on Form 10-K, we have access to and control over all our cash, cash equivalents, and short-term investments, with the exception of restricted cash.

The majority of our restricted cash amounts are held solely for safeguarding customer funds in connection with TransactPay’s card and e-money wallet programs, and are not available for our general corporate purposes or operations.

On February 3, 2023, we acquired all outstanding stock of Power Finance.

Upon the closure of the acquisition, we paid $135.8 million to the shareholders of Power Finance Inc, net of cash acquired.

As part of the terms of the acquisition, we paid additional cash of $53.1 million for contingent consideration tied to performance-based goals that were achieved.

We also entered into postcombination cash compensation arrangements with certain key acquired employees whereby we agreed to pay them $85.1 million of cash over a weighted average 2.2 year service period following the acquisition date (subject to forfeiture upon termination).

Additionally, we paid $53.1 million in contingent consideration upon achievement of specified performance-based milestones.

We also entered into postcombination cash compensation arrangements with certain key acquired employees whereby we agreed to pay them $85.1 million of cash over a weighted-average service period of 2.2 years following the acquisition date (subject to forfeiture upon termination).

As of December 31, 2025, $1.0 million of the postcombination cash compensation arrangements remained outstanding.

Our transaction to acquire TransactPay was completed on July 31, 2025 (“Closing”) for a total purchase price of approximately $59.9 million, as disclosed in Note 4 “Business Combinations” to the consolidated financial statements.

The total consideration primarily consisted of $54.0 million in cash paid at Closing, approximately $3.6 million in contingent consideration payable upon achievement of specified post-closing performance conditions through December 31, 2025, and approximately $2.3 million in holdbacks retained to secure sellers’ indemnification obligations and post-closing purchase price adjustments, which will be released within one year upon satisfactory resolution of related matters.

In accordance with the procedures outlined in the merger agreement, we paid the sellers approximately $1.1 million of the $1.2 million originally withheld for such adjustments.

As of December 31, 2025, $2.4 million of the holdbacks remain outstanding, retained solely for general indemnification purposes, and are expected to be released within one year, subject to any valid indemnification claims asserted prior to the scheduled release date.

Share Repurchase

On September 14, 2022, our board of directors authorized a share repurchase program (the “2022 Share Repurchase Program”) of up to $100 million of our Class A common stock beginning September 15, 2022.

Under the 2022 Share Repurchase Program, we were authorized to repurchase shares through open market purchases, in privately negotiated transactions or by other means, in accordance with applicable federal securities laws, including through trading plans under Rule 10b5-1 of the Exchange Act.

The 2022 Share Repurchase Program had no set expiration date;

however, the 2022 Share Repurchase Program was exhausted during the first quarter of 2023.

On May 8, 2023, our board of directors authorized a share repurchase program (the “2023 Share Repurchase Program”) of up to $200 million of our Class A common stock.

Under the 2023 Share Repurchase Program, we are authorized to repurchase shares through open market purchases, in privately negotiated transactions or by other means, in accordance with applicable federal securities laws, including through trading plans under Rule 10b5-1 of the Exchange Act.

The 2023 Share Repurchase Program has no set expiration date;

however, the 2023 Share Repurchase Program was exhausted during the first quarter of 2024.

On May 6, 2024, our board of directors authorized a share repurchase program (the “2024 Share Repurchase Program”) of up to $200 million of our Class A common stock.

Under the 2024 Repurchase Program, we are authorized to repurchase shares through open market purchases, in privately negotiated transactions or by other means, in accordance with applicable federal securities laws, including through trading plans under Rule 10b5-1 of the Exchange Act.

The 2024 Share Repurchase Program has no set expiration date and may be canceled or suspended at any time without notice.

As of December 31, 2024 $80.5 million remained available for future share repurchases under the 2024 Share Repurchase Program.

On February 25, 2025, the Company’s board of directors authorized an additional share repurchase program of up to $300 million of the Company’s Class A common stock (the “2025 Share Repurchase Program”).

Under the 2025 Share Repurchase Program, the Company is authorized to repurchase shares through open market purchases, in privately negotiated transactions, or by other means, in accordance with applicable federal securities laws, including through trading plans under Rule 10b5-1 of the Exchange Act.

Our Board of Directors has periodically authorized share repurchase programs for repurchases of shares of our Class A common stock, including most recently on December 4, 2025, when our Board of Directors authorized an additional share repurchase program of up to $100 million of the Company’s Class A common stock (the “December 2025 Share Repurchase Program”).

Under the December 2025 Share Repurchase Program, the Company is authorized to repurchase shares through open market purchases, in privately negotiated transactions, or by other means, in accordance with applicable federal securities laws, including through trading plans under Rule 10b5-1 of the Exchange Act.

The number of shares repurchased and the timing of purchases are based on general business and market conditions, and other factors, including legal requirements.

The 2025 Share Repurchase Program has no set expiration date.

The December 2025 Share Repurchase Program has no set expiration date.

As of December 31, 2025, $91.5 million remained available for future share repurchases under the December 2025 Share Repurchase Program.

Restricted Cash

At December 31, 2024, we had $8.5 million in restricted cash which included a deposit held at an Issuing Bank to provide the Issuing Bank collateral in the event that our customers' funds are not deposited at the Issuing Bank in time to settle our customers' transactions with the Card Networks.

Restricted cash also includes cash held at a bank to secure our payments under a lease agreement for our office space.

At December 31, 2025, we had $308.5 million in restricted cash of which $306.9 million is related to the cash and cash equivalents held by TransactPay on behalf of its customers related to card and e-money wallet programs.

Restricted cash also includes $1.6 million cash held at a bank to secure our payments under a lease agreement for our office space, of which $0.9 million is recorded in other assets in the Consolidated Balance Sheet.

