Ladies and gentlemen, welcome to the Marketa Third Quarter 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Maria Greiser, Investor Relations. Please go ahead.

Thanks, Operator. Good afternoon, everyone, and welcome to Marketa's Third Quarter 2025 Earnings Call. Hosting today's call is Mike Miletic, Marquetta's CEO and CFO. Before we begin, I would like to remind everyone that today's call may contain forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties, including those set forth in our filings with the SEC, which are available on our Investor Relations website, including our annual report on Form 10-K for the period ended December 31, 2024, for and our subsequent periodic filings with the SEC. Actual results may differ materially from any forward-looking statements we make today. These forward-looking statements speak only as of the time of this call, and the company does not assume any obligation or intent to update them, except as required by law. In addition, today's call includes non-GAAP financial measures. These measures should be considered as a supplement to and not a substitute for GAAP financial measures. Reconciliations to the most directly comparable GAAP measures can be found in today's earnings press release or earnings release supplemental materials, which are available on our Investor Relations website. With that, I'd like to turn the call

over to Mike to begin. Thank you, Maria, and thank you for joining us for Marketo's third quarter 2025 earnings call. To start, I'll briefly highlight our Q3 results, followed by an update on our progress growing the business across the full spectrum of debit and credit products, consumer and commercial offerings, and a wide variety of use cases and geographies with both new and existing customers. I'll conclude with details about our Q3 financial results and our expectations for the remainder of the year. Our great third quarter financial performance continues to demonstrate tremendous growth, resulting in our ability to deliver higher adjusted EBITDA through both efficiency and scale. Total processing volume, or TPV, was $98 billion in the third quarter, a 33% increase compared to the same quarter of 2024, and an acceleration of over three points from last quarter. Since this is the second consecutive quarter with accelerating TPV growth, despite our increasingly larger base to grow over. To put this performance in perspective, this is our highest TPV growth rate since Q1 2024, despite the base we are growing over this quarter being almost 50% larger than the base we grew over in Q1 2024. Q3 net revenue of $163 million grew 28% year-over-year due to robust growth across a broad spectrum of use cases we enable. Gross profit was $115 million, a 27% increase year-over-year, largely in line with the net revenue growth. Adjusted EBITDA was $30 million in the quarter, a 19% margin fueled by both exceptional gross profit growth and continued expense discipline, while we make strategic investments in new capabilities and scale to fuel future business growth. This is another all-time high for adjusted EBITDA dollars as we progress on our path to profitability. This year, we remain focused on expanding and deepening our customer relationships by enabling innovative programs and seamless geographic expansion, while also increasing our bank supply. One factor driving our performance is a remarkable growth in our lending use cases, including buy now, pay later. The growth is a testament to our ability to support customers in many markets, including North America, Europe, and Australia, but also to the innovation at scale that we enable. Once again, we are adding unique value to our customers in support of this use case. While BNPL started with Marketa enabling virtual cards for seamless payment experiences without costly back-end integrations. The category continues to evolve. We have been on the forefront of enabling the new wave of growth in the space with what we call pay-anywhere cards that allow end users to pay anywhere that cards are accepted with the flexibility to split a purchase over time. We were also the first to support the Visa flexible credential in the U.S., which gave us a significant lead as it has been rapidly adopted over the past year and now includes Klarna's recent expansion into Europe. The newer solutions enable our customers to deliver a better value proposition to their consumers with more flexibility to expand the availability of credit. Our unique combination of capabilities, geographic reach, and scale has helped broaden the category significantly, with TPV and lending, including buy now, pay later, use cases growing much faster than the overall company TPV growth. Another area where we have continued to see increased growth and demand is in commercial programs, particularly platforms that enable SMBs to reach bigger markets with money movement and access to working capital. In Q3, we signed a Fortune 500 customer to enable electronic supplier payments for the small and medium-sized businesses they serve. Our customer's global platform has a comprehensive suite of financial and business management applications serving millions of users. They were looking for a partner who would allow them to stay at the forefront of the needs of their end users with easier and more modern payment options. They saw Marketa as a leader and enabler of innovation in expense management use cases and selected Marketa for both our flexibility and ability to execute at scale. In Q4, this program will be the first to launch with one of our new U.S. bank partners. At the start of the year, we talked about our desire to expand our bank supply with partners who prioritize new capabilities and technology, maintain a strong focus on regulatory compliance, and can support our full range of offerings across debit and credit. In the U.S., CrossRiver Bank is now live, and we are in the process of technically integrating Coastal Community Bank to support programs starting in 2026. We are excited to grow with both banks going forward. With the addition of Transacbay enabling us to provide program management in the UK and the EU, we are also adding bank partners in Europe. Griffin Bank in the UK is now live in support of a new program currently in testing, which will launch broadly in Q1 2026. We also plan to add a new bank partner for the EU in the first half of 2026. In order to seamlessly interface with multiple banks, this year we built our business integration platform with the flexibility to rapidly onboard additional partners around the world. It serves as the orchestration layer that connects our internal money movement systems with external banking and payment partners through secure APIs and webhooks, ensuring every transaction remains synchronized end-to-end. This approach makes our platform bank-agnostic and reduces the time for bank integration by more than 50%, enabling us to scale new products and geographies without heavy engineering work or custom integrations. centralizing business logic and routing across banks also reduces operational complexity improves resiliency and creates leverage in our cost structure as we expand with more bank and payment partners globally europe continues to deliver strong results with momentum across a diverse set of use cases driving tpv growth to remain over 100 year over year this quarter we completed the acquisition of TransactPay on July 31st. This transaction has driven significant customer interest and increased referrals from the payment ecosystem, including our network partners, as well as increasing our TAN to pursue more enterprise customers looking for a single provider for processing, program management, and the EMI license in both the UK and the EU. This enables us to deliver a complete offering, comparable to what we offer in North America, so customers don't have to navigate the complexity of working with multiple partners. In Q3, we signed one of our top five expense management customers we have supported in North America for many years to expand into Europe. The acquisition of TransactPay was the catalyst as they can now deliver their offering in Europe at parity with North America through the Marquetta platform without a lot of incremental We also continue to gain steady traction as we seek out the right partners for our innovative credit solutions. We are having productive conversations with prospects who are looking to differentiate their offering and work with a single modern provider who can support multiple use cases. This quarter, we were selected to power a credit solution for companies' loyalty programs they enable for small and mid-sized companies. This customer has millions of monthly active users and the underlying data to help companies capitalize on trends through analytics and a credit product to drive incremental loyalty benefits, both in stores and through their app. They chose Marketa because they were looking for a modern partner who could grow and scale with them, given their significant embedded customer base. This customer plans to utilize several services in addition to processing, including tokenization, disputes, and our real-time decisioning risk product. To wrap up before moving to the details of our financial results, the business continues to have strong momentum as we head into the last quarter of the year, both in terms of our actual performance and the level of engagement from prospects on future opportunities. What continues to become clear for current and prospective customers is Marketa has a unique combination of modern capabilities, scale, geographic reach, expertise, and flexibility to enable their innovations without the need to make trade-offs. We provide our customers with a level of agility and control in issuing payment credentials that maximizes their ability to deliver value to their users, whether it's through creating new revenue streams, deepening engagement, or improving access to capital. This will continue to serve us well as we further diversify the business outside of debit and beyond the U.S. to deliver future growth. Now let me transition to our Q3 financial results. Q3 was a very strong quarter with performance significantly outpacing our expectations. Q3 TBV growth of 33% accelerated by over three points from Q2 after increasing by three points in Q2 versus Q1. This accelerating volume growth, combined with slightly higher net revenue and gross profit take rates versus Q2, drove the P&L outperformance. Additionally, our adjusted operating expense growth was on the lower end of our expectations, which resulted in a just of $30 million. For the second quarter in a row, the business outperformance and disciplined investment brought us close to gap net income, showcasing how the business can scale and demonstrating the tangible progress we are making on our path to profitability. Q3 TPV was $98 billion, an increase of 33% year over year. The Q3 TPV growth acceleration versus Q2 was broad-based, including both block and non-block growth, as well as each of our four major use cases. Non-block TPV is now growing two and a half times faster than block TPV, helped by Europe TPV continuing to grow over 100%. Growth within financial services continue to be a little slower than the overall company. Our non-block customers are growing over three times faster than block within these use cases. Consistent with prior quarters, expense management growth continues to be a little faster than the overall company, driven by our customers continuing to acquire new end users as their modern platforms gain share. On-demand delivery growth accelerated into the double digits in Q3, growing about twice as fast as last quarter, primarily fueled by both the merchant category and geographic expansion of our customers. Lending, including buy now, pay later, TPV growth, accelerated 10 points versus Q2 with a year-over-year growth rate that is about double the rate of the overall company. Six of our top 10 customers within this use case had their growth rate accelerate from Q2 to Q3, with three customers growing over 100%, while two customers were growing slower than 20%. This remarkable growth is driven by a combination of trends that accelerated from last quarter, with the two most significant being increased adoption of pay-anywhere card solutions, including growth in flexible network credential usage, and geographic expansion and growth on our platform. The TBV growth acceleration in Q3 is another demonstration of our ability to grow at scale, processing over $1 billion in volume on about two-thirds of the days in the quarter. Q3 net revenue growth was $163 million, growing 28% year over year. Our Q3 net revenue growth acceleration of eight points versus Q2 and the outperformance versus expectations was driven by strong TPV growth in all of our major use cases and our net revenue take rate of 17 basis points being slightly higher than last quarter. The addition of the TransacPay acquisition for two months after closing on July 31st contributed two points to growth. Block net revenue concentration of 44% in Q3 decreased by about two points from Q2. While both block and non-block net revenue growth accelerated from last quarter, non-block growth was over 10 points higher than block growth, driven by the strong TPV and the inclusion of TransacPay. Q3 gross profit was $115 million, growing 27% year-over-year, fueled by strong TBB growth and a gross profit take rate of nearly 12 basis points, slightly higher than last quarter. The addition of TransactPay added 2.5 points to growth. Gross profit growth was 10 points higher than the top of the expected range we shared with you last quarter, so obviously there were a few positive surprises in the quarter. I would classify the outperformance in four categories. By far, the most significant factor driving our outperformance is the underlying business growth. Accelerating TPV growth, combined with favorable business mix supporting our gross profit take rate, accounted for approximately six points of the outperformance. On our earnings call in August, you might remember we spoke about our Q2 TPV growth accelerating three points versus Q1, which was a little unexpected. So we wanted to see elevated growth trajectory endure for longer than a couple months before adjusting our forecast from the remainder of the year. especially considering the macroeconomic uncertainty. As I just walked through, Q3 TV further accelerated by more than three points versus Q2, driven by a broad cross-section of our customers and use cases. About two-thirds of this underlying business outperformance was driven by lending, including buy now, pay later, and on-demand delivery. The growth in these two use cases meaningfully accelerated in Q3 versus Q2 as we continue to support our customers' business expansion. Second, approximately two and a half points of the outperformance was driven by unusual items that were unexpected. The large majority of this impact was driven by recovering fees from smaller customers who previously terminated their card programs. We have worked diligently to recover contractually obligated fees, and it just so happens that several of the larger efforts were resolved during Q3. Third, approximately one point of the outperformance resulted from earning a network rebate from one of our network partners that we did not anticipate. Based on the Q3 results, we expect this will continue to be a benefit going forward. The final component of our outperformance was the strength of the TransactPay business, which contributed approximately one point more to our gross profit growth than expected. The Transact Bay business is on a better trajectory in 2025 than we had expected, and our visibility was limited until we started to consolidate results following the July 31st closing. As a reminder, we revised our accounting policy for estimating and recognizing card network incentives starting in Q2 of this year. We are now accruing incentives each quarter based on the forecasted annual contract year we expect to achieve, as opposed to booking the incentives each quarter as they are earned and move through the progressive tiers. As a result, Q3 gross profit growth had a headwind of 1.4 points due to the difference in methodologies for the year-over-year comparison. Q3 adjusted operating expenses were $84 million, growing 4% year-over-year, which was on the lower end of our expectations. This was a timing shift of marketing initiatives from Q3 to Q4, which lowered Q3 growth growth by approximately two points. The addition of Transact Bay contributed approximately three points to our year-over-year growth. Q3 adjusted EBITDA was $30 million, reaching another all-time high in dollars for the second quarter in a row. This resulted in a margin of 19% as we continue to make significant progress on our path to profitability. Adjusted EBITDA margin based on gross profit, which was 26%, is the metric we look at internally to illustrate the profitability potential of our business. The Q3 gap net loss was $3.6 million, which included $8 million of interest income and a non-recurring litigation-related expense of $4.3 million. We ended the quarter with a little over $830 million of cash and short-term investments driven by strong operating cash flows. With the addition of transact pay this quarter, one thing to note on our balance sheet is the $235 million of restricted cash and the offsetting liability. Transact Pay must comply with the regulatory safeguarding requirements associated with the EMI licenses, so we account for the customer funds they hold differently than our approach in other geographies, such as the U.S., where our program funding arrangements are structured more optimally. Our share repurchase activity remains ongoing as we continue to believe the current valuation does not fairly represent the company's value or the market opportunity ahead of us. In Q3, we repurchased 3.2 million shares at an average price of $6.12. For the year-to-day period ending September 30, 2025, we have repurchased 64.6 million shares at an average price of $4.53, which is a reduction of nearly 13% of the total issued in outstanding shares as of 2024 year-end. As of September 30, we had $88 million remaining on our buyback authorization. Now let's transition to our expectations for the fourth quarter of 2025. Based on our Q3 results, we are raising our expectations for Q4 in the full year. We now expect Q4 2025 net revenue and gross profit growth to be at least five points higher than what we had shared last quarter and adjusted EBITDA margin to be two points higher. Therefore, we now expect net revenue to grow between 22 and 24 percent in Q4 and approximately 22% for the full year 2025. Gross profit growth is expected to be between 17% and 19% in Q4 and approximately 23% for the full year 2025. The expected slowdown in gross profit growth from Q3 to Q4 of approximately nine points is primarily driven by three factors. First, Q3 growth benefited by approximately two and a half points from unusual items, mostly the recovery of contractually obligated fees. Second, the impact of our revised accounting policy for network incentives on the year-over-year comparison will be the most significant in Q4. We expect a drag of about 5.5 points on gross profit growth in Q4, which is approximately four points more drag than Q3. Third, as we've discussed all year, we are actively engaged in renewal discussions with two large customers. We expect one of those renewals to be in effect in Q4, resulting in a headwind of approximately two points. We expect Q4 adjusted operating expenses to grow in the mid-single digits, in line with what we shared last quarter, despite the timing shift of some marketing expenses from Q3 to Q4. Adjusted EBITDA margin is expected to be between 15% and 16% in Q4 and approximately 17% for the full year 2025. This equates to a little over $100 million in adjusted EBITDA in 2025, which is more than three times higher than last year and nearly double what we anticipated at the start of 2025. In conclusion, our incredible Q3 financial results not only led us to raise our full year 2025 expectations for net revenue, gross profit, and adjusted EBITDA, but they also reflect the deepening of our customer relationships and expansion of our platform capabilities. The combination of strong gross profit growth, efficiency increases, and scale benefits are rapidly improving our profitability and foreshadowing the future earnings potential of the business. We expect to finish the year strong as we position the business for sustainable long-term success through multiple growth factors and increasing scale. I will now turn it over to the operator for questions.

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. Please limit yourself to one question and one follow-up question. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. And our first question comes from Brian Keene with Citi.

Hey, Mike. Congrats on the very solid results. I guess my question is just trying to figure out new business, new ramping of contracts, and what that pipeline looks like. It looks like a lot of the outperformance is just by the existing business. And then my follow-up is just kind of thinking about going forward, does it make it tough to figure out how to guide and what the normalized growth rate of the company should be, given that you have areas like BMPL with such outsized growth, it's just hard to predict.

Thank you, Brian, for your question. So I would say first, when we are looking at the growth, we look at it, I guess, slightly different than the way you characterized it. we look at new business in terms of new programs. And within those new programs, how many of them are driven by existing customers versus new customers? So you are right that many of the exciting growth areas of the business are coming from our existing customers. But most of that is being driven by new programs that they are launching with us, either new products or expanding into new geographies. And whenever they make those decisions, of course, we would like to you know, have deeper relationships with them, but of course they have other options. And so we still consider that, you know, great new business that drives growth. We, this year, we've talked a lot about what we call our new cohort business, which are all programs that have launched since the start of 2024. And those are very much on track with what we started, what we believed at the start of the year, excluding the impact of VARO deciding to terminate. So our programs this year, again, programs that have launched since the start of 2024, are expected to contribute over $40 million of revenue in 2025. So that business is ramping well, and we're excited to continue to see it ramp into next year. In terms of guiding, I think we do have a complex business, but I feel like generally speaking, We do forecast the business pretty well. You know, I would say going into the holiday season in Q4, where, you know, buy now, pay later, the volume significantly ramps up. It is a little bit more difficult in Q4. And particularly with sort of the uncertainty in the macroeconomic environment, it's a little bit tougher to tell. But we feel pretty good about our ability to project the business forward. And, you know, we'll see as the quarter unfolds.

Got it. And then just as a follow-up, it sounds like TransactPay has been key to kind of develop the European market. Is it just expansion from existing customers that they didn't kind of feel comfortable expanding until you had that solution and just trying to figure out exactly how big that could be for you guys now that you have that asset under your belt?

Yeah, so there's two sources of value, two primary sources of value for us with TransactPay. So one is that you mentioned is it does make it much easier for our customers to move to either side of the Atlantic, so either North American customers going to Europe or European customers coming to North America. And the reason for that is prior to TransactPay, we couldn't offer the same level of solution that we could in North America, with the biggest difference being program management. So when a U.S. customer, for example, wanted to go to Europe, we'd be able to tell them, well, from a processing perspective, this will be pretty seamless on our platform. But there's a lot of things that you're going to have to find someone else to do for you in Europe that we take care of for you in the U.S. So that was not ideal for our customers. And so the transaction acquisition removes that barrier, Where actually our offering now will be very similar and very seamless to expand going either direction across the Atlantic. The other source of growth for TransactPay is incremental business. What we repeatedly have heard in the market and even what other ecosystem players tell us is the very large opportunities, the real enterprise customers want one partner, one platform to serve as both processing, program manager, and bring the EMI license. So there was a part of the market, which is really the bigger part of the market, the high end of the market, that we really couldn't play in before. And now with the Transact Pay acquisition, you know, we very much can play in that market, and our pipeline reflects that. So those are the two things that are quite exciting about the addition. And, you know, we're only three months in now, but we've hit the ground running since the close.

Okay, great. Congrats again.

Thank you.

And our next question comes from Timothy Chiodo with UBS.

Great. Thank you for taking the question. I was hoping we could dig in a little bit more to the car and card relationship. So clearly it's expanding 15 new markets, I believe is the number that was put out there. This is the in-store relationship for the card, but also I understand that the Apple Pay portion would be applicable as well. I was hoping you could help us, one, just put a little bit more detail around the relationship, but also to the extent even directionally, you could give us a sense on some of the numbers that we could start to put around this, meaning we certainly have estimates around the number of cards that this could be, given there's a wait list in the U.S. and we could put some kind of an assumption around the markets in Europe, but volumes per card, what's a reasonable expectation relative to the, call it 2,000 or so per card that we see with the Affirm card, and then directionally if the yield on this business would be lower, higher, or about the same. That would be appreciated.

All right. Thanks, Tim. You threw a lot in there, so let me see how much I can cover. Sorry about that. Yeah, we have a good – no worries. I would expect nothing less. So, yeah, Klarna is a great partner of ours. They've been a customer for a very long time, certainly going back probably seven or eight years. And, you know, we continue to have a great relationship where we can enable innovation together. What's exciting about the expansion of the Visa Flexible Credential and the 15 new markets is, you know, last October, we did a pretty significant migration for Klarna in Europe. And it was in three countries. And we converted or we migrated over 5 million cards. And so we've been operating with them in three markets. And now they're going to add 15 additional markets to that to that relationship. So we have, I guess, a good amount of information based on the three markets that we see today. But those were businesses that already existed before they got onto our platform. So it's a little bit different than in these new markets where they're starting with the first time of having a card solution. What I can tell you that we see in those three markets is the growth has been, you know, really strong. So, you know, when you're doing a migration, you move a lot of the historical information from one platform to your own. And so we had a good sense of the trajectory of the business prior to it coming onto the Marquetta platform. What we're seeing in the quarter since that happened is a significant acceleration in that business. And so part of that, of course, is, you know, Klarna gets all the credit there. They're executing really well and driving a lot of growth. But we'd like to hope that we at least have some hand in the capabilities of our platform and really making it easy and reliable for them to drive that kind of growth. And so, you know, we'll see how the new 15 markets go because we don't really have as good of a benchmark because, as you said, in the U.S., they had wait lists and other things. So I can't share those numbers. Maybe, you know, they would share them with you. But, you know, the yield was your last question. I would say, you know, in general, Europe, the yields are tend to be a little bit lower because just the economics in Europe are a little different. But there's still, you know, healthy yields for us to drive growth and also allows Klarna to be very competitive and, you know, offer a very effective value proposition for their end users.

Thank you, Mike. Appreciate that.

Thanks, Tim.

Moving on to Darren Peller with Wolf Research.

Mike, thanks. Look, there was a lot in the call, but I want to just take a step back. And if we look at the puts and takes of what you look at for 2025 and think about the trajectory of the business that you're on right now relative to what you'd expect and hope for going forward, anything anomalistic that we're seeing now in this trajectory that we should think is unsustainable? Because the growth obviously has done very well this quarter, And I guess we're getting questions on how that can look into the end of the year and into next year already. So any early indication of what you're seeing in terms of just trends and anything that may not be? You mentioned, I think, two contracts that might be renegotiated or anything else you can call out.

Yeah, no, thanks, Darren. I mean, there's no doubt that the trajectory of the business is stronger than that we expected. You know, just the TBD growth accelerating again for the second straight quarter. And as I mentioned, this is our fastest TBD growth in about six quarters. So clearly, things are on a good trajectory. I would say, first, from, I guess, the positive aspects that are driving this is certainly the buy now, pay later use case. And again, this combination of some geographic expansion as well as these what we call pay anywhere cards, but the buy now, pay later companies offering a card that can be used anywhere cards accepted to deliver the buy now, pay later use case are getting really strong adoption. And our lead and leadership, I guess, with the flexible credential from Visa has been something that we're quite proud of as the first to enable that. And that's leading to a lot of growth. Also, in SMB lending, that part of the market is also doing quite well. I didn't, you know, highlight that much, but that's another area. So everything in lending, I would say, is definitely performing better than we expected and driving better growth. And then the on-demand delivery acceleration this quarter was a little bit of a surprise. Our customers continue to expand into new, you know, merchant kind of categories, I guess, as well as geographies, and that's driving strong growth. And then just in general, I would say the business is doing a little better. The things that can change are, there are a few. So one is we talked about the renewals at the start of the year. And as I just mentioned, one of them we expect to be in effect in Q4 and lower our growth by about two points and our gross profit growth by two points in Q4. That other renewal we do expect to get done in the early part of 2026. So, you know, what we said at the beginning of the year was we expected those two to be a combined four points of drag on growth. So as we the first one is coming out to what we expected to be about two points, we'll see. So we'll update you on those two, but that's one thing that's changing. I think the second thing I would highlight is, you know, we do now expect that Cash App is going to diversify some of their new issuance with Bancor and use another processor. So, you know, it's the new issuance for now is our understanding. even if that they do all their new issuance starting January 1st, which would be aggressive. But if we just use that as an assumption, we think that would be about two points of drag on our growth in 2026. So that's something that we also expect to change. And then the last thing I would just point out is in this quarter, we did have two and a half points of sort of just, you know, kind of unusual items that we think are very unique to the quarter. And those wouldn't those wouldn't continue. So, you know, those are a few of the factors that are, I would say, we expect to change in 26, but we'll tell you more about that when we talk again in February.

All right. That's really helpful, Mike. I'll leave it there, just given how much you have to say. Appreciate it.

Okay. Thanks, Darren.

Our next question comes from Tianjin Wong with J.P. Morgan.

Hi, thanks. This is Connor on the Tianjin. Mike, I wanted to ask about Europe a little bit. and you talked about it still growing 100% plus or doubling. I was curious if you could just talk about, like, how sustainable you feel like that is. I think it's across a couple of use cases and it seems like you've got a couple of clients doing particularly well, but maybe just thoughts on the sustainability of that and mix shifts you're seeing within the use cases, maybe.

Sure. Thanks, Connor. So, yeah, the international business is doing really well and a lot of that is being fueled by Europe. Just so you have a sense, The international, so our non-U.S. business represents sort of a high teams percentage of our TPV, and that's up five percentage points from Q3 of last year. So it's, you know, that very high growth rate is, I mean, it's grabbing a bigger share of our business over time. And the Europe growth remains over 100%. You know, that's probably not, you know, sustainable, obviously, as the base gets larger. but we've now done that for several consecutive quarters. The use cases in Europe, what's great is it's very similar to our U.S. business. We have very large customers who are growing quickly in needle banking, lending, and buy now, pay later, as well as in expense management. So all three of those areas are all growing over 100% and are all of substantial size. I would say the only difference in Europe compared to the U.S. is just the on-demand delivery business is much smaller. It is there, but it's not nearly as significant as it is in the U.S., so that's really the biggest difference. In terms of sustainability, I mean, again, 100% growth is probably maybe a little bit much to expect as the base just keeps getting bigger and bigger. But we do think that the TPD growth in Europe can continue to grow at a materially faster rate than the overall company. And that's because we've got now TransactPay coming into the fold, which, again, just makes our offering that much more compelling and allows us to seamlessly support customers who maybe want to move to Europe or European customers who want to move to North America. And it just allows us to work, you know, compete in the premium market where the large enterprises play. So the big volumes that can be had are now available to us and we can be competitive for, which really wasn't the case. So what I would say is, you know, in the coming quarters, our growth rate might slow a little, like dip below 100 percent, but still be, you know, very fast, much faster than the overall company. And then the plan would be, you know, in a year or so, as some of these programs with the combination of Marquette and TransactPay together start to come on board, that that TPV growth could reaccelerate. So we think it's going to grow much faster than our, you know, the overall business for, you know, for at least the foreseeable future.

Perfect. Thank you. And maybe a follow-up on just like FlexCredential more broadly. I'm curious, I mean, you talked at some length about within BNPL, kind of the use case for Visa FlexCredential. Curious, like outside of BNPL, are you seeing demand for it from any of your customers? What can you say about kind of adoption curves if we exclude BNPL?

Yes, we are seeing a lot of interest in the Flexible Credential beyond just buy now, pay later. Because really the first use case was this combination of a debit credential with the ability to do essentially transaction-based lending or buy now, pay later lending. But what is coming from the networks that, you know, again, you could ask them for more detail. I don't want to steal their thunder, but we are going to move to a world where the flexible credential could be, you know, debit and more of a revolving credit instrument. And so then that now has a lot of applicability for people versus today, if you, you know, we probably all have a credit card and a debit card in our wallet, in the future, you might be able to just have one card that allows you to pay now and pay later or revolve all in one credential. So the discussions about that type of offering is we have a lot of those conversations, given that we have the most experience with these flexible credentials. And so we have a lot of a lot of conversations about that. The second area that I'd also say is right now it's the buy now pay later companies who are at the forefront of using this flexible credential. But we also talk to other companies who want to have a debit offering where you might embed buy now pay later that comes from one of these major buy now pay later customers of ours. So we do think even the current use case can expand beyond just buy-now-pay-later companies, but other issuers as well. And that would be both good for that issuer's value proposition as well as drive distribution for the buy-now-pay-later customers of ours.

Thanks, Mike. Moving on to Craig Murar with FT Partners.

Hey, Mike. Thanks for taking the questions. I wanted to ask, when we think about 2026, you know, how does Cross River help with the backlog? You know, does it open you up to new potential in terms of growing that? And second, the renewal cadence, you obviously talked about renewing two customers in fourth quarter and first quarter. How should we think about that going forward? And just lastly, how are the opportunities with American Express starting to shape up? Thanks.

Thanks, Craig. So, yes, and just in terms of Cross River Bank, I mean, we're excited to start working with Cross River Bank. Again, we have a program that is going to go live in Q4 and launch, which we're excited about. And then early next year, we expect to also have Coastal Community Bank up and running. The key thing is that when we were looking for new potential bank partners, we looked for the combination of both with banks that had a lot of capabilities and technology. So they had made a lot of investments themselves, because those are then things that we can utilize seamlessly to deliver value for our customers. We wanted them to have, obviously, a strong regulatory compliance footing. And then we also wanted banks that could support a broad range of offerings. Right. What makes Marketa unique is that we do sort of all use cases across debit and credit, consumer and commercial. And so we really want partners who also have that kind of breadth of offering. And, you know, Cross River Bank, we feel like is a is a great partner and we're excited to work with them as we go forward. So, you know, it will be more and more part of the new business that we bring on board to our platform, you know, starting in Q4. In terms of the renewal cadence, so yes, originally we thought these two renewals would get done kind of in the middle of 2025, and they've just taken longer. They're both going to get done before the current contract expires, so it's not like we're bringing it down to the wire here, but they are just taking a little bit longer. They're bigger customers, larger relationships, and so there's just more to discuss, and we expect one in Q4 and then the other one in the early part of 2026, and once they're done, we'll give you updates. And then your last question on American Express. So there are several opportunities that we're talking to customers about with American Express. And we also are talking to American Express about unique things we could do together. So I would say, you know, we had a few things in mind when we started the integration, which is almost complete. And, you know, we do continue to, you know, partner together to capture some people who are trying to do, you know, unique things in the market where we both bring something unique to the table.

Okay, thank you.

We'll go next to James Fawcett with Morgan Stanley.

Hey, good afternoon. Thanks for all the commentary here, Mike. I wanted to ask, you know, you talked about your ability to and opportunity you've had to ramp incremental markets with Klarna, et cetera. Can you talk about how that impacts your ability to add new markets for other partners and things that you can do to accelerate that process operationally for them? It seems like that would be a good opportunity, especially as people look at different countries around the world where they may want to have presence.

I totally agree, James. And we're doing this for a broad number of customers. Our view is that a lot of the fintech winners have been crowned, if you will, and many of them are becoming big businesses. And they're expanding in terms of both products and geographic reach. And we're really helping them do that. If we look at our top 10 customers, eight of them operate in more than one geography with us, which we would define as sort of U.S., Canada, Europe, Australia as sort of the primary geographies that I guess in one or two countries in Latin America. So we already, the majority of our largest customers operate in more than one of those on our platform. And I think it's around in the mid-teens of our top 20 customers are also in more than one market. So this is something we already do and have been doing for a while. But we think there's even more potential because in a lot of cases, these were maybe smaller efforts. But I think now many of our customers are, you know, seeing traction and looking to invest in those markets as there just aren't nearly as many people chasing all the same opportunities as there was three, four years ago. And so that's creating opportunity, which is part of the reason, as we talked about earlier, for the TransactPay acquisition is just to make our platform and our capabilities on a geographic basis much more consistent. And when we look at the pipeline of who we talk to now in terms of new customers and new opportunities, this is one of the key criteria is when we're looking at who we should target is who are the companies that are already multinational and have the kind of scale that could take advantage of that unique capability that we have. So the fact that we are, you know, 100% modern and operate at scale and can do all kinds of use cases across debit, credit, consumer, and commercial, but that also that we're one stack. And so we make it very easy for you to move from market to market versus, you know, on many other competitor platforms that might be a whole different platform that requires a different integration. So this is an area that we're leaning in both with our existing customers as well as if you were to see our pipeline, it, you know, includes a lot of companies who, you know, very quickly want to be in more than one market.

Thanks so much. Thank you, James.

And a final reminder, if you'd like to ask a question, that is star one. And we'll go next to Jamie Friedman with Susquehanna.

Hi. Thanks for taking my question. So I was wondering if you could share any perspective on the kind of respective revenue yields as there's relative growth in some. For example, you called out that revenue yield in Europe might typically be lower. How should we compare commercial, say, the expense management initiatives relative to consumer? Any perspective that you might have on revenue yield would be helpful.

Sure. Yeah, thanks for your question, Jamie. And I would say I'll talk about actually our gross profit take rate since we tend to focus on gross profit take rate. So I would say the yields from use case to use case are not as different as you would think. I would say generally they're relatively consistent. What changes the actual yield in each kind of use case more has to do with the size of the customers that we have. So how big are the very largest customers in that space? So when we compare, you know, our offerings or our gross profit take rate in the various segments, the differences more come from the sort of the weighting or the mix of the size of the customers in each, as opposed to, you know, us fundamentally charging different amounts for different use cases. Because like in, for example, in our financial services and the neobanking, obviously our largest customer, the predominantly their businesses is there, but we have a couple other quite significant customers. And so that one tends to be a little bit lower. And I would say the same thing in expense management, right? We have two or three very large customers in that space. And so the gross profit take rate tends to be a little bit lower versus in, you know, on demand delivery and lending and buy now, pay later. It's a little bit more diversified customer base. There are a lot more customers who are contributing. And so the gross profit take rates are a little bit higher. The only other thing that I would just mention about this is one of the other things that I haven't mentioned when we talk about TransactPay is that traditionally in Europe, our gross profit take rate was much lower because we were only providing processing and we really didn't have much else to offer versus now we'll have processing and program management, including the license, all of which you can monetize. And then also we're bringing a lot more of our value-added services to Europe. So we do expect that our gross profit take rates in Europe are going to improve over time, which will maybe also make the difference between, say, North America and Europe not as significant as it is today.

And that's a good follow-up to my second one, Mike, which is about value-added services. I might have missed it this quarter. I felt like you had more about it in the script earlier in the year. So what is the narrative on value-added services? And I apologize if I missed it earlier.

No, no, you didn't miss it. Yeah, we we didn't cover it much this quarter, but we spent a lot of time on it last quarter. You know, we continue to expand our value added services. If you really think back to two, three years ago, a lot of our engineering energy was going into scaling the business. Right. A payment platform that has to work every time. There's a lot of effort that goes into when your volume is growing, you know, at the rates R has over the last several years. That was a big part of our efforts, but I would say in the last 12 to 18 months, we've really sort of broken through that next level of scale, and it's allowed us to then divert some of our resources to adding more value-added services and making the offerings more robust. So some of the big areas I would say right now are related to things related to tokenization, as well as our risk products are both growing quite quickly. So those are two areas that we're excited about. And then the new area that we just started launching this year is our ability to support people with the user experience. so a white label app, a lot of the customers or a lot of prospects on our platform do want that full end-to-end solution. Because as we move into embedded finance, just remember that the way we at least define embedded finance is it's companies that their core business is outside of financial services. So our traditional customer base in fintech, they wanted to own a lot of these things and build a lot of these things themselves. Versus in embedded finance, these customers have another core business. And they're really looking for a full end-to-end solution, which is why we've really been investing in this area, because we think the more and more of our business going forward will be full solution sets, including lots of different offerings from our platform to make it easier for them. So it's relatively small right now, but growing quickly and will become a bigger part of the story in the coming years. Okay. Thanks for the perspective.

Yep. Thanks, Jimmy.

ladies and gentlemen thank you for your participation this does conclude today's teleconference you may disconnect your lines and have a wonderful day