Ashwin Shirvaikar: Understood. Okay. And continuing along the same vein as you sort of think of OpEx categories where you have flexibility versus not in the short run to potentially ride out volume weakness. How should we think of the near-term flexibility that is in the model today?
Mike Milotich: Yes. I think again something we will go into extensively at Investor Day. The – if you look at our expenses, they are very concentrated. About 85% is driven by personnel and our technology costs, which is really our cloud and SaaS tools that we utilize to run our platform. So, I would say – so some of that will flex, particularly on the technology side, will flex with differences in volume over time, so some of those costs are variable in nature. But the biggest lever for us, 70% of our expenses are personnel related. So, if that would be the – if we were going to really slow down our expense growth, that is – we would slow down our hiring, for example.
Ashwin Shirvaikar: Understood. Got it. Thanks.
Operator: Thank you. Our next question comes from the line of Bryan Keane with Deutsche Bank. Please proceed with your question.
Bryan Keane: Hey guys. Thanks for taking the questions. Just thinking about overall TPV growth then, Mike, for the fourth quarter, it sounds like it moderated a little on October. Does that take the growth rate down maybe from prior expectations? And then just thinking the underlying gross profit growth in fourth quarter ex-Block entirely, how did that trend versus expectations in that with your guidance?
Mike Milotich: Yes. So, on the TPV side, I would say this is all kind of consistent with our expectations. I would say when we – I would say, as you all know, the last couple of months, there has been talk as we get later in the year, there could be some softness. So, that’s always something that we add sort of accounted for in our planning and forecasting. So, I would say what we are seeing in October is not necessarily a big surprise and is in line with what we were thinking. The underlying gross profit growth in Q4 is still quite strong. In fact, as I mentioned, we – our gross profit growth will be the same as Q3, and that’s with us absorbing the 3 percentage points impact from the Square renewal. So – and that’s being just offset by stronger performance elsewhere and a little bit higher incentives.
So, the underlying growth of the business outside of Block is actually quite good. And if you think about the impacts that I shared earlier related to the renewals we have done, and the Visa impact, those impacts I am giving you are at the total company level. When you think about that Block makes up about half our business, the impacts on the non-Block are about twice as big. So, the drag on our gross profit we see from the heavy renewal activity and the lease incentives is more than 10 percentage points. And so without that, our non-Block gross profit would be growing in the double digits. So, as we – as those impacts start to dissipate in the coming couple of quarters, combined with the tailwinds that should start to cook in – come in with bookings.
As Simon talked about, we expect that to start ramping as we move through 2024. We expect that, that non-Block business to start performing quite well.
Bryan Keane: Got it. Helpful. And then just an update on when the rollout of the credit product will start hitting the P&L and having more of a material impact.
Simon Khalaf: Sure. It’s Simon. Thanks for the question. So, we do anticipate that we will take a couple of programs live in the first half of 2024. So, we are very close, but we will not launch them until the first half, but will not materially impact our revenue until these program ramps, so tail end of ‘24 and ‘25. But we will go live with a couple of programs in the first half of 2024.
Bryan Keane: Okay. Thanks for the update.
Simon Khalaf: Thanks Bryan.
Operator: Thank you. Our next question comes from the line of Chris Kennedy with William Blair. Please proceed with your question.
Chris Kennedy: Good afternoon. Thanks for the questions. Can you give us an update on your international business?
Simon Khalaf: Absolutely. I can give you that, and thank you for the question, Chris. So, the volume in – outside the U.S. is actually growing faster than the U.S. It’s 60% year-over-year. , it’s a smaller base. And I would say that there is a couple of things. I mean we are certified to operate in more than 40 countries. And we do have customers that are U.S.-based and expanding in international markets. And we also are live and launched in Brazil. So, we do expect the international business to continue to grow. And I would say – the last thing I would say is about 40% to – like low-40% of our bookings in Q3 were outside the United States. So, that is a good indicator to the continued growth.
Chris Kennedy: Great. Thanks for the additional detail. And then just one follow-up, can you talk about kind of the revenue mix and maybe we will learn about this on Thursday from the managed by Marqeta versus the powered by Marqeta model? Thank you.
Mike Milotich: Yes. So, I don’t want to feel from the anticipation on Thursday. Yes, there will be – we will talk about that in the Investor Day presentation. So, I think when you look at – the important thing, just the one thing, I guess I will say related to your question is when it comes to managed by, the important thing is really to look at – it’s a smaller impact of revenue, a much bigger impact to gross profit because we don’t have the bank and network fees associated with that volume. So, although the price itself is relatively low compared to managed by, when you start looking at the gross profit take rate, so the gross profit we make for every dollar of volume, it becomes much closer to our managed by business. And so we still really like that business a lot because it can scale quite well and be very accretive.
Chris Kennedy: Okay. Thanks for taking the questions.
Simon Khalaf: Thank you.
Operator: Thank you. Our final question comes from the line of James Faucette with Morgan Stanley. Please proceed with your question.
Meryl Thomas: Hi. This is Meryl Thomas on for James. I wanted to ask about some of your embedded finance customers and the growth within those relationships. Just how have you seen those customers, I guess grow in size and scope since you first went out with the RFP, just wanted to get a better standing for the existing customer growth there?
Simon Khalaf: Sure. Thanks for the question. So, the – we are very bullish on the embedded finance market. And I would say there is many reasons for that. One is the diverse use cases. So, we see traction across many dimensions. The first one is, and I think we have talked about it, is the accelerated wage access. That seems like a use case that can cross multiple industry verticals and also can spill over from traditional employment to labor marketplaces. The second one is point-of-sale lending. I mean BNPL kind of demonstrated the way. And many, I would say, large retailers kind of want to do it on their own, that can translate into solutions using Marqeta. Co-brands are something like your traditional co-brands that are fully integrated into the experience versus obviously using another app and a brand you are not familiar with is something that is very interesting.
