Core Insights - The article introduces Marcal Carbo as a new contributing analyst for Seeking Alpha, emphasizing the opportunity for others to share investment ideas and gain exposure [1] Group 1: Investment Philosophy - The analyst began with deep value investing influenced by Benjamin Graham's "The Intelligent Investor" but later shifted focus to growth companies after studying Peter Lynch's works, leading to improved investment results [2] - The investment strategy has evolved into a GARP (Growth at a Reasonable Price) approach, combining elements of both value and growth investing [2] - The analyst expresses a strong belief in fundamentals over technical analysis, focusing on fully profitable companies [2] Group 2: Market Performance - The analyst's track record includes underperforming the market in 2019 and 2020, transitioning to market-wide ETFs in 2022 and 2023, and successfully beating the market again in 2024 and 2025 [2] - The current focus is on sectors such as AI-related stocks, fintech, biotech, and manufacturing companies, indicating a strategic interest in high-growth industries [2]

Core Insights - Sezzle's shares fell 8% despite a strong third-quarter earnings report, driven by concerns over rising credit loss provisions, an executive change, and increased competition [1][2] Financial Performance - The company reported a 67% year-over-year revenue increase and achieved its first-ever $1 billion quarter in Gross Merchandise Volume (GMV) [2] - The provision for credit losses rose to 3.1% of GMV, up from 2.3% in the same period last year, raising concerns about loan quality [2] Executive Changes - Chief Financial Officer Karen Hartje is transitioning out of her role over the next twelve months, adding to the uncertainty surrounding the company [2] Competitive Landscape - Increased competition is evident as US Bank partnered with Mastercard to launch a new credit card that directly competes with buy-now-pay-later models [2] Market Reaction - Sezzle's shares have shown extreme volatility, with 80 moves greater than 5% over the past year, indicating that the market views the recent news as significant but not fundamentally altering its perception of the business [4] Stock Performance - Sezzle's stock is up 36.6% year-to-date but is still trading 65.9% below its 52-week high of $182.16 from July 2025 [6]

Group 1 - The article does not provide any specific information or data regarding companies or industries [1]

Core Insights - Sezzle Inc. reported quarterly earnings of $0.71 per share, exceeding the Zacks Consensus Estimate of $0.65 per share, and showing an increase from $0.49 per share a year ago, resulting in an earnings surprise of +9.23% [1] - The company achieved revenues of $116.8 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 12.38% and up from $69.96 million year-over-year [2] - Sezzle Inc. shares have increased approximately 44.2% year-to-date, significantly outperforming the S&P 500's gain of 15.1% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.91 on revenues of $134.54 million, and for the current fiscal year, it is $3.27 on revenues of $442.08 million [7] - The estimate revisions trend for Sezzle Inc. was mixed prior to the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Financial Transaction Services industry, to which Sezzle Inc. belongs, is currently ranked in the bottom 42% of over 250 Zacks industries, suggesting potential challenges in stock performance compared to higher-ranked industries [8]

