What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2025-02-26 compared with 2024-02-28 · 204 added, 141 removed, 445 unchanged (44% of the section changed)

14 unchanged sentences

• We have a history of net losses and we may not be able to achieve or sustain profitability.

• Our results may fluctuate significantly and may not fully reflect the underlying performance of our business, making it difficult to accurately forecast future results.

• Our results fluctuate significantly and may not fully reflect the underlying performance of our business, making it difficult to accurately forecast future results.

If we fail to meet the expectations of financial analysts or investors, our stock price and the value of your investment could decline.

• We rely on our relationships with Issuing Banks and Card Networks, and if we are unable to maintain these relationships, our business may be adversely affected.

• If our credit platform is inaccurate or does not perform as intended, our business may be adversely affected.

• If our credit platform or other credit programs are inaccurate, do not perform as intended, or lack sufficient capacity to meet demand, our business may be adversely affected.

• Litigation, disputes, regulatory actions, and government or legal investigations could be costly and time-consuming to defend, and our business may be adversely affected by our involvement or the outcome of such litigation, disputes, actions, or investigations.

• If we fail to maintain an effective system of disclosure controls and procedures or internal control over financial reporting, or remediate our existing material weaknesses, our ability to report timely and accurate financial results or comply with applicable regulations could be impaired, and our business, operating results, and the price of our Class A common stock may be adversely affected.

• Our business is subject to regulation and oversight in a variety of areas, directly and indirectly through our relationships with customers, Issuing Banks, and Card Networks, which regulations are subject to change and to uncertain interpretation.

Compliance with such laws and regulations could result in additional costs and any failure to comply could materially harm our business and financial condition.

• If we fail to maintain an effective system of disclosure controls and procedures or internal control over financial reporting, our ability to report timely and accurate financial results or comply with applicable regulations could be impaired, and our business, operating results, and the price of our Class A common stock may be adversely affected.

• The trading price of our Class A common stock has been and is likely to continue to be volatile, which could cause the value of your investment to decline.

7 unchanged sentences

While we have experienced rapid net revenue growth in prior periods, our net revenue decreased in the year ended December 31, 2024.

Our total net revenue was $676.2 million, $748.2 million, and $517.2 million for the years ended December 31, 2023, 2022, and 2021, respectively, a decrease of (10)% and an increase of 45% from the prior years, respectively.

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.

Our total net revenue was $507.0 million, $676.2 million, and $748.2 million for the years ended December 31, 2024, 2023, and 2022, respectively, a decrease of 25% and a decrease of 10% from the prior years, respectively.

We believe our net revenue growth depends on several factors, including, but not limited to, our ability to:

5 unchanged sentences

• diversify our customer base;

• maintain and grow our network of vendors and partners, including Issuing Banks and Card Networks;

• maintain and grow our network of vendors, Issuing Banks, and Card Networks;

• maintain the security and reliability of our platform;

12 unchanged sentences

Future net revenue growth depends on our ability to attract new customers and retain existing customers in a cost-effective manner.

If we are unable to attract new customers, retain existing customers on favorable terms, and grow and develop those relationships to drive increased processing volumes, our business, results of operations, financial condition, and future prospects would be adversely affected.

If we fail to attract new customers, including customers in new use cases, industry verticals, and geographies, and to expand our platform in a way that serves the needs of these customers, and to onboard them quickly, then we may not be able to continue to grow our net revenue.

Our customers generally are not subject to any minimum volume commitments under their contracts and have no obligation to continue using our platform, products, or services.

Accordingly, these customers may have, or may enter into in the future, similar agreements with our competitors, which could adversely affect our ability to drive the processing volume and revenue growth that we seek to achieve.

If we are unable to attract new customers, retain existing customers on favorable terms, grow and develop those relationships, and expand our platform in a way that serves the needs of these customers to drive increased processing volumes, our business, results of operations, financial condition, and future prospects would be adversely affected.

There are a number of factors that affect our ability to attract new customers and retain existing customers, many of which are outside of our control and are difficult to predict, including, but not limited to changing levels of regulatory scrutiny over banks that sponsor financial technology programs and the risk factors included in this section.

While historically our customers generally have not been subject to material minimum volume commitments under their contracts and have not had material contractual obligations to continue using our platform, products, or services, we increasingly require contractual obligations related to exclusivity and preferred provider status related to our products and services.

Accordingly, our legacy customers that do not have these contractual obligations may have, or may enter into in the future, similar agreements with our competitors, which could adversely affect our ability to drive the processing volume and revenue growth that we seek to achieve.

Some of our customer contracts provide for a termination clause that allows our customers to terminate their contract at any time following a limited notice period.

3 unchanged sentences

However, we cannot assure you that customers will continue to use our platform or that we will be able to continue processing transactions on our platform at the same rate as we have in the past.

We participate in markets that are competitive and continuously evolving, and, if we do not compete successfully, our business, results of operations, and financial condition, and future prospects may be adversely affected.

We participate in markets that are competitive and continuously evolving, and, if we do not compete successfully, our business, results of operations, financial condition, and future prospects may be adversely affected.

We operate in a highly competitive and dynamic industry and we expect competition to increase in the future as established and emerging companies continue to enter the markets we serve or attempt to address the problems that our platform addresses.

18 unchanged sentences

As discussed further in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” for the years ended December 31, 2024, 2023, and 2022, Block accounted for 47%, 68%, and 71% of our net revenue, respectively.

The net revenue from Block decreased over the second half of 2023 as a percentage of our total net revenue, due to the terms of the August 2023 Block Amendment.

The net revenue from Block decreased over the second half of 2023 and through 2024 as a percentage of our total net revenue, due to the terms of the August 2023 Block Amendment coupled with growth in other customers.

We renewed the Block Agreement in August and November 2023, and the current term for both the Cash App and Square Debit Card programs expires in June 2028.

1 unchanged sentence

The August 2023 Block Amendment provides that Block is responsible for defining and managing the Cash App program with respect to the primary Card Network going forward.

The August 2023 Block Amendment has, and is expected to continue to, reduce reported net revenue period-over-period comparisons through the first half of 2024.

However, we expect that net revenue from a relatively small group of customers, including Block, will continue to account for a significant portion of our net revenue in the near term.

3 unchanged sentences

We have a history of net losses and we may not be able to achieve or sustain profitability.

We have incurred significant net losses since our inception, including net losses of $223.0 million, $184.8 million, and $163.9 million for the years ended December 31, 2023, 2022, and 2021, respectively.

We have incurred significant net losses since our inception, except for the year ended December 31, 2024.

For the year ended December 31, 2024, we had net income of $27.3 million, which was primarily due to the forfeiture of the Executive Chairman Long-Term Incentive Award.

We had net losses of $223.0 million and $184.8 million for the years ended December 31, 2023 and 2022, respectively.

As of December 31, 2024 and December 31, 2023, our accumulated deficit was approximately $797.9 million and $825.2 million, respectively.

6 unchanged sentences

These decisions may not be consistent with investors’ expectations and may not produce the long-term benefits that we expect, and this may materially and adversely affect our business.

Our results may fluctuate significantly and may not fully reflect the underlying performance of our business, making it difficult to accurately forecast future results.

Our results fluctuate significantly and may not fully reflect the underlying performance of our business, making it difficult to accurately forecast future results.

If our results fail to meet the expectations of financial analysts or investors, our stock price and the value of your investment could decline.

Our results of operations for a given period may not fully reflect the underlying performance of our business and may fluctuate as a result of a number of factors, many of which are outside of our control and may be difficult to predict, including, but not limited to the risk factors included in this section.

Our results of operations for a given period may not fully reflect the underlying performance of our business and fluctuate as a result of a number of factors, many of which are outside of our control and are difficult to predict, including, but not limited to the risk factors included in this section.

You should not rely on our past results as an indicator of our future performance.

If our results of operations or other operating metrics fall short of the expectations of investors and financial analysts, the trading price of our Class A common stock could be adversely affected and the value of your investment could decline.

Forecasting our future results of operations can be challenging because of such fluctuations and because our net revenue depends in part on our customers’ end users.

Forecasting our future results of operations is challenging because of such fluctuations and because our net revenue depends in part on our customers’ end users.

Additionally, forecasting our performance can be impacted by a number of factors that are difficult to predict or control including, but not limited to, customer renewals, volume migration, and performance of new customers.

As customers scale and become more sophisticated, they may seek to diversify, which could impact our renewal economics and our share of the processing volume.

New customer performance is difficult to predict as there is a large spectrum of potential outcomes from very successful, hypergrowth customers to customers that never launch, and these outcomes are largely out of our control.

Our transaction mix adds further complexity.

1 unchanged sentence

In general, transactions that require a signature of the cardholder generate higher percentage-based Interchange Fees, while transactions that require a PIN generate lower percentage-based Interchange Fees.

