Table of intellectual property on our behalf to enter into agreements acknowledging that all works or other intellectual property generated or conceived by them on our behalf are our property, and assigning to us any rights, including intellectual property rights, that they may claim or otherwise have in those works or property, to the extent allowable under applicable law.Contents

We intend to pursue additional intellectual property protection to the extent we believe it would be beneficial and cost effective. Despite our efforts to protect our intellectual property rights, they may not be respected in the future or may be invalidated, circumvented, or challenged. In addition, the laws of various foreign countries where we operate may not protect our intellectual property rights to the same extent as laws in the United States. We expect that infringement claims may increase as the number of products and competitors in our market increase. In addition, to the extent that we gain greater visibility and market exposure as a public company, we face a higher risk of being the subject of intellectual property infringement claims from third parties. Any third-party intellectual property claims against us could significantly increase our expenses and could have a significant and negative impact on our business, results of operations and financial condition.

From time to time, we also incorporate certain intellectual property licensed from third parties, including under certain open source licenses. Even if any such third-party technology did not continue to be available to us on commercially reasonable terms, we believe that alternative technologies would be available as needed in every case.

~~Sales~~See the section titled “Risk Factors—Risks Relating to Intellectual Property” for a more comprehensive description of risks related to our intellectual property and ~~Marketing~~

Our marketing and business development teams work together closely, under the umbrella of one, closely aligned go-to-market, or GTM, organization. Our GTM organization is responsible for how we position ourselves within the industry, growing awareness and adoption of our platform and accelerating customer acquisition. We deploy a range of marketing strategies to drive brand awareness and adoption, including public relations, advertising campaigns, and generating leads and opportunities through direct marketing (online and offline).

Our business development teams handle both sales and account management support.Our GTM organization delivers specific verticalized expertise for growth, core, enterprise, and strategic accounts. We also support our prospects and customers with industry subject matter expertise through our industry partnerships and engineering teams. This enables Marqeta to employ strategies specific to the industry, vertical, use-case and customer, to convert interest into customers, capture market share and drive revenue. Our thoughtful, multi-stage engagement process sets the stage for enduring enterprise partnerships with our customers.

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We believe that highly responsive and effective support and education are an extension of our brand and are core to ensuring we are reducing time to revenue when signing a new customer and building and maintaining trust. We firmly believe in the importance of partnering with our customers, made possible by close cooperation between customers and our customer success and delivery operations and bank partnership team.

proprietary rights.

Research and Development

Our research and development efforts focus on building enterprise-grade product and service capabilities for our ~~customers. Technical direction is derived from our understanding of the payments ecosystem~~customers and our partners, the evolving opportunity and needs of our customer base, and the developer community. This focus enables the development of a robust, global platform to support a wide array of products, services, and use cases.their cardholders. Our design, product, engineering, and customer success teams collaborate to ~~connect~~design, build, deploy and monitor our platform. We enable our customers to build solutions on our platform, which connects to our Issuing Banks and Card Networks. ~~Our technical operations team also works to ensure the successful deployment and monitoring of our platform.~~ Software development is primarily executed by our team of professionals across design, product management, and engineering disciplines. We intend to continue to invest in our research and development capabilities to extend our ~~platform.~~platform offerings.

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Government Regulation

We are subject, directly, or indirectly through our relationships with our Issuing Banks, customers, or Card Networks, to a number of ~~state, federal, and foreign~~ laws and regulations. The regulatory environment in which we operate is rapidly evolving, and the most significant government regulations that ~~involve matters central~~impact our business are discussed below. For more information on the risks relating to our ~~business. These laws and regulations involve privacy, data protection, information security, intellectual property, competition, and other subjects.~~regulatory environment, see the section titled “Risk Factors—Risks Relating to Regulation.”

Many of the laws and regulations that we are subject to are still evolving and being tested in courts and could be interpreted in ways that could harm our business. In addition, the application and interpretation of these laws and regulations often are uncertain, particularly in the new and rapidly evolving industry that we operate in. Further, these laws and regulations are sometimes ambiguous or inconsistent, and the extent to which they apply to us is at times unclear. As global laws and regulations have continued to develop and evolve rapidly, it is possible that we may not be, or may not have been, compliant with each such applicable law or regulation or that we may in the future be required to obtain licenses and registrations. Any actual or alleged failure to comply with applicable laws or regulations may result in, among other things, private litigation, regulatory investigations and enforcement actions, sanctions, civil and criminal liability and constraints on our ability to continue to operate.

~~As we expand our geographical reach and our offerings, we may become subject to additional regulations, in the United States and internationally.~~

~~Dodd-Frank Wall Street Reform and~~ Consumer Protection ~~Act~~

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 or the Dodd-Frank Act, effected comprehensive revisions to a wide array of federal laws governing financial institutions, financial services and financial markets. Among its most notable provisions is the creation of(the “Dodd-Frank Act”) created the Consumer Financial Protection Bureau ~~or CFPB,~~(the “CFPB”) which ~~is charged with regulating~~regulates consumer financial products or services and which assumes much of the rulemaking authority under federal laws affecting the extension of credit. In addition to rulemaking authority over several enumerated federal consumer financial protection laws, the CFPB is authorized to issue rules prohibiting unfair, deceptive, or abusive acts or practices by persons offering consumer financial products or services and their service providers and has authority to enforce these consumer financial protection laws and CFPB rules. The CFPB has not defined what is a consumer financial product or service but has indicated informally that, in some instances, small businesses may be covered under consumer protection.

services. Due to our relationships with Issuing Banks and Card Networks, we may be subject to direct or indirect supervision and examination by the ~~CFPB in connection with our platform and certain of our products and services.~~CFPB. CFPB rules, examinations, investigations, and enforcement actions against us or our Issuing Banks, Card Networks, or customers may require us to adjust our activities and may increase our compliance costs.

~~In addition, the Durbin Amendment~~We are subject to ~~the Dodd-Frank Act provides that Interchange Fees that an Issuing Bank or Card Network receives or charges for debit transactions are regulated by~~Section 5 of the Federal ~~Reserve~~Trade Commission Act, which prohibits unfair and ~~must be “reasonable~~deceptive acts or practices in or affecting commerce, and proportional” to the cost incurred by the card issuer in authorizing, clearing, and settling the transaction. Card Network fees may not be used directly or indirectly to compensate Issuing Banks in circumvention of the interchange transaction fee restrictions. While we only partner with Issuing Banks who are exempt from the interchange fee restrictions in the Durbin Amendment to provide services, we remain sensitive to changes in the regulation of Interchange Fees. The implementationSection 1031 of the Dodd-Frank Act, ~~is ongoing, and as a result, its overall impact remains unclear. Its provisions, however, are sufficiently far reaching that it is possible that we could be further directly~~which prohibits unfair, deceptive, or ~~indirectly impacted.~~

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abusive acts or practices in connection with any consumer financial product or service.

Privacy, Data Protection, and Information Security Regulations

We provide services that are subject to various ~~state, federal, and foreign~~ laws and regulations relating to privacy, data protection, and information security, including, among others, the Gramm-Leach Bliley Act, the EU General Data Protection Regulation, and the California Consumer Protection Act. We maintain privacy policies and terms of service, which describe our practices concerning the use, transmission, and disclosure of certain information. For additional information about laws and regulations relating to privacy, data protection, and information security, see the section titled “Risk Factors—Risks Relating to Regulation—Stringent and changing laws, regulations and industry standards related to privacy and data protection could adversely affect our ability to effectively provide our services ~~and could result in claims or fines, harm our results of operations, financial condition, and future prospects, or otherwise harm our business.~~”

Additionally, our platform hosts, transmits, processes, and stores payment card data and is therefore required to comply with the PCI DSS. As a result, we are subject to PCI DSS audits and must comply with related security requirements. See the section titled “Risk Factors—Risks Relating to Our Business and Industry—Our business relies on our relationships with Issuing Banks and Card Networks, and if we are unable to maintain these relationships, our business may be adversely affected. Further, any changes to the rules or practices set by Card Networks, including changes in Card Network fees or Interchange Fees, or our handling of such fees, could adversely affect our business.”

Association and Card Network Rules

Our Issuing Banks must comply with the bylaws, regulations, and requirements that are set forth by the Card Networks, including the PCI DSS and other applicable data security program requirements. In providing services through our platform, ~~we are also subject to such requirements. To provide payment processing services,~~ we are certified and registered with certain Card Networks as a processor for member institutions. As such, we are subject to applicable Card Network rules that could subject us to fines or penalties for certain acts or omissions. The Card Networks routinely update and modify their requirements and we, in turn, must work to comply with such updates to continue processing transactions on their networks.

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Further, we are subject to network operating rules promulgated by the National Automated Clearing House Association relating to payment transactions processed on our platform using the Automated Clearing House Network and to various federal and state laws regarding such operations.

Prepaid, Debit, and Credit Card Regulations

The Durbin Amendment to the Dodd-Frank Act directs the Federal Reserve Board to regulate debit card Interchange Fees so that they are “reasonable and proportional” to the cost incurred by the card issuer with respect to the transaction. We generally partner with Issuing Banks who are exempt from the Interchange Fee caps in the Durbin Amendment to provide MxM services for prepaid and debit card programs. We continue to monitor proposed changes to the Durbin Amendment.

The card programs that we manage for our customers are subject to various federal and state laws and regulations, including the Credit Card Accountability, Responsibility, and Disclosure Act of 2009 and the CFPB’s Regulation E, which impose requirements on general-use prepaid cards, store gift cards, and electronic gift certificates. The CFPB also regulates prepaid accounts, including certain accounts that are capable of being loaded with funds and whose primary function is to conduct transactions with multiple, unaffiliated merchants, at ATMs, or for person-to-person transfers. These regulations include, among other things, disclosure of fees to the consumer prior to the creation of a prepaid account; liability limits and error-resolution requirements; regulation of prepaid accounts with overdraft and credit features; and the submission of prepaid account agreements to the CFPB and the publication of such agreements to the general public.

~~These laws and regulations~~We are ~~evolving, unclear, and sometimes inconsistent and~~ subject to ~~judicial~~various federal consumer protection regimes as a result of our credit platform and ~~regulatory challenge~~relationship with originating Issuing Banks, including, among others:

•the Equal Credit Opportunity Act and ~~interpretation,~~Regulation B promulgated thereunder, which prohibit creditors from discriminating against credit applicants on the basis of race, color, sex, age, religion, national origin, marital status, the fact that all or part of the applicant’s income derives from any public assistance program, or the fact that the applicant has in good faith exercised any right under the Federal Consumer Credit Protection Act or any applicable state law;

•the Fair Credit Reporting Act, as amended by the Fair and ~~therefore~~Accurate Credit Transactions Act, and Regulation V promulgated thereunder, which promote the ~~extent these~~accuracy, fairness, and privacy of information in the files of consumer reporting agencies;

•the Truth-in-Lending Act and Regulation Z promulgated thereunder, which require certain disclosures to consumers regarding the terms and conditions of loans and credit transactions;

•the Military Lending Act and similar state laws, ~~and rules apply to, and impact, us is in flux. The extensive nature of these regulations may result in additional compliance~~which provide disclosure requirements, interest rate limitations, substantive conduct obligations, and ~~expense for our business.~~prohibitions on certain behavior relating to loans made to covered borrowers, which include both servicemembers and their dependents; and

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the Servicemembers Civil Relief Act and similar state laws, which allows active duty military members to suspend or postpone certain civil obligations so that the military member can devote his or her full attention to military duties.

Anti-Money Laundering

Although we are not a “money services business” or otherwise subject to ~~AML~~anti-money laundering (“AML”) registration requirements under U.S. federal or state law, we are subject to certain AML laws and regulations in ~~the United States, the United Kingdom, the European Union, and other~~various jurisdictions. In the United States, the Currency and Foreign Transactions Reporting Act, ~~which is also~~ known as the Bank Secrecy Act ~~or BSA,~~(the “BSA”) and ~~which was~~ amended by the USA PATRIOT Act of 2001, contains a variety of provisions aimed at fighting terrorism and money laundering. Among other things, the BSA and implementing regulations issued by the U.S. Treasury Department require certain financial institutions to establish AML programs, to not engage in terrorist financing, to report suspicious activity, and to maintain a number of related records.

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Due to our relationships with Issuing Banks that are directly regulated for AML purposes, we have implemented an AML program designed to prevent our platform from being used to facilitate money laundering, terrorist financing, and other illicit activity. When providing program management services, we ~~ensure that~~design our AML program ~~complies with~~to meet the requirements of our Issuing Banks. Our programs are also designed to prevent our platform from being used to facilitate activity in violation of applicable sanctions laws and regulations, including conducting business in specified countries or with designated persons or entities, including those on lists promulgated by the U.S. Department of the Treasury’s Office of Foreign Assets Controls and equivalent foreign authorities. Our AML compliance program includes policies, procedures, reporting protocols, and internal controls to guard against money laundering, terrorist financing, and other illicit activity, including the designation of a compliance officer in the United States and in other jurisdictions to oversee our AML compliance program, and it is designed to assist in managing risk associated with money laundering and terrorist financing.

Anti-Bribery Laws

We are subject to anti-corruption and anti-bribery and similar laws, such as the U.S. Foreign Corrupt Practices Act of 1977, as amended ~~or the~~ ~~FCPA,~~(the “FCPA”), the U.S. domestic bribery statute contained in 18 U.S.C. § 201, the U.S. Travel Act, the U.K. Bribery Act 2010, and other anti-corruption and anti-bribery laws in countries where we conduct activities.

The FCPA includes anti-bribery and accounting provisions enforced by the Department of Justice and the Securities and Exchange Commission ~~or the SEC.~~(the “SEC”). The statute has a broad reach, covering all U.S. companies and citizens doing business abroad, among others, and defining a foreign official to include not only those holding public office but also local citizens affiliated with foreign government- run or owned organizations. The statute also requires maintenance of appropriate books and records and maintenance of adequate internal controls.

Other

We are subject to examination by our Issuing Banks’ regulators and must comply with certain regulations to which ~~our sponsor~~these banks are subject, as applicable. For instance, due to our relationships with certain Issuing Banks and certain customers, we may be subject to indirect supervision and examination by the Federal Deposit Insurance Corporation (the “FDIC”), state banking regulators (such as the California Department of Financial Protection and Innovation), and the Office of the Comptroller of the Currency in connection with our platform and certain of our products and services. We are also subject to audit by certain Issuing Banks. Further, certain of our customers are financial institutions or non-bank regulated entities and, as a result, we may be indirectly subject to examination and obligated to assist those customers in complying with certain regulations to which they are subject or with responses to audits of such customers.

International Regulation

The conduct of our business and the use of our products and services outside the United States are subject to various foreign laws and regulations administered by government entities and agencies in the countries and territories where we operate and where our customers and their cardholders use our products and services. For instance, we are subject to processing fee and transaction fee regulation where our cards are used and may in the future be subject to Interchange Fee regulations in other countries where our cards are used.

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~~Security, Privacy, and Data Protection~~

~~Trust is important for our relationship with our customers, and we take significant measures to protect the privacy and security of their data and the data of their cardholders.~~

~~Security~~

We devote considerable resources to our information security program, which is dedicated to ensuring the highest confidence in our custodianship of our customers’ data. Our security program is aligned to ISO 27000 standards and is regularly audited and assessed by third parties. In addition, our security program has achieved several internationally-recognized certifications and industry standard audited attestations.

Our security program focuses on preserving the confidentiality, integrity, and availability of the personal information and other confidential information of our customers and our customers’ cardholders. To this end, our team of security professionals, working in partnership with peers across our company, work to identify and mitigate risks, implement means to address identified risks, and continue to evaluate ways to improve our information security. These steps include data encryption in transit and at rest, network security, classifying and inventorying data, limiting and authorizing access controls, and multi-factor authentication for access to systems with data. We also employ regular system monitoring, logging, and alerting to retain and analyze the security state of our corporate and production infrastructure. In addition, we take steps to help ensure that appropriate security measures are maintained by third-party vendors we use, which may include conducting security reviews and audits.

Privacy and Data Protection

The privacy of our customers’ data and our customers’ cardholders’ data is important to our continued growth and ~~success.~~success, and we take significant measures to protect the privacy and security of such data. Privacy and data protection is a shared responsibility among all our employees. We also have a privacy team that builds and executes on our privacy program, including support for data protection and privacy-related requests.

We are committed to complying with applicable privacy and data protection laws. We monitor guidance from industry and regulatory bodies and update our platform and contractual commitments accordingly.

We maintain a privacy ~~policy~~notices that ~~describes~~describe how we collect, use, and share personal information relating to our customers and we implement appropriate contractual provisions relating to our processing of cardholders’ personal information.

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Our Employees and Human Capital Resources

As of December 31, ~~2022,~~2023, we had a total of ~~958~~771 employees and we supplement our workforce with contractors and consultants. To our knowledge, none of our employees is represented by a labor union or covered by a collective bargaining agreement. We have not experienced any work stoppages, and we consider our relations with our employees to be good.

Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing, and integrating our existing and prospective employees. ~~We believe our culture helps us hire and retain best-in-class talent, as we empower employees to do the best work of their lives.~~

~~Diversity, Equity, and Inclusion~~

A key focus of our human capital management approach is our commitment to advancing diversity, equity, and inclusion. At Marqeta, we believe that creating a truly inclusive workplace means investing in company-wide programs, policies, and practices centered on equity. We strive to build a culture where everyone belongs and is empowered to bring their authentic selves to work every day, regardless of race, ethnicity, gender identity, age, religion, sexual orientation, physical ability, background or any other human qualifier.

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~~Compensation, Benefits, and Wellness~~

We believe we offer a robust, competitive compensation and benefits package that supports our employees’ overall health and financial wellness. To ensure alignment with our short- and long-term objectives, our compensation programs include base pay, and cash and equity incentives. The principal purposes of our equity incentive plans are to attract, retain and reward personnel through the granting of share-based compensation awards which allows us to align employees’ interests with our shareholders and to allow our employees to share in increases in the value of our equity.

Corporate Information

We were incorporated in 2010 under the name Marqeta, Inc. as a Delaware corporation. We completed our initial public offering (“IPO”) in June 2021 and our Class A common stock is listed on the Nasdaq Global Select Market ~~or Nasdaq,~~(“Nasdaq”), under the symbol “MQ.” Our principal executive offices are located at 180 Grand Avenue, 6th Floor, Oakland, CA 94612, and our telephone number is ~~(888) 462-7738.~~(877) 962-7738.

Available Information

Our website is located at www.marqeta.com, and our investor relations website is located at www.investors.marqeta.com. Copies of our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to these reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are available, free of charge, on our investor relations website as soon as reasonably practicable after we file such material electronically with or furnish it to the SEC. The SEC also maintains a website that contains our SEC filings. The address of the site is www.sec.gov. We use our www.investors.marqeta.com and www.marqeta.com websites, as well as our blog posts, press releases, public conference calls, webcasts, our ~~Twitter~~X feed (@Marqeta), our Instagram page (@lifeatmarqeta), our Facebook page, and our LinkedIn page, as a means of disclosing material nonpublic information and for complying with our disclosure obligations under Regulation FD. The contents of our websites are not intended to be incorporated by reference into this Annual Report on Form 10-K or in any other report or document we file with the SEC, and any references to our websites are intended to be inactive textual references only.

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Item 1A. Risk Factors

Investing in our Class A common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information in this Annual Report on Form 10-K and our ~~consolidated financial statements~~Consolidated Financial Statements and the related notes and the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” before making a decision to invest in our Class A common stock. Our business, results of operations, financial condition, and prospects could also be harmed by risks and uncertainties not currently known to us or that we do not currently believe to be material. If any of the risks actually occur, our business, results of operations, financial condition, and prospects could be adversely affected. In that event, the trading price of our Class A common stock could decline, and you could lose part or all of your investment.

Risk Factors Summary

Our business is subject to numerous risks and uncertainties that you should consider before investing in our company. The following is a summary of some of these risks and uncertainties. This summary should be read together with the more detailed description of each risk factor below.

•We have experienced rapid ~~net revenue~~ growth ~~in recent periods~~ and our ~~recent net revenue~~past growth rates may not be indicative of ~~our~~ future ~~net revenue growth.~~

•growth rates. If we fail to manage ~~our~~ growth effectively, ~~we may be unable to execute~~ our business ~~plan or maintain high levels of customer service and satisfaction, and our business, results of operations,~~ and financial ~~condition could~~results may be adversely affected.

•Future net revenue growth depends on our ability to attract new customers and retain existing ~~customers, drive increased TPV on our platform, and attract new~~ customers in a cost-effective manner.

•We participate in markets that are competitive and continuously evolving, and, if we do not compete successfully, ~~with established companies and new market entrants,~~ our business, results of operations, financial condition, and future prospects ~~could~~may be ~~materially and~~ adversely affected.

•We currently generate significant net revenue from a small number of customers, including our largest customer, Block, and the loss of any of these significant relationships or decline in net revenue from these customers, including as a result of renewals on less favorable terms, could adversely affect our business ~~results of operations,~~and financial ~~condition, and future prospects.~~

•~~Our recent growth, ongoing changes in our industry, and our transaction mix make it difficult to forecast our net revenue and evaluate our business and future prospects.~~results.

•We have a history of net losses ~~we anticipate increasing operating expenses in the future,~~ and we may not be able to achieve or sustain profitability.

•WeOur results may ~~experience significant annual or quarterly fluctuations in~~fluctuate significantly and may not fully reflect the underlying performance of our ~~results of operations due to a number of factors that make our future results~~business, making it difficult to ~~predict~~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 ~~cause our results of operations to fall below analyst or investor expectations.~~decline.

•~~Our business relies~~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. ~~Further, any changes~~

•If our credit platform is inaccurate or does not perform as intended, 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 ~~rules or practices set by Card Networks, including changes in Card Network fees or Interchange Fees, or our handling~~outcome of such ~~fees,~~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 ~~affect our business.~~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 orof your investment to decline.

•The dual class structure of our common stock has the effect of concentrating voting control with those stockholders who hold shares of our Class B common stock, including our directors, executive officers, and their affiliates. As a result of the dual class structure of our common stock, the trading price of our Class A common stock may be depressed.

•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.

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Risks Relating to Our Business and Industry

We have experienced rapid ~~net revenue~~ growth ~~in recent periods~~ and our ~~recent net revenue~~past growth rates may not be indicative of future growth rates. If we fail to manage growth effectively, our ~~future~~business and financial results may be adversely affected.

While we have experienced rapid net revenue ~~growth.~~

growth in prior periods, our net revenue decreased in the year ended December 31, 2023. Our total net revenue was $676.2 million, $748.2 million, ~~$517.2 million~~ and ~~$290.3~~$517.2 million for the years ended December 31, 2023, 2022, and 2021, respectively, a decrease of (10)% and ~~2020, respectively,~~ an increase of 45% ~~and 78%~~ from the prior years, respectively. Our TPV was $166.3 billion, $111.1 billion and $60.1 billion for the years ended December 31, 2022, 2021, and 2020, respectively, an increase of 50% and 85% from the prior years, respectively. We may not be able to sustain our net revenue and TPV growth rates, or the growth rate of related key operating metrics. We believe our net revenue growth depends on several factors, including, but not limited to, our ability to:

•acquire new customers and retain existing customers on favorable terms;

•achieve widespread acceptance and use of our platform and the products and services we offer, including in markets outside of the United States;

•increase ~~the use of our platform and~~ our offerings, TPV, and the number of customers and transactions on our platform;

•effectively scale our ~~operations;~~operations, including successfully integrating acquired businesses and technology;

•expand our product and service offerings;

•diversify our customer base;

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

•~~hire and retain talented employees at all levels of our business;~~

•maintain the security and reliability of our platform;

•adjust for the impact of the anticipated accounting treatment of our customer agreements and the risk that such accounting treatment may be subject to further changes or developments;

•adapt to changes in laws and regulations applicable to our business;

•adapt to changing macroeconomic conditions and evolving conditions in the payments industry; and

•successfully compete against established companies and new market entrants.