Financial Performance - Total revenue for Q3 2025 reached $116,796,000, a 67% increase from $69,958,000 in Q3 2024[17] - Operating income for Q3 2025 was $35,561,000, compared to $20,842,000 in Q3 2024, reflecting a 70% increase[17] - Net income for Q3 2025 was $26,671,000, up from $15,446,000 in Q3 2024, representing a 73% increase[17] - Net income for the nine months ended September 30, 2025, was $90,439,000, compared to $53,155,000 for the same period in 2024, representing an increase of 70%[23] - Total revenue for the nine months ended September 30, 2025, reached $320.4 million, compared to $172.9 million in 2024, marking an increase of 85%[38] Assets and Equity - Total current assets increased to $329,454,000 as of September 30, 2025, from $257,619,000 at the end of 2024, a growth of 28%[15] - Total assets grew to $366,964,000 as of September 30, 2025, compared to $298,372,000 at the end of 2024, marking a 23% increase[15] - Total stockholders' equity increased to $155,270,000 as of September 30, 2025, up from $87,835,000 at the end of 2024, a growth of 77%[15] Cash Flow and Liquidity - Cash and cash equivalents increased to $104,147,000 as of September 30, 2025, from $73,185,000 at the end of 2024, a rise of 42%[15] - Net cash provided from operating activities for the nine months ended September 30, 2025, was $55,618,000, compared to $39,928,000 in 2024, an increase of 39%[23] - Cash, cash equivalents, and restricted cash at the end of the period on September 30, 2025, totaled $134,656,000, up from $88,343,000 in 2024, an increase of 52%[23] Credit Losses and Risk Management - Provision for credit losses for Q3 2025 was $32,177,000, significantly higher than $15,402,000 in Q3 2024, indicating increased risk management measures[17] - The company recognized a provision for credit losses of $32.2 million for Q3 2025, compared to $15.4 million in Q3 2024, representing a 109.7% increase[55] - The allowance for credit losses increased to $33.7 million as of September 30, 2025, compared to $18.6 million at the end of Q3 2024[55] Revenue Sources - Merchant and partner income totaled $26.0 million for Q3 2025, up from $21.9 million in Q3 2024, representing a 18.7% increase[40] - Transaction income from consumer fees increased significantly to $33.5 million in Q3 2025, compared to $14.5 million in Q3 2024, marking a 131% growth[41] - Subscription revenue for Q3 2025 was $24.3 million, compared to $22.9 million in Q3 2024, reflecting a 6.1% increase[44] Expenses - Marketing, advertising, and tradeshow expenses surged by 221.9% to $8.8 million for the three months ended September 30, 2025, compared to $2.7 million in 2024[115] - Personnel expenses increased by 6.7% to $14.3 million for the three months ended September 30, 2025, compared to $13.4 million in 2024[110] - Third-party technology and data expenses rose by 55.2% to $3.7 million for the three months ended September 30, 2025, compared to $2.4 million in 2024[114] Stock and Shareholder Actions - The company performed a 6-for-1 stock split effective March 28, 2025, impacting share and per share amounts retroactively[15] - The Board of Directors authorized a stock repurchase program of up to $50 million, effective from April 7, 2025, to April 7, 2026[158] - During the three months ended September 30, 2025, the company purchased 47,089 shares at an average price of $84.24 to cover tax obligations[157] Legal and Regulatory Matters - The company filed a lawsuit against Shopify for antitrust violations, seeking damages that could be tripled under applicable laws[153] - The company does not believe that the outcome of ongoing legal matters will have a material adverse effect on its financial position[154] - The company is currently assessing the impact of the One Big Beautiful Bill Act enacted on July 4, 2025, which includes significant tax provisions[37] Taxation - Income tax expense for the nine months ended September 30, 2025, was $20,871,000, compared to a benefit of $(13,567,000) in 2024, reflecting a significant change[122] - The effective income tax rate for the three months ended September 30, 2025, was 15.7%, up from 12.3% in 2024, while for the nine months it was 18.8% compared to (34.3%) in 2024[122] Consumer Metrics - Active Consumers increased to 2.971 million as of September 30, 2025, representing a 9.0% growth from 2.725 million at the end of 2024[87] - Monthly On-Demand Users and Subscribers (MODS) rose to 784,000, an 11.0% increase from 707,000 in December 2024[87] Financial Controls and Compliance - As of September 30, 2025, the company's disclosure controls and procedures were deemed effective at a reasonable assurance level by the CEO and CFO[149] - No changes in internal control over financial reporting occurred during the nine months ended September 30, 2025, that materially affected internal controls[150] - The financial statements fairly present the financial condition and results of operations of Sezzle Inc. for the quarter ended September 30, 2025[172]

Financial Data and Key Metrics Changes - Total revenue increased by 67% year-over-year to $116.8 million in Q3 2025 [18] - GAAP net income grew by 72.7% year-over-year to $26.7 million, with an adjusted net income increase of 52.6% to $25.4 million [23] - Adjusted EBITDA rose nearly 74.6% year-over-year to $39.6 million, representing a 33.9% adjusted EBITDA margin [24] - GMV increased by 58.7% year-over-year, marking the company's first $1 billion quarter [19] - The take rate rose by 60 basis points year-over-year to 11.2% [19] Business Line Data and Key Metrics Changes - The number of monthly on-demand users reached 264,000 by the end of Q2 2025, but the subscriber count decreased from 529,000 to 484,000 during the same period [10] - By the end of Q3 2025, subscribers increased to 568,000 as the company pivoted back to focus on subscription products [12] Market Data and Key Metrics Changes - Consumer metrics measured by mods rose almost 50% year-over-year [4] - Monthly active users grew by 38% year-over-year, while revenue-generating users rose by 120% year-over-year [42] Company Strategy and Development Direction - The company is focusing on enhancing its product experience and deepening consumer engagement through new features like the Earn tab [5][18] - There is a strategic shift back to subscription products, with on-demand services being used as a fallback option [12] - The company is exploring a banking charter to enhance efficiency and flexibility in its operations [16] Management's Comments on Operating Environment and Future Outlook - Management believes the BNPL industry is still in its early days, with significant growth potential ahead [3] - The company has not seen any deterioration in consumer activity despite recent headlines affecting the lending sector [21] - The outlook for 2026 includes adjusted EPS guidance of $4.35, reflecting a 29% growth over 2025 [25] Other Important Information - The company incurred $1.3 million in costs related to corporate strategic projects during the quarter [23] - The CFO, Karen Hartje, is retiring, but will assist in the transition for the next 12 months [17] Q&A Session Summary Question: Impact of de-emphasizing on-demand on growth - Management noted that the decision to de-emphasize on-demand was made mid-quarter due to insufficient conversion rates into subscriptions [27][28] Question: Take rate trends and credit losses - The take rate is targeted at 60% gross margin, and the 3.1% credit loss rate aligns with expectations, with a potential drop as on-demand is de-emphasized [30][31] Question: Market strategy for BNPL in the U.S. - Management believes the BNPL market has significant growth potential, viewing it as a safer alternative to credit cards for consumers [38][40] Question: Underlying drivers of 2026 EPS guidance - The guidance reflects continued growth in subscriptions and a focus on maintaining gross margin dollars at a faster pace than operational expenses [49] Question: Changes in competition - Management has not observed significant changes in pricing or strategy from competitors, aside from Klarna launching a subscription product [52]

Financial Data and Key Metrics Changes - Total revenue increased by 67% year-over-year to $116.8 million in Q3 2025 [18] - GAAP net income grew by 72.7% year-over-year to $26.7 million, with an adjusted net income increase of 52.6% to $25.4 million [23] - Adjusted EBITDA rose nearly 74.6% year-over-year to $39.6 million, representing a 33.9% adjusted EBITDA margin [24] - GMV increased by 58.7% year-over-year, marking the company's first $1 billion quarter [19] - The take rate rose by 60 basis points year-over-year to 11.2% [19] Business Line Data and Key Metrics Changes - The number of monthly on-demand users reached 264,000 by the end of Q2 2025, but the subscriber count decreased from 529,000 to 484,000 during the same period [10] - By the end of Q3 2025, subscribers increased to 568,000 as the company pivoted back to subscription products [12] Market Data and Key Metrics Changes - Consumer metrics measured by monthly active users grew by 38% year-over-year, while revenue-generating users rose by 120% year-over-year [42] - Monthly sessions climbed by 78% year-over-year, indicating increased engagement [42] Company Strategy and Development Direction - The company is focusing on enhancing its subscription model while using on-demand as a supplementary tool for specific consumer segments [12][28] - There is a strong emphasis on responsible lending practices, positioning the BNPL product as a budgeting tool rather than a means to overspend [4][40] - The company is exploring additional products and features, including AI-driven tools to enhance customer service and engagement [7][8] Management's Comments on Operating Environment and Future Outlook - Management believes the BNPL industry is still in its early stages, with significant growth potential ahead [3] - The company is maintaining a disciplined approach to costs while focusing on sustainable growth and profitability [24][25] - Despite some concerns in the consumer credit market, the company has not observed any deterioration in consumer activity [21] Other Important Information - The company incurred $1.3 million in costs related to corporate strategic projects, including an antitrust suit and capital markets exploration [14][15] - The company is exploring a banking charter to enhance operational efficiency without becoming a bank holding company [16] Q&A Session Summary Question: Impact of de-emphasizing on-demand on growth - Management noted that the decision to de-emphasize on-demand was made mid-quarter due to insufficient conversion rates into subscriptions [27][28] Question: Take rate trends and credit losses - The take rate is expected to maintain a target of 60% gross margin, while the 3.1% credit loss rate aligns with expectations [30][31] Question: Market strategy for BNPL in the U.S. - Management believes the BNPL market has many years of growth ahead, as consumers increasingly prefer it over traditional credit cards [38][40] Question: Underlying drivers of 2026 EPS guidance - The guidance reflects continued growth in subscriptions and a focus on maintaining gross margin dollars at a faster pace than operational expenses [48][50] Question: Changes in competition - Management has not observed significant changes in pricing or strategy from competitors, although some are launching similar subscription products [52] Question: Marketing posture for subscriptions - The current marketing strategy emphasizes direct offers for subscriptions rather than on-demand products, aiming to improve lifetime value [58][64]

Financial Data and Key Metrics Changes - Total revenue increased by 67% year-over-year to $116.8 million in Q3 2025 [17] - GAAP net income grew by 72.7% year-over-year to $26.7 million, with an adjusted net income increase of 52.6% to $25.4 million [22] - Adjusted EBITDA rose nearly 74.6% year-over-year to $39.6 million, representing a 33.9% adjusted EBITDA margin [23] - GMV (Gross Merchandise Volume) increased by 58.7% year-over-year, marking the first $1 billion quarter for the company [17] Business Line Data and Key Metrics Changes - The number of monthly on-demand users reached 264,000 by the end of Q2 2025, but the subscriber count decreased from 529,000 to 484,000 during the same period [9] - By the end of Q3 2025, subscribers rose to 568,000 as the company pivoted back to focus on subscription products [11] Market Data and Key Metrics Changes - The take rate, defined as total revenue as a percentage of GMV, rose by 60 basis points year-over-year to 11.2% [18] - The provision for credit losses as a percentage of GMV increased by 70 basis points year-over-year to 3.1% [19] Company Strategy and Development Direction - The company is focusing on enhancing its subscription model while using on-demand as a supplementary tool for specific consumer segments [11][10] - There is a strong emphasis on responsible lending practices, positioning the BNPL product as a budgeting tool rather than a means to overspend [4][33] - The company is exploring new product features, including AI-driven tools to enhance customer service and engagement [6][7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth potential of the BNPL industry, citing its early-stage development and consumer preference over traditional credit cards [3][31] - The company reaffirmed its guidance for top-line growth and adjusted net income, with modest adjustments to GAAP net income due to a discrete tax benefit [24] Other Important Information - The company incurred $1.3 million in costs related to corporate strategic projects, including an antitrust suit and capital markets exploration [12][13] - Total cash grew by $14.7 million in the quarter to $134.7 million, demonstrating the strength of the balance sheet [23] Q&A Session Summary Question: Impact of de-emphasizing on-demand on growth - Management noted that the decision to de-emphasize on-demand was made mid-quarter based on conversion data, indicating that on-demand is better suited for enterprise merchants rather than direct-to-consumer [25][26] Question: Take rate trends and credit losses - The take rate is targeted at maintaining a 60% gross margin, and the 3.1% credit loss rate aligns with expectations, with guidance indicating a range of 2.5%-2.75% for the year [27][29] Question: Market strategy for BNPL in the U.S. - Management believes the BNPL market has significant growth potential, viewing it as a safer alternative to credit cards and emphasizing responsible spending [31][33] Question: Drivers of 2026 EPS guidance - The company anticipates continued growth in subscriptions and is focused on maintaining cost discipline while monitoring economic conditions [37][39] Question: Changes in marketing strategy for subscriptions - The marketing approach has shifted to prioritize subscription offerings directly to consumers, contrasting with previous strategies that emphasized on-demand products [40][42]

a sezzle The Responsible Way to Pay Third Quarter 2025 Earnings Presentation November 5, 2025 Disclaimer Cautionary Note Regarding Forward-Looking Statements This presentation the "Pesentation" Contrines sumray information abox "the othilies of Septembling. The internsion in the internsion in this Pesertation is of a sepeat lat Presentation remairs subject to champe willing in of se. Nact fragmation in the Presentation struktura tradici nota a seadrice to otterhali metros or grand stransfor nors financial s ...

Core Insights - Sezzle Inc. has reported significant growth in its financial metrics for Q3 2025, achieving over $1 billion in quarterly Gross Merchandise Volume (GMV) for the first time, reflecting a strong consumer base and engagement [2][3][4] - The company is focusing on long-term innovation and proven results, particularly as it prepares for the holiday shopping season [2][4] Financial Performance - Quarterly GMV increased by 58.7% year-over-year, surpassing $1 billion [3][4] - Total revenue rose by 67.0% year-over-year, reaching a new quarterly high of $116.8 million [3][4] - Net income per diluted share grew by 70.5% year-over-year to $0.75, while adjusted net income per diluted share climbed by 51.1% year-over-year to $0.71 [3][4][20] - Adjusted EBITDA reached $39.6 million, reflecting a 74.6% year-over-year increase and accounting for 33.9% of total revenue [5][21] Operational Highlights - The increase in GMV was driven by higher usage of subscription products and On-Demand services, along with effective marketing and consumer engagement strategies [4][11] - Monthly Active Users grew by 38% year-over-year, and Revenue-Generating Users increased by 120% year-over-year [11] - Sezzle added 36,000 Monthly On-Demand & Subscribers (MODS) during the quarter, bringing the total to 784,000 [4][11] Guidance and Future Outlook - For FY2025, Sezzle has raised its guidance for net income per diluted share and adjusted EBITDA, with adjusted net income per diluted share guidance set at $4.35 for FY2026 [3][7] - The company anticipates total revenue growth of 60% to 65% for FY2025, with no changes to previous guidance [7] Balance Sheet and Liquidity - As of September 30, 2025, Sezzle had $134.7 million in cash and cash equivalents, with $30.5 million being restricted [10] - The company increased its borrowing capacity from $150 million to $225 million through an amendment to its credit facility [10] Strategic Initiatives - Sezzle has expanded its app features to enhance consumer engagement, including the introduction of the Earn Tab and a browser extension for smarter shopping [11] - The company signed two new enterprise partners in Q3 2025, indicating growing appeal among retailers [12] Recognition and Awards - Sezzle was recognized in TIME's top 100 inaugural list of America's Growth Leaders, highlighting its exceptional revenue growth and financial stability [13]