Accordingly, we may be unable to prepare accurate internal financial forecasts, and our results of operations in future reporting periods may differ materially from our estimates and forecasts or the expectations of investors or financial analysts, causing our business to suffer and our Class A common stock trading price to decline.

Accordingly, we have in the past and may in the future be unable to prepare accurate internal financial forecasts, and our results of operations in future reporting periods has and may differ materially from our estimates and forecasts or the expectations of investors or financial analysts, causing our business to suffer and our Class A common stock trading price to decline.

We rely on our relationships with Issuing Banks and Card Networks, and if we are unable to maintain these relationships, our business may be adversely affected.

We rely on our relationships with Issuing Banks and Card Networks to provide certain services for our platform, products, and services.

We rely on our relationships with Issuing Banks and Card Networks to provide certain services in connection with our platform, products, and services.

We have in the past and may in the future pay certain amounts in association with these relationships, regardless of whether we were compelled to under law or contract.

In addition, we have in the past and may in the future have disagreements with these financial institutions.

If we are unable to maintain the quality of these relationships or fail to comply with our contractual requirements with these financial institutions, our business would be adversely affected.

In addition, we have in the past and may in the future have disagreements with Issuing Banks and Card Networks.

If we are unable to maintain the quality of these relationships or fail to comply with our related contractual requirements, our business would be adversely affected.

A significant portion of our payment transactions are settled through a small number of Issuing Banks.

For the years ended December 31, 2024, 2023, and 2022, 70%, 76%, and 82%, respectively, of TPV was settled through one Issuing Bank, Sutton Bank.

If Sutton Bank terminates our agreement with them or is unable or unwilling to settle our transactions for any reason, we may be required to switch some or all of our processing volume to one or more other Issuing Banks, including to any of the other Issuing Banks that we currently contract with.

Switching processing volume to another Issuing Bank would take time and could result in additional costs, which may adversely affect our business.

Switching processing volume to another Issuing Bank would take time and could result in additional costs or loss of revenue or customers, which may adversely affect our business.

We also have agreements with Card Networks that, among other things, provide us certain monetary incentives based on the processing volume of our customers’ transactions routed through the respective Card Network.

The timing and extent of amendments or new contracts related to our volume incentive arrangements with Card Networks could result in incentive payments that are recorded in a current period and based on volume processed in a prior period.

We currently include Card Network fees in the pricing arrangements with the majority of our MxM customers.

If our customers were to manage the relationship with the Card Networks directly, our reported net revenue may decrease.

We currently include Card Network fees in the pricing arrangements with the majority of our customers who engage us to arrange their use of one of more of the Card Networks.

If these customers were to manage the relationship with the Card Networks directly, our reported net revenue may decrease.

For example, the August 2023 Block Amendment provides that Block will be responsible for defining and managing the Cash App program with respect to the primary Card Network going forward which has the effect of reducing reported net revenue.

We intend to expand and deepen our relationships with Issuing Banks and Card Networks, and diversifying these contractual relationships and operations may increase the complexity of our operations and may also lead to increased costs.

We intend to continue expanding and deepening our relationships with Issuing Banks and Card Networks.

Diversifying these contractual relationships and operations increases the complexity of our operations and has lead and may continue to lead to increased costs.

The Issuing Banks and Card Networks we work with may fail to process transactions, breach their agreements with us, or refuse to renew or renegotiate our agreements with them on terms that are favorable, commercially reasonable, or at all.

They might also take actions that could degrade the functionality of our platform, impose additional costs or requirements on us, or give preferential treatment to competitive services, including their own.

If we are unsuccessful in establishing, renegotiating, or maintaining relationships with Issuing Banks and Card Networks, our business may be adversely affected.

If we are unsuccessful in establishing, renegotiating, or maintaining relationships with Issuing Banks or Card Networks, our business may be adversely affected.

Performance issues, systems failures, and interruptions in the availability of our platform may adversely affect our business, results of operations, and financial condition.

6 unchanged sentences

We release regular updates to our platform, which have in the past contained, and may in the future contain, undetected errors, failures, and bugs.

Any platform performance issues could lead to claims by customers, Card Networks, Issuing Banks, or other partners or vendors, or other claims, regulatory fines, or proceedings.

Any platform performance issues could lead to claims by customers, vendors, Card Networks, Issuing Banks, or other third parties, or other claims, regulatory fines, or proceedings.

It could also damage ours and our customers’ businesses and, in turn, hurt our brand and reputation.

The performance and availability of the data centers and cloud-based solutions that provide computing and storage infrastructure for our platform is outside of our control.

The performance, availability, and connectivity of the data centers, cloud-based solutions, and other third parties that provide computing and storage infrastructure for our platform are outside of our control.

If any of these infrastructure providers fail to provide sufficient capacity to support our platform or otherwise experience service outages, we may experience interruptions in our ability to operate our platform and our business could be adversely affected.

7 unchanged sentences

Therefore, any performance issue, systems failure, outage, or interruption in the availability of our platform would adversely affect our business, and could subject us to financial penalties and liabilities.

Any real or perceived improper or unauthorized use of, disclosure of, or access to our or our customers’ and partners’ confidential, proprietary, or sensitive data, including by cyberattacks, security breaches or incidents, or employee or other misconduct, could expose us to liability and damage our reputation.

Any real or perceived improper or unauthorized use of, disclosure of, or access to our or our customers’ and other third parties’ confidential, proprietary, or sensitive data, including by cyberattacks, security breaches or incidents, or employee or other misconduct, could expose us to liability and damage our reputation.

Our operations depend on receiving, storing, transmitting, and otherwise processing sensitive information pertaining to our business, employees, customers, and customers’ end users.

3 unchanged sentences

We use vendors to perform certain services for us, in some cases involving management or other processing of sensitive data, and these vendors face similar security threats to the confidentiality, security, and integrity of their systems and the data they process for us.

Unauthorized parties have attempted and will continue to attempt to gain access to our platform, systems, or facilities, and those of our customers, partners, and vendors using a variety of methods such as denial-of-service attacks, phishing attacks and other forms of social engineering, and ransomware and other malicious code.

Any attempted, perceived or actual breach or incident could disrupt our systems and other aspects of our operations, result in unauthorized or unlawful access to or loss, modification, unavailability, misuse, or other unauthorized processing of our and our customers’ data, have a significant impact on our reputation as a trusted brand, and expose us to legal risk and potential liability, and costs associated with remediation.

Further, if there is a breach of payment card information that we store, process, or transmit or that is stored, processed, or transmitted by our customers or other third parties that we do business with, we could be liable to the Issuing Banks or our customers for certain of their costs and expenses, in addition to the potential for fines, penalties, and other liabilities.

Unauthorized parties have attempted and will continue to attempt to gain access to our platform, systems, or facilities, and those of our customers, vendors, and other third parties with which we do business using a variety of methods such as cloud account takeover attacks, software lifecycle compromise, denial-of-service attacks, phishing attacks and other forms of social engineering, and ransomware and other malicious code.

We have incorporated and may continue to incorporate artificial intelligence (“AI”) solutions and features (including AI solutions utilizing generative AI) into our platform and other aspects of our business and operations.

The use of AI solutions and features in our business may increase or create additional cybersecurity risks, including risks of security breaches, data leaks, and other incidents.

Also, due to political uncertainty and military actions associated with geopolitical tensions, we and the third parties we work with are vulnerable to heightened risks of security breaches and incidents.

Any attempted, perceived or actual breach or incident could disrupt our systems and other aspects of our operations, result in unauthorized or unlawful access to or loss, modification, unavailability, misuse, or other unauthorized processing of ours and our employees’ data and the data of third parties with which we work, have a significant impact on our reputation as a trusted brand, and expose us to legal risk and potential liability, and costs associated with remediation.

Further, if there is a breach impacting payment card information that we store, process, or transmit or that is stored, processed, or transmitted by our customers or other third parties that we do business with, we could be liable to the Issuing Banks or our customers for certain of their costs and expenses, in addition to the potential for fines, penalties, and other liabilities.

While we believe that none of the incidents that we have identified to date have materially impacted us, we cannot be certain that the security measures we have in place to detect and address security breaches, incidents, and other disruptions and protect sensitive data will be sufficient to counter the risks and threats facing us, our customers, and our vendors.

21 unchanged sentences

Our new products and technologies have a limited performance history, and any failure to execute on our related strategy could have an adverse impact on our business and financial condition.

We acquired Power Finance in the first quarter of 2023 and released our credit card issuing platform publicly in October 2023.

Net revenue growth attributed to credit card issuing is dependent on increasing the number of existing customers or new customers who use our credit card issuing capabilities.

We have limited experience administering our credit card issuing platform, and failure to scale the platform due to our limited experience or a competitive market could adversely affect our business and financial results.

Our failure to accurately predict the demand or growth of new products and technologies could have a material and adverse effect on our business, results of operations, financial condition, and future prospects.

New products and technologies are inherently risky, due to, among other things, risks associated with:

the product or technology not working, or not working as expected;

In fiscal 2024, we announced new technologies, including portfolio migration, UX Toolkit, and the development of Marqeta Flex.

Net revenue growth attributed to these new technologies is dependent on increasing the number of existing customers or new customers who use our platform and these capabilities.

Failure to scale these technologies, a competitive market, or failure to bring Marqeta Flex to market could adversely affect our business and financial results.

We may introduce other new products, technologies, or business opportunities in the future.

Our failure to accurately predict the demand or growth of new products, technologies, or businesses could have a material and adverse effect on our business, results of operations, financial condition, and future prospects.

New products, technologies, and businesses are inherently risky, due to, among other things, risks associated with:

the product, technology, or business not working, or not working as expected;

customer acceptance;

2 unchanged sentences

and the failure to meet customer expectations.

As a result of these risks, we could experience increased claims, reputational damage, or other adverse effects, which could be material.

In addition, our investment in new products and technologies and making changes or updates to our platform may either be insufficient or result in expenses that exceed the revenue actually generated from these new products.

If our credit platform is inaccurate or does not perform as intended, our business may be adversely affected.

The success of our credit platform depends on our ability to effectively manage related risks for us and our Issuing Banks.

While the Issuing Banks we work with bear the credit risk, they rely on our credit decisioning engine and managed services to underwrite and service credit card programs in accordance with their credit policies.

As a result of these risks related to new products and technologies, we could experience increased claims, reputational damage, or other adverse effects, which could be material.

In addition, our investment in new products, technologies, and businesses and making changes or updates to our platform may either be insufficient or result in expenses that exceed the revenue actually generated from these new products, technologies, or businesses.

If our credit platform or other credit programs are inaccurate, do not perform as intended, or lack sufficient capacity to meet demand, our business may be adversely affected.

We acquired Power Finance in the first quarter of 2023 and released our credit card issuing capabilities publicly in October 2023.

Net revenue growth attributed to credit card issuing is dependent on increasing the number of existing customers or new customers who use our credit card issuing capabilities.

We have limited experience administering our credit card issuing platform, and failure to scale due to our limited experience or a competitive market could adversely affect our business and financial results.

The success of our credit issuing capabilities and other credit programs also depends on our ability to effectively manage related risks for us and our Issuing Banks.

While the Issuing Banks or other third parties we work with bear the credit risk, in some cases they rely on our credit decisioning engine and managed services to underwrite and/or to otherwise support the management of credit card programs in accordance with their credit policies.

Our current and future efforts and the efforts of our Issuing Banks and other partners to expand the capacity of our Issuing Banks and mitigate risk to our credit issuing capabilities and other credit programs may not be successful.

Numerous factors, many of which are outside of our control, can adversely affect the evaluation of credit risk.

The information we use in our credit platform may be inaccurate or incomplete as a result of error or fraud, both of which may be difficult to detect and avoid.

The information we use in processing credit transactions may be inaccurate or incomplete as a result of error or fraud, both of which may be difficult to detect and avoid.

If a fraudulent applicant is approved based on our credit risk model, we may be liable for the losses incurred by the Issuing Bank, which could adversely affect our business and results of operations.

There may be risks that exist, or that develop in the future, including market risks, interest rate risks, economic risks, and other external events, that we have not appropriately anticipated, identified, or mitigated that would impact our Issuing Bank partners or our ability to offer credit products.

If our credit risk tools do not effectively and accurately model the credit risk of potential cards issued by our Issuing Banks, greater than expected losses may result on such card programs and, as a result, our customers may stop marketing their card programs, potential customers may be less likely to initiate card programs, and Issuing Banks may stop using our platform for credit card issuing.

Further, if our credit platform does not operate as intended or is inaccurate, it may be alleged that we and/or our bank partners have failed to comply with applicable laws and regulations, we and/or our bank partners may be subject to litigation or regulatory investigations or other proceedings, we and/or our bank partner may have to pay fines and penalties or become subject to civil or criminal liability or have additional obligations or restrictions imposed upon our respective businesses, and our customer relationships and reputation may be adversely affected, which could have a material adverse effect on our business, results of operations, and financial condition.

Further, if our platform does not operate as intended or is inaccurate, it may be alleged that we and/or our Issuing Banks have failed to comply with applicable laws and regulations, we and/or our Issuing Banks may be subject to litigation or regulatory investigations or other proceedings, we and/or our Issuing Banks may have to pay fines and penalties or become subject to civil or criminal liability or have additional obligations or restrictions imposed upon our respective businesses, and our customer relationships and reputation may be adversely affected, which could have a material adverse effect on our business, results of operations, and financial condition.

The Issuing Banks face the risk that our customers’ cardholders will default on their payment obligations, creating the risk of potential charge-offs.

7 unchanged sentences

It is also important for us to implement tools to support the operational efficiency of our platform.

For example, in the past year generative artificial intelligence (“AI”) solutions have emerged as an opportunity for us, our customers, our partners, and our vendors to innovate more quickly and efficiently and better serve our customers.

Rapid adoption and novel uses of generative AI may, however, introduce unique and unpredictable security risks to our systems and platform, products, and services.

For example, in the past year AI solutions have emerged as an opportunity for us, our customers, our vendors, and other third parties to innovate more quickly and efficiently and better serve our customers.

Rapid adoption and novel uses of AI may, however, introduce unique and unpredictable security risks to our systems and platform, products, and services.

Our business could be adversely affected if we are not successful in developing modifications, enhancements, and improvements, in bringing them to market quickly or cost-effectively, or at modifying our platform to remain compliant with applicable legal and regulatory requirements.

Our business could also be harmed if we experience unintended consequences with the enhancements we provide or use.

Issues relating to our use of AI technologies, including generative and agentic AI, combined with an uncertain legal and regulatory environment, could materially and adversely affect our business, financial condition, and results of operations.

We have incorporated and may continue to incorporate AI solutions and features into our platform or other offerings, and otherwise within our business, and these solutions and features may become more important to our operations or to our future growth over time.

There can be no assurance that we will realize the desired or anticipated benefits from AI and we may fail to properly develop, implement or market our AI solutions and features or to do so in a cost-effective manner.

Additionally, we may fail to offer the AI solutions and features that our customers and potential customers expect or adopt.

Our competitors or other third parties may incorporate AI into their products, offerings, and solutions more quickly or more successfully than we do, which could impair our ability to compete effectively, and adversely affect our results of operations.

Additionally, our AI solutions and features may expose us to additional claims, demands, and proceedings by private parties and regulatory authorities and subject us to legal liability as well as brand and reputational harm.

For example, if AI models used in our products or other offerings are incorrectly designed, the data we use to train them is incomplete or inadequate, the outputs (including any analysis or recommendations) are or are deemed to be inaccurate or discriminatory, or we do not have sufficient rights to use the data on which our models rely, the performance of our AI solutions and features, as well as our reputation, could suffer or we could incur liability through the violation of contractual or regulatory obligations.

The legal, regulatory, and policy environments around AI are evolving rapidly.

For example, the EU AI Act, which achieved approval by the European Council on February 2, 2024, and the European Parliament on March 13, 2024, will impose obligations on providers and users of AI technologies.

Additionally, several U.S.

states have proposed, and in certain cases have enacted, legislation imposing obligations in connection with the development or use of, or otherwise regulating, AI technologies.

and state-specific regulatory bodies have also issued advisories on the use of AI technologies and will likely step up their oversight and enforcement of these technologies.

Other countries also are contemplating laws regulating AI and machine learning technologies.

We may become subject to new legal and other obligations in connection with our use of AI, which could require us to make significant changes to our policies and practices, necessitating expenditure of significant time, expense, and other resources.

We may continue to expand operations internationally where we have limited operating experience and may be subject to increased business, economic, and regulatory risks that could adversely impact our operations and financial results.

We have offices in the United States and United Kingdom (“U.K.”), and legal entities in various other global jurisdictions, and we may pursue further international expansion of our business in new international markets where we have limited or no experience in marketing, selling, employing personnel, and deploying our platform, products, and services.

We have offices in the United States, Poland, and the United Kingdom (“U.K.”), and legal entities in various other global jurisdictions, and we may pursue further international expansion of our business in new international markets where we have limited or no experience in marketing, selling, employing personnel, and deploying our platform, products, and services.

Managing international operations requires us to comply with new regulatory frameworks, additional regulatory hurdles, and implement additional resources and controls.

3 unchanged sentences

• conforming our platform with applicable business customs and languages;

• increased costs and difficulty in protecting intellectual property and sensitive data;

• increased costs and difficulty in protecting intellectual property and sensitive data, including compliance with data residency requirements or commitments;

• increased costs from local Card Networks, BIN sponsors, vendors, and other local providers;

5 unchanged sentences

• difficulties in gaining acceptance from industry self-regulatory bodies;

• risks related to government regulations in and related to foreign jurisdictions, including compliance with multiple, potentially conflicting, and changing laws and regulations;

• risks related to government regulations in and related to foreign jurisdictions, including compliance with multiple, potentially conflicting, and changing laws, regulations, and industry standards, and related penalties or fines for non-compliance;

• Interchange Fee regulation in foreign jurisdictions;

5 unchanged sentences

We may incur losses relating to the settlement of payment transactions on our platform.

We settle funds on behalf of our customers on a daily basis for a variety of transaction types.

We are and will continue to be subject to the risk of losses relating to the day-to-day settlement of payment transactions, including with respect to pre-funding and chargeback requests as well as human or processing error.

If transactions or settlement reconciliations are not performed timely or are inaccurate due to human or processing error, we could incur losses.

We contract with Issuing Banks to settle funds on behalf of our customers on a daily basis for a variety of transaction types.

We are and will continue to be subject to the risk of losses relating to the day-to-day settlement of payment transactions, including with respect to pre-funding, ACH processing errors or delays, and chargeback requests as well as human or processing error.

If transactions or settlement reconciliations are not performed timely or accurately due to human or other processing error, we could incur losses.

While customers deposit a certain amount of pre-funding into bank accounts at our Issuing Banks, depending on the model of the card program and the timing of funding and transactions, some transactions may be authorized in an amount that exceeds the pre-funding in the customer’s account.

2 unchanged sentences

We would seek to recover such losses from the customer, but we may not fully recover them if the customer is unwilling or unable to pay.

Additionally, when a chargeback request is approved, the purchase price of the transaction is refunded to the customer’s end user’s account through our platform.

Additionally, if the Issuing Banks we work with do not receive and submit ACH return files from us on time to the Federal Reserve Bank, the originating depository financial institution that sent the original ACH payment is not required to return the funds to the customer account at the Issuing Bank.

We have in the past and may in the future be responsible for delays or errors in processing ACH return files, in which case we bear responsibility for the funds that should have been returned to the customer account and may suffer financial losses.

In addition, when a chargeback request is approved, the purchase price of the transaction is refunded to the customer’s end user’s account through our platform.

If we do not properly process the chargeback, the customer may request that we fund the refunded amount to their end user.

We have in the past, and may in the future, incur costs relating to the improper processing of chargeback requests.

We have in the past, and may in the future, incur costs relating to transactions exceeding customer pre-funding and the improper processing of ACH files and chargeback requests.

The costs we incur related to our settlement obligations may adversely affect our business and financial condition.

2 unchanged sentences

We have programs to vet and monitor our potential customers and the transactions we process for them, but such programs may not be effective in detecting and preventing fraud or illegitimate transactions.

Illegitimate transactions or illegal activities such as money laundering or terrorist funding can expose us to governmental and regulatory enforcement actions and potentially prevent us from satisfying our contractual obligations to our third-party partners, which may cause us to be in breach of our obligations.

The techniques used to perpetrate fraud on our customers and our platform are continually evolving, and we expend considerable resources to continue to monitor and combat them.

Illegitimate transactions or illegal activities such as money laundering or terrorist funding can expose us to governmental and regulatory enforcement actions and potentially prevent us from satisfying our contractual obligations to our Issuing Banks and other counterparties, which may cause us to be in breach of our obligations.

The techniques used to perpetrate fraud are continually evolving, and we expend considerable resources to continue to monitor and combat them.

Criminals may commit fraud using techniques such as stolen identities and bank accounts, compromised business email accounts, employee or insider fraud, account takeover, false applications, check fraud, “skimming,” counterfeit payment cards, and stolen cards or card account numbers.

6 unchanged sentences

Our labor expenses may increase as a result of a shortage in the supply of qualified personnel.

In addition, job candidates and existing employees often consider the value of the equity awards they receive in connection with their employment.

If the value of our equity awards declines, it may impair our ability to recruit and retain highly skilled employees.

A number of our employees are foreign nationals who rely on work authorization provided to them by the U.S.

federal government.

In recent years, the United States has increased the level of scrutiny in work authorization immigration status.

We may experience additional complications hiring and retaining qualified personnel who rely on such immigration status to lawfully work with our Company, as compliance with new or changing U.S.

immigration and labor laws could restrain our ability to retain and attract qualified personnel.

In addition, we anticipate potential impacts to foreign national employees’ ability to travel for either business or personal reasons due to longer vetting times at the U.S.

border for all individuals entering the United States.

We also anticipate potential impacts to foreign national employees’ ability to obtain new or renewed visas abroad, which are required in most circumstances to re-enter the United States.

These processes could cause delays in employees’ ability to return to work in the event of travel.

Job candidates and existing employees often consider the value of the equity awards they receive in connection with their employment.

If the value of our equity awards continues to decline or does not improve, it may impair our ability to recruit and retain highly skilled employees.

If we are not able to add and retain employees effectively, our ability to achieve our strategic objectives will be adversely affected, and our business and growth prospects will be adversely affected.

8 unchanged sentences

We intend to continue to make investments to support our business and may require additional funds.

In particular, we may seek additional funds to develop new products and enhance our platform and existing products, expand our operations, improve our infrastructure, or acquire complementary businesses, technologies, services, products, and other assets.

In addition, we are using a portion of our cash to satisfy tax withholding and remittance obligations related to the vesting of RSUs.

Despite having $1.1 billion in cash and highly liquid short-term investments on our balance sheet, we may seek additional funds to develop new products and enhance our platform and existing products, expand our operations, improve our infrastructure, or acquire complementary businesses, technologies, services, products, and other assets.

In addition, we are using a portion of our cash to satisfy tax withholding and remittance obligations related to the vesting of Restricted Stock Units (“RSUs”) and P erformance-based Restricted Stock Units (“PSUs”) as well as to effect share repurchases.

See the section titled “Risk Factors—Risks Relating to Ownership of Our Class A Common Stock—We cannot guarantee that our share repurchase program will enhance long-term stockholder value.

Share repurchases could also affect the trading price of our stock and may reduce working capital” for additional information regarding our share repurchase programs.

Accordingly, we may need to engage in equity or debt financings to secure additional funds.

16 unchanged sentences

For example, we acquired Power Finance Inc.

in February 2023.

in February 2023 and we intend to complete the acquisition of the TransactPay business of Neptune International Ltd in 2025.

The identification, pursuit, evaluation, and negotiation of potential strategic transactions may divert the attention of management and entail various expenses, whether or not such transactions are ultimately consummated.

9 unchanged sentences

Such claims, disputes, lawsuits, proceedings, and investigations could involve matters relating to employment, wage and hour, commercial, antitrust, securities, the duties of officers or directors, regulatory compliance, and other matters.

The number and significance of litigation, regulatory, and government or legal investigation matters and disputes may increase as our business expands.

We also had in the past, have currently, and may have in the future indemnification obligations as a result of our contracts with customers and partners that may require us to reimburse or pay for damages, fees, or other expenses associated with claims, lawsuits, proceedings, and investigations such customers and partners face.

The number and significance of litigation, regulatory, and government or legal investigation matters and disputes has increased and may continue to increase as our business expands.

We also had in the past, have currently, and may have in the future indemnification obligations as a result of our contracts with customers and other counterparties that may require us to reimburse or pay for damages, fees, or other expenses associated with claims, lawsuits, proceedings, and investigations such customers and other counterparties face.

Further, our liability insurance may not cover all potential claims made against us or third parties or be sufficient to cover us for all liability that may be imposed.

5 unchanged sentences

We depend on services from various third-party vendors to provide our products and services.

Any disruptions in these services, including as a result of actions outside of our control, would significantly impact the continued performance of our platform.

We conduct vendor due diligence and manage such vendors using a risk-based approach intended to determine if relevant vendors have the ability to implement and maintain appropriate security measures, consistent with all applicable laws, to implement and maintain reasonable security measures in connection with their work with us, and to promptly report to us any suspected breach of their security measures that may affect our business.

If we are unable to timely and accurately identify at-risk vendors or if a service provider fails to properly safeguard our data or intellectual property, fails to meet contractual requirements (including compliance with applicable laws and regulations), suffers a cyberattack, security breach or incident, or other system outage or interruption, or terminates its contract with us, we could be subject to claims from customers and other third parties or regulatory enforcement actions, and such incidents may also put information we process at risk which could in turn adversely affect our business, reputation, financial condition, or results of operations.

Any disruptions in these services, including as a result of actions outside of our control, could significantly impact the continued performance of our platform.

We conduct vendor due diligence and manage such vendors using a risk-based approach intended to determine if relevant vendors have the ability, consistent with all applicable laws, to implement and maintain reasonable security measures in connection with their work with us, and to promptly report to us any suspected breach of their security measures that may affect our business.

If we are unable to timely and accurately identify at-risk vendors or if a service provider fails to properly safeguard our data or intellectual property, fails to meet contractual requirements (including compliance with applicable laws and regulations), suffers a cyberattack, security breach or incident, or other system outage or interruption, or terminates its contract with us, we could be subject to claims from customers or other third parties or regulatory enforcement actions, and such incidents may also put information we process at risk which could in turn adversely affect our business, reputation, financial condition, or results of operations.

In some cases, vendors are the sole source, or one of a limited number of sources, of the services they provide to us.

2 unchanged sentences

Indemnity provisions in various agreements potentially expose us to substantial liability and risk of loss.

Our agreements with Issuing Bank partners and customers include indemnification provisions under which we agree to indemnify them for losses or expenses suffered or incurred in certain circumstances, including, for example, in relation to claims arising out of the breach of such agreements, services to be provided by us, or from intellectual property infringement claims made by third parties.

Our agreements with Issuing Banks, Card Networks, customers, vendors, lessors, and other third parties include indemnification provisions under which we agree to indemnify them for losses or expenses suffered or incurred in certain circumstances, including, for example, in relation to claims arising out of the breach of such agreements, services to be provided by us, or from intellectual property infringement claims made by third parties.

Some of these agreements provide for uncapped liability for indemnification claims and some indemnity provisions survive termination or expiration of the applicable agreement.

In some cases, we have in the past and could continue to be exposed to liability or indemnification claims from our customers or partners in connection with the services we provide.

Large payments to partners or customers could harm our business, results of operations, and financial condition.

Any dispute with a partner or customer with respect to these obligations could have adverse effects on our relationship with that partner or customer and other existing or prospective partners and customers, and harm our business and results of operations.

In some cases, we have in the past and could continue to be exposed to liability or indemnification claims from our customers, Card Networks, or Issuing Banks in connection with the services we provide.

Large payments to customers, Card Networks, or Issuing Banks could harm our business, results of operations, and financial condition.

Any dispute with a customer, Card Network, or Issuing Bank with respect to these obligations could have adverse effects on our relationship with that counterparty and other existing or prospective customers, Card Networks, or Issuing Banks, and harm our business and results of operations.

Further, although we carry insurance, our liability insurance may not cover all potential claims made against us or be sufficient to cover us for all liability that may be imposed, and any such coverage may not continue to be available to us on acceptable terms or at all.

3 unchanged sentences

The results of these estimates form the basis for making judgments about the carrying values of assets, liabilities and equity, and the amount of net revenue and expenses that are not readily apparent from other sources.

Assumptions and estimates used in preparing our Consolidated Financial Statements include those related to revenue recognition, accounting for business combinations and share-based compensation.

Significant assumptions and estimates used in preparing our Consolidated Financial Statements include, but are not limited to, the fair value and useful lives of assets acquired and liabilities assumed through business combinations, the estimation of contingent liabilities, 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 estimation of network incentives, and valuation of income taxes.

In addition, we have been and may continue to be involved in various lawsuits, claims, and proceedings that arise in the ordinary course of business.

We record a liability for these when we believe it is probable that we have incurred a loss, and that we can reasonably estimate the loss.

We regularly evaluate current information to determine whether we should adjust a recorded liability or record a new one.

If a loss is reasonably possible and the loss or range of loss can be reasonably estimated, we disclose the possible loss in the accompanying notes to the Consolidated Financial Statements.

Judgment is required to determine both the probability and the estimated amount.

If we make incorrect assumptions or estimates, our reported financial results may be over- or understated, which could materially and adversely affect our business, financial condition and results of operations.

1 unchanged sentence

Risks Relating to Regulation

Our business is subject to extensive regulation and oversight in a variety of areas, directly and indirectly through our relationships with Issuing Banks and Card Networks, which regulations are subject to change and to uncertain interpretation.

Our business is subject to regulation and oversight in a variety of areas, directly and indirectly through our relationships with customers, Issuing Banks, and Card Networks, which regulations are subject to change and to uncertain interpretation.

Compliance with such laws and regulations could result in additional costs and any failure to comply could materially harm our business and financial condition.

We, our vendors, our partners, and our customers are subject to a wide variety of laws, regulations, and industry standards, including supervision and examination with respect to the foregoing by multiple authorities and governing bodies and in multiple countries, which govern numerous areas important to our business.

While we currently operate our business in an effort to ensure our business itself is not subject to the same level of regulation as the Issuing Banks and Card Networks that we partner with, Issuing Banks and Card Networks operate in a highly regulated environment, and there is a risk that those regulations could become applicable to or impact us.

As a program manager, we are responsible for aligning compliance with Issuing Bank requirements and Card Network rules, and we help create regulatory compliant card programs for our customers.

In some cases, we have in the past and could continue to be exposed to liability or indemnification claims from our customers or partners in connection with the services we provide.

We are directly, and indirectly through our contractual relationships with customers, Issuing Banks, and Card Networks, subject to regulation in areas which may include privacy, data protection and information security, global sanctions regimes and export controls, and anti-bribery, and those relating to payments services (such as payment processing and settlement services), AI, consumer protection, AML, escheatment, and compliance with PCI DSS.

As our business and platform continue to develop and expand, we may become subject to additional laws, rules, regulations, and industry standards, including possible additional examination and supervision, in the United States and internationally.

New or changing laws or regulations could require us to incur significant expenses and devote significant management attention to ensure compliance and could also prompt our Issuing Banks to alter their dealings with us in ways that may have adverse consequences for our business.

We, our customers, our vendors, and other third parties we do business with are subject to a wide variety of laws, regulations, and industry standards, including supervision and examination with respect to the foregoing by multiple authorities and governing bodies and in multiple countries, which govern numerous areas important to our business.

While we currently operate our business in an effort to ensure our business itself is not subject to the same level of regulation or licensing as the Issuing Banks and Card Networks that we contract with, Issuing Banks and Card Networks operate in a highly regulated environment, and there is a risk that those regulations could become directly applicable to or directly impact us.

We have structured our business in a manner reasonably designed to comply with applicable laws and regulations, including, but not limited to, applicable laws relating to money laundering, sanctions, consumer protection, and money transmission services;

however, it is possible that a relevant regulator may disagree, which could expose us to penalties and/or censure.

If a relevant regulator disagreed with our analysis of, and compliance with, applicable laws, we may be required to seek licenses, authorizations, or approvals from those regulators, which may be dependent on us meeting certain capital and other requirements, and may subject us to additional regulation and oversight, all of which could significantly increase our operating costs.

As a program manager, we are responsible for aligning compliance with Issuing Bank requirements and Card Network rules, and we help create card programs for our customers designed to comply with applicable legal and regulatory requirements.

In some cases, we have in the past and could continue to be exposed to liability or indemnification claims from our customers or other third parties in connection with the services we provide.

We are directly, and indirectly through our contractual relationships with customers, Issuing Banks, and Card Networks, subject to regulation in areas which may include, but are not limited to, privacy, data protection and information security, global sanctions regimes and export controls, and anti-bribery, and those relating to payments services (such as payment processing and settlement services), AI, consumer protection, AML, and escheatment, as well as compliance with industry standards, such as PCI DSS.

As our business and platform continue to develop and expand, we continue to become subject to additional laws, rules, regulations, and industry standards, including possible additional examination and supervision, in the United States and internationally.

For example, in Canada, the Retail Payment Activities Act (the “RPAA”) will subject payment service providers (“PSPs”), including a Marqeta subsidiary, to supervision by the Bank of Canada.

One of our subsidiaries submitted an application for registration under the RPAA in November 2024, and we and other PSPs must establish, implement, and maintain a risk management and incident response framework that complies with the RPAA by September 8, 2025.

New or expanded regulation or changes in interpretation or enforcement of existing regulations may have an adverse effect on our business, results of operations, and financial condition due to increased compliance costs and new restrictions affecting the offering of our platform, products and services.

We may not be able to respond quickly or effectively to, or accurately predict the scope or applicability of, regulatory, legislative, or other developments, which may in turn impair our ability to offer our existing or planned features, products, and services and/or increase our cost of doing business.

In addition, we may become subject to audits, inquiries, whistleblower complaints, adverse media coverage, investigations, or criminal or civil sanctions, all of which may have an adverse effect on our reputation, business, results of operations, and financial condition.

For example, regulatory scrutiny over banks that sponsor financial technology programs increased in fiscal 2024, and the heightened regulatory environment contributed to the Issuing Banks we work with focusing more on maintaining existing programs than launching new programs with us.

As a result, we launched fewer programs than projected in fiscal 2024, adversely affecting our results of operations and business.

In addition, we may become subject to audits, inquiries, whistleblower complaints, adverse media coverage, investigations, or criminal or civil complaints or sanctions, all of which may have an adverse effect on our reputation, business, results of operations, and financial condition.

As a result of our business relationships, we may also be subject to direct or indirect supervision and examination by various authorities.

The CFPB, for example, has indicated it has dormant authority to examine certain companies whose services may pose risk to consumers, which may include our company.

The CFPB has also published guidance on third party risk management, which places additional vendor compliance oversight expectations for certain companies operating in the financial services industry.