Net revenue, TPV or key operating metrics for any prior quarterly or annual period should not be relied on as an indication of our future performance. If our net revenue and TPV growth rates decline, we may not achieve profitability as expected, and our business, financial condition, results of operations, and the price of our Class A common stock would be adversely affected.

If we fail to manage our growth effectively, we may be unable to execute our business plan or maintain high levels of customer service and satisfaction, and our business, results of operations, and financial condition could be adversely affected.

We have experienced, and expect to continue to experience, rapid growth, which has placed, and may continue to place, significant demands on our management and our operational and financial resources. For example, our workforce has grown to 958 employees as of December 31, 2022 from 789 employees as of December 31, 2021. We have offices in the United States, United Kingdom, or U.K., and Australia, and legal entities in Canada, Singapore and Brazil, and we plan to continue to expand our international footprint and operations into other countries in the future. We have also historically experienced significant growth in the number of customers using our platform, the number of card programs and solutions we manage for our customers, and TPV on our platform. Our TPV was $222.3 billion, $166.3 billion, and $111.1 billion for the years ended December 31, 2023, 2022, and 2021, respectively, an increase of 34% and 50% from the prior years, respectively.

~~To manage~~Net revenue and TPV for any prior period should not be relied on as an indication of our future performance. If our TPV and net revenue growth rates decline or continue to decline, we may not achieve profitability as expected, and our business, financial condition, results of operations, and ~~personnel~~the price of our Class A common stock would be adversely affected.

Our growth wehas placed, and may continue to place, significant demands on our management and our operational and financial resources. We will need to continue to grow and improve our operational, financial, and ~~management~~information technology controls, and our reporting systems and procedures. We will require significant capital expenditures and the allocation of valuable management resources to expand our systems and ~~infrastructure before~~infrastructure. If we fail to manage our ~~net revenue increases without any assurances that our net revenue will increase.~~

We also believe that our corporate culture has been and will continue to be a valuable component of our success. We have moved to a flexible-first approach to work, meaning our employees are able to choose whether they work at home or, depending on where they live, in one of our office locations. As we expandgrowth effectively, our business and ~~mature as a public company, we~~financial results may find it difficult to maintain our corporate culture while managing this growth as our employees and other service providers increasingly work from geographic areas across the globe. Failure to manage our anticipated growth and organizational changes in a manner that preserves the key aspects of our culture could reduce our ability to recruit and retain personnel, innovate, operate effectively, and execute on our business strategy, potentially adversely affecting our business, results of operations, and financial condition.

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Further, as more of our employees are located in new jurisdictions, we will be required to invest resources and to monitor continually changing local regulations and requirements, and we may experience a resulting increase in our expenses, decrease in employee productivity, and changes in our corporate culture.

We have in the past, and may in the future, experience high attrition and turnover rates across the Company. The loss of these employees may lead to a decrease in institutional knowledge which may adversely affect our ability to expand our business.

In addition, as we expand our business, it is important that we continue to maintain a high level of customer service and satisfaction. As our customer base continues to grow, we will need to expand our account management and customer service teams and continue to scale our platform. If we are not able to continue to provide high levels of customer service, our reputation, as well as our business, results of operations, and financial condition, could be adversely affected.

Future net revenue growth depends on our ability to attract new customers and retain existing ~~customers, drive increased TPV on our platform, and attract new~~ customers in a cost-effective manner.

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

If we fail to attract new customers, including customers in new use cases, industry verticals, and ~~adversely affected, as could~~geographies, and to expand our platform in a way that serves the ~~market price~~needs of ~~our Class A common stock. Our net revenue growth substantially depends on our ability~~these customers, and to ~~maintain and~~onboard them quickly, then we may not be able to continue to grow our ~~relationships with existing customers and increase the volume~~net revenue.

Table of ~~transactions processed on our platform.~~Contents

To grow our business and extend our market position, we intend to focus on educating potential customers about the benefits of our platform, expanding the capabilities of our platform and our product offerings, and bringing new products and services to market to increase market acceptance and use of our platform. If our prospective customers do not recognize, or our existing customers do not continue to recognize, the need for and benefits of our platform and our products, they may decide to adopt alternative products and services to satisfy their business needs. 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. In addition, ourOur 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 ~~level of~~ processing volume and revenue growth that we seek to achieve. ~~Customers may terminate or reduce their use~~Some of our ~~platform~~customer contracts provide for a termination clause that allows our customers to terminate their contract at any number of reasons, including their level of satisfaction with our products and services, the effectiveness of our support services, our pricing and the pricing and quality of competing products or services, or the effects of global economic conditions.time following a limited notice period.

The loss of customers or reductions in their processing volumes, particularly any loss of or reductions by Block, may adversely affect our business, results of operations, and financial condition. Our growth may decline in the future if customers are not satisfied with our platform or our ability to meet our customers’ needs and expectations. The complexity and costs associated with switching processing volume to our competitors may not ultimately prevent a customer from switching to another provider. To achieve continued growth, we must not only maintain our relationships with our existing customers, but also encourage them to renew their contracts with us and to increase adoption and usage of our products. For example, customers can have multiple card programs on our platform across different use cases and geographies. If customers do not renew their contracts or broaden their use of our services, or do not renew on favorable terms, our growth may slow or stop and our business, results of operations, and financial condition may be materially and adversely affected. WeHowever, 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.

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In addition to capitalizing on the potential net revenue embedded within our existing customer base, we must continue to attract new customers to promote growth. Our growth depends on developing new use cases and industry verticals across new geographies. We may face additional challenges that are unique to the markets we target and we may not be able to acquire new customers in a cost-effective manner. To reach new customers, we may need to spend significantly more on sales and marketing to generate awareness of our platform and educate potential customers on the value of our platform. We may also need to adapt our existing technology and offerings or develop new or innovative capabilities to meet the particular needs of customers in these new use cases or new markets, and there can be no assurance that we will be successful in these efforts. We may not have adequate financial or technological resources to develop effective and secure products and services that will satisfy the demands of customers in these new markets. When a new customer launches with us, if we are slow to onboard them onto our platform or are slow to expand their use cases, our net revenue from the customer may be limited. 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 new customers, and to onboard them quickly, then we may not be able to continue to grow our net revenue.

We participate in markets that are competitive and continuously evolving, and, if we do not compete successfully, ~~with established companies and new market entrants,~~ our business, results of operations, and financial condition, and future prospects ~~could~~may be ~~materially and~~ adversely affected.

We operate in a highly competitive and dynamic ~~industry.~~ ~~We were founded in 2010,~~industry and we provide a single, global, cloud-based, open-API platform for modern card issuing and payment processing. We face competition along several dimensions, including providers with legacy technology platforms, such as Fidelity National Information Services (FIS), Fiserv, and Global Payments (TSYS); legacy API-based providers, such as Galileo, i2c, and Visa DPS; and emerging providers, such as Adyen and Stripe. We believe the principal competitive factors in our market include industry expertise, platform and product features and functionality, ability to build new technology and keep pace with innovation, scalability, extensibility, product pricing, security and reliability, brand recognition and reputation, agility, and speed to market. 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. We face competition along several dimensions, including providers with legacy technology platforms, such as Fidelity National Information Services (FIS), Fiserv, and Global Payments (TSYS); modern API-based providers, such as Galileo, i2c, and Visa DPS; and emerging providers, such as Adyen and Stripe. We believe that the principal competitive factors in our market include: pricing; multiple program types (debit, prepaid, credit); multinational reach; complete solutions at scale; flexibility and configurability; reliability; compliance solutions; program management; brand recognition and reputation; and industry expertise and customer service. Moreover, as we expand the scope of our platform, we may face additional competition.

Many of our existing competitors have, and some of our potential competitors could have, substantial competitive advantages such as greater brand name recognition, longer operating histories, larger sales and marketing budgets and resources, more established relationships with vendors or customers, greater customer support resources, greater resources to make acquisitions and investments, lower labor and development costs, larger and more mature intellectual property portfolios, and other substantially greater ~~financial, technical, and other~~ resources.

Such competitors ~~with greater financial and operating resources~~ may be able to respond more quickly and effectively than we can to new or changing opportunities, technologies, standards, customer requirements, or regulatory developments.

If we are unable to successfully compete, our growth could slow or decline, which would materially and adversely affect our business, results of operations, financial condition, and future prospects.

We currently generate significant net revenue from a small number of customers, including our largest customer, Block, and the loss of any of these significant relationships or decline in net revenue from these customers, including as a result of renewals on less favorable terms, could adversely affect our business, results of operations, financial condition, and future prospects.

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A small number of customers account for a large percentage of our net revenue. ~~For~~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, 2023, 2022, ~~2021~~ and ~~2020,~~2021, Block accounted for 68%, 71%, ~~69%~~ and ~~70%~~69% of our net revenue, respectively. ~~Although we expect the~~

The net revenue from ~~our largest customer will decrease~~Block decreased over ~~time~~the second half of 2023 as a percentage of our total net revenue, ~~as we generate more~~due to the terms of the August 2023 Block Amendment. 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. The Block Agreement automatically renews thereafter for successive one-year periods. 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 ~~from other customers,~~period-over-period comparisons through the first half of 2024.

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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. ~~Additionally, consolidation within our customers’ industries has accelerated in recent years, which has in turn increased the~~The concentration of our customers, and these trends may continue. For example, Block, our largest customer, announced in January 2022 that it had completed its acquisition of our customer Afterpay Limited, which has and may continue to increase thea large percentage of our net revenue ~~represented by our largest customer. Furthermore, in the event that~~with a limited number of customers exposes us disproportionately to any of ~~our largest~~those customers choosing to stop using our platform or ~~use~~using our platform in a reduced capacity, reducing their processing volume with us, or renegotiating, terminating, or failing to renew their agreements with us, or renewing their agreements with us on different terms. For example, the August 2023 Block Amendment renewed our agreement with Block for the Cash App program on different terms, which reduced reported net revenue. Should any of those events occur, our business, results of operations, and financial condition ~~would~~may be adversely affected. ~~In addition, any publicity associated with the loss of any of these customers may adversely affect our reputation and could make it more difficult to attract and retain other customers.~~

Our customer contracts generally do not contain long-term commitments from our customers, and our customers may be able to terminate their agreements with us prior to expiration of the contract’s term. The current term of our agreement with Block for Cash App expires in March 2024 and the current term of our agreement with Block for Square Card expires in December 2024, and each agreement automatically renews thereafter for successive one-year periods. Furthermore, while certain of our Customer contracts have minimum volume commitments, others do not. There can be no assurance that we will be able to continue our relationships with our Customers on the same or more favorable terms in future periods or that our relationships will continue beyond the terms of our existing contracts with them. In addition, the processing volume from Block has in the past fluctuated from period to period and may fluctuate or decline in future periods. Our net revenue and results of operations could suffer if, among other things, Block or any of our other largest customers do not continue to use our products, use fewer of our products, reduce their processing volume with us, or renegotiate, terminate or fail to renew, or to renew on similar or favorable terms, their agreements with us.

~~Our recent growth, ongoing changes in our industry, and our transaction mix make it difficult to forecast our net revenue and evaluate our business and future prospects.~~

We launched our platform publicly in 2014, and much of our growth has occurred in recent periods. This recent growth makes it difficult to effectively assess or forecast our future prospects, particularly in an evolving industry. Our modern card issuing platform represents a substantial departure from the traditional card issuing methods and the payment processing solutions offered by traditional providers. While our business has grown rapidly, the market for our platform, products, and services may not develop as we expect or in a manner that is favorable to our business. As a result of ongoing changes in our evolving industry, our ability to forecast our future results of operations and plan for and model future growth is limited and subject to a number of uncertainties.

In particular, forecasting our future results of operations can be challenging because our net revenue depends in part on our customers’ end users, and our transaction mix adds further complexity. Our transaction mix refers to the proportion of signature debit versus PIN debit transactions and consumer versus commercial transactions that make up our TPV. 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 analysts, causing our business to suffer and our Class A common stock trading price to decline.

We have a history of net losses ~~we anticipate increasing operating expenses in the future,~~ and we may not be able to achieve or sustain profitability.

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We have incurred significant net losses since our inception, including net losses of $223.0 million, $184.8 million, ~~$163.9 million~~ and ~~$47.7~~$163.9 million for the years ended December 31, 2023, 2022, ~~2021~~ and ~~2020,~~2021, respectively. As of December 31, ~~2022~~2023 and December 31, ~~2021,~~2022, our accumulated deficit was approximately ~~$602.2~~$825.2 million and ~~$417.5~~$602.2 million, respectively. We expect to continue to incur net losses for the foreseeable future and we may not achieve profitability. We anticipate our operating expenses to continue to increase in the foreseeable future as we hire additional personnel, adjust compensation packages to hire new or retain existing employees, expand our operations and infrastructure, and continue to enhance and expand our platform, ~~and develop and expand its capabilities, expand our~~ products, and ~~services, and expand and improve our APIs.~~services. These initiatives may be more costly than we expect and may not result in increased net revenue. Further as we expand our offerings to additional markets, our offerings in these markets may be less profitable than the markets in which we currently operate.

In addition, as a public company, we have incurred, and we will continue to incur, additional significant legal, insurance, accounting, and other expenses that we did not incur as a private company.

From time to time, we may make decisions that may reduce our short-term operating results if we believe those decisions will improve the experiences of our customers and their end users, ~~and other users of our products and services,~~ which we believe will improve our operating results over the long term. 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.

WeOur results may ~~experience significant annual or quarterly fluctuations in~~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 ~~operations due to a number~~financial analysts or investors, our stock price and the value of ~~factors that make our future results difficult to predict and~~your investment could ~~cause our results of operations to fall below analyst or investor expectations.~~decline.

Our ~~annual or quarterly~~ 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 as well as:~~

•~~demand for our platform, products, and services by our customers;~~

•~~our success in engaging and retaining existing customers and attracting new customers;~~

•~~changes in transaction mix or volume processed on the different Card Networks used and the resultant mix of interchange and transaction fees earned;~~

•~~our success in increasing our customers’ processing volumes;~~

•~~demand for our customers’ products by their customers;~~

•~~the timing and success of new capabilities by us or by our competitors or any other change in the competitive landscape of our market;~~

•changes to the terms of and performance under our customer contracts, including concessions, or payments to customers resulting from our failure to meet certain service level commitments, which are generally based on our platform uptime, API response time, and/or transaction success rate;

•~~reductions in pricing as a result of renegotiations with our larger customers;~~

•the amount and timing of operating expenses and capital expenditures, as well as entry into operating leases, that we may incur to maintain and expand our business and operations and remain competitive;

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

•~~changes in customers’ processing volumes resulting from seasonal fluctuations;~~

•~~security breaches, and technical difficulties involving our platform or interruptions or disruptions of our platform;~~

•~~adverse litigation judgments, other dispute-related settlement payments, or other litigation-related costs;~~

•~~regulatory fines;~~

•~~changes in, and continuing uncertainty in relation to, the legislative or regulatory environment;~~

•~~the timing and extent of changes in interchange rates set by Card Networks;~~

•~~legal and regulatory compliance costs in new and existing markets;~~

•~~the amount of compensation for and timing of hiring new employees, and the impact of the increased labor market competition in the United States;~~

•~~the rate of expansion and productivity of our sales force;~~

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•the timing and extent of increases of grants or vesting of equity awards to employees, directors, or consultants and the recognition of associated share-based compensation expenses and related payroll tax;

•~~fluctuations in foreign currency exchange rates;~~

•~~fluctuations in interest rates;~~

•~~increased inflation;~~

•~~costs and timing of expenses related to the acquisition of businesses, talent, technologies, or intellectual property, including potentially significant amortization costs and possible write-downs;~~

•~~the impact of tax charges as a result of non-compliance with, or changes to, federal, state, local, or other tax regulations;~~

•~~changes to generally accepted accounting standards in the United States;~~

•~~health pandemics, such as the COVID-19 pandemic, influenza, and other highly communicable diseases or viruses; and~~

•general economic conditions in either domestic or international markets, including conditions resulting from geopolitical uncertainty and instability or war, including the significant military action against Ukraine launched by Russia.

~~Any one or more of the factors above may result in significant fluctuations in our results of operations.~~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 ~~our~~ investors and financial analysts, the trading price of our Class A common stock could be adversely ~~affected.~~affected and the value of your investment could decline.

~~Systems failures and interruptions in the availability of~~Forecasting our ~~platform may adversely affect our business,~~future results of operations can be challenging because of such fluctuations and ~~financial condition.~~

~~Our continued growth~~because our net revenue depends on the efficient operation of our platform without interruption or degradation of performance. Our business involves processing large numbers of transactions, enabling the movement of large sums of money on an aggregate basis, and the management of large amounts of data. System outages or data loss could have a material adverse effectin part on our ~~business,~~customers’ end users. Our transaction mix adds further complexity. Our transaction mix refers to the proportion of signature debit versus PIN debit transactions and consumer versus commercial transactions that make up our TPV. 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 financial condition. We may experience service interruptions, data loss, outages, and other performance problems due to a variety of factors, including infrastructure changes or failures, introductions of new functionality, human or software errors, capacity constraints, denial-of-service attacks, phishing attacks, ransomware attacks, or other security-related incidents, including as retaliation against financial institutions for sanctions imposed against Russia as a result of the significant military action against Ukraine launched by Russia. In some instances, we may not be able to identify the cause or causes of these performance problems immediately or in short order, and we may face difficulties remediating and otherwise responding to any such issues, including resuming operations in a timely manner for our customers and preventing data loss.

Further, our customer contracts typically provide for service level commitments. If we suffer extended periods of downtime of our platform or are otherwise unable to meet these commitments, we are contractually obligated to provide service credits, which may be based on a percentage of the processing volume on the day of an incidentforecasts or the ~~revenue we earned from our customer on the day~~expectations of ~~an incident,~~investors or based on our overall monthly transaction success rate and the incentive payments or fees from that month. We have experienced incidents requiring us to pay service level credits and other customer service concessions in the past. In addition, the performance and availability of the cloud-based solutions that provide cloud infrastructures for our platform is outside of our control and, therefore, we are not in full control of whether we meet our service level commitments. As a result, we have experienced, and expect to continue to periodically experience, unpredictable outages of the services provided by these cloud infrastructure providers. Our business, results of operations, and financial condition has in the past been affected and could in the future be adversely affected if we suffer unscheduled downtime that exceeds the service level commitments we have made to our customers. Any extended service outages could adversely affectanalysts, causing our business to suffer and ~~reputation and erode customer trust.~~

~~Any of the above circumstances or events may harm~~ our ~~reputation, cause customers~~Class A common stock trading price to terminate their agreements with us, impair our ability to renew contracts with customers and grow our customer base, subject us to financial penalties and liabilities, and otherwise adversely affect our business, results of operations, and financial condition.decline.

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We may not be able to maintain the level of service uptime and performance needed by our customers, especially as TPV increases. If we are unable to maintain sufficient processing capacity, customers could face longer processing times or even downtime. Furthermore, any efforts to further scale our platform or increase its complexity to handle a larger number or more complicated transactions could result in performance issues, including downtime. If our platform is unavailable or if customers are unable to access our platform within a reasonable amount of time, or at all, our business would be adversely affected. Our customers rely on the full-time availability of our platform to process payment transactions, and an outage on our platform could impair the ability of our customers to operate their business and generate revenue. Therefore, any system failure, outage, performance problem, or interruption in the availability of our platform would negatively impact our brand, reputation, and customer satisfaction, and could subject us to financial penalties and liabilities.

~~Our business relies~~ on our relationships with Issuing Banks and Card Networks, and if we are unable to maintain these relationships, our business may be adversely affected. Further, any changes to the rules or practices set by Card Networks, including changes in Card Network fees or Interchange Fees, or changes in our handling of such fees could adversely affect our business.

We rely on our relationships with ~~financial institutions, including~~ Issuing Banks and Card Networks ~~that~~to provide certain services ~~that are an important part~~for 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 ~~our product offering. We~~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. ~~We partner with Issuing Banks, who issue payment cards to our customers and settle payment transactions on such cards.~~

A significant portion of our payment transactions are settled through ~~one~~a small number of Issuing ~~Bank, Sutton Bank.~~Banks. For the years ended December 31, 2023, 2022, and 2021, ~~and 2020,~~76%, 82%, ~~90%~~ and ~~96%~~90%, 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 ~~three~~ other ~~U.S.~~ Issuing Banks that we currently contract with. Switching ~~a significant portion or all of our~~ processing volume to another Issuing Bank ~~including contracting with additional Issuing Banks,~~ would take time and could result in additional costs, ~~including increased operating expenses, and termination fees under~~which may adversely affect our agreement with Sutton Bank if unilaterally terminated by us without Sutton Bank's consent. We could also lose customers if we do not have another Issuing Bank who is willing to support such customers. Diversifying our contractual relationships and operations with Issuing Banks may increase the complexity of our operations and may also lead to increased costs.business.

We also have agreements ~~directly~~ 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. ~~For certain~~The timing and extent of amendments or new contracts related to our volume incentive arrangements with ~~an annual measurement~~Card Networks could result in incentive payments that are recorded in a current period ~~the one-year period may not align with our fiscal year.~~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 ~~pay these fees directly to~~manage the relationship with the Card Networks directly, our reported net revenue may decrease.

~~Unusual fluctuations in~~ 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 ~~fees can occur in~~going forward which has the ~~quarter in which volume thresholds are achieved as higher incentive rates are applied~~effect of reducing reported net revenue.

We intend to ~~volumes over~~expand and deepen our relationships with Issuing Banks and Card Networks, and diversifying these contractual relationships and operations may increase the ~~entire measurement periods, which can span 6 or 12 months, which can affect~~complexity of our ~~financial results for a given quarter or fiscal year. If we were~~operations and may also lead to ~~lose our certification with a Card Network, we could lose customers if they needed to switch to a different Card Network, for which we did not have a certification.~~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 ~~services,~~platform, impose additional costs or requirements on us, or give preferential treatment to competitive services, including their ~~own services.~~own. If we are unsuccessful in establishing, renegotiating, or maintaining relationships with Issuing Banks and Card Networks, our business may be adversely affected.

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~~Our agreements with Issuing Banks~~Performance issues, systems failures, and Card Networks require us to comply with Card Network rules. The Card Networks set these rules and have discretion to interpret the rules and change them at any time. For additional information about regulations relating to Card Network rules, see the section titled “Risk Factors—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. ~~Changing international, federal, state, and local laws, as well as changing regulatory enforcement policies and priorities, including changes that may result from changes~~interruptions in the ~~political landscape,~~availability of our platform may ~~negatively impact our business, results of operations, financial condition, and future prospects.~~” The termination of the card association registrations held by us or any of the Issuing Banks or any changes to these Card Network rules or how they are interpreted could have a significant impact on our business and financial condition. Any changes to or interpretations of the Card Network rules that are inconsistent with the way we or our Issuing Banks currently operate may require us to make changes to our business that could be costly or difficult to implement. If we fail to make such changes or otherwise resolve the issue with the Card Networks, the Card Networks could charge us additional fees or prohibit us from processing transactions. We have been charged such additional fees in the past, and expect to continue to be charged such fees in the future. These additional fees are considered costs of revenue. While changes in the Card Network rules usually relate to pricing, other types of changes could require us to take certain steps to comply or adapt.

~~Unfavorable conditions in our industry or the global economy could~~ adversely affect our business, results of operations, and financial condition.

