Shares of payment processor Marqeta tumbled 24% on Thursday after founder Jason Gardner announced plans to step down as CEO, and the company said it’s being cautious given the challenges in the economy and fintech sector.
Gardner started Marqeta in 2010 and grew it into a company that was worth over $16 billion after its stock market debut last year. However, the stock is more than 75% off its high, and the broader tech market swoon has pushed the company’s valuation below $5 billion.
“To maximize the next stage of growth, as we diversify the business and the capabilities we offer and the geographies we serve, we want to be very proactive and begin our succession planning process by looking for the next CEO to lead Marqeta,” Gardner told analysts on the earnings call. He said he’s staying on as executive chairman and will remain CEO as the company looks for a successor.
Marqeta sells payment technology that’s designed to detect potential fraud and ensure that money is properly routed. The company issues customized physical cards that look like credit and debit cards, which contractors from DoorDash or Instacart use to make point-of-sale purchases from restaurants or supermarkets.
For the second quarter, Marqeta beat estimates as revenue jumped 53% from a year ago to $187 million. But CFO Mike Milotich warned of economic challenges on the horizon. He said it’s “prudent to be cautious about the next several months.”
In particular, Milotich said many of the customers that signed up in the last year, including crypto companies, will ramp their business more slowly than previously expected. He also called out the “fintech-specific challenges with significant declines in valuation and increasing difficulties in raising capital.”
Still, analysts at KeyBanc Capital Markets lifted their price target to $12 from $11 and increased their revenue estimate for the year.
“Based on our research, we believe Marqeta has established a strong market presence with customers based on platform modularity, innovation velocity and roadmap, deep domain knowledge, fair and aligned contract terms, and robust commercialization capabilities with a general desire to expand international presence,” the KeyBanc analysts wrote in a note after results were released late Wednesday.