As a program manager, we may be viewed as overseeing third party relationships on behalf of our Issuing Banks and, as such, it is possible that regulators could hold us responsible for actual or perceived deficiencies in our oversight and control of third party relationships.

The Board of Governors of the Federal Reserve System, the FDIC, and the Office of the Comptroller of the Currency (the “Federal Banking Agencies”) have also issued a growing number of enforcement actions in connection with partnerships between banks and financial technology companies in recent years.

The Federal Banking Agencies have also published interagency guidance for banks to develop and implement risk management practices for these arrangements, which clarifies supervisory expectations for banks to oversee the third parties with whom they partner.

With respect to payment activities, including card issuing, the Federal Banking Agencies have indicated that they may further clarify their supervisory expectations.

Accordingly, as a program manager for Issuing Banks, we are subject to the Issuing Banks’ risk management standards for third-party relationships in accordance with supervisory guidance and examination by the Federal Banking Agencies.

Should we or the Issuing Banks with whom we work be unable to satisfy these standards, we may have to discontinue certain programs or relationships or be unable to onboard new customers or products to the Issuing Banks, and, it is also possible that regulators could hold us or our customers responsible for actual or perceived deficiencies in connection with our arrangements with Issuing Banks, and our business, financial condition, and results of operations may be adversely affected.

In addition, increased supervisory scrutiny has in the past contributed to, and may in the future contribute to, the Issuing Banks with whom we currently have relationships reassessing the details of their arrangement with us and may deter new Issuing Banks from establishing a relationship with us or have other adverse impacts upon our business.

Further, while we do not handle or interact with cryptocurrency and we only process transactions on our platform in fiat currencies, certain cryptocurrency businesses use our platform to provide card products to their customers and end users.

The regulation of cryptocurrency is rapidly evolving and varies significantly among jurisdictions and is subject to substantial uncertainty.

Various legislative and executive bodies in the U.S.

and other countries may adopt laws, regulations, or guidance, or take other actions, which may impact our Issuing Banks and restrain the growth of cryptocurrency businesses and in turn impact the net revenue associated with our cryptocurrency business customers.

Various legislative and executive bodies in the United States and other countries may adopt laws, regulations, or guidance, or take other actions, which may impact our Issuing Banks and restrain the growth of cryptocurrency businesses and in turn impact the net revenue associated with our cryptocurrency business customers.

While we have developed policies and procedures designed to assist in compliance with laws and regulations, no assurance can be given that our compliance policies and procedures will be effective.

1 unchanged sentence

In some cases, regardless of fault, it may be less time-consuming or costly to settle these matters, which may require us to implement certain changes to our business practices, provide remediation to certain individuals, or make a settlement payment to a given party or regulatory body.

Laws, regulations, and industry standards related to privacy and data protection, and our actual or perceived failure to comply with such obligations, could adversely affect our business and financial results.

Governmental bodies and industry organizations in the United States and abroad have adopted, or are considering adopting, laws and regulations governing the use of, and requiring safeguarding of, personal information.

Laws, regulations, and industry standards related to privacy and data governance, and our actual or perceived failure to comply with such obligations, could adversely affect our business and financial results.

As we operate and expand our business, we process and manage a significant amount of personal data that increasingly subjects us to global laws and regulations governing the collection, use, disclosure, and other processing of that information and security measures with regard to that information.

We also are and may become subject to contractual obligations relating to privacy, data protection, and information security.

For example, we are subject to the California Consumer Privacy Act (“CCPA”), as amended and supplemented by the California Privacy Rights Act, which imposes significant restrictions on the collection, processing, and disclosure of personal information, including imposing increased penalties related to data privacy incidents.

For example, we are subject to the California Consumer Privacy Act (as amended, including by the California Privacy Rights Act, the “CCPA”), which imposes significant restrictions on the collection, processing, and disclosure of personal data, including imposing increased penalties related to data privacy incidents.

states have also passed or are considering privacy legislation, including omnibus privacy legislation similar to the CCPA, and industry organizations regularly adopt and advocate for new standards in these areas.

In Europe, we are subject to the General Data Protection Regulation (“GDPR”) which extends the scope of E.U.

data protection law to all companies processing data of individuals within the E.U., regardless of the company’s location, and requires companies to meet stringent requirements regarding the handling of personal data.

has also adopted a law substantially implementing the GDPR as part of its local data protection law, referred to as the U.K.

The GDPR imposes substantial obligations and risk upon our business and provides for significant penalties in the event of any non-compliance.

The GDPR and other laws and regulations in the E.U., the U.K., and elsewhere also impose limitations on international transfers of personal data.

We continue to monitor and assess evolving regulatory guidance and other developments related to our data transfer mechanisms, and it is possible that our ability to transfer personal data will be impacted or challenged as such requirements evolve.

Any inability to transfer personal data in compliance with these requirements may require us to modify our policies and practices and may otherwise adversely affect our business.

Current or future laws, regulations, contractual obligations, and industry standards or other frameworks may impose, or be asserted to impose, requirements that are inconsistent with our data management and processing practices or the operation of our products and services.

While we have incurred and expect to continue to incur substantial expense in complying with new and evolving privacy and data protection laws and frameworks, we may not be successful in our efforts to achieve compliance.

If we fail or are alleged to have failed to comply with these laws, regulations, frameworks, or other actual or asserted obligations, we may be subject to regulatory investigations, enforcement actions, and other proceedings, civil litigation, claims, and demands, and fines and other penalties, all of which may result in additional cost and liability to us, damage our reputation, and adversely affect our business.

We may also be required to make additional, significant changes in our policies and business operations, such as modifying products and services, our data processing practices or policies, or otherwise restricting our operations, which we may be unable to complete on a commercially reasonable basis or at all, and our potential liability in connection with non-compliance with laws, regulations, contractual obligations, and frameworks may increase, all of which could have a material adverse effect on our business, results of operations, and financial condition.

We are also subject to U.S.

federal legislation such as the Gramm-Leach-Bliley Act and regulatory oversight in this area, including by the CFPB which has shown an increased interest in the governance of personal data.

As we continue to operate and expand internationally, we are also subject to, and will continue to be subject to, international privacy laws including but not limited to the EU’s General Data Protection Regulation (“GDPR”), the U.K.

GDPR, and local privacy and data protection legislation in EU member states, as well as laws within Canada, including the Personal Information Protection and Electronic Documents Act and local provincial legislation.

In addition, other global laws, rules, and regulations related to data governance may impact our current and future operations.

This includes, for example, regulations relating to cybersecurity, such as Europe’s Digital Operational Resilience Act, U.S.

federal and state-specific data broker legislation, and laws, regulations, and advisory opinions pertaining to the development and use of AI.

Current or future laws, regulations, contractual obligations, and industry standards or other frameworks relating to privacy and data governance may impose, or be asserted to impose, requirements that are inconsistent with our practices or the operation of our products and services.

As a result, these requirements may require us to modify our policies and practices and may otherwise adversely affect our business.

While we continue to monitor and assess the evolving regulatory landscape in the context of our business and our products and services, this area is rapidly evolving and may be subject to uncertainty as well as varying interpretations of relevant requirements.

Although we have incurred and expect to continue to incur substantial expense in complying with certain new and evolving privacy and data governance laws and frameworks, we may not be successful in our efforts to achieve and maintain compliance.

Additionally, our interpretation and applications of relevant requirements may be inconsistent with the interpretation and application of these requirements by relevant authorities and regulatory bodies.

If we fail or are alleged to have failed to comply with any of these laws, regulations, frameworks, or other actual or asserted obligations, we may be subject to regulatory investigations, enforcement actions, and other proceedings, civil litigation, claims, and demands, and fines and other penalties, all of which may result in additional cost and liability to us, damage our reputation, and adversely affect our business.

We may also be required to make additional or significant changes to our policies and business operations, such as modifying products and services or our data processing practices or policies, or otherwise restricting our operations, which we may be unable to complete in a commercially reasonable manner or at all, and our potential liability in connection with our actual or alleged non-compliance with laws, regulations, contractual obligations, and frameworks may increase, all of which could have a material adverse effect on our business, results of operations, and financial condition.

We may from time to time make representations regarding our practices and controls related to privacy, our processing of personal data, and related matters, such as our security measures including but not limited to within our public-facing privacy notices.

We may at times fail, or be alleged to have failed, to comply with these representations.

Any actual or alleged failure to comply with these representations, or any such representations being, or alleged to be, deceptive or misrepresentative, may result in regulatory investigations, enforcement actions, and other proceedings, civil litigation, claims, and demands, and fines and other penalties and liabilities, all of which may result in additional cost and liability to us, damage our reputation, and adversely affect our business.

A portion of our net revenue is derived from Interchange Fees and changes in Interchange Fees or Interchange Fee regulation could adversely affect our business, results of operations, and financial condition.

1 unchanged sentence

Interchange Fees and assessments are subject to change from time to time by the Card Networks and due to government regulation.

Interchange Fees are the subject of intense legal and regulatory scrutiny and competitive pressures in the electronic payments industry.

For example, the Durbin Amendment may restrict or otherwise impact the way we do business or limit our ability to charge certain fees to customers.

Issuing Banks that are exempt from the Interchange Fee restrictions in the Durbin Amendment are able to access higher interchange rates.

As a result, to maximize our Interchange Fees, we generally only contract with Issuing Banks that are subject to this exemption from the Durbin Amendment when we provide MxM services for debit and prepaid card programs.

Interchange Fee regulation also exists in other countries where our customers use payment cards and such regulation could adversely affect our business in other foreign regions.

Any changes in the Interchange Fees associated with our customers’ card transactions could adversely affect our business, results of operations, and financial condition.

Interchange Fees have historically been, and continue be, the subject of intense legal and regulatory scrutiny and competitive pressures in the electronic payments industry in the United States and internationally.

For example, in the United States, the Durbin Amendment may restrict or otherwise impact the way we do business or limit our ability to charge certain fees to customers.

Issuing Banks that are exempt from the Interchange Fee restrictions in the Durbin Amendment are able to access higher interchange rates on debit and prepaid card transactions.

As a result, to maximize our Interchange Fees in the United States, we generally only contract with Issuing Banks that are subject to this exemption from the Durbin Amendment when we provide services for debit and prepaid card programs.

While these Issuing Banks are currently exempt from the limitations on debit and prepaid card Interchange Fees, and we expect them to continue to be exempt, we can offer no assurance or guarantee that they will remain exempt, and various events outside our control may cause these Issuing Banks to become subject to the interchange fee limits under the Durbin Amendment.

In addition, new laws or regulations related to interchange fees may be enacted.

For example, Illinois passed the Interchange Fee Prohibition Act (“IFPA”), which prohibits the collection of debit and credit card interchange fees in Illinois for the portion of a card transaction that is attributable to sales taxes, excise taxes and gratuities if the merchant informs the acquiring bank of the amount of these taxes and gratuities.

The IFPA is expected to be effective on July 1, 2025, pending ongoing litigation.

While any potential reduction in our revenue from the new law in Illinois is not expected to be material, if any additional legislation regulating Interchange Fees is enacted in other jurisdictions, then the portion of our net revenue derived from Interchange Fees may be adversely affected.

Further, complying with a patchwork of state laws governing Interchange Fees may create compliance burdens for our Issuing Banks and us, which may adversely affect our business, financial condition, and results of operations.

Changes to the rules or practices set by Card Networks or our failure to comply with their rules and practices could adversely affect our business.

4 unchanged sentences

These additional fees are considered costs of revenue.

We could also be fined and our registrations or certifications could be suspended or terminated which could limit our ability to process transactions and could have a material adverse effect on our business and results of operations.

If we fail to comply with such Card Network rules, we could also be fined and our registrations or certifications could be suspended or terminated which could limit our ability to process transactions and could have a material adverse effect on our business and results of operations.

We are subject to anti-money laundering, anti-bribery and corruption (“AB&C”), sanctions, and similar laws, and non-compliance with such laws and regulations can subject us to criminal penalties or significant fines, adversely affect our business and reputation, or have other adverse consequences for us.

We can be held liable under AML, AB&C, sanctions, and similar laws for the corrupt or illegal activities of our third-party intermediaries and our employees, representatives, contractors, partners, and agents, even if we do not authorize such activities.

While we have programs and controls designed to comply with applicable AML, AB&C, and sanctions laws and regulations, we cannot assure you that our programs and controls will be effective in ensuring compliance and that none of our third-party intermediaries or employees, representatives, contractors, partners, and agents will take actions in violation of those controls and laws.

While we have programs and controls designed to comply with applicable AML, AB&C, and sanctions laws and regulations, we cannot guarantee that our programs and controls will be effective in ensuring compliance and that none of our third-party intermediaries or employees, representatives, contractors, partners, and agents will take actions in violation of those controls and laws.

Ours or these third parties’ failure to comply with these laws and regulations could result in a breach and/or termination of our agreements with Issuing Banks and customers and/or fines or penalties by governmental agencies, which would have a material adverse effect on our business, results of operations, and financial condition.

10 unchanged sentences

Governmental regulation of encryption technology and regulation of exports of encryption products, or our failure to obtain required approval for our products, when applicable, could adversely affect our international sales and net revenue.

If we fail to maintain an effective system of disclosure controls and procedures or internal control over financial reporting, or remediate our existing material weaknesses, our ability to report timely and accurate financial results or comply with applicable regulations could be impaired, and our business, operating results, and the price of our Class A common stock may be adversely affected.

If we fail to maintain an effective system of disclosure controls and procedures or internal control over financial reporting, our ability to report timely and accurate financial results or comply with applicable regulations could be impaired, and our business, operating results, and the price of our Class A common stock may be adversely affected.

The Sarbanes-Oxley Act of 2002 requires, among other things, that we maintain effective disclosure controls and procedures and to report any material weakness in our internal controls over financial reporting.

In the period ended March 31, 2023, we identified a material weakness related to the accounting for our acquisition of Power Finance , and, for the period ended December 31, 2023, we identified a material weakness related to information technology general controls .

See Part II, Item 9A “Controls and Procedures” for additional information about these material weaknesses.

In 2023, we identified a material weakness related to the accounting for our acquisition of Power Finance , and a material weakness related to information technology general controls .

While management deems these material weaknesses remediated as of the date of the filing of this Annual Report on Form 10-K, and no further material weaknesses in our disclosure controls or controls over financial reporting were identified in 2024, we could identify additional material weaknesses in the future.

The process of designing and implementing effective internal controls and disclosure controls is a continuous effort.

To maintain and improve the effectiveness of our disclosure controls and procedures and remediate the material weaknesses in our internal control over financial reporting, we have expended, and anticipate that we will continue to expend, significant resources, including technology- and accounting-related costs and significant management oversight.

If any of our controls and systems do not perform as expected, we may experience additional material weaknesses or we may be unable to remediate the existing material weaknesses.

To maintain and improve the effectiveness of our disclosure controls and procedures and internal control over financial reporting, we have expended, and anticipate that we will continue to expend, significant resources, including technology- and accounting-related costs and significant management oversight.

If any of our controls and systems do not perform as expected, we may experience material weaknesses.

In addition, testing and maintaining internal controls and disclosure controls may divert management’s attention from other matters that are important to our business.

2 unchanged sentences

Changes in financial accounting standards or practices may cause adverse, unexpected financial reporting fluctuations and affect our results of operations.

A change in accounting standards or practices may have a significant effect on our results of operations or financial condition and may affect our reporting of transactions completed before the change is effective.

New accounting pronouncements and varying interpretations of accounting pronouncements have occurred and may occur in the future.

Changes to existing rules or practices may adversely affect our reported results of operations or the way we conduct our business.

We prepare our consolidated financial statements in conformity with GAAP.

These principles are subject to interpretation by the Financial Accounting Standards Board (“FASB”), the SEC, and various bodies formed to interpret and create appropriate accounting principles and guidance.

Any new or amended accounting standards or practices may have a significant effect on our results of operations or financial condition and may impact the way we conduct our business.

Adoption of these types of accounting standards and any difficulties in implementation of changes in accounting principles, including the ability to modify our accounting systems, could cause us to fail to meet our financial reporting obligations, potentially resulting in regulatory discipline and weakening investors’ confidence in us.

Changes in tax laws or regulations could have a material adverse effect on our business, results of operations, and financial conditions.

The rules addressing taxation are constantly under review by the legislature, the Internal Revenue Service, the U.S.

Department of the Treasury, and state, local, and non-U.S.

tax authorities.

For example, beginning on January 1, 2022, the Tax Cuts and Jobs Act of 2017 eliminated the option to deduct research and development expenditures in the current period and requires taxpayers to capitalize and amortize these expenses.

However, recently proposed tax legislation, if enacted, would restore the ability to deduct currently domestic research and development expenditures through 2025 and would retroactively restore this benefit for 2022 and 2023.

While this change, has not currently had a material impact on us, if such provision is not deferred or repealed, we expect to have taxable income in periods earlier than we would have had in the absence of this change, which could adversely impact our financial condition, operating results, and cash flows.

On August 16, 2022, the Inflation Reduction Act of 2022 created an excise tax of 1% on stock repurchases from publicly traded US corporations, among other changes, which has resulted and is expected to continue to result in increased tax liabilities for us.

In addition, the Organization for Economic Cooperation and Development (the “OECD”) has proposed enacting a global minimum tax rate of at least 15% for multinationals with global revenue exceeding certain thresholds, known as “Pillar Two,” and many countries have adopted or intended to adopt these proposals.

We are currently evaluating the impact on our 2024 annual effective tax rate as we wait for additional guidance from the OECD and for additional countries to enact the Pillar Two legislation.

We are subject to income taxes in the United States and numerous foreign jurisdictions.

Our domestic and international tax liabilities are dependent upon the location of earnings among these different jurisdictions.

Any changes in tax legislation, regulations, policies, or practices in the jurisdictions in which we operate could increase our effective tax rate and materially increase the amount of taxes we owe, thereby negatively impacting our results of operations as well as our cash flows from operations.

A successful assertion by one or more states, or foreign jurisdictions, requiring us to collect sales, value added, or similar indirect taxes where we presently do not do so, or to collect more of such indirect taxes in a jurisdiction in which we currently do collect some indirect taxes, could result in substantial tax liabilities, including taxes on past sales, as well as penalties and interest.

Additionally, successful assertion by one or more states, or foreign jurisdictions, requiring us to collect sales, value added, or similar indirect taxes where we presently do not do so, or to collect more of such indirect taxes in a jurisdiction in which we currently do collect some indirect taxes, could result in substantial tax liabilities, including taxes on past sales, as well as penalties and interest.

Furthermore, compliance with changing tax laws and regulations could require us to make substantial changes to our business practices, allocate additional resources, and increase our costs, potentially negatively affecting our business, results of operations, and financial condition.

9 unchanged sentences

We have incurred substantial net operating losses (“NOLs”) and other tax attributes, including research & development (“R&D”) credits, during our history.

In general, under Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), a corporation that undergoes an “ownership change” (generally defined as a greater than 50-percentage-point cumulative change (by value) in the equity ownership of certain stockholders over a rolling three-year period) is subject to limitations on a company’s ability to utilize its NOLs and other tax attributes to offset taxable income.

In general, under Section 382 of the Internal Revenue Code of 1986, as amended, a corporation that undergoes an “ownership change” (generally defined as a greater than 50-percentage-point cumulative change (by value) in the equity ownership of certain stockholders over a rolling three-year period) is subject to limitations on a company’s ability to utilize its NOLs and other tax attributes to offset taxable income.

We have experienced ownership changes since inception and believe that our existing NOLs and other tax attributes, including R&D credit carryforward, will be subject to such limitation.

1 unchanged sentence

Our NOLs and other tax attributes may also be subject to limitations under state law.

There is a risk that due to legislative or regulatory changes, or other unforeseen reasons, our existing NOLs and other tax attributes could expire or otherwise be unavailable to offset future income tax liabilities.

For example, recently enacted California legislation limits the use of state NOLs for tax years beginning on or after January 1, 2024, and before January 1, 2027.

As a result of this or other legislative or regulatory changes, or other unforeseen reasons, our existing NOLs and other tax attributes could expire or otherwise be unavailable to offset future income tax liabilities.

Risks Relating to Intellectual Property

31 unchanged sentences

Even if such claims were not valid, defending them could be expensive and distract our management team.

We have agreed to defend, indemnify, and hold harmless certain of our customers and other partners from damages and costs arising from the infringement or claimed infringement by our products of third-party intellectual property rights.

We have agreed to defend, indemnify, and hold harmless certain of our customers and other counterparties from damages and costs arising from the infringement or claimed infringement by our products of third-party intellectual property rights.

The scope of these indemnity obligations varies.

Even if we are not a party to any litigation between a customer and a third party relating to infringement by our products, an adverse outcome in any such litigation could make it more difficult for us to defend our solutions against intellectual property infringement claims in any subsequent litigation where we are a named party.

Even if we are not a party to any litigation between a customer or other counterparty and a third party relating to alleged infringement in relation to our products, an adverse outcome in any such litigation could make it more difficult for us to defend our solutions against intellectual property infringement claims in any subsequent litigation where we are a named party.

Any of these results could harm our brand and adversely affect our results of operations.

11 unchanged sentences

Our directors, executive officers, and their affiliates, beneficially own in the aggregate 46.23% of the voting power of our capital stock as of December 31, 2024.

The holders of our Class B common stock collectively continue to control a majority of the combined voting power of our common stock and therefore control all matters submitted to our stockholders for approval and may continue to control such matters until the tenth anniversary of our initial public offering, when all outstanding shares of Class A common stock and Class B common stock will convert automatically into shares of a single class of common stock.

The holders of our Class B common stock collectively continue to control a majority of the combined voting power of our common stock and therefore control all matters submitted to our stockholders for approval and may continue to control such matters until the tenth anniversary of our IPO, when all outstanding shares of Class A common stock and Class B common stock will convert automatically into shares of a single class of common stock.

This concentrated control limits or precludes your ability to influence corporate matters for the foreseeable future, including the election of directors, amendments of our organizational documents, and any merger, consolidation, sale of all or substantially all of our assets, or other major corporate transaction requiring stockholder approval.

12 unchanged sentences

In addition, as of December 31, 2024, we had 14,962,000 option shares outstanding that, if fully vested and exercised, would result in the issuance of an equal number of shares of Class A or Class B common stock, as well as 33,806,000 total shares of Class A or Class B common stock subject to RSU awards.

We have also granted the Executive Chairman Long-Term Performance Award to our Executive Chairman and former Chief Executive Officer, which vests upon the satisfaction of a service condition and the achievement of certain stock price goals.

If the Executive Chairman Long-Term Performance Award vests and is exercised, your ownership will be diluted.

See Note 11 “Stock Incentive Plans” to our Consolidated Financial Statements for more information about the Executive Chairman Long-Term Performance Award.

Any Class A common stock or securities convertible into shares of our Class A common stock that we issue from time to time will dilute your percentage ownership.

42 unchanged sentences

In May 2023, our board of directors approved a $200 million share repurchase program for shares of our Class A common stock (the “2023 Share Repurchase Program”).

The actual timing, manner, number, and value of shares repurchased under the program will depend on a number of factors, including the availability of cash, the market price of our Class A common stock, general market and economic conditions, applicable requirements, and other business considerations.

The share repurchase program may be suspended, modified or discontinued at any time and we have no obligation to repurchase any amount of our Class A common stock under the program.

The share repurchase program has no set expiration date.

We intend to make all repurchases in compliance with applicable regulatory guidelines and to administer the plan in accordance with applicable laws, including Rule 10b-8 of the Exchange Act.

Repurchases under the 2023 Share Repurchase Program were completed as of March 31, 2024.

In May 2024, our board of directors approved another $200 million share repurchase program for shares of our Class A common stock (the “2024 Share Repurchase Program”), and in February 2025, our board of directors approved an additional $300 million share repurchase program for shares of our Class A common stock (the “2025 Share Repurchase Program,” and, together with the 2024 Share Repurchase Program, the “Active Share Repurchase Programs”).

The actual timing, manner, number, and value of shares repurchased under the Active Share Repurchase Programs will depend on a number of factors, including the availability of cash, the market price of our Class A common stock, general market and economic conditions, applicable requirements, and other business considerations.

The Active Share Repurchase Programs may be suspended, modified, or discontinued at any time and we have no obligation to repurchase any amount of our Class A common stock under the programs.

The Active Share Repurchase Programs have no set expiration date.

We intend to make all repurchases in compliance with applicable regulatory guidelines and to administer the plans in accordance with applicable laws, including Rule 10b-8 of the Exchange Act.

Other risks and uncertainties include, among other things, the market price of our stock prevailing from time to time, the nature of other investment opportunities presented to us, our financial performance and our cash flows from operations, and general economic conditions, which could adversely affect our results of operations and cash flows.

3 unchanged sentences

Our net revenue is impacted, to a significant extent, by general economic conditions, their impact on levels of spending by businesses and their customers, and the financial performance of our customers.

Supply chain disruption, a global labor shortage, increased inflation, and higher interest rates have adversely affected our business, results of operations, and business outlook and may continue to create uncertainty as to our and our customers’, partners’, and vendors’ financial results, operations, and business outlook.

Supply chain disruption, a global labor shortage, increased inflation, and higher interest rates have adversely affected our business, results of operations, and business outlook and may continue to create uncertainty as to our and our customers’, vendors’ and other counterparties’ financial results, operations, and business outlook.

We are unable to predict the impact that these and other macroeconomic factors may have or continue to have on our business and processing volumes, and on our future results of operations.

8 unchanged sentences

Our systems and operations are vulnerable to damage or interruption from earthquakes, fires, floods, power losses, telecommunications failures, strikes, health pandemics, such as the COVID-19 pandemic, and similar events.

For example, our corporate headquarters are located in the San Francisco Bay Area, a region known for seismic activity and wildfires, and a significant natural disaster in that area or any other location in which we have offices or facilities or employees working remotely, such as an earthquake, fire, or flood, could have a material adverse effect on our business, results of operations financial condition, and future prospects.

For example, our principle executive offices are located in the San Francisco Bay Area, a region known for seismic activity and wildfires, and a significant natural disaster in that area or any other location in which we have offices or facilities or employees working remotely, such as an earthquake, fire, or flood, could have a material adverse effect on our business, results of operations financial condition, and future prospects.

Our insurance coverage may be insufficient to comp ensate us for the losses that may occur.

3 unchanged sentences

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 1A. Risk Factors