The following table summarizes our cash flows for the periods indicated:

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(in thousands)

Net cash provided by (used in) operating activities

Net cash provided by operating activities

$ 162,623 $ 58,170 $ 21,104

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(347,319) (186,914) (261,794)

Decrease in cash, cash equivalents, and restricted cash

Increase (decrease) in cash, cash equivalents, and restricted cash

$ 86,415 $ (57,956) $ (202,174)

Operating Activities

Our largest source of cash provided by our operating activities is our net revenue.

Our primary uses of cash in our operating activities are for Card Network and Issuing Bank fees, and employee-related compensation.

The timing of settlement of certain operating assets and liabilities, including revenue share payments, bonus payments, prepayments made to cloud-computing service providers, settlement receivables, and network incentive receivables can affect the amounts reported as Net cash used in or provided by operating activities on the Consolidated Statement of Cash Flows.

Our primary source of cash from operating activities is net revenue.

Primary cash outflows include Card Network and Issuing Bank fees, as well as employee-related compensation and technology expenses.

The timing of settlements of certain operating assets and liabilities, such as revenue share payments, bonus payments, prepayments to cloud-computing service providers, settlements receivable, and network incentives receivable, may impact the amounts reported as net cash provided by or used in operating activities in the Consolidated Statements of Cash Flows.

Net cash provided by operating activities was $162.6 million for the year ended December 31, 2025 compared to $58.2 million in the year ended December 31, 2024.

The increase in net cash provided by operating activities during fiscal year 2024 was due mainly to higher gross profit and lower operating expenses that improved net income year-over-year and favorable timing of settlement receivable collections.

These benefits were partially offset by the unfavorable timing of revenue share payables.

The year-over-year improvement was primarily driven by higher gross profit, reflecting stronger operational performance, as well favorable changes in working capital, which included the timing of settlements related to revenue share payable, accrued expenses and other liabilities, and network incentive receivables.

Investing Activities

Net cash provided by investing activities consists primarily of maturities and sales of our investments in short-term investments and sale of equity method investments.

Net cash used in investing activities consists primarily of purchases of short-term investments, purchases of property and equipment, and equity method investments.

Net cash provided by investing activities was $70.8 million for the year ended December 31, 2024 compared to $38.5 million in the year ended December 31, 2023.

The increase in net cash provided by investing activities is primarily due to the Power Finance acquisition which occurred in 2023, partially offset by a decrease in cash inflows from the maturities and sales of short-term investments and higher capitalization of internal-use-software in the current year.

Net cash flows from investing activities primarily consist of proceeds from maturities of short-term investments, offset by purchases of short-term investments, acquisitions of property and equipment, capitalized internal-use software development costs, and cash consideration for business combinations.

Net cash provided by investing activities increased to $271.1 million for the year ended December 31, 2025, from $70.8 million in the year ended December 31, 2024.

This year-over-year improvement was primarily driven by $229.7 million in restricted cash acquired as part of the TransactPay acquisition and $28.9 million in additional proceeds from maturities of short-term investments.

These inflows were partially offset by $45.7 million in net cash used for the TransactPay acquisition, as well as ongoing capital expenditures for property, equipment, and internal-use software.

Financing Activities

Net cash used in financing activities consists primarily of net payments related to the share-based compensation activities and share repurchase programs.

Net cash used in financing activities was $186.9 million for the year ended December 31, 2024 compared to $261.8 million in the year ended December 31, 2023.

The decrease in net cash used in financing activities is primarily due to the payment of the contingent consideration from our Power Finance acquisition in the prior year and lower payments to repurchase our Class A common stock under the 2024 and 2023 Share Repurchase Programs, partially offset by higher tax payments related to net share settlement of share-based compensation awards.

Net cash used in financing activities consists primarily of net payments related to share-based compensation activities, repurchases under our share repurchase program, and the net impact of changes in funds payable and amounts due to customers arising from the TransactPay acquisition.

Net cash used in financing activities increased to $347.3 million for the year ended December 31, 2025, from $186.9 million in the year ended December 31, 2024.

This year-over-year increase in outflows was primarily driven by repurchases of our Class A common stock under our share repurchase programs, partially offset by favorable changes in funds payable and amounts due to customers.

Obligations and Other Commitments

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In this assessment, we consider if we obtain control of the specified goods or services before they are transferred to the customer.

The assessment of whether we are considered the principal or the agent in a transaction could impact our Net revenue and Cost of revenue recognized on the Consolidated Statements of Operations and Comprehensive Income (Loss).

Business Combinations

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These estimates can include, but are not limited to:

• future expected cash flows from acquired developed technologies;

• obsolescence curves and other useful life assumptions, such as the period of time and intended use of acquired intangible assets in our product offerings;

• discount rates;

• future expected cash flows from acquired licenses, developed technologies and customer relationships;

• useful life assumptions, such as the period of time and intended use of acquired intangible assets in our product offerings;

• probability of achieving the expected performance of the earn-out arrangements;

• uncertain tax positions and tax-related valuation allowances;

• fair value of assumed equity awards;

• discount rates.

These estimates are inherently uncertain and unpredictable, and unanticipated events and circumstances may occur that could affect the accuracy or validity of such assumptions, estimates, or actual results.

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We continue to collect information and reevaluate these estimates and assumptions quarterly and record any adjustments to our preliminary estimates to goodwill provided that we are within the measurement period.

Upon the conclusion of the measurement period or final determination of the fair value of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the Consolidated Statements of Operations and Comprehensive Income (Loss).

Earn-out provisions are initially measured at fair value as of the closing date, with subsequent changes in fair value recognized in the Consolidated Statements of Operations and Comprehensive (Loss) Income until settlement.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis