Core Points - S&P Dow Jones Indices announced changes to the S&P 500 and S&P SmallCap 600 indices, effective December 11 and December 15, 2025 [1][4] Group 1: S&P 500 Changes - Ares Management (Ticker: ARES) will be added to the S&P 500, replacing Kellanova (Ticker: K) which is being acquired by Mars Inc. [1][4] - The acquisition of Kellanova is expected to close soon, pending final closing conditions [4] Group 2: S&P SmallCap 600 Changes - Vital Farms (Ticker: VITL) will replace Heidrick & Struggles International (Ticker: HSII) in the S&P SmallCap 600, with the latter being acquired by Advent International and Corvex Private Equity [1][4] - Sezzle (Ticker: SEZL) will be added to the S&P SmallCap 600, replacing Vital Energy (Ticker: VTLE), which is being acquired by Crescent Energy Co. [1][4] - The changes for the S&P SmallCap 600 will take effect on December 11 and December 15, 2025 [1]

Core Insights - Sezzle is positioned in the buy now, pay later (BNPL) market, which is expected to experience strong growth over the next 7 to 10 years, benefiting all players in the space [2][17] - The company differentiates itself by focusing on credit building for younger, mid to low-income customers, which is a significant market segment in the U.S. [15][18] Company Background - Sezzle was co-founded by Charlie Youakim, who transitioned from a previous mobile payment company called Passport to focus on retail payments and BNPL after recognizing its potential [4][7] - The company initially faced challenges in the mobile payment space but pivoted to BNPL, which has since seen rapid growth [7] Market Dynamics - The BNPL market is characterized by a rising tide that benefits all players, with Sezzle aiming to capture a larger market share through innovation and competition [17] - Sezzle's customer base primarily consists of younger individuals who are more likely to use BNPL as a budgeting tool, contrasting with traditional credit card users who may face debt cycles [9][12] Financial Performance - Sezzle maintains strong gross margins, with a principal loss rate (PLR) of about 2% and top-line revenue percentage around 11%, indicating resilience even in economic downturns [12] - The company can quickly adjust credit limits and stop further credit extensions in response to customer financial difficulties, providing a safety net that traditional credit cards do not offer [12] Customer Usage - Sezzle's customers are increasingly using the service for essential purchases, moving beyond initial categories like beauty and fashion to include general retail [13] - The average transaction amount for Sezzle is in the low hundreds, significantly lower than typical credit card balances, which can average around $6,000 [10] Competitive Landscape - Sezzle competes with established players like Klarna, Afterpay, and PayPal, but believes that the market is still in its early stages, allowing for multiple successful players [17] - The company emphasizes its unique offerings, such as credit building and open-loop products, which allow customers to use Sezzle at various retailers without being tied to specific merchant websites [15][18]

Core Insights - Sezzle Inc. (NASDAQ:SEZL) is recognized as a fast-growing small-cap stock, with analysts providing mixed price target adjustments while maintaining varying ratings [1][2]. Financial Performance - For fiscal Q3 2025, Sezzle reported a revenue increase of 66.95% year-over-year, reaching $116.8 million, which exceeded estimates by $12.09 million [2]. - The company's earnings per share (EPS) was $0.71, surpassing expectations by $0.06 [2]. - Sezzle achieved a record high Gross Merchandise Volume (GMV) of $1 billion, reflecting a year-over-year growth of 58.7% [2]. - The growth in GMV was attributed to increased usage of subscription products and a strategic focus on consumer acquisition, engagement, and retention [2]. Guidance Updates - Sezzle raised its EPS guidance from $3.25 to $3.38 [3]. - The Adjusted EBITDA guidance was increased from a range of $170 million – $175 million to $175 million – $180 million [3]. Business Model - Sezzle operates as a fintech company offering a "buy now, pay later" payment platform, enabling consumers to split purchases into four interest-free installments [3].

Core Viewpoint - Sezzle has experienced significant growth but has recently faced a sharp decline in stock price, presenting a potential buying opportunity amidst broader market concerns about the fintech sector and credit risks [1][2][3]. Company Performance - Sezzle's stock fell 43% since September 9, underperforming compared to other fintech stocks [3]. - Despite the stock's decline, Sezzle reported strong third-quarter results, with gross merchandise volume increasing by 58.7% to $1 billion and revenue rising by 67% to $116.8 million [8]. - Adjusted EBITDA rose 75% to $39.6 million, and adjusted earnings per share increased from $0.47 to $0.71 [9]. Market Position and Strategy - Sezzle operates in the buy now, pay later (BNPL) space, offering a "pay in four" feature and generating revenue primarily from merchants through a 6% processing fee plus $0.30 per transaction [9]. - The company positions itself as more user-friendly and less predatory than competitors, implementing measures to limit credit risk by cutting off users who miss payments [10]. Financial Metrics - Sezzle's current market capitalization is approximately $2 billion, with a forward P/E ratio of 16 based on an updated adjusted EPS of $3.38 for the year, indicating a potentially attractive valuation for a high-growth company [12]. - The provision for credit losses doubled to $32.2 million in the third quarter, reflecting rising credit risk in the current macroeconomic environment [13]. Future Outlook - If Sezzle can navigate the current market volatility, there is potential for significant stock appreciation, with a 10x gain considered possible if the company maintains its growth trajectory [14].

Group 1 - The article introduces ML Research as a new contributing analyst for Seeking Alpha, encouraging others to share investment ideas for publication and potential earnings [1] Group 2 - The author reflects on their journey in investing, starting from a young age and evolving from paper trading to a disciplined approach that combines technical and fundamental analysis [2] - The focus has shifted towards swing trading small to mid-sized companies perceived as undervalued, with an emphasis on achieving strong, risk-adjusted returns [2]

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]