Mike Milotich: I’ll maybe take the first one and then pass it to Simon for the second one. So our unit economics rate way, I would say, are very similar to our neobanking economics that we would have for other customers. Those use cases are tied together in many ways. And so our economics end up being quite similar. So it’s a very attractive use case for us in terms of how much we can earn on par with what we earn and many other use cases across our business.
Simon Khalaf: In terms of your two other questions which is, are we seeing renewed interest or opportunities in new banking and the third one was large FIs. So the answer on two is absolutely as we see some of the accelerated wage access players expanding from just being a credit union for the lack of a better term and to be effectively a national bank, we are a benefiter of that trend. And there’s a couple that are getting interesting traction. So that’s one. On the large financial institutions, we’re still on the same time line. I would say the commercial side of the large financial institutions are starting to probably accelerate the conversations with us. We’re still on the same timeline in terms of not that segment being material in terms of revenue until like the late ’25, ’26.
Operator: Our next question is from Cassie Chan with Bank of America.
Cassie Chan: So just want to ask any changes to your TPV growth expectations for the full year? I believe you previously said about 30%. Obviously, you’re running slightly higher than that. Should we expect it to remain relatively steady in ’24 and kind of associated take rate dynamics that we should expect there? And then on a related note, you mentioned the mix of TPV swinging more towards the power buy side which is impacting some of those net revenue figures and expectations for the full year. Is there any change in client behavior in the market that you’re seeing? And how should we think about the mix of Power by versus Manage by going forward?
Mike Milotich: So in Q1, our TPV growth was 33% but a little over 1 point of that is the leap year benefit. So we do still expect our TPV growth to be about 30%. Things are running a little bit better. But obviously, as we go through the year, as I mentioned in my remarks, this is the fourth straight quarter where we’ve grown 33% year-over-year. And so our comps will get tougher as the year goes on. So we don’t expect material changes from quarter-to-quarter but Q1 because the leap year will be a little bit on the higher end and we still expect our growth for the year to be about 30%, roughly. In terms of your second question on the shift to Power by, I think we’re not seeing a change in the behavior. It’s really related to two dynamics.
One is some of our very large customers who we are in a Power by relationship are growing very quickly. And so that’s one dynamic that’s happening. The second is that there are a lot more customers who are coming to us with what internally we call Power by Plus type constructs, where they want to maybe manage the network relationship themselves or have their own bank relationship, for example but they still want us to do everything else. So we’re still going to do a lot of program management activities for them. But the big difference from a P&L perspective between power by and manage buy is that when we’re managed by the network and bank costs are also running through our P&L versus in a Power by construct, we’re really just charging for our processing services and any other additional service we provide.
And so it ends up working out similar in gross profit, not exactly the same because obviously, when we manage everything, we add a little bit more value but the revenue difference is what’s so significant. And so it’s not really a change in behavior. It’s more just about the growth of customers and how people are approaching the marketplace.
Operator: Our final question is from Alex Markgraff with KeyBanc Capital Markets.
Alex Markgraff: Just wanted to come back to the expense management volume migration that you mentioned. I’m just curious, taking that in the broader context of Marqeta. What is the right way to think about that? And maybe another way to ask it is thinking about Marqeta wallet share or TPV share at customers today? Just curious if there are other opportunities in the future around this type of migration or if it was more of a onetime anomaly?
Mike Milotich: Yes. Maybe I’ll start and then Simon may have some comments as well. I think that if you think about the way our customers view it is as they sign a new customer and they’re in the expense management space, in particular and they are going to start offering a card solution. If they’re using more than one provider, typically, they’ll decide, okay which platform are going to put that customer on. They can start to diversify between 2 providers and maybe they’ve been doing that for the last couple of quarters and then they start to say, okay but now the customers I’m signing want these types of capabilities. And so maybe before it was a 70-30 split the last few quarters now, maybe I’m going to be 80-20 or 90-10 because a lot of the types of deals I’m signing are things that I think will be better served on one of the platforms or the other.
So it really is a dynamic environment, particularly in this space where many of these companies are growing quite quickly. These are not customers growing 5%, 10% a year. These are companies growing 30, 50, 50-plus type percentage growth rates. And so as they’re bringing on that much additional volume, where they decide to put that volume can be pretty impactful in terms of the share we capture. And so in terms of as we look ahead to your second question, I think what we believe is because of our focus and the comprehensive nature of our platform as well as the consistent reliability that we deliver, it should help us increase our lead over time. We should become more attractive to larger players who are looking to do a program that maybe is focused on engagement, as Simon talked about, rather than just loyalty in the co-brand space.
or if you’re an expense management player and you’re really thinking big, then that reliability and that focus in terms of the capabilities we can serve up becomes quite attractive as you get to even greater and greater scale. So there will also be new competitors, of course, along the way but we think that our position should benefit us more and more as time goes on.