Our ~~revenue is impacted, to a significant extent, by general economic conditions, their impact~~continued growth depends on ~~levels of spending by businesses and their customers, and~~ the ~~financial performance~~efficient operation of our customers. Our business, the industry, and our customers’ businesses are sensitive to macroeconomic conditions. Our net revenue is dependent on the usage of our platform, which in turn is influenced by the volume of business our customers conduct. 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. Weak economic conditions or a significant deterioration in economic conditions, including the current inflationary environment and the possibility of a recession could result in a reduced volume of business for our customers and prospective customers, and demand for, and use of, our platform, products, and services may decline. If spending by their customers declines, our customers could process fewer payments with us or, if our customers cease to operate, they could stop using our platform and our products and services altogether. Moreover, if the financial condition of a customer deteriorates significantly or a customer becomes subject to a bankruptcy proceeding, we may not be able to recover amounts due to us from the customer.

Furthermore, weak economic conditions may make it more difficult to collect on outstanding accounts receivable. If, as a result of a weak economy, our customers reduce their use of our platform, or prospective customers delay adoption or elect not to adopt our platform, our business, results of operations, and financial condition could be adversely affected. We are unable to predict the impact of other macroeconomic factors, including the military action against Ukraine launched by Russia, supply chain shortages, higher inflation rates, higher interest rates, and other global economic conditions, will have on our processing volumes, and on our future results of operations. A deterioration in macroeconomic conditions could increase the risk of lower consumer spending, consumer and merchant bankruptcy, insolvency, business failure, higher credit losses, foreign currency fluctuations, or other business interruption, which may adversely impact our business. We continue to monitor the situation and may take actions that alter our operations and business practices as may be required by federal, state, or local authorities or that we determine are in the best interests of our customers, vendors, employees, and us.

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Performance issues in our platform or our platform’s transaction processing could diminish demand for our platform or products, adversely affect our business and results of operations, and subject us to liabilities.

platform. Any significant disruption, ~~in,~~outage, data loss, or errors in service on our platform, including events beyond our control, such as infrastructure changes or failures, or human or software errors could have a material and adverse effect on our business ~~results of operations,~~and financial ~~condition,~~condition. We have experienced such performance incidents in the past and ~~future prospects.~~ expect that we will continue to periodically experience such performance issues in the future.

Our platform is designed to process a high number of transactions and deliver reports and other information related to those transactions at high processing speeds. ~~Our customers use~~We have in the past and may in the future experience errors, inaccuracies, or omissions in our processing, reconciling, or reporting of transactions. The risk of performance issues has increased in recent periods due to the significant increase in our TPV and increases further with new product launches and geographical expansion. We release regular updates to our platform, ~~for important aspects of their businesses. Our~~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, ~~use reports~~or other partners or vendors, or other claims, regulatory fines, or proceedings. It could also damage ours and information from our platform in part to settle card transactions with the Card Networks. Any performance issues, including errors, defects, or disruptions in our platform or our platform’s transaction processing, could damage our customers’ businesses and, in turn, hurt our brand and ~~reputation~~reputation.

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The performance and ~~erode~~availability of the data centers and cloud-based solutions that provide computing and storage infrastructure for our platform is 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. We have experienced, and expect to continue to periodically experience, outages of the services provided by these providers.

If we are not able to maintain the level of service uptime and performance needed by our customers, they could face longer processing times or downtime as a result. If customers are unable to access our platform within a reasonable amount of time, or at all, we may not be able to meet the service level commitments typically provided for in our customer ~~trust.~~contracts and we would be contractually obligated to provide service level credits. We have experienced incidents, including incidents outside our control, and expect we may experience incidents in the future requiring us to pay service level credits and other customer service concessions.

In addition, ~~in the event of damage or interruption,~~ our insurance policies may not adequately compensate us for any losses that we may ~~incur.~~incur as a result of damage or interruption. Further, we are continuing to refine our enterprise resilience functions such as business continuity, crisis management, and disaster recovery. Our disaster recovery plan has not been tested under actual disaster conditions, and we may not have sufficient capacity to recover all data and services in the event of an outage. ~~The risk of~~Therefore, any performance ~~issues has increased in recent periods due to the significant increase in our TPV.~~

~~This risk of performance issues further increases with new product launches and geographical expansion. We release regular updates to our platform, which have~~issue, systems failure, outage, or interruption in the past contained, and may in the future contain, undetected errors, failures, vulnerabilities, and bugs. Additionally, we have in the past and may in the future experience errors, inaccuracies, or omissions in our processing, reconciling or reporting of transactions. For instance, in the third quarter of 2022, we incurred losses related to the processing of a limited number of international transactions in excess of customer authorized amounts. Further, we may be unable to replenish the supply of payment cards issued to our customers before it is depleted, such that our customers could run out of cards for a short period of time. Real or perceived errors, failures, or bugs in our platform or our platform’s transaction processing could result in negative publicity, loss of or delay in market acceptanceavailability of our platform or our products, loss of competitive position, lower customer retention, claims by customers, Card Networks, Issuing Banks, or other partners or vendors for losses sustained by them, or other claims, regulatory fines, or proceedings. In such an event, we may be required, or may choose, for customer relations or other reasons, to expend additional resources to help correct the problem. In addition, we may not carry insurance sufficient to compensate us for any losses that may result from claims arising from defects or disruptions in our platform or operations. As a result, our reputation and our brand could be harmed, andwould adversely affect our business, ~~results of operations,~~ and could subject us to financial ~~condition may be adversely affected.~~penalties and liabilities.

~~We, our customers, our vendors, and others who use or interact with our platform obtain and process a large amount of sensitive data.~~ Any real or perceived improper or unauthorized use of, disclosure of, or access to ~~such~~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.

Our operations depend on receiving, storing, ~~processing,~~transmitting, and ~~transmitting~~otherwise processing sensitive information pertaining to our business, employees, customers, and customers’ end users. The confidentiality, ~~security,~~integrity, and ~~integrity~~availability of such ~~sensitive business~~ information residing on or ~~otherwise~~ processed using our systems is important to our business. ~~Any unauthorized access, intrusion, infiltration, network disruption, denial~~While we have an internal security program, the success of ~~service, infection~~such program will be impacted by ~~ransomware, viruses,~~new and existing vulnerabilities, human error, resource constraints, the efficiency of our processes and procedures, and management of gaps in controls. The integrity of our internal security program is also subject to changing standards or interpretations of standards as new frameworks are introduced and existing frameworks evolve.

We use vendors to perform certain services for us, in some cases involving management or other ~~malicious code, or~~processing of sensitive data, and these vendors face similar ~~incident could disrupt~~security threats to the ~~integrity, continuity,~~confidentiality, security, and ~~trust~~integrity of ~~our~~their systems ~~or data, or the systems or data of our customers or vendors. These incidents are often difficult to detect~~ and the ~~threats are constantly evolving, and we or our customers or vendors may face difficulties or delays in identifying or otherwise responding to any incident.~~

data they process for us. Unauthorized parties have attempted and ~~may~~will continue to attempt to gain access to our platform, systems, or facilities, and those of our customers, partners, and vendors ~~through various means~~using a variety of methods such as denial-of-service attacks, phishing attacks and ~~with increasing sophistication.~~ ~~Currently, there is a threat~~other forms of ~~attacks against U.S. financial institutions as retaliation against financial institutions for sanctions imposed against Russia as a~~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 ~~the significant military action against Ukraine launched by Russia. These events could create costly claims~~our and ~~litigation, significant financial liability, regulatory investigations or proceedings, increased regulatory scrutiny, financial sanctions, a loss of confidence in~~ our ~~ability to serve customers and cause current or potential customers to choose another service provider, all of which could~~customers’ data, have a ~~material adverse~~significant impact on our ~~business. In addition, cybersecurity researchers have warned of the possibility of~~reputation as a ~~broader increase in cyberattack activity in connection~~trusted brand, and expose us to legal risk and potential liability, and costs associated with ~~this military action. We expect to continue to invest significant resources to maintain and enhance our information security and controls and to investigate and~~

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~~remediate any security vulnerabilities.~~

Although we believe that we maintain a robust data security program, including a responsible disclosure program, and that none of the incidents that we have encountered to date have materially impacted us, we cannot be certain that the security measures and procedures we have in place to detect security incidents and protect sensitive data, including protection against unauthorized access and use by our employees, will be successful or sufficient to counter all current and emerging risks and threats facing us and our customers and vendors. The impact of a material event involving our systems or data, or those of our customers or vendors, could have a material adverse effect on our business, results of operations, and financial condition.

~~Under Card Network rules and our contracts with our Issuing Banks,~~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. Additionally, if~~expenses, in addition to the potential for fines, penalties, and other liabilities.

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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 ~~own confidential business information were improperly acquired~~customers, and our vendors. We and our vendors may be unable to anticipate, react to, remediate, or otherwise ~~disclosed~~address any actual or ~~processed, our business could be materially and adversely affected. The reliability and~~attempted security ~~of our platform is a core component of our business. Any perceived~~breach or ~~actual breach of security or~~other security incident ~~regardless of how it occurs~~in a timely manner, or ~~the extent of the~~implement adequate preventative measures. Any security breach or incident ~~could significantly disrupt~~involving our ~~operations, result in unauthorized~~systems or ~~unlawful access to, misuse, disclosure, loss, acquisition, corruption, unavailability, alteration, modification~~data, or ~~destruction~~those of our ~~and our customers’ data, including sensitive and proprietary information, personal data and personal information,~~customers or vendors, could have a ~~significant impact~~material adverse effect on our business, results of operations, and financial condition. Even the perception of inadequate security may damage our reputation asand negatively impact our ability to gain new customers and retain existing customers. We expect to invest significant resources to maintain and enhance our information security program and controls in compliance with industry standards and applicable laws and regulations; however, if we experience resourcing constraints, our investments and the result of such investments may be delayed.

We have adopted a ~~trusted brand, cause~~flexible-first work environment, and expect to continue to be subject to challenges and risks associated with having a remote workforce. For example, our employees are accessing our servers remotely through home or other networks to perform their job responsibilities. Such security systems may be less secure than those used in our offices, which may subject us to ~~lose existing customers, prevent us from obtaining new customers, require~~increased security risks, and expose us to ~~expend significant funds~~risks of data or financial loss and associated disruptions to ~~remedy problems caused by the~~our business operations. In addition, any inability to track and manage hardware and software assets across our remote workforce could lead to loss of intellectual property, a security breach or incident, and unauthorized access to ~~implement measures to prevent further breaches~~our systems and ~~incidents,~~applications, potentially adversely affecting our business and expose us to legal risk and potential liability, including those resulting from governmental or regulatory investigations, claims, demands, investigations, and litigation initiated by private parties, including class action litigation, and costs associated with remediation, such as fraud monitoring, card reissuance, and forensics. Our vendors face similar security risks, and any actual or perceived security breach or incident at a vendor providing services to us or our customers could have similar effects.financial condition.

While we maintain cybersecurity insurance, ~~subject to applicable deductibles and policy limitations,~~ our insurance may be insufficient to cover all liabilities incurred by ~~such attacks.~~ a cybersecurity breach or incident. We cannot be certain that our insurance coverage will be adequate for ~~privacy, information security, and data protection~~ liabilities actually incurred, that insurance will continue to be available to us on economically reasonable terms, or at all, or that an insurer will not deny coverage as to any future claim. ~~The successful assertion of one or more large claims against us that exceed~~If a claim exceeds available insurance coverage or if the ~~occurrence~~conditions of ~~changes in~~ our insurance policies ~~premiums, or deductibles could have a material adverse effect on~~change, our business ~~results of operations, and~~or financial ~~condition.~~condition could be adversely affected.

Our business depends on a strong and trusted brand, and any failure to maintain, protect, enhance, and market our brand would hurt our business.

Negative publicity about us or our industry could adversely affect our business, results of operations, financial condition, and future prospects. We have developed a strong and trusted brand that has contributed significantly to the success of our business. We believe that maintaining and promoting our brand in a cost-effective manner is important to ~~achieving widespread acceptance~~the continued growth of our ~~platform~~business.

Any failure to maintain high quality customer support, or a market perception that we do not maintain high quality customer support, could erode customer trust and ~~the products~~adversely affect our reputation, business, results of operations, and ~~services~~financial condition. If we ~~offer, expanding~~do not devote sufficient resources or are otherwise unsuccessful in assisting our ~~base of~~customers effectively, it could adversely affect our ability to retain existing customers and ~~end users, and increasing~~could prevent prospective customers from adopting our ~~TPV.~~platform.

Harm to our brand can arise from many other sources as well, including ~~failure by us or our partners and vendors to satisfy expectations of service and quality,~~ inadequate protection or misuse of sensitive information, compliance failures, ~~and claims,~~ litigation, and other claims, and misconduct by our ~~vendors~~employees, contractors, or ~~other counterparties.~~vendors. We may also be the target of incomplete, inaccurate, and misleading or false statements about our company and our business that could damage our brand and deter customers from adopting our services. As a result, our business, results of operations, financial condition, and future prospects would be materially and adversely affected.

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.

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~~If we fail~~Our failure to ~~offer high-quality customer support,~~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 ~~reputation will suffer.~~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; customer acceptance; technological outages or failures; increased regulatory scrutiny; 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.

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

The success of our ~~customers depend~~credit platform depends on our ~~customer support team~~ability to ~~assist them in launching~~effectively manage related risks for us and ~~deploying~~ 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 ~~effectively, help them resolve issues quickly, and provide ongoing support. Our direct, ongoing interactions~~in accordance with ~~our customers help us tailor offerings to them at scale and in the context~~their credit policies. Numerous factors, many of ~~their usage. Our customer support team also helps increase awareness and usage~~which are outside of our control, can adversely affect the evaluation of credit risk. The information we use in our credit platform ~~while helping customers address inquiries~~may be inaccurate or incomplete as a result of error or fraud, both of which may be difficult to detect and ~~issues.~~avoid. If a fraudulent applicant is approved based on our credit risk model, we ~~do not devote sufficient resources or are otherwise unsuccessful in assisting our customers effectively, it~~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 ~~retain existing~~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 ~~and could prevent prospective~~may stop marketing their card programs, potential customers ~~from adopting our platform. We~~ may be ~~unable~~less likely to ~~respond quickly enough~~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 ~~accommodate short-term increases in demand for~~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 ~~support. Increased demand for customer support, without corresponding net revenue,~~relationships and reputation may be adversely affected, which could ~~increase costs and adversely affect~~have a material adverse effect on our business, results of operations, and financial condition. ~~Our sales~~

The Issuing Banks face the risk that our customers’ cardholders will default on their payment obligations, creating the risk of potential charge-offs. While we are ~~highly dependent on~~not contractually obligated to pay for any credit-related delinquencies or charge-offs, we have in the past and may in the future make payments to our ~~business reputation~~Issuing Banks in association with our relationship with them, regardless of whether we were compelled to under law or contract. Incremental charge-offs may also affect the Issuing Bank’s future credit decisioning which could impact the volume of transactions processed and on positive recommendations from customers. Any failure to maintain high quality customer support, or a market perception that we do not maintain high quality customer support, could erode customer trust andthe number of cards issued. This may adversely affect our ~~reputation,~~ business ~~results of operations,~~ and ~~financial condition.~~

In addition, as we continue to grow our operations and reach a larger and increasingly global customer base, we need to be able to provide efficient customer support that meets the needs of customers on our platform globally and at scale. The number of customers and end users using our platform, TPV, the products and services we offer, and usage of our platform by customers have all grown significantly and this has put additional pressure on our support organization. If we are unable to provide efficient customer support globally and at scale, our ability to grow our operations may be adversely affected and we may need to hire additional support personnel, potentially adversely affecting our results of operations.

If we fail to anticipate, adapt to, ~~rapid technological changes~~or keep pace with new technologies and develop ~~enhancements~~new services and ~~new~~ capabilities for our platform, our ~~ability to remain competitive~~business and future growth could be ~~impaired.~~harmed.

We compete in an industry that is characterized by rapid technological changes, frequent introductions of new products and services, and evolving industry standards and regulatory requirements. Our ability to attract new customers and increase net revenue ~~from customers~~ will depend in significant part on our ability to adapt to industry standards, anticipate trends, and continue to enhance our platform and introduce new products and capabilities on a timely and secure basis to keep pace with technological developments and customer expectations. For example, it is important for us to implement tools to support the operational efficiency of our platform. If we are unable to provide enhancements and new products on our platform, develop new capabilities that achieve market acceptance, innovate quickly enough to keep pace with rapid technological developments, or experience unintended consequences with enhancements we provide, our business could be adversely affected. For example, our customers may not adopt enhancements and new products or may not use them as intended.

We must also keep pace with changing legal and regulatory regimes that affect our platform, products, services, and business.

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.

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

~~In addition, because our platform is designed to operate directly~~ Our business could also be harmed if we experience unintended consequences with the ~~Card Networks, Issuing Banks,~~enhancements we provide or use.

We may continue to expand operations internationally where we have limited operating experience and ~~general payments ecosystem, we need~~may be subject to ~~continuously modify~~increased business, economic, and ~~enhance~~regulatory risks that could adversely impact our ~~platform to keep pace with changes~~operations and financial results.

We have offices in ~~technologies, while maintaining compatibility~~the United States and United Kingdom (“U.K.”), and legal entities in various other global jurisdictions, and ~~regulatory compliance. Any failure~~we may pursue further international expansion of our ~~platform to continue to operate effectively with third-party infrastructures~~business in new international markets where we have limited or no experience in marketing, selling, employing personnel, and ~~technologies could reduce the demand for~~deploying our platform, products, ~~or services, result in the dissatisfaction of our customers,~~ and ~~materially and adversely affect our business.~~

Our future success depends in part on our ability to expand internationally and drive the adoption of our platform and products by international customers. Expanding our business internationally, however, could subject us to new challenges and risks.

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Further expansion of our operations internationally is important to the success of our business and will subject us to new challenges and risks. During the year ended December 31, 2022, we derived 3% of our net revenue from customers located outside the United States. We do not currently have operations in Russia or plans to expand there, and, based on the actions taken by certain Card Networks, to our knowledge no Marqeta-powered card could currently operate in Russia. It is unclear, however, whether the significant military action against Ukraine launched by Russia will have any broader implications that may impact our business and results of operations.services. Managing ~~our new and existing~~ international operations requires us to comply with new regulatory frameworks, additional regulatory hurdles, and implement additional resources and controls. ~~Furthermore, our~~Our business model may not be successful or have the same traction outside the United States. International expansion subjects our business to additional risks, including:

•~~difficulty in attracting a sufficient number of customers in a given international market;~~

•failure to anticipate competitive conditions and competition with ~~market-players~~market players that have greater experience in the local markets than we do or that have pre-existing relationships with potential customers and investors in those markets;

•~~conformity of~~conforming our platform with applicable business customs ~~including translation into foreign languages~~ and ~~associated expenses;~~languages;

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

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

•potential changes to our established business and pricing models;

•the ability to support and integrate with local BIN sponsors and other service providers;

•difficulties in ~~staffing and~~ managing foreign ~~operations in an environment of diverse culture, laws, and customers;~~operations;

•increased travel, infrastructure, and legal and compliance ~~costs associated with international operations;~~costs;

•difficulties in recruiting and retaining qualified ~~employees and maintaining our company culture;~~personnel;

•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 ~~governmental~~ laws and ~~regulations, including banking, AML, securities, employment, tax, privacy, and data protection laws and regulations, such as the~~ ~~EU’s General Data Protection Regulation, or the~~ ~~GDPR;~~regulations;

•~~compliance with U.S. and~~Interchange Fee regulation in foreign ~~anti-bribery laws, including the FCPA;~~jurisdictions;

•exchange rate risk and ~~Interchange Fee regulation in foreign countries;~~

•~~limited experience selling our platform, products, and services outside of the United States;~~global market volatility;

•potential restrictions on repatriation of earnings;

•~~expanded compliance with potentially conflicting and changing laws~~management of ~~taxing jurisdictions in which we conduct business and applicable U.S.~~ tax laws as they relate to international operations, the complexity of such tax laws, and potentially adverse tax consequences due to changes in such tax laws or the interpretation or administration thereof;consequences; and

•~~regional~~political, social, and/or economic ~~and political conditions.~~instability or military conflict.

As a result of these risks, we may not be successful in managing our existing international operations or expanding our international ~~operations.~~operations, and our business and financial condition could be adversely affected.

We may incur losses relating to the settlement of payment transactions ~~and the fraudulent use of payment cards issued through~~on our platform.

~~Our resources, technologies, and fraud prevention tools may be insufficient to accurately detect and prevent fraud.~~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, ~~that is inherent in our business model,~~ including with respect to pre-funding and chargeback ~~requests. Customers~~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.

While customers deposit a certain amount of pre-funding into bank accounts at our Issuing ~~Banks. However,~~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 ~~exceed~~exceeds the ~~amount of~~ pre-funding in the customer’s ~~account are still authorized.~~ ~~We have in the past, and may in the future, incur costs relating to the improper processing of chargeback requests.~~account.

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Customers are ultimately responsible for fulfilling their obligations to fund transactions. However, when a customer does not have sufficient funds to settle a transaction, we ~~are~~may be liable to the Issuing Bank to settle the transaction, including a fraudulent or disputed ~~transaction,~~transactions, and may incur losses as a result of claims from the Issuing Bank. We would seek to recover such losses from the customer, but we may not fully recover them if the customer is unwilling or unable t~~o pay due~~ to ~~their financial conditio~~pay.

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

~~Additionally, criminals are using increasingly sophisticated methods~~We may incur losses relating to ~~engage~~illegal and fraudulent activity on our platform.

Our resources, technologies, and fraud prevention tools may be insufficient to accurately detect and prevent fraud on our platform. 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 ~~they~~ may ~~use~~cause us to ~~target us, including~~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. 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 ~~identity theft. A single, significant incident~~stolen cards or ~~a series of incidents of fraud~~card account numbers. Fraud or theft involving cards issued through our platform or as a result of actions by our employees or contractors could result in financial losses, civil or criminal liability, reputational damage, harm to ~~us, potentially reducing the use and acceptance of~~ our ~~platform~~business, or ~~leading~~increasing costs related to ~~greater regulatory scrutiny that would increase our~~remediation or more rigorous compliance ~~costs.~~obligations. Fraudulent activity could also result in the imposition of regulatory sanctions, including significant monetary fines, or other operating ~~losses. The foregoing~~losses, all of which could have a material adverse effect on our business, results of operations, and financial condition. ~~We are also potentially susceptible to risk from fraudulent acts of employees or contractors.~~

~~We depend on our executive officers and other key employees, and the loss of one or more of these employees or an inability~~Failure to attract and retain key personnel, including senior management and other highly skilled employees, could adversely affect our business.

~~Our success depends largely upon the continued services~~ of our executive officers and other key employees. There have been changes in the past and there may be changes in the future, to our executive management team resulting from the hiring or departure of executives, which could disrupt our business. For example, we appointed Simon Khalaf, most recently our Chief Product Officer and interim Chief Revenue Officer, as Chief Executive Officer and as a member of our board of directors, effective January 31, 2023. Mr. Khalaf succeeds Jason Gardner, who has served as our Chief Executive Officer since November 2010 and Mr. Gardner will continue as Executive Chairman of the board of directors. The loss of one or more of our executive officers or other key employees could adversely affect our business. Changes in our executive management team may also cause disruptions in, and adverse impacts to, our business. We also may not be able to successfully navigate the leadership changes while maintaining key aspects of our culture, which could have a significant negative effect on our existing business and our ability to pursue future plans.

The volatility in or lack of appreciation of the trading price of our Class A common stock may affect our ability to attract and retain executive officers or other key employees. Many of our key employees have become, or will become, vested in a substantial amount of restricted stock units, or RSUs, or stock options. Employees may be more likely to leave us if the shares they own or the shares underlying their vested options or RSUs have significantly appreciated in value relative to the original purchase price of the shares or the exercise price of the options, or conversely, if the exercise prices of the options that they hold are significantly above the market price of our Class A common stock.

Any employment agreements we have with our executive officers or other key personnel do not require them to continue to work for us for any specified period and, therefore, they could terminate their employment with us at any time. We have in the past, and may in the future, experience high attrition and turnover rates across the Company, including key employees. The loss of these employees may lead to a decrease in institutional knowledge which may adversely affect our business. Additionally, we do not maintain any key person insurance policies.

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~~Our business depends on our ability to attract and retain highly skilled employees.~~

Our future success depends on our ability to identify, hire, develop, motivate, and retain highly qualified personnel for all areas of our ~~organization, in particular highly experienced product and technology personnel.~~organization. Competition for ~~these types of~~ highly skilled employees is ~~intense. Trained and experienced personnel~~intense as these employees are in high demand and may be in short supply. We have from time to time experienced, are currently experiencing, and we expect to continue to experience difficulty in hiring and retaining employees with appropriate qualifications, at a speed that is consistent with our business needs, and at an appropriate cost. ~~Any changes to U.S. immigration policies that restrain the flow of technical and professional talent may also inhibit our ability to recruit and retain highly qualified employees.~~

Many of the companies with which we compete for experienced employees have greater resources than we do and may be able to offer more attractive terms of employment. In addition, we invest significant time and expense in training our employees, which increases their value to competitors that may seek to recruit them. We may not be able to attract, develop, and maintain the skilled workforce necessary to operate our business, andOur labor expenses may increase as a result of a shortage in the supply of qualified personnel.

~~In addition, in 2022, we transitioned our Company to a flexible-first work environment. As of December 31, 2022, 58% of our employees were remote. Over~~ time such remote operations may decrease the cohesiveness of our teams and our ability to maintain our culture, both of which are critical to our success. Additionally, a remote working environment may impede our ability to undertake new business projects, foster a creative environment, hire new team members, and retain existing team members. Such effects may adversely affect the productivity of our team members and overall operations, which could have a material adverse effect on our business, results of operations, financial condition, and future prospects.

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. 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.

~~Exposure~~The majority of our employees operate in a remote capacity, and we expect to ~~political developments~~continue to be subject to challenges and risks associated with having a remote workforce. For example, operating our business with both remote and in-person workers across different geographies and time zones could have a negative impact on our corporate culture, decrease the ability of our workforce to collaborate and communicate effectively, decrease innovation and productivity, or negatively affect workforce morale.

Changes in our executive management team may also disrupt our business. Any employment agreements we have with our executive officers or other key personnel do not require them to continue to work for us for any specified period and, therefore, they could terminate their employment with us at any time. We have in the ~~United Kingdom, including the United Kingdom’s decision to leave the European Union, could adversely affect us.~~

~~On June 23, 2016, a referendum was held on the U.K.’s membership~~past, and may in the ~~European Union, or~~future, experience high attrition and turnover rates across the EU, resulting in a vote in favor of leaving the European Union. Effective as of January 31, 2020, the U.K. formally withdrew its membership from the European Union. The U.K.’s decision to leave the European Union has created an uncertain political and economic environment in the U.K. and across other European Union member states. The political and economic instability created by the U.K.’s decision to leave the European Union has caused and may continue to cause volatility in global financial markets and the value of the British Pound or other currencies,Company, including ~~the~~ Euro. In addition, this uncertainty may cause some of our customers or potential customers to curtail or delay spending or adoption of our platform. Depending on the market and regulatory effects of the U.K.’s exit from the European Union, it is possible that there may be adverse practical or operational implications on our business. For example, the U.K. Data Protection Act, which implemented the EU’s General Data Protection Regulation, or the GDPR, was amended January 1, 2021 to reflect the U.K.’s status outside the European Union. However, the U.K. has discussed its plans to depart from the GDPR and implement its own framework. It remains unclear how U.K. data protection laws or regulations will develop and be interpreted in the medium to longer term, how data transfers to and from the U.K. will be regulated, and how those regulations may differ from those in the European Union. While we have taken measures to preemptively address the impact of the U.K.’s departure from the European Union by including contingency clauses in our European Union master service agreements, for example, these may not adequately protect us from adverse implications on our business. Further, the U.K.’s exit from the European Union may create increased compliance costs.

~~These~~executive officers and other ~~factors related~~key personnel. The loss of these employees may lead to ~~the departure of the U.K. from the European Union~~a decrease in institutional knowledge which may adversely affect our ~~business, financial condition, and results of operations.~~

~~We may face exposure to foreign currency exchange rate fluctuations, and such fluctuations could adversely affect our business, results of operations, and financial condition.~~business. Additionally, we do not maintain any key person insurance policies.

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As we continue to expand our global operations, we become more exposed to the effects of fluctuations in currency exchange rates. Our customer contracts are denominated primarily in U.S. dollars, and therefore the majority of our net revenue is not subject to foreign currency risk. We expect, however, to significantly expand the number of transactions with customers that are denominated in foreign currencies in the future as we continue to expand our business internationally. We also incur expenses for employee compensation and other operating expenses at our non-U.S. locations in the local currency for such locations. Fluctuations in the exchange rates between the U.S. dollar and other currencies could result in an increase to the U.S. dollar equivalent of such expenses and, as a result, adversely affect our business, results of operations, and financial condition.

We may require additional capital to support our business, and this capital might not be available on acceptable terms, if at all.

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, ~~including our sales and marketing organizations and our presence outside of the United States,~~ 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. Accordingly, we may need to engage in equity or debt financings to secure additional funds. ~~If we raise additional funds through future issuances of equity or convertible debt securities, our stockholders could suffer significant dilution, and any~~

Any new equity securities we issue could have rights, preferences, and privileges superior to those of holders of our Class A common stock and Class B common stock. Any debt financing that we may secure in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, potentially making it more difficult for us to obtain additional capital and to pursue business opportunities. We may not be able to obtain additional financing on terms favorable to us, if at all. Disruptions in the credit markets or other factors, such as ~~the current inflationary environment and~~inflation or rising interest rates, could adversely affect the availability, diversity, cost, and terms of funding arrangements.

In addition, actual events involving limited liquidity, defaults, non-performance, or other adverse developments that affect financial institutions, transactional counterparties, or other companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems. The ultimate outcome of these events cannot be predicted, but these events could have a material adverse effect on our business. The FDIC only insures up to $250,000 per depositor per insured bank, and we currently have cash deposited in certain financial institutions in excess of FDIC insured levels. If any of the banking institutions in which we have deposited funds ultimately fails, we may lose our deposits over $250,000. Further, certain banks may be under regulatory orders and may not be able to support us due to regulatory challenges. The loss of our deposits at such banks may have a material adverse effect on our business, financial condition, and liquidity.

We have in the past and may in the future make investments in investment-grade securities. If such investments are not diversified or are concentrated at an “at-risk” institution, we may experience losses and may not be able to liquidate such investments.

If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to support our business growth, scale our infrastructure, develop product enhancements, and respond to business challenges could be significantly impaired, and our business, results of operations, and financial condition may be adversely affected.

~~Any acquisition, strategic investment, partnership, alliance~~Strategic transactions, including acquisitions, investments, partnerships, and ~~other transaction~~collaborations, could ~~be difficult to identify,~~ fail to achieve strategic objectives, divert the attention of ~~key~~ management, ~~personnel,~~ disrupt our ongoing operations, dilute stockholder value, ~~or result in operating difficulties, liabilities~~ and ~~expenses, harm~~may adversely affect our business and ~~negatively impact our results of operations.~~financial results. We may be unable to successfully integrate any acquired businesses and technology.

We have in the past and may in the future ~~seek to~~ acquire or invest in businesses, products, or technologies that we believe could complement our platform, products, and services, ~~or expand the breadth of our platform, enhance our products and capabilities,~~ expand our geographic reach or customer base, or otherwise offer growth opportunities. For example, we acquired Power Finance Inc. onin February 3, 2023. The identification, pursuit, evaluation, and negotiation of potential strategic ~~investment~~ transactions ~~or acquisitions~~ may divert the attention of management and entail various expenses, whether or not such transactions are ultimately consummated. Any acquisition, investment, or business relationship may result in unforeseen operating difficulties and expenditures or require us to make adjustments to our or the acquired company's business ~~models .~~models. There can be no assurance that we will be successful in identifying, negotiating, and consummating favorable transaction opportunities or successfully integrating the acquired personnel, operations, and technologies, or effectively scaling ~~expanding,~~ and managing the combined business following the acquisition.

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Specifically, we may not successfully evaluate or utilize the acquired technology or personnel from an acquired business and we may be unable to retain key personnel after a transaction, including personnel who are critical to the success of the ongoing business. We may not accurately forecast the financial impact of an acquisition ~~transaction, including accounting charges.~~transaction. Moreover, the anticipated benefits, ~~opportunities,~~ growth, ~~synergies,~~ or ~~business model improvements~~synergies of any acquisition, investment, or business relationship may not be realized or we may be exposed to unknown risks or liabilities.

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~~We may not be able to find and identify desirable acquisition targets or~~ If we may not be successful in entering into an agreement with any one target. We may be required to issue equity or debt securities to acquire businesses which could dilute our shareholders or adversely affect our results of operations. In addition, if an acquired business fails to meet our expectations, our business, results of operations, and financial condition may suffer.

We have made, and may in the future seek to make, strategic investments in early stage companies developing products or technologies that we believe could complement our platform or expand its breadth, enhance our technical capabilities, or otherwise offer growth opportunities. These investments may be in early stage private companies for restricted stock. Such investments are generally illiquid and may never generate value. Further, we may invest in companies that do not succeed, ~~and~~ our investments may lose all or some of their value, which could result in us recording impairment charges reflected in our results of operations.

Litigation, disputes, regulatory actions, and ~~compliance issues~~government or legal investigations could ~~subject us~~be costly and time-consuming to ~~fines, penalties, judgments, remediation costs, requirements resulting in increased expenses~~defend, and ~~reputational harm.~~our business may be adversely affected by our involvement or the outcome of such litigation, disputes, actions, or investigations.

In the ordinary course of business, we have been, are currently, and in the future may be, involved in litigation or disputes. We have also received and ~~subject~~may in the future receive, inquiries, warrants, subpoenas, and other requests for information in connection with government investigations. Such claims, disputes, lawsuits, proceedings, and investigations could involve matters relating to ~~litigation for a variety of claims or disputes and receive regulatory inquiries.~~

~~These claims, lawsuits, and proceedings could include labor and~~ employment, wage and hour, commercial, antitrust, ~~alleged~~ securities, ~~law violations~~the duties of officers or ~~other investor claims,~~directors, regulatory compliance, and other matters. The number and significance of ~~these potential claims~~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.

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

~~Any~~ A claim brought against us ~~regardless~~or third parties that is uninsured or under-insured could result in unanticipated costs. The costs associated with litigation, disputes, regulatory actions, and government or legal investigations can also be unpredictable depending on the complexity of ~~its merit, could be costly,~~the matter, the resources needed to manage it, and length of time devoted to it. These matters may also divert management’s attention and operational resources, ~~and~~could harm our ~~reputation. As litigation is inherently unpredictable, we~~reputation regardless of the outcome, and might seriously harm our business, overall financial condition, and operating results. We cannot assure you that any actual or potential litigation, claims, disputes, investigations, or ~~disputes~~proceedings will not have a material adverse effect on our business, results of operations, and financial condition.

The current regulatory environment, increased regulatory compliance efforts, and enhanced regulatory enforcement have resulted in significant operational and compliance costs and may prevent us from providingWe rely on third parties to provide certain products and ~~services. Some of the laws~~services, and regulations affecting our business have been enacted relatively recently. Many laws and regulations affecting our business are evolving, unclear, and inconsistent across jurisdictions, and ensuring compliance with them is difficult and costly. There is no assurance that these regulatory matterstheir failure to perform those services or other factors will not, in the future, affect how we conduct our business and, in turn, have an adverse effect on our business. Additionally, 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. Failure to comply with laws and with regulatory requirements applicable to our business could subject us to damages, revocation of licenses, class action lawsuits, administrative enforcement actions, and civil and criminal liability, which may harm our business.

~~Our vendor relationships subject us to a variety of risks, and the failure of third parties to~~ comply with legal or regulatory requirements ~~or to provide various services that are important to our operations~~ could ~~have an adverse effect on~~adversely affect our business ~~results of operations,~~and financial ~~condition, and future prospects.~~results.

We depend on services from various third-party vendors to ~~maintain~~provide our ~~infrastructure, including data center facilities~~products and ~~Amazon Web Services, Inc. as our computing and storage platform. We also rely on Card Networks to complete, settle, and reconcile transactions processed on our platform.~~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.

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We conduct vendor due ~~diligence; however,~~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 ~~develop and maintain sufficient internal control processes, fails to maintain adequate~~properly safeguard our data ~~privacy controls and electronic security systems,~~ or fails to provide sufficient capacity to support our platform or otherwise experiences service outages, such failure could adversely affect the business of our customers using our platform or their perception of our platform’s reliability. Further, if any service providerintellectual property, fails to meet contractual requirements (including compliance with applicable laws and regulations), suffers a ~~cyber-attack~~cyberattack, security breach or incident, or other ~~security breach, experiences damage to its systems~~system outage or ~~facilities,~~interruption, or terminates its contract with us, ~~such failure~~we could be subject to claims from customers and other third parties or ~~event could subject us to~~ regulatory enforcement actions, ~~claims from third parties, including our customers,~~ and ~~we could suffer economic and reputational harm that could have an adverse effect on our business.~~

~~If any service provider fails, we~~such incidents may also ~~be unable to effectively address capacity constraints, upgrade~~put information we process at risk which could in turn adversely affect our ~~systems as needed, and continually develop our technology and network architecture to accommodate actual and anticipated changes in technology, as well as to increase efficiency.~~ 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. In the future, these services may not be available to us on commercially reasonable terms, or at all. Any loss of any of these services could ~~result~~adversely affect our business and we may incur additional costs to resolve the issue.

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Indemnity provisions in ~~decreased functionality~~various agreements potentially expose us to substantial liability and risk of ~~our platform until equivalent technology is either developed~~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 ~~if available~~ from ~~another provider, is identified, obtained, and integrated into our infrastructure. We may incur significant costs to resolve any disruptions in service, which could adversely affect our business.~~

Additionally, if our vendors, or other service providers, fail to comply with the legal requirements applicable to the particular products or services being offered, or violate applicable laws or our policies, or become subject to third party claims of intellectual property infringement ~~misappropriation,~~claims made by third parties. Some of these agreements provide for uncapped liability for indemnification claims and some indemnity provisions survive termination or ~~other violation, or malfunctions or functions~~expiration of the applicable agreement. In some cases, we have in ~~a way we did not anticipate, such violations may also put information we process at risk~~the past and could continue to be exposed to liability or indemnification claims from our customers or partners in ~~turn adversely impact and affect~~connection with the services we provide. Large payments to partners or customers could harm our business, ~~reputation,~~results of operations, and financial ~~condition,~~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. 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.

If our estimates or judgments relating to our accounting policies prove to be incorrect, our results of operations could be adversely affected.

The preparation of financial statements in conformity with ~~U.S.~~ generally accepted accounting principles ~~or GAAP,~~(“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the ~~consolidated financial statements~~Consolidated Financial Statements and accompanying notes. We base our estimates in part on historical experience, market observable inputs, if available, and various other assumptions that we believe to be reasonable under the circumstances. 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~~Consolidated Financial Statements include those related to revenue recognition, ~~and~~ accounting for business combinations and share-based compensation. 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. Our results of operations may also be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our results of operations to fall below the expectations of securities analysts and investors, resulting in a decline in the trading price of our Class A common stock.

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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. ~~Changing international, federal, state,~~Compliance with such laws and ~~local laws, as well as changing regulatory enforcement policies~~regulations could result in additional costs and ~~priorities, including changes that may result from changes in the political landscape, may negatively impact~~any failure to comply could materially harm our business ~~results of operations,~~and financial ~~condition, and future prospects.~~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 in the United States, both at the federal and state level, and in other countries where we operate both directly and indirectly through our relationships with Issuing Banks and Card Networks. As we continue to expand our operations internationally, we may become subject to additional laws and regulations, including possible examination and supervision, by international authorities.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 ~~our~~the Issuing Banks and Card Networks that we partner with, ~~the~~ 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. For example, due to our relationships with certain Issuing Banks and Card Networks, we may be subject to indirect supervision and examination by the CFPB, which is engaged in rule-making and regulation of ~~the payments industry, including, among other things, the regulation of prepaid cards, BNPL financing programs, and the enforcement of certain protections under applicable regulations.~~

~~We are directly subject to regulation in areas inclu~~ding privacy, data protection and information security, and anti-bribery, and our contractual relationships with customers, Issuing Banks and Card Networks may subject us to additional regulations including those relating to payments services (such as payment processing and settlement services) and those relating to payments products and services utilizing artificial intelligence, consumer protection, AML, anti-bribery, escheatment, international sanctions regimes and export controls, privacy, data protection, information security, intellectual property, and compliance with the PCI DSS, a data security standard and set of requirements designed to ensure that all companies that process, store, or transmit payment card information maintain a secure environment to protect cardholder data. The laws, rules, regulations, and standards applicable to our business are enforced by multiple authorities and governing bodies in the United States, including federal agencies, self-regulatory organizations, and numerous state agencies. Outside of the United States, we may be subject to additional laws, rules, regulations, and standards.

In addition, as our business and platform continue to develop and expand, we may become subject to additional rules, regulations, and industry standards in the United States and internationally where we do business. New laws or regulations could also require us to incur significant expenses and devote significant management attention to ensure compliance. For example, we could be regulated by international, federal, and state regulatory agencies through licensing and other supervisory or enforcement authority, which could include regular examination by international, federal, and state governmental authorities.

We may not always accurately predict the scope or applicability of certain regulations to our business, particularly as we expand into new areas of operations, which could have a significant negative effect on our existing business and our ability to pursue future plans.

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In addition to laws and regulations that apply directly to us, we are contractually subject to certain laws and regulations through our relationships with Issuing Banks and Card Networks, which operate in a highly regulated industry. Additionally, asAs a program manager, we are responsible for ~~ensuring~~aligning compliance with Issuing ~~Banks’~~Bank requirements and Card Network rules, and we help create regulatory compliant card programs for our customers. In some cases, ~~our inability~~we have in the past and could continue to ~~ensure such compliance could expose us~~be exposed to liability or indemnification claims from our customers or ~~partners. Furthermore, legislative~~partners in connection with the services we provide.

We are directly, and ~~regulatory changes~~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 ~~the extent or the terms of~~ their dealings with us in ways that may have adverse consequences for our business. ~~For example, due~~

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 ~~relationships with certain Issuing Banks~~ability to offer our existing or planned features, products, and ~~Card Networks,~~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.

As a result of our business relationships, we may also be subject to direct or indirect supervision and examination by ~~the~~various authorities. The CFPB, which is engaged in rulemaking and regulation of the payments industry, including, among other things, the regulation of prepaid cards, BNPL financing programs, and the enforcement of certain protections under applicable regulations. While reform in the payment industry, such as the formation of the CFPB,for example, has focused on individual consumer protection, legislatures continue to consider whether to include business customers, especially smaller business customers, within the scope of these regulations and the CFPB recently indicated it has dormant authority to ~~regulate any company~~examine certain companies whose services may ~~have consumer impact.~~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 ~~result, new~~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. New or expanded regulation ~~focusing on business customers~~ 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 ~~terms under which we offer~~offering of our ~~Platform or our~~platform, products and services.

~~A majority of our net revenue is derived from Interchange Fees~~Further, while we do not handle or interact with cryptocurrency and we ~~expect Interchange Fees~~only process transactions on our platform in fiat currencies, certain cryptocurrency businesses use our platform to ~~continue~~provide card products to ~~represent a significant percentage~~their customers and end users. The regulation of ~~our net revenue~~cryptocurrency is rapidly evolving and varies significantly among jurisdictions and is subject to substantial uncertainty. Various legislative and executive bodies in the ~~near term. The amount~~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 ~~Interchange Fees we earn is highly dependent on the interchange rates that the Card Networks set~~cryptocurrency businesses and adjust. From time to time, Card Networks change the Interchange Fees and assessments they charge for transactions processed using their networks. Interchange Fees and assessments are also subject to change from time to time 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 to the Dodd-Frank Act, which limits Interchange Fees, may restrict or otherwise~~turn 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 currently only contract with Issuing Banks that are subject to this exemption from the Durbin Amendment when we provide MxM services. Changes in regulation or additional rulemaking may adversely affect the way we conduct our business or result in additional compliance obligations and expense for our business and limitations on net revenue. On October 3, 2022, the Board of Governors of the Federal Reserve System adopted its final rule pursuant to the Electronic Fund Transfer Act to clarify the requirement that debit card issuers ensure that at least two unaffiliated payment card networks have been enabled to process all debit card transactions, including “card not present” transactions, such as online payments. Such secondary payment card networks may charge lower Interchange Fees, and to the extent merchants substantially shift their ‘card not present’ transaction volumes to such networks, we may experience a reduction in net revenue derived from Interchange Fees. 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 Feesrevenue associated with our ~~customers’ card transactions could adversely affect our~~cryptocurrency business ~~results~~customers.

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Moreover, our use of vendors and our other ongoing third party business relationships could be subject to increasing regulatory requirements and attention. We regularly use vendors and subcontractors as part of our business. It is possible that regulators will hold us responsible for deficiencies in our oversight and control of third party relationships and in the performance of the parties with whichWhile we have ~~these relationships.~~

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. If we fail to comply or are alleged or perceived to have failed to comply with applicable laws and regulations, ~~applicable to our business in a timely and appropriate manner, or if this is perceived or reported to have occurred,~~ we may be subject to litigation or regulatory investigations or other proceedings, we may have to pay fines and penalties or become subject to civil or criminal liability or have additional obligations or restrictions imposed upon our business, ~~or operations, our reputation may be harmed,~~ 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. 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.

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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 international, federal, state, and local 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.

~~We may not be able to respond quickly or effec~~tively to regulatory, legislative, or other developments, and these changes 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, if our practices are not consistent or viewed as not consistent with legal and regulatory requirements, 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.

~~Stringent and changing laws,~~Laws, regulations, and industry standards related to privacy and data protection, and ~~information security~~our actual or perceived failure to comply with such obligations, could adversely affect our ~~ability to effectively provide our services~~business and ~~could result in claims or fines, harm our results of operations,~~ financial ~~condition, and future prospects, or otherwise harm our business.~~results.

Governmental bodies and industry organizations in the United States and abroad have adopted, or are considering adopting, laws and regulations ~~restricting~~governing the use of, and requiring safeguarding of, personal 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 ~~became effective on January 1, 2020~~(“CCPA”), as amended and ~~imposed~~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. Additionally, a new privacy law, the California Privacy Rights Act, or the CPRA, which became effective on January 1, 2023, creates additional obligations relating to personal information (with certain provisions having retroactive effect to January 1, 2022). Other U.S. 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. Many obligations under these proposed laws and legislative proposals remain uncertain, and we cannot fully predict their impact on our business. Industry organizations also regularly adopt and advocate for new standards in these areas, and

In Europe, we are ~~and may become~~ subject to ~~contractual obligations relating to privacy, data protection, and information security.~~

If we fail to comply with any of these laws, standards, or other actual or asserted obligations, if we fail to protect information that we collect or otherwise process, or if any of these events is reported or perceived to have occurred, we may be subject to regulatory investigations, enforcement actions, and other proceedings, civil litigation, claims, investigations, and demands, and fines and other penalties and liabilities, all ofthe General Data Protection Regulation (“GDPR”) which may generate negative publicity, harm our reputation, and have a negative impact on our business. Further, any such actual or perceived failure may result in, among other things, revocation of any required licenses or registrations, loss of any approved status, administrative enforcement actions, sanctions, civil and criminal liability, and constraints on our ability to operate. Our efforts to comply with laws, regulations, and other obligations relating to privacy, data protection, and information security also may cause us to incur substantial operational costs or require us to change our policies and our business practices. We may not be successful in our efforts to achieve compliance either due to internal or external factors, such as resource allocation limitations or a lack of vendor cooperation.

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As we continue to expand our operations internationally, we will continue to become subject to various foreign policy and data protection laws and regulations, which may in some cases be more stringent than the requirements in the jurisdictions in which we currently operate. For example, the GDPR, which became effective in 2018, extends the scope of ~~European Union~~E.U. data protection law to all companies processing ~~personal~~ data of ~~European Union residents,~~individuals within the E.U., regardless of the company’s location, and requires companies to meet stringent requirements regarding the handling of personal data. The U.K. has also adopted a law substantially implementing the GDPR as part of its local data protection law, referred to as the U.K. GDPR. The GDPR ~~and other laws and regulations in Europe, the U.K., and elsewhere also impose some limitations on international transfers of personal data. The GDPR~~ imposes substantial obligations and risk upon our business and provides for significant penalties in the event of any non-compliance. ~~Administrative fines under the~~The GDPR ~~can amount up to 20 million Euros or four percent of a company group’s annual global turnover, whichever is higher. Further, it remains unclear how U.K. data protection~~and other laws and regulations ~~will develop~~ in the ~~medium~~E.U., the U.K., and elsewhere also impose limitations on international transfers of personal data. We continue to ~~longer term. We~~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 ~~legal~~laws and frameworks, ~~and~~ 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, ~~all of which may adversely affect our net revenue~~such as modifying products and our business overall. Additionally, because many of these new regimes lack a substantial enforcement history, we are unable to predict how emerging standards may be applied to us. Among other requirements, the GDPR regulates transfers of personal data subject to the GDPR to third countries that have not been found to provide adequate protection to such personal data, including the United States. On July 16, 2020, the Court of Justice of the European Union invalidated the EU-U.S. Privacy Shield, eliminating a mechanism we had relied on to legitimize EU-U.S. data transfers. An alternative transfer mechanism that we rely on, use of standard contractual clauses approved by the European Union Commission, continues to be a valid mechanism for data transfers, provided additional safeguards are in place and the appropriate versions of those standard contractual clauses are employed. The EU and U.K. each have issued updated standard contractual clauses that are required to be implemented. We continue to monitor and assess regulatory guidance and other developments related to our data transfer mechanisms, with it possible that our ability to transfer personal data across borders, including from the European Union, U.K., and Switzerland to the United States (and other countries), will be impacted. We and many other companies may need to implement different or additional measures to establish or maintain legitimate means for the transfer and receipt of personal data from the European Union, U.K., Switzerland, or other jurisdictions to the United States (and other countries), and we may, in addition to other impacts, experience additional costs associated with increased compliance burdens, and we and our customers face the potential for regulators to apply new or different standards to the transfer of personal data from the European Union, U.K., Switzerland, or other jurisdictions to the United States (and other countries), and to restrict, block, or impose conditions or restrictions with respect to, certain personal data transfers. Other jurisdictions have also enacted legislation that requires maintaining data locally. Any inability to transfer personal data in compliance with laws or regulations relating to privacy, data protection, or information security, or otherwise comply with requirements in this rapidly changing environment, may impede our ability to attract and retain customers.

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If more restrictive or burdensome laws, rules, or regulations related to privacy, data protection, or information security are adopted by authorities in the future on the federal or state level or internationally, or if new or existing laws, rules, or regulations become subject to new or differing interpretations or enforcement, or if we become bound by additional obligations that we become subject to in response to customer requests, contractual obligations, or otherwise, relating to privacy, data protection, or information security, including any additional compliance standards relating to non-public consumer personal information, our compliance and operational costs may increase, our opportunities for growth may be curtailed, we may find it necessary or appropriate to modifyservices, our data processing practices or policies, or otherwise ~~restrict~~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 ~~breaches or incidents relating to privacy, data protection,~~non-compliance with laws, regulations, contractual obligations, and ~~information security~~frameworks may increase, all of which could have a material adverse effect on our business, results of operations, and financial condition. ~~Because~~

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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.

A portion of our net revenue is derived from Interchange Fees and the ~~interpretation~~amount of Interchange Fees we earn is highly dependent on the interchange rates that the Card Networks set and ~~application~~adjust. 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 ~~many laws~~intense legal and ~~regulations relating~~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 ~~privacy, data protection,~~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 ~~information security are uncertain, it~~prepaid card programs. Interchange Fee regulation also ~~is possible that current or future laws may be interpreted~~exists in other countries where our customers use payment cards and ~~applied~~such regulation could adversely affect our business in ~~a manner that is inconsistent~~other foreign regions. Any changes in the Interchange Fees associated with our ~~existing data management~~customers’ card transactions could adversely affect our business, results of operations, and financial condition.

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.

We are required to comply with the ~~features~~rules set by the Card Networks. The termination of the card association registrations held by us or any of our ~~products~~Issuing Banks or any changes to these Card Network rules or their interpretation could have a significant impact on our business and ~~services.~~financial condition. If ~~so,~~we fail to make required changes or otherwise resolve an issue with the Card Networks, the Card Networks could charge us additional fees. We have been charged such additional fees in ~~addition~~the past, and expect to continue to be charged such fees in the ~~possibility~~future as Card Network rules change. These additional fees are considered costs of ~~fines, lawsuits, claims, demands, regulatory investigations~~revenue. We could also be fined and ~~other proceedings, and other claims and penalties, we~~our registrations or certifications could be ~~required to change our business activities and practices~~suspended or ~~modify our products or services, any of~~terminated which could limit our ability to process transactions and could have ana material adverse effect on our business and which we may be unable to complete on a commercially reasonable basis or at all. Any claims regarding our inability to adequately address privacy, data protection, or information security concerns, even if unfounded, or to comply with applicable laws, regulations, contractual requirements, policies, or other actual or asserted obligations, such as industry standards, could result in additional cost and liability to us, damage our reputation, result in negative publicity, and adversely affect our business. Privacy, data protection, and information security concerns, whether valid or not, may inhibit market adoptionresults of our products and services, particularly in certain industries and jurisdictions. Additionally, if we are not able to quickly adjust to changing laws, regulations, and standards related to the internet, we could face fines, lawsuits, regulatory investigations and other claims and penalties, our business may be harmed.operations.

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

We can be held liable under ~~anti-corruption, anti-bribery,~~ 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 ~~ensure compliance~~comply with ~~all~~ applicable AML, AB&C, and ~~anti-bribery~~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 ~~and our~~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.

We may be subject to governmental export controls and economic sanctions regulations that could impair our ability to compete in international markets and could subject us to liability if we ~~are not in compliance with applicable laws.~~fail to comply.

Certain of our products and services may be subject to export control and economic sanctions regulations, including the U.S. Export Administration Regulations, and various economic and trade sanctions regulations administered by the U.S. Department of the Treasury’s Office of Foreign Assets Control. ~~Exports of our products and the provision of our services must be made in compliance with these laws and regulations.~~ If we fail to comply with these laws and regulations, we and certain of our employees could be subject to substantial civil or criminal penalties, ~~including:~~including the possible loss of export ~~privileges;~~privileges, fines imposed on us and responsible employees, ~~or managers;~~ and, in extreme cases, the incarceration of responsible ~~employees or managers.~~employees.

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~~In addition, changes~~Changes in applicable export or economic sanctions regulations, may create delays in the introduction and deployment of our platform, products, and services in international markets, or, in some cases, prevent the use of our platform and products or provision of our services in certain countries or with certain end users. Any change in e~~xport or economic sanctions regulations, shift~~shifts in the enforcement or scope of existing regulations, or change in the countries, governments, persons, or technologies targeted by such regulations ~~could also result~~may create delays in ~~decreased~~the introduction and deployment of our platform and existing or future products and services in international markets, or, in some cases, prevent or decrease the use of our platform ~~products,~~ and ~~services or in our decreased ability to provide our products and services to~~ existing or ~~prospective customers~~future products or provision of existing or future services in certain countries or with ~~international operations.~~certain end users. Any decreased use of our platform, products, or services or limitation on our ability to provide our platform, products, or services could adversely affect our business, results of operations, and financial condition.

Further, we incorporate encryption technology into certain of our products. Various countries regulate the import of certain encryption technology, including through im~~port~~import permitting and licensing requirements, and have enacted laws that could limit our customers’ ability to use our products in those countries if our products are subject to such laws and regulations. While we believe our encryption products meet certain exceptions that reduce the scope of export control restrictions applicable to such products, these exceptions may be determined not to apply to our encryption products and our products and underlying technology may become subject to export control restrictions.

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 were required to comply with regulatory requirements regarding the export of our platform and products and provision of our services, including with respect to new releases of our products and services, we may experience delays introducing our platform in international markets, our customers with international operations may experience difficulty deploying our platform and products and using our services, or, in some cases, we may be prevented from exporting our platform or products or providing our services to some countries altogether.

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 ~~market~~ price of our Class A common stock may be adversely affected.

~~As a public company, we are required to maintain internal control over financial reporting and to report any material weaknesses in such internal control.~~ 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 ~~control~~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.

The process of designing and implementing effective internal controls and disclosure controls is a continuous effort that requires us to anticipate and react to changes in our business and the economic and regulatory environment and to expend significant resources to maintain a system of internal controls that is adequate to satisfy our reporting obligations as a public company.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 ~~these new or improved~~our controls and systems do not perform as expected, we may experience additional material weaknesses ~~in our controls.~~or we may be unable to remediate the existing material weaknesses. In addition, testing and maintaining internal controls and disclosure controls may divert ~~our~~ management’s attention from other matters that are important to our business.

~~If we are unable~~Any failure to ~~establish~~implement and maintain ~~appropriate~~effective internal control over financial reporting ~~and disclosure controls and procedures, it~~ could cause us to fail to meet our reporting obligations on a timely basis, result in material misstatements in our consolidated financial statements, ~~and harm our operating results. Any failure to maintain effective internal control over financial reporting or disclosure controls and procedures could~~ have an adverse effect on our business and operating results, and could cause investors to lose confidence in us, all of which could cause a decline in the price of our Class A common stock. We could also ~~could~~ become subject to investigations by ~~the stock exchange on which our securities are listed,~~Nasdaq, the SEC, or other regulatory authorities, which could require additional financial and management ~~resources.~~

~~Any failure to implement~~resources, and maintain effective internal control over financial reporting also could adversely affect the results of periodic management evaluations and annual independent registered public accounting firm attestation reports regarding the effectiveness of our internal control over financial reporting. Ineffective disclosure controls and procedures and internal control over financial reporting could also cause investors to lose confidence in our reported financial and other information, which could

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~~have a negative effect on the trading price of our Class A common stock. In addition, if we are unable to continue to meet these requirements,~~ we may not be able to remain listed on Nasdaq. Additionally, if our internal control over financial reporting is not effective, our independent registered public accounting firm may issue an adverse report. As a public company, we are required to provide an annual management report on the effectiveness of our internal control over financial reporting.

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 ~~even~~ 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.

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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.

We could be required to collect additional sales, value added or similar taxes or be subject to other tax liabilities that may increase the costs our customers would have to pay for our solutions and adversely affect our results of operations.

While we have not historically collected sales, value added or similar indirect taxes from our customers in most jurisdictions in which we have sales, we expect to collect sales, value added, or similar indirect taxes from our customers in 2023. One or more jurisdictions may seek to impose incremental or new sales, value added or other indirect tax collection obligations on us.

A successful assertion by one or more states, or foreign jurisdictions, requiring us to collect taxes where we presently do not do so, or to collect more taxes in a jurisdiction in which we currently do collect some taxes, could result in substantial tax liabilities, including taxes on past sales, as well as penalties and interest. Any requirement to collect sales, value added or similar indirect taxes by foreign, state or local governments could also create additional administrative burdens for us and decrease our future sales, which could have a material adverse effect on our business and results of operations.

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

The rules ~~dealing with~~addressing taxation are constantly under review by ~~persons involved in~~ the ~~legislative process and by~~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. AsHowever, 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 ~~result of this change,~~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 ~~(IRA)~~ of 2022 ~~was signed into law to implement new tax provisions and provide various incentives and tax credits. The IRA~~ created ~~a 15% corporate alternative minimum tax and~~ an excise tax of 1% on stock repurchases from publicly traded US corporations, among other ~~changes. As~~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 ~~December 31, 2022,~~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 ~~Company has determined that neither this Act nor changes to income tax laws or regulations in other jurisdictions have a significant~~ impact on our ~~financial results~~2024 annual effective tax rate as we wait for additional guidance from the OECD and ~~operations.~~ for additional countries to enact the Pillar Two legislation.

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.

Furthermore, ~~our implementation of new practices and processes designed to comply~~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. As we grow internationally, we may also be subject to taxation and review by taxation authorities in ~~several~~additional jurisdictions ~~around the world~~ with increasingly complex tax laws, the application of which can be ~~uncertain. The~~uncertain, and which could increase the amount of taxes we pay, in these jurisdictions could increase substantially as a result of changes in the applicable tax rules, including increased tax rates, new tax laws, or revised interpretations of existing tax laws and precedents, potentially adversely affecting our liquidity and results of operations. In addition, the authorities in these jurisdictions could review our tax returns and impose additional tax, interest, and penalties, and the authorities could claim that various withholding requirements apply to us or our subsidiaries or assert that benefits of tax treaties are not available to us or our subsidiaries, any of which could adversely affect us and our results of operations.

We may have exposure to greater-than-anticipated tax liabilities, which may materially and adversely affect our business, results of operations, and financial condition.

The determination of our worldwide provision for income taxes, value-added taxes, and other tax liabilities requires estimation and significant judgment, and ~~there are many transactions and calculations where~~ the ultimate tax determination is uncertain. Like many other multinational corporations, we are subject to tax in multiple U.S. and foreign tax jurisdictions. Our determination of our tax liabilities is always subject to audit and review by applicable domestic and foreign tax authorities. Any adverse outcome of any such audit or review could have a negative effect on our business and the ultimate tax outcome may differ from the amounts recorded in our financial statements and may materially affect our results of operations and financial condition in the periods for which such determination is made. While we have established reserves based on assumptions and estimates that we believe are reasonable to cover such eventualities, these reserves may prove to be ~~insufficient.~~

~~In addition, our future income taxes could be adversely affected by earnings being lower than anticipated, or by the incurrence of losses, in jurisdictions that~~insufficient, which may have lower statutory tax rates and higher than anticipated in jurisdictions that have higher statutory tax rates; by changes in the valuation of our deferred tax assets and liabilities, as a result of gainsan adverse effect on our ~~foreign exchange risk management program; or changes in tax laws, regulations, or accounting principles, as well as certain discrete items.~~

Various levels of government, such as U.S. federal and state legislatures, and international organizations, such as the Organization for Economic Co-operation and Development, are increasingly focused on tax reform and other legislative or regulatory action to increase tax revenue. Any such tax reform or other legislative or regulatory actions could increase our effective tax rate, which may materially and adversely affect our business, ~~financial condition, and~~ results of ~~operations.~~

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Our ability to use our net operating losses and other tax attributes to offset future taxable income may be subject to certain limitations.

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We have incurred substantial net operating losses ~~or NOLs,~~(“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 ~~or the Code,~~(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. We ~~do not~~have experienced ownership changes since inception and believe that our existing NOLs ~~are~~and other tax attributes, including R&D credit carryforward, will be subject to limitation; however, if we have undergone previous ownership changes, or if we undergo an ownership change in the future, our ability to utilize NOLs could be limited by Section 382 of the Code and/or analogous provisions of applicable state tax law in states where we have incurred NOLs for state income tax purposes. Future changes in our stock ownership, some of which may be outside of our control, could result in an ownership change under these rules.such limitation.

In addition, the amount of NOLs ~~arising in taxable years beginning after December 31, 2017~~and other tax attributes that we are permitted to deduct in a taxable year beginning after December 31, 2017 is limited to 80% of our taxable income in each such year to which the NOLs are applied, where taxable income for such year is determined without regard to the NOL deduction itself, and such NOLs may be ~~carried forward indefinitely. NOLs generated in taxable years beginning on or prior to December 31, 2017, however, may be carried forward for only 20 years, but are not~~ subject to ~~the 80% limitation.~~limitations and our NOLs and other tax attributes may expire before they are fully utilized. 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 these reasons, we may not be able to realize a tax benefit from the use of our NOLs, whether or not we attain profitability.~~

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Risks Relating to Intellectual Property

If we fail to adequately protect our ~~proprietary~~intellectual property rights, our ~~competitive position~~business could be ~~impaired~~adversely affected and we ~~may lose valuable assets, generate reduced net revenue, and~~could incur ~~costly litigation~~additional expenses to protect our rights.

~~Our success depends, in part, upon protecting our proprietary information and technology.~~ We rely on a combination of patents, copyrights, trademarks, service marks, trade secret laws, and contractual restrictions to establish and protect our intellectual property and proprietary ~~rights.~~rights, which are critical to our success. The steps we take to protect our intellectual property, however, may be ~~inadequate.~~ inadequate, and various events outside of our control may pose a threat to our intellectual property rights.

We cannot assure you that any patents or trademarks will be issued with respect to our currently pending patent and trademark applications in a manner that gives us adequate defensive protection or competitive advantages, if at all, or that any patents or trademarks issued to us will not be challenged, invalidated, or circumvented.applications. Our ~~currently issued~~ patents and trademarks ~~and any patents or trademarks that~~ may be ~~issued in the future with respect to pending~~contested, circumvented, or ~~future applications~~found unenforceable or invalid, and we may ~~not provide sufficiently broad protection, or they may not prove to be enforceable in actions against alleged infringers. We will~~ not be able to ~~protect~~prevent third parties from infringing, diluting, or otherwise violating them. There can be no guarantee that others will not independently develop similar products, duplicate any of our products, or design around our patents. As the development, adoption, and use of generative AI technologies grows, our intellectual property ~~if we are unable to enforce our rights or if we do not detect unauthorized~~may inadvertently be exposed through the use of ~~our intellectual property.~~

Despite our precautions, it may be possible for unauthorized third parties to copy our platform, or certain aspects of our platform, and use information that we regard as proprietary to create products that compete with our platform. Some license provisions protecting against unauthorized use, copying, transfer, and disclosure of our platform, or certain aspects of our platform, may be unenforceable under the laws of certain jurisdictions and foreign countries.

such technologies. Further, the laws of some foreign countries domay not protect ~~proprietary~~our intellectual property rights to the same extent as the laws of the United States, and ~~mechanisms for enforcement of~~effective intellectual property ~~rights~~protection and mechanisms may not be available in some foreign countries may be inadequate. To the extent we continue to expand our international activities, our exposure to unauthorized copying and use of our platform, or certain aspects of our platform, and proprietary information may increase. Further, competitors, foreign governments, foreign government-backed actors, criminals, or other third parties may gain unauthorized access to our proprietary information and technology. Accordingly, despite our efforts, we may be unable to prevent third parties from infringing upon or misappropriating our technology and intellectual property.those jurisdictions.

We also rely in part on trade secrets, proprietary ~~know-how,~~technology, and other confidential information to maintain our competitive position. Although we enter into confidentiality ~~and invention assignment~~ agreements with our employees, ~~consultants,~~service providers, and ~~contractors and enter into confidentiality agreements with the parties with whom we have~~other actual or potential strategic ~~relationships and~~ business ~~alliances, no assurance can be given that~~partners, these agreements ~~will~~may not be effective in controlling access to and distribution of our platform, or certain other aspects of our ~~platform,~~trade secrets, proprietary technology, and ~~proprietary~~other confidential information. ~~Further, these agreements do not prevent our competitors from independently developing technologies that are substantially equivalent or superior to our platform.~~

To protect our intellectual property rights, we may be required to spend significant resources to monitor and protect these rights, in the U.S. and internationally, and we may not be able to detect infringement by third parties. Litigation may be necessary in the future to enforce our intellectual property rights and to protect our trade secrets. Such litigation could be costly, time consuming, and distracting to management and could result in the impairment or loss of portions of our intellectual property. Furthermore, our efforts to enforce our intellectual property rights may be met with defenses, counterclaims, and countersuits attacking the validity and enforceability of our intellectual property rights. Our inability to protect our proprietary technology against unauthorized copying or use, as well as any costly litigation or diversion of our management’s attention and resources, could delay further sales or the implementation of our platform, impair the functionality of our platform, delay introductions of new capabilities, result in our substituting inferior or more costly technologies into our platform, or injure our reputation. In addition, we may be required to license additional technology from third parties to develop and market new capabilities, and we cannot assure you that we could license that technology on commercially reasonable terms or at all, and our inability to license such technology could impair our ability to compete.

Our use of open source software could ~~negatively~~adversely affect our ability to sell our ~~products and subject us to possible litigation.~~

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products.

Our platform incorporates open source software, and we expect to continue to incorporate open source software in our products and platform in the future. ~~Few~~There have been claims challenging the use of ~~the licenses applicable to~~ open source software against companies that incorporate it into their products. If it is alleged that we have ~~been interpreted by courts, and there is a risk that these licenses~~not complied with an open source license, we could ~~be construed in a manner that could impose unanticipated conditions or restrictions on our ability to commercialize our products and platform.~~ incur significant legal expenses defending against such allegation.

If we fail to comply with an open source ~~licenses,~~license, we may be ~~subject~~required to ~~certain requirements, including requirements that we~~ offer our products that incorporate the open source software for no cost, ~~that we~~ make available the source code for modifications or derivative works we create based upon, incorporating, or using the open source software, and ~~that we~~ license such modifications or derivative works under the terms of applicable open source licenses. If an author or other third party that distributes such open source software were to allege that we had not complied with the conditions of one or more of these licenses, we could be required to incur significant legal expenses defending against such allegations and could be subject to significant damages, enjoined from generating net revenue from customers using products that contained the open source ~~software, and required to comply with onerous conditions or restrictions on these products. In any of these events, we and our customers could~~software. We may also be required ~~to seek licenses from third parties to continue offering our products and operating our platform and~~ to re-engineer our products or platform or to discontinue offering our products to customers in the event re-engineering cannot be accomplished on a timely basis. Any of the foregoing could require us to devote additional research and development resources to re-engineer our products or platform, could result in customer dissatisfaction, andproducts. These events may adversely affect our business, results of operations, and financial condition.

In addition to risks related to license requirements, open source licensors generally do not provide warranties or other contractual protections regarding infringement, misappropriation, or other violations, the quality or security of code, or the origin of the software. Many of the risks associated with the use of open source software cannot be eliminated and could adversely affect our business, results of operations, and financial condition. For instance, open source software developers operate outside of our control and open source software may have security vulnerabilities, defects, or errors of which we are not aware. It may take a significant amount of time to address such vulnerabilities, defects, or errors once we are aware of them, which could negatively impact our products and services and result in liability to us, our vendors and service providers.

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We may be accused of infringing the intellectual property rights of third parties.

We have in the past and may in the future be accused of infringing, misappropriating, or otherwise violating the intellectual property or other proprietary rights of third ~~parties, including their copyrights, trademarks, or patents, or improperly using or disclosing their trade secrets, or otherwise~~parties. Although we seek to comply with the statutory, regulatory, and judicial frameworks and the terms and conditions of statutory licenses, we cannot assure you that we are not infringing or violating ~~their proprietary rights.~~ any third-party intellectual property rights, or that we will not do so in the future.

The costs of ~~supporting any~~ litigation ~~or disputes related to such claims~~ can be considerable, and we cannot assure you that we will achieve a favorable outcome of any such claim. Although we carry insurance, our insurance may not cover potential claims of this type or may not be adequate to cover us for all liability that may be imposed. If any such claim is valid, we may be ~~compelled~~required to ~~cease our use of~~stop using such intellectual property or other proprietary rights and pay damages, ~~potentially~~which could adversely ~~affecting~~affect our business. Even if such claims were not valid, defending them could be expensive and distract our management ~~team, adversely affecting our results of operations.~~

Although we require our employees to not use the proprietary information or know-how of others in their work for us and we are not currently subject to any claims that they have done so, we may in the future become subject to claims that these employees have divulged, or we have used, proprietary information of these employees’ former employers. Litigation may be necessary to defend against these claims. If we are unable to successfully defend any such claims, we may be required to pay monetary damages and to discontinue our commercialization of certain solutions. In addition, we may lose valuable intellectual property rights or personnel. A loss of key research personnel or their work product could hamper our ability to develop new solutions and features for our existing solutions, which could severely weaken our business. Even if we are successful in defending against these claims, litigation efforts are costly, time-consuming and a significant distraction to management.team.

We ~~currently have a number of agreements in effect pursuant to which 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 ~~solutions~~products of third-party ~~patents or other~~ intellectual property ~~rights, which may include patents, copyrights, trademarks, or trade secrets.~~rights. The scope of these indemnity obligations varies, but may, in some instances, include indemnification for damages and expenses, including attorneys’ fees. Our insurance may not cover all intellectual property infringement claims. A claim that one of our solutions infringes a third party’s intellectual property rights, even if untrue, could damage our relationships with our customers, may deter future customers from purchasing our solutions, and could expose us to costly litigation and settlement expenses.varies. Even if we are not a party to any litigation between a customer and a third party relating to infringement by our ~~solutions,~~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.

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Risks Relating to Ownership of Our Class A Common Stock

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.

The ~~market~~trading price of our Class A common stock has been and may continue to be highly volatile and could be subject to wide fluctuations. This ~~market~~ volatility, as well as general economic, market, industry, and political conditions, and the occurrence of the risks discussed in this risk factor section, could reduce the market price of shares of our Class A common stock despite our operating performance.

~~In addition, our results of operations could be below the expectations of public market analysts and investors due to a number of potential factors, including:~~

•~~overall performance of the economy, equity markets, and/or publicly-listed technology and fintech companies;~~

•~~actual or anticipated fluctuations in our net revenue or other operating metrics;~~

•~~our actual or anticipated operating performance and the operating performance of our competitors;~~

•~~the financial projections we may provide to the public, any changes in those projections, or our failure to meet those projections;~~

•failure of securities analysts to maintain coverage of us, changes in financial estimates by any securities analysts who follow our company, or our failure to meet the estimates or the expectations of investors;

•~~rumors and market speculation involving us or other companies in our industry;~~

•~~announcements by us or our competitors of significant innovations, new products, services or capabilities, acquisitions, strategic partnerships or investments, joint ventures, or capital commitments;~~

•~~new laws or regulations or new interpretations of existing laws or regulations applicable to our business;~~

•~~lawsuits threatened or filed against us;~~

•~~actual or perceived privacy or data security incidents;~~

•~~developments or disputes concerning our intellectual property or other proprietary rights;~~

•~~changes in accounting standards, policies, guidelines interpretations or principles;~~

•~~changes in our board of directors, management, or key personnel;~~

•other events or factors, including those resulting from war (including the significant military action against Ukraine launched by Russia and any related political or economic responses and counter-responses or otherwise by various global actors or general effect on the global economy), incidents of terrorism, pandemics (including the COVID-19 pandemic), or elections, or responses to these events; and

•~~sales of additional shares of our Class A common stock by us or our stockholders.~~

Because of these fluctuations, comparing our results of operations on a period-to-period basis may not be meaningful. You should not rely on our past results as an indication of our future performance. This variability and unpredictability could also result in our failing to meet the expectations of industry or financial analysts or investors for any period.

~~These broad market and industry factors may decrease the market share of our Class A common stock, regardless of our actual operating performance.~~ In addition, stock markets in general, and the market for technology and fintech companies in particular, have from time to time experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. In the past, stockholders have often instituted securities class action litigation against a company following periods of overall market volatility and volatility in the market price of that company’s securities. ~~If we were to become involved in securities~~Securities litigation ~~could~~can result in substantial costs and divert resources and the attention of management.

~~Table~~ See Part I, Item 3 of ~~Contents~~

this Annual Report on Form 10-K for more information about litigation proceedings.

The dual class structure of our common stock has the effect of concentrating voting control with those stockholders who hold shares of our Class B common stock, including our directors, executive officers, and their affiliates. As a result of the dual class structure of our common stock, the trading price of our Class A common stock may be depressed.

Our Class B common stock has 10 votes per share, and our Class A common stock has one vote per share. Our directors, executive officers, and their affiliates, beneficially own in the aggregate ~~50.1%~~52.4% of the voting power of our capital stock as of December 31, ~~2022. Because of the ten-to-one voting ratio between our Class B and Class A common stock, the~~2023. 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.

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. In addition, this concentrated control may prevent or discourage unsolicited acquisition proposals or offers for our capital stock that you may believe are in your best interest as ~~one of our stockholders.~~a stockholder.

~~Future transfers~~Transfers by holders of Class B common stock will generally result in those shares converting to Class A common stock, subject to limited exceptions, ~~such as certain transfers effected for estate planning purposes. The conversion of Class B common stock~~which has had and will continue to ~~Class A common stock will~~ have the effect ~~over time,~~ of increasing the relative voting power of those holders of Class B common stock who retain their shares in the long term. As a result, it is possible that one or more of the persons or entities holding our Class B common stock could gain significant voting control as other holders of Class B common stock sell or otherwise convert their shares into Class A common stock.

Our dual class structure may also depress the trading price of our Class A common stock due to negative perceptions by market participants and other stakeholders. Certain index providers have announced restrictions on including companies with ~~multiple class~~multiple-class share structures in certain of their ~~indexes.~~indices. Similarly, several stockholder advisory firms have announced their opposition to the use of ~~multiple class~~multiple-class structures. Any exclusion from indices or criticism of our corporate governance practices by stockholder advisory firms could result in a less active trading market for our Class A common stock.

Our issuance of additional capital stock may dilute your ownership and adversely affect the market price of our Class A common stock.

We expect to issue additional capital stock in the future that will result in dilution to all other stockholders. For example, we may attempt to obtain financing or to further increase our capital resources by issuing additional shares of our Class A common stock or securities convertible into shares of our Class A common stock or offering debt or other securities. We could ~~also~~ issue shares of our Class A common stock or securities convertible into our Class A common stock or debt or other securities in connection with acquisitions or other strategic ~~transactions.~~ transactions or in an attempt to obtain financing or to further increase our capital resources.

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Additionally, we expect to grant equity awards to employees ~~directors,~~ and ~~consultants~~directors under our stock incentive plan. We have granted equity awards to employees and directors under our stock incentive plans in the past, and such grants may dilute your ownership as the equity vests and the RSUs are released and the options are exercised. In addition, as of December 31, 2023, we had 36,670,638 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 38,177,072 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 ~~including in connection with a financing, acquisition, investment or under any equity incentive plans or that we may adopt in the future,~~ will dilute your percentage ownership. In addition, issuing additional shares of our Class A common stock or securities convertible into our Class A common stock or debt or other securities may dilute ~~the~~your economic and voting rights ~~of our existing stockholders~~ and would likely reduce the market price of our Class A common stock both upon issuance and conversion, in the case of securities convertible into our Class A common stock.

As of December 31, 2022, unrecognized compensation costs related to unvested RSUs and unvested outstanding stock options, excluding the Executive Chairman Long-Term Performance Award, formerly known as the CEO Long-Term Performance Award, were $296.0 million and $58.6 million, respectively. These costs are expected to be recognized over a weighted-average period of 3.3 years and 2.4 years, respectively.

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In April and May 2021, our board of directors granted our Executive Chairman and then-Chief Executive Officer equity incentive awards in the form of performance-based stock options covering 19,740,923 and 47,267 shares of our Class B common stock with an exercise price of $21.49 and $23.40 per share, respectively, or, collectively, the Executive Chairman Long-Term Performance Award. The Executive Chairman Long-Term Performance Award vests upon the satisfaction of a service condition and the achievement of certain stock price goals.

As of December 31, 2022, the aggregate unrecognized compensation cost related to the Executive Chairman Long-Term Performance Award was $117.0 million, which is expected to be recognized over the remaining derived service period of 3.1 years.

In addition, as of December 31, 2022, we had 36,156,445 option shares outstanding that, if fully vested and exercised, would result in the issuance of an equal number of shares of Class B common stock or Class A common stock, as well as 34,146,546 total shares of Class B or Class A common stock subject to RSU awards. All of the shares of Class B common stock issuable upon the exercise of stock options, and the shares reserved for future issuance under our equity incentive plans are registered for public resale under the Securities Act following conversion to shares of Class A common stock. Accordingly, these shares will be able to be freely sold in the public market upon issuance, subject to volume limitations under Rule 144 for our executive officers and directors and applicable vesting requirements. Certain holders of our Class B common stock have rights, subject to some conditions, to require us to file registration statements for the public resale of the Class A common stock issuable upon conversion of such shares or to include such shares in registration statements that we may file for us or other stockholders.

We do not intend to pay dividends on our Class A common stock in the foreseeable future and, consequently, the ability of Class A common stockholders to achieve a return on investment will depend on appreciation in the trading price of our Class A common stock.

We have never declared or paid any cash dividends on our capital stock. We intend to retain any earnings to finance the operation and expansion of our business, and we do not anticipate paying any cash dividends in the foreseeable future. We anticipate that we will retain all of our future earnings for use in the operation of our business and for general corporate purposes. Any determination to pay dividends in the future will be at the discretion of our board of directors. Accordingly, investors must rely on sales of their Class A common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investments.

Provisions in our charter documents and under Delaware law could make an acquisition of our company more difficult, limit attempts by our stockholders to replace or remove our current board of directors, and limit the trading price of our Class A common stock.

Provisions in our amended and restated certificate of incorporation and amended and restated bylaws may have the effect of delaying or preventing a change of control or changes in our management. Our amended and restated certificate of incorporation and amended and restated bylaws include provisions that:

•provide that our board of directors will be classified into three classes of directors with staggered three-year terms;

•permit our board of directors to establish the number of directors and fill any vacancies and newly-created directorships;

•require super-majority voting to amend some provisions in our amended and restated certificate of incorporation and amended and restated bylaws;

•authorize the issuance of “blank check” preferred stock that our board of directors could use to implement a stockholder rights plan;

•provide that only the ~~Chairperson~~chairperson of our board of directors, our ~~Chief Executive Officer,~~chief executive officer, or a majority of our board of directors will be authorized to call a special meeting of stockholders;

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•provide for a dual class common stock structure where holders of our Class B common stock are able to control the outcome of matters requiring stockholder approval, even if they own significantly less than a majority of the outstanding shares of our Class A and Class B common stock, including the election of directors and significant corporate transactions, such as a merger or other sale of our company or its assets;

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•prohibit stockholder action by written consent, thereby requiring all stockholder actions to be taken at a meeting of our stockholders;

•provide that the board of directors is expressly authorized to make, alter, or repeal our amended and restated bylaws; and

•contain advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted upon by stockholders at annual stockholder meetings.

Moreover, Section 203 of the Delaware General Corporation Law may discourage, delay, or prevent a change in control of our company. Section 203 imposes certain restrictions on mergers, business combinations, and other transactions between us and holders of 15% or more of our common stock.

Our amended and restated bylaws designate state or federal courts located within the State of Delaware as the exclusive forum for certain litigation that may be initiated by our stockholders, potentially limiting stockholders’ ability to obtain a favorable judicial forum for disputes with us.

Our amended and restated bylaws provide that, unless we consent in writing to the selection of an alternative forum, to the fullest extent permitted by law, the Court of Chancery of the State of Delaware is the sole and exclusive forum for any state law claims for:

•any derivative action or proceeding brought on our behalf;

•any action asserting a claim of breach of fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders;

•any action asserting a claim arising pursuant to the Delaware General Corporation Law, our amended and restated certificate of incorporation, or our amended and restated bylaws; or

•any action asserting a claim that is governed by the internal affairs doctrine ~~or the Delaware~~(the “Delaware Forum ~~Provision.~~Provision”).

The Delaware Forum Provision does not apply to any causes of action arising under the Securities Act of 1933, as amended (the “Securities Act”) or the Exchange Act. Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. Accordingly, both state and federal courts have jurisdiction to entertain such claims. To prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations, our amended and restated bylaws provide that, unless we consent in writing to the selection of an alternative forum, the United States District Court for the District of Delaware shall be the sole and exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act ~~or the Federal~~(the “Federal Forum ~~Provision,~~Provision”), as we are incorporated in the State of Delaware.

In addition, our amended and restated bylaws provide that any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock is deemed to have notice of and consented to the Delaware Forum Provision and the Federal Forum Provision; provided, however, that stockholders cannot and will not be deemed to have waived our compliance with the U.S. federal securities laws and the rules and regulations thereunder.

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The Delaware Forum Provision and the Federal Forum Provision in our amended and restated bylaws may impose additional litigation costs on stockholders in pursuing any such claims. Additionally, these forum selection clauses may limit our stockholders’ ability to bring a claim in a judicial forum that they find favorable for disputes with us or our directors, officers, or employees, potentially discouraging the filing of lawsuits against us and our directors, officers, and employees, even though an action, if successful, might benefit our stockholders. In addition, while the Delaware Supreme Court ruled in March 2020 that federal forum selection provisions purporting to require claims under the Securities Act be brought in federal court are “facially valid” under Delaware law, there is uncertainty as to whether other courts will enforce our Federal Forum Provision. If the Federal Forum Provision is found to be unenforceable, we may incur additional costs associated with resolving such matters. The Federal Forum Provision may also impose additional litigation costs on stockholders who assert that the provision is not enforceable or invalid. The Court of Chancery of the State of Delaware and the United States District Court for the District of Delaware may also reach different judgments or results than would other courts, including courts where a stockholder considering an action may be located or would otherwise choose to bring the action, and such judgments may be more or less favorable to us than our stockholders.

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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.

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. 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.

General Risk Factors

Unfavorable conditions in the global economy could adversely affect our business and financial results.

Our business, the industry, and our customers’ businesses are generally sensitive to macroeconomic conditions. 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. 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.

Weak economic conditions or a significant deterioration in economic conditions could result in a reduced volume of business for our customers and prospective customers, demand for, and use of, our platform, products, and services may decline, and prospective customers could delay adoption or elect not to adopt our platform. If spending by their customers declines, our customers could process fewer payments with us or, if our customers cease to operate, they would stop using our platform, products, and services altogether. Moreover, if the financial condition of a customer deteriorates significantly or a customer becomes subject to a bankruptcy proceeding, we may not be able to recover amounts due to us from the customer.

Weak economic conditions may make it more difficult to collect on outstanding accounts receivable. The global credit and financial markets have from time to time experienced extreme volatility and disruptions, including severely diminished liquidity and credit availability, rising interest and inflation rates, declines in consumer confidence, declines in economic growth, increases in unemployment rates, and uncertainty about economic stability. The bank closures and failures in 2023 created bank-specific and broader financial institution liquidity risk and concerns. Future adverse developments with respect to specific financial institutions or the broader financial services industry may lead to market-wide liquidity shortages, impair the ability of companies to access near-term working capital needs, and create additional market and economic uncertainty.

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Our business is subject to the risks of earthquakes, fire, floods, pandemics, and other natural catastrophic events, and to interruption by man-made issues such as power disruptions and strikes.

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. Our insurance coverage may be insufficient to compensate us for the losses that may occur. In addition, strikes, wars, terrorism, and other geopolitical unrest could cause disruptions in our business and lead to interruptions, delays, or loss of critical data. If a natural disaster, power outage, connectivity issue, or other event occurs that impacts our employees’ ability to work remotely, our business and results of operations could be adversely affected. We may not have sufficient protection or recovery plans in certain circumstances, such as a significant natural disaster, and our business interruption insurance may be insufficient to compensate us for losses that may occur.

~~The requirements of being a public company may strain our resources, divert management’s attention and affect our ability to attract and retain executive management and qualified board members.~~

As a public company, we are subject to the reporting requirements of the Exchange Act, the listing standards of Nasdaq and other applicable securities rules and regulations. We expect that the requirements of these rules and regulations will continue to increase our legal, accounting, and financial compliance costs, make some activities more difficult, time-consuming and costly, and place significant strain on our personnel, systems, and resources. For example, the Exchange Act requires, among other things, that we file annual, quarterly, and current reports with respect to our business and results of operations and comply with the Sarbanes-Oxley Act and other regulations.

As a result of the complexity involved in complying with the rules and regulations applicable to public companies, our management’s attention may be diverted from other business concerns, potentially adversely affecting our business, results of operations, and financial condition. Although we have already hired additional employees to assist us in complying with these requirements, we may need to hire more employees in the future or engage outside consultants or contractors, which will increase our operating expenses.

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In addition, changing laws, regulations, and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs and making some activities more time-consuming. These laws, regulations, and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies, potentially resulting in continued uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governancepractices. We intend to invest substantial resources to comply with evolving laws, regulations, and standards, and this investment may result in increased general and administrative expenses and a diversion of management’s time and attention from business operations to compliance activities. If our efforts to comply with new laws, regulations, and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to their application and practice, regulatory authorities may initiate legal proceedings against us and our business may be adversely affected.

Being a public company and being subject to these new rules and regulations makes it more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These factors could also make it more difficult for us to attract and retain qualified members of our board of directors, particularly to serve on our audit committee and compensation committee, and qualified executive officers.

Most members of our management team have limited experience managing a publicly traded company, interacting with public company investors and complying with the increasingly complex laws pertaining to public companies. Our management team may not successfully or efficiently manage our transition to being a public company subject to significant regulatory oversight and reporting obligations under the federal securities laws and the continuous scrutiny of securities analysts and investors. These new obligations and constituents require significant attention from our management and could divert their attention away from the day-to-day management of our business, potentially adversely affecting our business, results of operations, and financial condition.

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Item 1B. Unresolved Staff Comments

None.

Item 1C. Cybersecurity

Our industry is subject to various cybersecurity risks that could adversely affect our business, financial condition, and results of operations. While we have not, as of the date of this Annual Report on Form 10-K, experienced a cybersecurity threat or incident that resulted in a material adverse impact to our business or operations, there can be no guarantee that we will not experience such an incident in the future. See Item 1A, “Risk Factors,” in this Annual Report on Form 10-K, including the section titled “Risk Factors—Risks Relating to Regulation” for additional information regarding the risks related to cybersecurity threats.

Our Chief Information Security Officer (“CISO”) is responsible for Marqeta’s information security posture and cybersecurity program. We believe our CISO is qualified to assess and manage our material risks from cybersecurity threats based on 15 years of cybersecurity and risk management expertise as a security and risk management leader at various public and private companies and as a cyber threat intelligence analyst for a branch of the United States military. Our CISO reports to our Chief Product and Technology Officer and oversees a team of cybersecurity professionals in areas including Governance, Risk, and Compliance, Product and Infrastructure Security, Security Operations, and Identity Security.

Our cybersecurity program is designed to align with certain industry standards and best practices, such as ISO 27001 and the National Institute of Standards and Technology Cybersecurity Framework. We have a Cyber Incident Response Plan which defines roles and responsibilities in the event of a cybersecurity incident, as well as the processes for keeping the CISO, senior management, and the board of directors informed about the prevention, detection, mitigation, and remediation of cybersecurity incidents.

Our board of directors administers its cybersecurity risk oversight function directly as a whole, as well as through the audit committee. Our CISO provides quarterly and as-needed briefings to the audit committee regarding cybersecurity risks and activities, including any recent cybersecurity incidents and related responses, cybersecurity systems testing, and activities of third party consultants. Our audit committee provides quarterly and as-needed updates to the board of directors on such reports and management provides annual and as-needed updates to the board of directors regarding our cybersecurity program.

We have policies and processes in place for assessing, identifying, and managing material cybersecurity risks, and integrate these processes into our overall risk management systems. We conduct periodic risk assessments to identify reasonably foreseeable internal and external cybersecurity risks, the likelihood and potential damage that could result from such risks, and the sufficiency of existing policies, procedures, systems, and safeguards in place to manage such risks.

Following these risk assessments, we develop strategies, policies, standards, and action plans to minimize identified risks and reasonably address any identified gaps in existing safeguards. These steps include vulnerability management, shift-left secure product design, data encryption, endpoint security, network security, limiting and authorizing access controls, and multi-factor authentication for access to systems with data. We also employ system monitoring, logging, and alerting to retain and analyze the security state of our corporate and production infrastructure. As part of our overall risk management system, all employees are required to complete annual cybersecurity training and relevant employees are trained at least annually on applicable safeguards.

We engage consultants in connection with our risk assessment processes to help us design and implement our cybersecurity policies and procedures, as well as to monitor and test our safeguards. We manage third party service providers using a risk-based approach intended to determine if the relevant third parties 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 any suspected breach of their security measures that may affect our business.

The maturation and scaling of our cybersecurity program is ongoing and despite our investments in our cybersecurity program, there will always be residual risk and the potential for control failure or bypass by a determined cyber threat actor.

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Item 2. Properties

Our corporate headquarters is located in Oakland, California, where we currently lease approximately 63,284 square feet pursuant to a lease agreement that expires in 2026. We also lease ~~and purchase service memberships to~~an additional ~~facilities~~facility in London, ~~and Manchester,~~ United ~~Kingdom as well as Melbourne, Australia.~~Kingdom. We believe that our facilities are suitable to meet our current needs.

Item 3. Legal Proceedings

~~We are not currently a party to any legal proceedings that we believe to be material to our business or financial condition.~~ From time to time, we may be subject to legal proceedings and claims arising in the ordinary course of business. We are currently involved in the following matter:

On August 24, 2023, a putative class action and shareholder derivative lawsuit was filed in the case captioned Stephanie Smith v. Jason Gardner, et al. (Case No. 2023-0872-MTZ) in the Court of Chancery for the State of Delaware against each of the members of our board of directors and naming Marqeta as a nominal defendant. The complaint alleges that the individual defendants breached fiduciary duties in approving the 2023 Share Repurchase Program by failing to implement measures to prevent Marqeta founder Jason Gardner from acquiring control of the Company or to ensure that unaffiliated stockholders receive a control premium. The plaintiff seeks damages and injunctive relief in the case, among other relief.

On February 24, 2024 the parties entered into a Standstill and Release Agreement (the “Standstill Agreement”) in which (i) the plaintiff agreed to file a stipulation of dismissal of the lawsuit, (ii) Mr. Gardner agreed not to take unilateral, affirmative action to increase his voting power above 49.99% of the total voting power of the Company’s outstanding stock for the period of time between and including February 24, 2024 and September 11, 2024, and (iii) the parties agreed to releases and related provisions. The stipulation of dismissal has received court approval. The summary of the Standstill Agreement is qualified in its entirety by reference to the full text, which is filed as Exhibit 99.1 to this Form 10-K and is incorporated herein by reference.

Item 4. Mine Safety

Not applicable.

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PART II

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information for Common Stock

Our Class A common stock has traded on the Nasdaq Global Select Market under the symbol “MQ” since our ~~initial public offering~~IPO on June 9, 2021. Prior to that date, there was no public market for our common stock. There is no public trading market for our Class B common stock.

Stockholders

As of February ~~17, 2023,~~23, 2024, we had 5243 holders of record of our Class A common stock and 6957 holders of record of our Class B common stock. Because many of the shares of our Class A common stock are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of beneficial owners of our Class A common stock represented by the record holders.

Dividend Policy

We have ~~never~~not declared or paid any cash dividend on our capital stock. We currently intend to retain any future earnings and do not expect to pay any dividends in the foreseeable future. Any future determination to declare cash dividends will be made at the discretion of our board of directors, subject to applicable laws, and will depend on a number of factors, including our financial condition, results of operations, capital requirements, any contractual restrictions, general business conditions, and other factors that our board of directors may deem relevant.

Stock Performance Graph

The following performance graph shall not be deemed “soliciting material” or deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of Section 18 of the Exchange Act, and shall not be deemed to be incorporated by reference into any of our filings under the Exchange Act or the Securities Act.

The following stock performance graph ~~compares~~depicts the cumulative total return on our Class A common stock relative to the cumulative total returns of the Nasdaq Composite Index and the S&P Information Technology Index during each monthly period from June 9, 2021 (the date our Class A common stock began trading on the Nasdaq Global Select Market) through December 31, ~~2022.~~2023. All values assume a $100 initial investment and reinvestment of dividends. The returns shown are based on historical results and are not intended to ~~suggest~~be indicative of future performance.

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Company/Index (1)
06/09/21 06/30/21 09/30/21 12/31/21 03/31/22 06/30/22 09/30/22 12/31/22
Marqeta, Inc. $ 100.00 $ 91.97 $ 72.48 $ 56.26 $ 36.17 $ 26.57 $ 23.33 $ 20.02
Nasdaq Composite Index $ 100.00 $ 104.29 $ 104.05 $ 112.84 $ 102.75 $ 79.86 $ 76.73 $ 76.13
S&P Information Technology Index $ 100.00 $ 105.62 $ 107.03 $ 124.90 $ 114.46 $ 91.29 $ 85.62 $ 89.68


~~(1) Prepared by Zacks Investment Research, Inc. Used with permission. All rights reserved.~~
~~Index Data: Copyright NASDAQ OMX, Inc. Used with permission. All rights reserved.~~
~~Copyright Standard and Poor’s, Inc. Used with permission. All rights reserved.~~

~~Issuer~~ Purchase of Equity Securities by the Issuer

The following table contains information relating to the repurchases of our common stock made by us in the three months ended December 31, ~~2022:~~2023:

Period
Total Number of
Shares Purchased (1)
Average Price
Paid per Share
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2)
October 1 - October 31, 2022 3,050,868 $ 7.25 3,050,805 63,969,722.39
November 1 - November 30, 2022 2,802,531 $ 6.69 2,798,972 45,195,438.19
December 1 - December 31, 2022 3,848,712 $ 6.32 3,848,712 20,799,675.89
Total 9,702,111 9,698,489


Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2)
October 1 - October 31, 2023	3,804,287	$	5.47	3,804,287	67,271,767
November 1 - November 30, 2023	4,091,046	$	5.72	4,091,046	43,858,299
December 1 - December 31, 2023	1,779,177	$	6.53	1,779,177	32,244,882
Total	9,674,510			9,674,510

(1) Represents share repurchased as part of a publicly announced program and shares of unvested common stock previously issued upon early exercise of unvested stock options that were repurchased by us from former employees upon their termination in accordance with the terms of their stock option agreements. We purchased the shares from the former employees at the respective original exercise prices.

~~(2)~~ On ~~September 14, 2022,~~May 8, 2023, our board of directors authorized a share repurchase program of up to ~~$100~~$200 million of our Class A common stock beginning ~~September 15, 2022.~~May 11, 2023. Under the repurchase program, we ~~were~~are authorized to repurchase shares through open market purchases, in privately negotiated transactions or by other means, in accordance with applicable federal securities laws, including through trading plans under Rule 10b5-1 of the Exchange Act. The share repurchase program has no set expiration date.

Use of Proceeds

On June 11, 2021, we closed our ~~initial public offering, or the~~ IPO, of 52,272,727 shares of our Class A common stock at an offering price of $27.00 per share, including 6,818,181 shares pursuant to the exercise of the underwriters’ option to purchase additional shares of our Class A common stock, resulting in aggregate net proceeds to us of $1.3 billion after deducting underwriting discounts and commissions of $91.6 million, and offering costs of $7.5 million. All of the shares issued and sold in our IPO were registered under the Securities Act pursuant to a registration statement on Form S-1 (File No. 333-256154), which was declared effective by the SEC on June 8, 2021. Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC acted as representatives of the underwriters for the offering.

We also used $10.9 million of the net proceeds from our IPO to satisfy the tax withholding and remittance obligations related to the settlement of our outstanding restricted stock units in connection with the offering.

No payments were made to our directors or officers or their associates, holders of 10% or more of any class of our equity securities, or to our affiliates in connection with the issuance and sale of the securities registered.

There has been no material change in the planned use of the IPO proceeds as discussed in our final prospectus filed with the SEC on June 10, 2021, pursuant to Rule 424(b) of the Securities Act.

Item 6. Reserved

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Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and the related notes included elsewhere in this Annual Report on Form 10-K. This discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties. As discussed in the section titled “Note About Forward Looking Statements,” our actual results may differ materially from those discussed in these forward-looking statements as a result of various factors, including those set forth under the section titled “Risk Factors” under Part I, Item 1A. You should read the following discussion and analysis of our financial condition and results of operations together with our Audited Consolidated Financial Statements and the related notes included elsewhere in this Annual Report on Form 10-K.

A discussion regarding our liquidity, financial condition, and results of operations for the fiscal year ended December 31, 2023 compared to the fiscal year ended December 31, 2022 is presented below. A discussion regarding our liquidity, financial condition, and results of operations for the fiscal year ended December 31, 2022 compared to the fiscal year ended December 31, 2021 ~~is presented below. A discussion regarding our liquidity, financial condition and results of operations for the fiscal year ended December 31, 2021 compared to the fiscal year ended December 31, 2020~~ can be found in “Management's Discussion and Analysis of Financial Condition and Results of Operations” in in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2021~~2022 filed with the SEC on ~~March 11, 2022,~~February 28, 2023, which is hereby incorporated by reference.

Overview

Marqeta’s mission is modernizing financial services by making the entire payment experience native and delightful. Marqeta’s modern ~~card issuing~~ platform empowers our customers to create customized and innovative payment card programs with configurability and flexibility. Marqeta’s open APIs provide instant access to highly scalable, cloud-based payment infrastructure that enables customers to embed the payments experience into apps or websites for a personalized user experience. Customers can launch and manage their own card programs, issue cards, ~~giving them the ability~~and authorize and settle payment transactions quickly using our platform. We also deliver robust card program management, allowing our customers to embed Marqeta in their offering without having to build more configurable and flexible payment experiences. We serve customers in multiple industry verticals including on-demand services, lending (including BNPL financing), expense management, disbursements, online marketplaces, and digital banking. Before the rise of modern card issuing, issuing cards was slow,certain complex and subject to mistakes. Marqeta helps solve these problems. Our platform, powered by open APIs, enables businesses to develop modern, frictionless payment card experiences for consumer and commercial use cases.

Our modern architecture allows for flexibility, a high degree of configurability, and accelerated product development, democratizing access to card issuing technology. It also enables us to rapidly expand our platform’s functionality, creating added value for our customers.compliance elements or customer support services.

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

Impact of Macroeconomic Factors

We are unable to predict the impact macroeconomic factors, including ~~the~~ ~~military action against Ukraine launched by Russia~~,various geopolitical conflicts, ongoing supply chain shortages, higher inflation and interest rates, and ~~other~~uncertainty in global economic conditions will have on our processing volumes, and on our future results of operations. A deterioration in macroeconomic conditions could increase the risk of lower consumer spending, consumer and merchant bankruptcy, insolvency, business failure, higher credit losses, foreign currency fluctuations, or other business interruption, which may adversely impact our business. We continue to monitor ~~the situation~~these situations and may take actions that alter our operations and business practices as may be required by federal, state, or local authorities or that we determine are in the best interests of our customers, vendors, and employees.

In addition, the COVID-19 pandemic had a significant impact on the U.S. economy and the markets in which we operate. Various governmental measures to slow and control the spread of COVID-19 have led to uncertainty related to the labor market, inflation, and fiscal and monetary policy responses. Businesses continue to face difficulty in meeting consumer demand, and certain portions of the global supply chain remain challenged by shortages and delays.

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

~~Table of Contents~~

Key Operating Metric and Non-GAAP Financial Measures

We review a number of operating and financial metrics, including the key operating metric set forth below, to help us evaluate our business and growth trends, establish budgets, evaluate the effectiveness of our investments, and assess operational efficiencies. In addition to the results determined in accordance with GAAP, the following table sets forth a key operating metric and non-GAAP financial measures that we consider useful in evaluating our operating performance.

Year Ended December 31,
2022 2021 2020
Total Processing Volume (TPV) (in millions) $ 166,260 $ 111,133 $ 60,075
Net revenue (in thousands) $ 748,206 $ 517,175 $ 290,292
Gross profit (in thousands) $ 320,001 $ 231,705 $ 117,907
Gross margin 43 % 45 % 41 %
Net loss (in thousands) $ (184,780) $ (163,929) $ (47,695)
Net loss margin (25) % (32) % (16) %
Total operating expenses (in thousands) $ 529,809 $ 393,711 $ 164,994
Non-GAAP Measures:
Adjusted EBITDA (in thousands) $ (41,796) $ (12,767) $ (15,378)
Adjusted EBITDA margin (6) % (2) % (5) %
Non-GAAP operating expenses (in thousands) $ 361,797 $ 244,472 $ 133,285

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	Year Ended December 31,
	2023			2022			2021
Total Processing Volume (TPV) (in millions)	$	222,264		$	166,260		$	111,133

Net revenue (in thousands)	$	676,171		$	748,206		$	517,175
Gross profit (in thousands)	$	329,514		$	320,001		$	231,705
Gross margin	49		%	43		%	45		%
Net loss (in thousands)	$	(222,962)		$	(184,780)		$	(163,929)
Net loss margin	(33)		%	(25)		%	(32)		%
Total operating expenses (in thousands)	$	612,529		$	529,809		$	393,711

Non-GAAP Measures:
Adjusted EBITDA (in thousands)	$	(2,290)		$	(41,796)		$	(12,767)
Adjusted EBITDA margin	(0.3)		%	(6)		%	(3)		%
Non-GAAP operating expenses (in thousands)	$	331,804		$	361,797		$	244,472

Total Processing Volume ~~(TPV)~~(“TPV”) - TPV represents the total dollar amount of payments processed through our platform, net of returns and chargebacks. We believe that TPV is a key operating metric and a principal indicator of the market adoption of our platform, growth of our brand, growth of our customers' businesses and scale of our business.

Adjusted EBITDA - Adjusted EBITDA is a non-GAAP financial measure that is calculated as net income (loss) adjusted to exclude depreciation and amortization; share-based compensation expense; payroll tax related to share-based compensation; restructuring charges; acquisition related expenses which ~~consists~~consist of due diligence costs, transaction costs and integration costs related to potential or successful acquisitions and ~~transaction costs, integration costs~~cash and ~~amortization of intangible assets related to successful acquisitions;~~non-cash postcombination compensation expenses; income tax expense (benefit); and other income (expense) net, which consists of changes in the fair value of redeemable convertible preferred stock warrant liabilities (for periods prior to the IPO), interest income from our short-term investments, realized foreign currency gains and losses, ~~interest income from our marketable securities,~~ our share of equity method investments’ profit or loss, impairment of equity method investments or other financial instruments, and gain from sale of equity method investments. We believe that ~~adjusted~~Adjusted EBITDA is an important measure of operating performance because it allows management and our board of directors to evaluate and compare our core operating results, including our operating efficiencies, from period to period. Additionally, we utilize ~~adjusted~~Adjusted EBITDA as an input into our calculation of our annual employee bonus plans. See the section below titled “Use of Non-GAAP Financial Measures” for a discussion of the use of non-GAAP measures and a reconciliation of net loss to Adjusted EBITDA.

Adjusted EBITDA Margin - Adjusted EBITDA Margin is a non-GAAP financial measure that is calculated as Adjusted EBITDA divided by net revenue. This measure is used by management and our board of directors to evaluate our operating efficiency. See the section below titled “Use of Non-GAAP Financial Measures” for a discussion of the use of non-GAAP measures and a reconciliation of net loss to Adjusted EBITDA Margin.

~~Table of Contents~~

Non-GAAP operating expenses - Non-GAAP operating expenses is a non-GAAP financial measure that is calculated as total operating expenses adjusted to exclude depreciation and amortization; share-based compensation expense; payroll tax related to share-based compensation; restructuring charges; and acquisition related expenses which consists of due diligence costs, transaction cost and integration costs related to potential or successful acquisitions, and ~~transaction costs, integration costs~~cash and ~~amortization of intangible assets related to successful acquisitions.~~non-cash postcombination compensation expenses. We believe that non-GAAP operating expenses is an important measure of operating performance because it allows management and our board of directors to evaluate and compare our core operating results, including our operating efficiencies, from period to period. See the section below titled “Use of Non-GAAP Financial Measures” for a discussion of the use of non-GAAP measures and a reconciliation of total operation expenses to non-GAAP operating expenses.

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Components of Results of Operations

Net Revenue

We have two components of net revenue: platform services revenue, net and other services revenue.

Platform services revenue, net. Platform services revenue includes Interchange Fees, net of Revenue Share and other service-level payments to ~~customers.~~customers, and Card Network and Issuing Bank costs for certain customer arrangements where the Company is an agent in the delivery of services to the customer. Platform services revenue also includes processing and other fees. Interchange Fees are earned on card transactions we process for our ~~MxM~~ customers and are based on a percentage of the transaction amount plus a fixed amount per transaction. Interchange Fees are recognized when the associated transactions are settled.

Revenue Share payments are incentives to our ~~MxM~~ customers to increase their processing volumes on our platform. Revenue Share is generally computed as a percentage of the Interchange Fees earned or processing volume and is paid to our ~~MxM~~ customers monthly. Revenue Share payments are recorded as a reduction to net revenue. ~~As MxM~~Generally, as customers' processing volumes increase, the rates at which we share revenue ~~generally~~ increase.

Processing and other fees are priced as either a percentage of processing volume or on a fee per transaction basis and are earned when payment cards are used at automated teller machines or to make cross-border ~~purchases, and under our PxM agreements.~~purchases. Minimum processing fees, where customers' processing volumes fall below certain thresholds, are also included in processing and other fees.

~~Platform~~We recognize revenue when the promised services ~~revenue is recognized as Marqeta satisfies~~are complete, and our performance obligations ~~which typically aligns with~~are satisfied. Platform services are considered complete when we have authorized the ~~period when volumes~~transaction, validated that the transaction has no errors, and ~~transactions are processed.~~accepted and posted the data to our records.

Other services revenue. Other services revenue primarily consists of revenue earned for card fulfillment services. Card fulfillment fees are generally billed to customers upon ordering card inventory and recognized as revenue when the cards are shipped to the customers.

Costs of Revenue

Costs of revenue consist of Card Network fees, Issuing Bank fees, and card fulfillment ~~costs.~~costs for customer arrangements where the Company is the principal in providing services to the customer and excludes depreciation and amortization, which is reported separately within the Consolidated Statements of Operations and Comprehensive Loss. Card Network fees are equal to a specified percentage of processing volume or a fixed amount per transaction routed through the respective Card Network. Issuing Bank fees compensate our Issuing Banks for issuing cards to our customers and sponsoring our card programs with the Card Networks and are typically equal to a specified percentage of processing volume or a fixed amount per transaction. Card fulfillment costs include physical cards, packaging, and other fulfillment costs.

We have separate marketing and incentive arrangements with Card Networks that provide us with monetary incentives for establishing customer card programs with, and routing volume through, the respective Card Network. The amount of the incentives is generally determined based on a percentage of the processing volume or the number of transactions routed over the Card Network. We record these incentives as a reduction of Card Network fees ~~included~~ in ~~costs of revenue.~~customer arrangements where the Company is the principal. Generally, as processing volumes increase, we earn a higher rate of monetary incentives from these arrangements, subject to attaining certain volume thresholds during an annual measurement period. For certain incentive arrangements with an annual measurement period, the one-year period may not align with our fiscal year. Additionally, unusual fluctuations in Card Network fees can occur in the quarter in which volume thresholds are attained as higher incentive rates are applied to volumes over the entire measurement periods, which can span six or twelve months.

Operating Expenses

Compensation and Benefits. Compensation and benefits consist primarily of salaries, employee benefits, severance and other termination benefits, incentive compensation, contractors’ cost, and share-based compensation.

Table of Contents

Technology. Technology consists primarily of third-party hosting fees, software licenses, and hardware purchases below our capitalization threshold, and support and maintenance costs.

Professional Services. Professional services consist primarily of consulting, legal, audit, and recruiting fees.

Occupancy. Occupancy consists primarily of rent expense, repairs, maintenance, and other building related costs.

~~Table of Contents~~

Depreciation and Amortization. Depreciation and amortization consist primarily of depreciation of our fixed assets and amortization of capitalized Internal-use software and developed technology intangible assets.

Marketing and Advertising. Marketing and advertising consist primarily of costs of general marketing and promotional activities.

Other Operating Expenses. Other operating expenses consist primarily of insurance costs, indemnification costs, ~~employee~~ travel-related expenses, ~~employee training costs,~~ indirect state and local taxes, and other general office expenses.

Other Income (Expense), net

Other income (expense), net consists primarily of interest income from our ~~marketable securities,~~short-term investments and cash deposits, gain ~~from~~ from sale of equity method investments, impairment of equity method investments or other financial instruments, equity method investment share of loss, realized foreign currency gains and losses, and changes in the fair value of the redeemable convertible preferred stock warrant liabilities (for periods prior to the IPO).

Income Tax ~~Expense~~Benefit

Income tax expense consists of U.S. federal and state income taxes, and ~~U.K. and Australia~~ income ~~taxes.~~taxes related to certain foreign jurisdictions. We maintain a full valuation allowance against our U.S. federal and state net deferred tax assets as we have concluded that it is not more likely than not that we will realize our net deferred tax assets.

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Results of Operations

The following table sets forth our results of operations for the periods presented:


			Year Ended December 31,
		Year Ended December 31,											Year Ended December 31,
(dollars in thousands)	(dollars in thousands)		2022		2021		2020		(dollars in thousands)	2023	2022	2021
Net revenue	Net revenue		$	748,206	$	517,175	$	290,292
Costs of revenue	Costs of revenue		428,205		285,470		172,385
Gross profit	Gross profit		320,001		231,705		117,907
Operating expenses:	Operating expenses:
Compensation and benefits
Compensation and benefits
Compensation and benefits	Compensation and benefits		415,094		318,116		129,802
Technology	Technology		52,361		33,637		13,239
Professional services	Professional services		23,479		18,443		7,188
Occupancy	Occupancy		4,514		4,181		4,337
Depreciation and amortization	Depreciation and amortization		3,853		3,534		3,498
Marketing and advertising	Marketing and advertising		3,995		2,284		1,670
Other operating expenses	Other operating expenses		26,513		13,516		5,260
Total operating expenses	Total operating expenses		529,809		393,711		164,994
Loss from operations	Loss from operations		(209,808)		(162,006)		(47,087)
Other income (expense), net	Other income (expense), net		24,926		(2,563)		(521)
Loss before income tax expense	Loss before income tax expense		(184,882)		(164,569)		(47,608)
Income tax expense (benefit)			(102)		(640)		87
Income tax benefit
Net loss	Net loss		$	(184,780)	$	(163,929)	$	(47,695)


Delaware			27-4306690
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification Number)

180 Grand Avenue, 6th Floor, Oakland, California			94612
(Address of principal executive offices)			(Zip Code)


		Page
Note About Forward-Looking Statements		3
	PART I
Item 1.	Business	5
Item 1A.	Risk Factors	2517
Item 1B.	Unresolved Staff Comments	6043
I tem 1C.	Cybersecurity	43
Item 2.	Properties	6044
Item 3.	Legal Proceedings	6044
Item 4.	Mine Safety Disclosures	6044
	PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	6145
Item 6.	Reserved	6246
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	6347
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	7860
Item 8.	Financial Statements and Supplementary Data	7961
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	~~114~~99
Item 9A.	Controls and Procedures	~~114~~99
Item 9B.	Other Information	~~115~~101
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	~~115~~101
	PART III
Item 10.	Directors, Executive Officers and Corporate Governance	~~116~~102
Item 11.	Executive Compensation	~~116~~102
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	~~116~~102
Item 13.	Certain Relationships and Related Transactions and Director Independence	~~116~~102
Item 14.	Principal Accountant Fees and Services	~~116~~102
	PART IV
Item 15.	Exhibits and Financial Statements Schedules	~~117~~103
Item 16.	Form 10-K Summary	~~118~~105
	Signatures


			Year Ended December 31,
		Year Ended December 31,
(dollars in thousands)
(dollars in thousands)
(dollars in thousands)	(dollars in thousands)		2022			2021			$ Change		% Change			2023				2022				$ Change						% Change
Costs of revenue:	Costs of revenue:
Card Network fees, net
Card Network fees, net
Card Network fees, net	Card Network fees, net		$	380,162		$	244,387		$	135,775	56	%		$	309,453			$	380,162			$	(70,709)			(19)			(19)		%
Issuing Bank fees	Issuing Bank fees		30,160			27,282			2,878		11	%	Issuing Bank fees			21,549				30,160				(8,611)			(29)				(29)		%
Other	Other		17,883			13,801			4,082		30	%	Other			15,655				17,883				(2,228)			(12)				(12)		%
Total costs of revenue	Total costs of revenue		$	428,205		$	285,470		$	142,735	50	%	Total costs of revenue			$	346,657			$	428,205			$	(81,548)		(19)				(19)		%

Gross profit	Gross profit		$	320,001		$	231,705		$	88,296	38	%
Gross profit
Gross profit																$	329,514			$	320,001			$	9,513					3		%
Gross margin	Gross margin		43		%	45		%


	Year Ended December 31,
(dollars in thousands)	2023			2022			$ Change		% Change
Operating expenses:
Salaries, bonus, benefits and payroll taxes	$	318,856		$	254,351		$	64,505	25	%
Share-based compensation	180,739			160,743			19,996		12	%
Total compensation and benefits	499,595			415,094			84,501		20	%
Percentage of net revenue	74		%	55		%
Technology	55,612			52,361			3,251		6	%
Percentage of net revenue	8		%	7		%
Professional services	21,679			23,479			(1,800)		(8)	%
Percentage of net revenue	3		%	3		%
Occupancy	4,361			4,514			(153)		(3)	%
Percentage of net revenue	1		%	1		%
Depreciation and amortization	10,741			3,853			6,888		179	%
Percentage of net revenue	2		%	1		%
Marketing and advertising	2,566			3,995			$	(1,429)	(36)	%
Percentage of net revenue	—		%	1		%
Other operating expenses	17,975			26,513			(8,538)		(32)	%
Percentage of net revenue	3		%	4		%
Total operating expenses	$	612,529		$	529,809		$	82,720
Percentage of net revenue	91%			71%


	Year Ended December 31,
(dollars in thousands)	2023		2022		$ Change		% Change
Share-based compensation:
Restricted stock units	$	99,648	$	76,094	$	23,554	31	%
Stock options	26,323		28,816		(2,493)		(9)	%
Executive Chairman Long-Term Performance Award	53,214		53,214		—		—	%
Employee Stock Purchase Plan	1,554		2,619		(1,065)		(41)	%

Total share-based compensation	$	180,739	$	160,743	$	19,996	12	%


☒			ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


Company/Index (1)	06/09/21		06/30/21		09/30/21		12/31/21		03/31/22		06/30/22		09/30/22		12/31/22
Marqeta, Inc.	$	100.00	$	91.97	$	72.48	$	56.26	$	36.17	$	26.57	$	23.33	$	20.02
Nasdaq Composite Index	$	100.00	$	104.29	$	104.05	$	112.84	$	102.75	$	79.86	$	76.73	$	76.13
S&P Information Technology Index	$	100.00	$	105.62	$	107.03	$	124.90	$	114.46	$	91.29	$	85.62	$	89.68


Period	Total Number of Shares Purchased (1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2)
October 1 - October 31, 2022	3,050,868	$	7.25	3,050,805	63,969,722.39
November 1 - November 30, 2022	2,802,531	$	6.69	2,798,972	45,195,438.19
December 1 - December 31, 2022	3,848,712	$	6.32	3,848,712	20,799,675.89
Total	9,702,111			9,698,489


	Three Months Ended
	Dec 31, 2022		Sep 30, 2022		Jun 30, 2022		Mar 31, 2022		Dec 31, 2021		Sep 30, 2021		Jun 30, 2021		Mar 31, 2021
	(in thousands)
Net revenue	$	203,805	$	191,621	$	186,678	$	166,102	$	155,414	$	131,512	$	122,266	$	107,983
Costs of revenue	116,681		111,519		108,629		91,376		79,615		72,438		75,291		58,126
Gross profit	87,124		80,102		78,049		74,726		75,799		59,074		46,975		49,857
Operating expenses:
Compensation and benefits	110,991		105,887		97,868		100,348		88,995		84,462		97,755		46,904
Technology	14,401		13,422		13,154		11,384		11,143		9,299		7,569		5,626
Professional services	6,295		6,620		5,794		4,770		5,712		4,704		3,831		4,196
Occupancy	1,126		1,125		1,148		1,115		1,097		1,091		907		1,086
Depreciation and amortization	1,019		934		921		979		967		786		874		907
Marketing and advertising	1,862		688		886		559		804		490		495		495
Other operating expenses	5,753		10,922		4,995		4,843		4,811		3,880		3,530		1,295
Total operating expenses	141,447		139,598		124,766		123,998		113,529		104,712		114,961		60,509
Loss from operations	(54,323)		(59,496)		(46,717)		(49,272)		(37,730)		(45,638)		(67,986)		(10,652)
Other income (expense), net	28,468		6,333		1,802		(11,677)		142		(57)		(481)		(2,167)
Loss before income tax expense	(25,855)		(53,163)		(44,915)		(60,949)		(37,588)		(45,695)		(68,467)		(12,819)
Income tax expense (benefit)	471		5		(227)		(351)		(781)		(35)		87		19
Net loss	$	(26,326)	$	(53,168)	$	(44,688)	$	(60,598)	$	(36,807)	$	(45,730)	$	(68,554)	$	(12,838)


			Page
Report of Registered Independent Public Accounting Firm (PCAOB ID: 42)			8062
Consolidated Balance Sheets			8467
Consolidated Statements of Operations and Comprehensive Loss			8568
Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)			8669
Consolidated Statements of Cash Flows			8770
Notes to Consolidated Financial Statements			8972


			Revenue Share, Consideration Payable to Customers
Description of the Matter			For the year ended December 31, ~~2022,~~2023, the Company’s net revenue was ~~$748.2~~$676.2 million, and as of December 31, ~~2022,~~2023, the Company’s revenue share payable was ~~$142.2~~$173.6 million. As described in Note 2 to the consolidated financial statements, the Company's contracts with ~~its~~ customers typically include provisions under which the Company shares a portion of interchange fees with its customers, referred to as revenue share. Revenue share payments are incentives to customers to increase their processing volume on the Company’s platform, and is computed as a percentage of the interchange fees earned or processing volume, and is paid to customers monthly. As customers’ processing volumes increase, the customers may earn an increased percentage of revenue share. Revenue share, determined to be consideration payable to customers, is recorded as a reduction to net revenue in the consolidated statements of operations and comprehensive loss. The Company records the amount due to the customer as revenue share payable on the consolidated balance sheets. Auditing the Company’s revenue share amounts was challenging because the revenue share calculation includes a significant volume of data and multiple inputs that could be different across customers. Further, the revenue share calculation for certain customers is performed manually by the Company because of the bespoke and complex nature of certain contractual terms.
How We Addressed the Matter in Our Audit			We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company's process to calculate and record revenue share, including controls over management’s review of the calculation and of the completeness and accuracy of data used in the revenue share calculation. We performed the following audit procedures, among others, related to revenue share amounts. We independently calculated total annual revenue share for a sample of customers based on the contractual terms of the customers’ agreements and other inputs, including processing volume, interchange fees and card network and issuing bank fees using source data and compared our independent calculations of revenue share to the Company’s recorded amounts. For this same sample of customers, we inspected the underlying customer agreements and used the revenue share rates per the contract to calculate each customer’s total annual revenue share. Additionally, we performed analytical procedures to assess the ~~reasonableness of the~~ revenue share for all other customers entitled to revenue share over the fiscal year and evaluated any significant deviations from developed expectations that considered contractual revenue share rates and processing volume, among other factors. We tested the completeness and accuracy of the underlying payment transaction data used in the revenue share calculation and also compared the revenue share payable as of December 31, ~~2022,~~2023, to amounts paid in subsequent periods.


			Valuation of an Acquired Developed Technology Intangible Asset
Description of the Matter			As discussed in Note 4 to the consolidated financial statements, the Company acquired Power Finance Inc. on February 3, 2023 for a base cash purchase price of $221.9 million. The Company accounted for this acquisition as a business combination and, accordingly, the assets acquired and liabilities assumed from Power Finance Inc. were recorded at fair value as of the acquisition date. Auditing the Company’s accounting for the acquisition of Power Finance Inc. was complex due to the estimation uncertainty in the Company’s determination of the fair value of acquired developed technology of $41.0 million, which was estimated using an income approach. The estimation uncertainty was primarily due to the determination of the underlying assumptions used in the fair value measurement of the acquired developed technology. The significant assumptions used by management included revenue and EBITDA forecasts, obsolescence rate, and discount rate. These significant assumptions are forward looking and could be affected by future economic and market conditions.
How We Addressed the Matter in Our Audit			To test the fair value of the acquired developed technology, our audit procedures included, among others, inspecting the underlying business combination agreements, and involving our valuation specialists to assist in evaluating management’s selected valuation methodology and testing the significant assumptions described above. For example, we evaluated the discount rate by comparing the rate to those of the acquired business’s weighted internal rate of return, weighted-average return on assets, and venture capital rates of return. To evaluate the assumptions used to project cash flows attributable to the acquired developed technology, we compared the significant assumptions to the Company’s historical trends and market data and performed a sensitivity analysis of the significant assumptions to evaluate the change in the fair value that would result from changes in the assumptions.


		As of December 31,
		2022		2021
	As of December 31,							As of December 31,
	2023						2023		2022
Assets	Assets
Current assets:	Current assets:
Current assets:
Current assets:
Cash and cash equivalents
Cash and cash equivalents
Cash and cash equivalents	Cash and cash equivalents	$	1,183,846	$	1,247,581
Restricted cash	Restricted cash	7,800		7,800
Marketable securities		440,858		452,875
Short-term investments
Accounts receivable, net	Accounts receivable, net	15,569		13,187
Settlements receivable, net	Settlements receivable, net	18,028		11,266
Network incentives receivable	Network incentives receivable	42,661		30,399
Prepaid expenses and other current assets	Prepaid expenses and other current assets	38,007		35,617
Total current assets	Total current assets	1,746,769		1,798,725
Operating lease right-of-use assets, net
Property and equipment, net	Property and equipment, net	7,440		9,687
Operating lease right-of-use assets, net		9,015		11,296
Equity method investment		—		8,384
Intangible assets, net
Goodwill

Other assets

Other assets

Other assets	Other assets	7,122		2,286
Total assets	Total assets	$	1,770,346	$	1,830,378
Liabilities and stockholders’ equity	Liabilities and stockholders’ equity
Current liabilities:	Current liabilities:
Current liabilities:
Current liabilities:
Accounts payable
Accounts payable
Accounts payable	Accounts payable	$	3,798	$	2,693
Revenue share payable	Revenue share payable	142,194		121,179
Accrued expenses and other current liabilities	Accrued expenses and other current liabilities	136,887		114,096
Total current liabilities	Total current liabilities	282,879		237,968

Operating lease liabilities, net of current portion	Operating lease liabilities, net of current portion	9,034		12,427
Operating lease liabilities, net of current portion
Operating lease liabilities, net of current portion
Other liabilities	Other liabilities	5,477		6,557
Total liabilities	Total liabilities	297,390		256,952
Commitments and contingencies (Note 7)
Commitments and contingencies (Note 10)						Commitments and contingencies (Note 10)

Stockholders’ equity:	Stockholders’ equity:
Preferred stock, $0.0001 par value; 100,000,000 and 100,000,000 shares authorized, no shares issued and outstanding as of December 31, 2022 and December 31, 2021, respectively		—		—
Common stock, $0.0001 par value: 1,500,000,000 and 1,500,000,000 Class A shares authorized, 486,530,334 and 421,792,153 shares issued and outstanding as of December 31, 2022 and December 31, 2021, respectively. 600,000,000 and 600,000,000 Class B shares authorized, 54,833,765 and 119,591,365 shares issued and outstanding as of December 31, 2022 and December 31, 2021, respectively		53		54
Stockholders’ equity:
Stockholders’ equity:
Preferred stock, $0.0001 par value; 100,000,000 and 100,000,000 shares authorized, no shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively
Preferred stock, $0.0001 par value; 100,000,000 and 100,000,000 shares authorized, no shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively
Preferred stock, $0.0001 par value; 100,000,000 and 100,000,000 shares authorized, no shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively
Common stock, $0.0001 par value: 1,500,000,000 and 1,500,000,000 Class A shares authorized, 465,985,131 and 486,530,334 shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively. 600,000,000 and 600,000,000 Class B shares authorized, 54,357,844 and 54,833,765 shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively
Additional paid-in capital	Additional paid-in capital	2,082,373		1,993,055
Accumulated other comprehensive loss		(7,237)		(2,230)
Accumulated other comprehensive income (loss)
Accumulated deficit	Accumulated deficit	(602,233)		(417,453)
Total stockholders’ equity	Total stockholders’ equity	1,472,956		1,573,426
Total liabilities and stockholders’ equity	Total liabilities and stockholders’ equity	$	1,770,346	$	1,830,378


	Redeemable Convertible Preferred Stock																			Redeemable Convertible Preferred Stock	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Income (loss)	Accumulated Deficit	Total Stockholders’ Equity (Deficit)
	Shares

		Redeemable Convertible Preferred Stock			Common Stock			Additional Paid-in Capital				Accumulated Other Comprehensive Income (loss)		Accumulated Deficit		Total Stockholders’ Equity (Deficit)
		Shares	Amount		Shares	Amount

Balance as of December 31, 2019		336,843,578	$	335,748	118,430,031	$	12			$	7,365			$	46	$	(205,829)	$	(198,406)
Issuance of Series E-1 redeemable convertible preferred stock at $8.34 per share, net of issuance costs of $8,058		20,989,756	166,942		—	—		—				—		—		—
Conversion of Series A and Series C redeemable convertible preferred stock to common stock		(5,988,994)	(809)		5,988,994	1		808				—		—		809
Issuance of common stock upon exercise of vested options		—	—		5,236,999	—		2,472				—		—		2,472
Issuance of common stock upon early exercise of unvested options		—	—		847,184	—		—				—		—		—
Repurchase of early exercised stock options		—	—		(190,370)	—		—				—		—		—
Vesting of early exercised stock options		—	—		—	—		742				—		—		742
Vesting of common stock warrants		—	—		—	—		171				—		—		171
Share-based compensation expense		—	—		—	—		28,211				—		—		28,211
Change in accumulated other comprehensive income (loss)		—	—		—	—		—				(21)		—		(21)
Net loss		—	—		—	—		—				—		(47,695)		(47,695)
Balance as of December 31, 2020		351,844,340	501,881		130,312,838	13		39,769				25		(253,524)		(213,717)

Balance as of January 1, 2021

Balance as of January 1, 2021

Balance as of January 1, 2021
Issuance of common stock upon initial public offering, net of issuance costs	Issuance of common stock upon initial public offering, net of issuance costs	—	—		52,272,727	7		1,312,331				—		—		1,312,338
Conversion of redeemable convertible preferred stock to common stock upon initial public offering	Conversion of redeemable convertible preferred stock to common stock upon initial public offering	(351,844,340)	(501,881)		351,844,340	34		501,847				—		—		501,881
Reclassification of redeemable convertible preferred stock warrant liabilities to common stock and additional paid-in capital upon initial public offering	Reclassification of redeemable convertible preferred stock warrant liabilities to common stock and additional paid-in capital upon initial public offering	—	—		—	—		5,438				—		—		5,438
Issuance of common stock upon exercise of options	Issuance of common stock upon exercise of options	—	—		4,277,344	—		4,969				—		—		4,969
Issuance of common stock under employee stock purchase plan	Issuance of common stock under employee stock purchase plan	—	—		153,905	—		3,201				—		—		3,201

Repurchase of early exercised stock options	Repurchase of early exercised stock options	—	—		(85,870)	—		—				—		—		—
Repurchase of early exercised stock options
Repurchase of early exercised stock options

Issuance of common stock upon net settlement of restricted stock units
Issuance of common stock upon net settlement of restricted stock units
Issuance of common stock upon net settlement of restricted stock units	Issuance of common stock upon net settlement of restricted stock units	—	—		1,736,212	—		(23,552)				—		—		(23,552)
Issuance of common stock upon exercise of common stock warrants	Issuance of common stock upon exercise of common stock warrants	—	—		872,022	—		60				—		—		60
Vesting of common stock warrants	Vesting of common stock warrants	—	—		—	—		6,332				—		—		6,332
Share-based compensation expense	Share-based compensation expense	—	—		—	—		142,660				—		—		142,660
Change in accumulated other comprehensive income (loss)	Change in accumulated other comprehensive income (loss)	—	—		—	—		—				(2,255)		—		(2,255)
Net loss	Net loss	—	—		—	—		—				—		(163,929)		(163,929)
Balance as of December 31, 2021	Balance as of December 31, 2021	—	$	—	541,383,518	$	54	$	1,993,055			$	(2,230)	$	(417,453)	$	1,573,426
Issuance of common stock upon exercise of options	Issuance of common stock upon exercise of options	—	—		7,785,748	—		9,754				—		—		9,754
Repurchase of early exercised stock options	Repurchase of early exercised stock options	—	—		(45,958)	—		—				—		—		—
Issuance of common stock under employee stock purchase plan	Issuance of common stock under employee stock purchase plan	—	—		683,485	—		4,762				—		—		4,762
Issuance of common stock upon net settlement of restricted stock units	Issuance of common stock upon net settlement of restricted stock units	—	—		3,214,677	—		(15,362)				—		—		(15,362)

Vesting of common stock warrants	Vesting of common stock warrants	—	—		—	—		8,621				—		—		8,621
Vesting of common stock warrants
Vesting of common stock warrants
Share-based compensation expense	Share-based compensation expense	—	—		—	—		160,743				—		—		160,743
Repurchase and retirement of common stock	Repurchase and retirement of common stock	—	—		(11,657,371)	(1)		(79,200)				—		—		(79,201)
Change in accumulated other comprehensive income (loss)	Change in accumulated other comprehensive income (loss)	—	—		—	—		—				(5,007)		—		(5,007)
Net loss	Net loss	—	—		—	—		—				—		(184,780)		(184,780)
Balance as of December 31, 2022	Balance as of December 31, 2022	—	$	—	541,364,099	$	53	$	2,082,373			$	(7,237)	$	(602,233)	$	1,472,956
Issuance of common stock upon exercise of options
Repurchase of early exercised stock options
Issuance of common stock under employee stock purchase plan
Issuance of common stock upon net settlement of restricted stock units
Issuance of common stock upon exercise of common stock warrants
Vesting of common stock warrants
Share-based compensation expense
Repurchase and retirement of common stock, including excise tax
Change in accumulated other comprehensive income (loss)
Net loss
Balance as of December 31, 2023


int


Contract balance	Balance sheet line reference	December 31, 2022		December 31, 2021
Contract assets - current	Prepaid expenses and other current assets	$	621	$	950
Contract assets - non-current	Other assets	1,323		927
Total contract assets		$	1,944	$	1,877
Deferred revenue - current	Accrued expenses and other current liabilities	$	17,048	$	19,060
Deferred revenue - non-current	Other liabilities	4,202		6,107
Total deferred revenue		$	21,250	$	25,167


Contract balance	Balance sheet line reference	December 31, 2023		December 31, 2022
Contract assets - current	Prepaid expenses and other current assets	$	1,461	$	621
Contract assets - non-current	Other assets	9,397		1,323
Total contract assets		$	10,858	$	1,944
Deferred revenue - current	Accrued expenses and other current liabilities	$	11,829	$	17,048
Deferred revenue - non-current	Other liabilities	4,071		4,202
Total deferred revenue		$	15,900	$	21,250


Base purchase price less contingent consideration	$	221,933
Less: postcombination cash, non-cash expense and other purchase adjustments	118,447
Plus: cash acquired on acquisition date	7,089
Total purchase consideration, excluding contingent consideration	110,575
Contingent consideration	53,067
Purchase consideration	$	163,642


Balance as of December 31, 2022	$	—
Goodwill from acquisition of Power Finance, Inc.	123,000
Measurement period adjustments	523
Balance as of December 31, 2023	$	123,523


	December 31, 2023		December 31, 2022
Developed technology	$	41,000	$	—
Accumulated amortization	(5,369)		—
Intangibles, net	$	35,631	$	—


2024	$	5,857
2025	5,857
2026	5,857
2027	5,857
2028	5,857
Thereafter	6,345
Total expected future amortization expense for intangible assets	$	35,631


		December 31, 2022
		Amortized Cost		Unrealized Gain		Unrealized Loss		Estimated Fair Value
Marketable securities
	December 31, 2023											December 31, 2023
	Amortized Cost									Amortized Cost	Unrealized Gain	Unrealized Loss	Estimated Fair Value
Short-term Investments
U.S. treasury securities
U.S. treasury securities
U.S. treasury securities	U.S. treasury securities	$	384,951	$	—	$	(6,949)	$	378,002
U.S. agency securities	U.S. agency securities	29,012		47		—		29,059
Commercial paper		28,815		—		—		28,815

Asset-backed securities
Asset-backed securities
Asset-backed securities
Corporate debt securities	Corporate debt securities	5,049		—		(67)		4,982
Total marketable securities		$	447,827	$	47	$	(7,016)	$	440,858

Total short-term investments
Total short-term investments
Total short-term investments


	December 31, 2022				December 31, 2021
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value

Due within one year	$	447,827	$	440,858	$	64,914	$	64,879
Due after one year through two years	—		—		390,090		387,996
Total	$	447,827	$	440,858	$	455,004	$	452,875


	December 31, 2022
	Level 1		Level 2		Level 3		Total Fair Value
Cash equivalents
Money market funds	$	462,459	$	—	$	—	$	462,459

Marketable securities
U.S. treasury securities	378,002		—		—		378,002
U.S. agency securities	—		29,059		—		29,059
Commercial paper	—		28,815		—		28,815

Corporate debt securities	—		4,982		—		4,982
Total assets	$	840,461	$	62,856	$	—	$	903,317


			June 9, 2021
~~Dividend yield~~			~~0.00%~~
~~Expected volatility~~			~~49.93%~~
~~Expected term (in years)~~			~~2.34~~
~~Risk-free interest rate~~			~~0.31%~~
~~Fair value of Series B redeemable convertible preferred stock~~			~~$27.00~~


	December 31, 2021
~~Balance, beginning of the period~~	$	~~2,517~~
~~Remeasurement of redeemable convertible preferred stock warrant liabilities~~	~~2,921~~
~~Reclassification of redeemable convertible preferred stock warrant liabilities to common stock and additional paid-in capital upon initial public offering~~	~~(5,438)~~
~~Balance, end of the period~~	$	—


	December 31, 2022		December 31, 2021
Prepaid expenses	$	9,082	$	6,492
Inventory	5,150		3,940
Prepaid hosting and data costs	6,443		2,455
Accrued interest receivable	3,983		392
Prepaid insurance	3,729		3,546
Card program deposits	2,128		2,167
Contract assets	621		950
Other financial instruments	—		11,616
Other current assets	6,871		4,059
Prepaid expenses and other current assets	$	38,007	$	35,617


	December 31, 2022		December 31, 2021
Leasehold improvements	$	8,110	8,110
Computer equipment	9,115		8,581
Furniture and fixtures	2,542		2,459
Internally developed and purchased software	3,082		2,954
	22,849		22,104
Accumulated depreciation and amortization	(15,409)		(12,417)
Property and equipment, net	$	7,440	$	9,687


	December 31, 2022		December 31, 2021
Accrued costs of revenue	$	57,191	$	41,339
Accrued compensation and benefits	41,268		32,954
Deferred revenue	17,048		19,060
Accrued tax liabilities	4,978		3,240
Accrued professional services	4,784		2,454
Operating lease liabilities, current portion	3,394		3,021
Reserve for contract contingencies and processing errors	2,494		3,386
Other accrued liabilities	5,730		8,642
Accrued expenses and other current liabilities	$	136,887	$	114,096


	December 31, 2022		December 31, 2021
Deferred revenue, net of current portion	$	4,202	$	6,107
Other long-term liabilities	1,275		450
Other liabilities	$	5,477	$	6,557


	December 31, 2023		December 31, 2022
Contract assets, noncurrent	$	9,397	$	1,323
Deferred tax assets	495		1,207
Other noncurrent assets	6,695		4,592

Other assets	$	16,587	$	7,122


2023		4,239

2024

2024

2024	2024	4,472			4,472
2025	2025	4,599		2025		4,599
2026	2026	780		2026		780

Total lease payments	Total lease payments	$	14,090
Total lease payments
Total lease payments						$	9,851
Less imputed interest	Less imputed interest	(1,662)		Less imputed interest		(817)
Total operating lease liabilities	Total operating lease liabilities	$	12,428	Total operating lease liabilities		$	9,034


	Number of Restricted Stock Units	Weighted-average grant date fair value per share
Balance as of December 31, 2020	4,430,336	$	4.93
Granted	8,409,821	22.20
Vested	(2,641,196)	10.12
Canceled and forfeited	(1,197,012)	14.23
Balance as of December 31, 2021	9,001,949	$	18.30
Granted	36,159,090	8.91
Vested	(4,883,296)	13.99
Canceled and forfeited	(6,131,197)	14.07
Balance as of December 31, 2022	34,146,546	$	9.74


		Number of Options	Weighted-Average Exercise Price per Share		Weighted-Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value(1)
Balance as of January 1, 2020(2)		25,159,411	$	0.92	8.74	$	46,594
	Number of Options							Number of Options	Weighted-Average Exercise Price per Share	Weighted-Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value(1)
Balance as of January 1, 2021
Granted	Granted	6,404,800	2.31
Exercised	Exercised	(6,084,183)	0.53
Exercised
Exercised
Canceled and forfeited	Canceled and forfeited	(2,058,654)	1.50
Balance as of December 31, 2020(2)		23,421,374	$	1.35	8.33	$	248,002
Canceled and forfeited
Canceled and forfeited
Balance as of December 31, 2021
Balance as of December 31, 2021
Balance as of December 31, 2021
Granted	Granted	29,113,555	20.07
Exercised	Exercised	(4,277,344)	1.18
Exercised
Exercised
Canceled and forfeited	Canceled and forfeited	(4,072,097)	5.58
Balance as of December 31, 2021(2)		44,185,488	$	13.31	8.46	$	279,242
Canceled and forfeited
Canceled and forfeited
Balance as of December 31, 2022
Balance as of December 31, 2022
Balance as of December 31, 2022
Granted	Granted	4,182,522	10.16
Exercised	Exercised	(7,785,748)	1.20
Exercised
Exercised
Canceled and forfeited	Canceled and forfeited	(4,425,817)	6.60
Balance as of December 31, 2022(2)		36,156,445	$	16.37	7.67	$	29,101
Vested as of December 31, 2022		7,389,512	$	6.57	4.98	$	24,410
Canceled and forfeited
Canceled and forfeited
Balance as of December 31, 2023
Balance as of December 31, 2023
Balance as of December 31, 2023
Exercisable as of December 31, 2023(2)
Vested as of December 31, 2023


Tranche	Company Stock Price Hurdle	Number of Options Eligible to Vest
1	$67.50	2,826,884
2	$78.98	2,826,884
3	$92.40	2,826,884
4	$108.11	2,826,884
5	$126.49	2,826,884
6	$147.99	2,826,884
7	$173.15	2,826,884
Total		19,788,188