Group 1 - The article discusses the author's extensive experience as a Merchant Seaman and a growing interest in investing over the past 15 years, particularly in Tech stocks due to an engineering background [1]. - The author attributes much of their investment knowledge to The MF, indicating a reliance on established investment resources for learning [1]. Group 2 - There is a disclosure stating that the author has no current stock or derivative positions in any mentioned companies and has no plans to initiate any such positions in the near future [2]. - The article emphasizes that past performance is not indicative of future results, highlighting the uncertainty inherent in investment decisions [2].

Company Overview - Sezzle is a high-growth financial technology company operating in the buy-now, pay-later (BNPL) market [1] - The stock has appreciated significantly, rising nearly 270% over the past 12 months, despite a 50% pullback from its high in July 2025 [1] Market Performance - The stock's performance indicates strong investor interest and market confidence in Sezzle's business model and growth potential [1]

Core Viewpoint - Sezzle Inc. (SEZL) shows potential for significant upside, with a mean price target of $131.67 indicating a 49.6% increase from the current price of $88 [1]. Price Targets - The average price target consists of three estimates: a low of $111.00, a high of $150.00, and a standard deviation of $19.6, suggesting a range of potential increases from 26.1% to 70.5% [2]. - A low standard deviation indicates a strong agreement among analysts regarding the price targets, which can be a useful starting point for further research [9]. Analyst Sentiment - Analysts have shown increasing optimism about SEZL's earnings prospects, as evidenced by a positive trend in earnings estimate revisions, which historically correlates with stock price movements [11]. - Over the past 30 days, the Zacks Consensus Estimate for the current year has risen by 0.4%, with one estimate increasing and no negative revisions [12]. Zacks Rank - SEZL holds a Zacks Rank of 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate factors, indicating strong potential for near-term upside [13]. Caution on Price Targets - While the consensus price target is a commonly referenced metric, it should not be the sole basis for investment decisions due to historical inaccuracies in predicting actual stock price movements [3][7][10]. - Analysts may set overly optimistic price targets influenced by business relationships, which can lead to inflated expectations [8].

Core Insights - Sezzle (SEZL) has experienced a remarkable 74.2% year-over-year increase in gross merchandise volume (GMV) in Q2 2025, continuing a trend of significant growth over the past quarters [1][9] - The company's focus on consumer engagement through product innovation and targeted marketing has led to improved user loyalty and consistent profit growth [2] - Customer engagement is reflected in the increase in purchase frequency, which rose to 6.1 from 4.8 year-over-year, indicating a shift towards regular usage of Sezzle's services [3] Financial Performance - Sezzle's GMV growth has resulted in a 76.4% year-over-year increase in revenue, with operating income soaring 116.1% year-over-year and margins expanding by 6.8 basis points [5] - Adjusted net income increased by 91.8% year-over-year, showcasing strong underlying profitability driven by a loyal user base [6] Subscriber Growth - The number of Monthly On-Demand & Subscribers reached 748,000 in Q2 2025, marking a 13.7% sequential increase, which is attributed to successful product innovations [4] Stock Performance - SEZL's stock price surged 315.5% over the past year, significantly outperforming the industry growth of 22.7% and the S&P 500's rise of 14.3% [7] Valuation Metrics - Sezzle trades at a forward price-to-earnings ratio of 22.45X, slightly above the industry average of 22.17X, while competitors OppFi and PayPal have lower ratios of 6.62X and 12.13X, respectively [11] - The Zacks Consensus Estimate for Sezzle's earnings for 2025 and 2026 has increased by 2.8% and 2.3%, respectively, over the past 60 days [14]

Core Insights - Sezzle Inc.'s stock has surged 324.1% over the past year, significantly outperforming the industry growth of 19.7% and the S&P 500 Composite's 15.9% rally [1] - The company's performance also exceeds that of close competitors, PagSeguro Digital and Western Union, which saw declines of 38.1% and 29.2%, respectively [1] Performance Overview - Year-to-date, Sezzle's stock has increased by 115.5%, outpacing PagSeguro Digital's 44.2% growth and Western Union's 21.2% decline [4] - In the second quarter of 2025, Sezzle recorded a gross merchandise volume (GMV) of $927 million, reflecting a 76.4% year-over-year revenue increase [7][8] Product Development - Sezzle launched its On-Demand product in October 2024, allowing flexibility for Pay-in-4 transactions wherever Visa is accepted, positioning itself as a Buy Now, Pay Later solution [5] - The On-Demand product has seen success, with Monthly On-Demand Subscribers (MODS) reaching 748,000 in Q2 2025 after a seasonal dip [6] Profitability Metrics - Sezzle reported a return on equity (ROE) of 102.9% and a return on invested capital (ROIC) of 58.2%, both significantly above industry averages of 48.6% and 22.2%, respectively [9][11] - The company's current ratio stood at 3.51, well above the industry average of 1.15, indicating strong liquidity [13] Sales and Earnings Outlook - The Zacks Consensus Estimate for Sezzle's 2025 sales is $442.1 million, representing a 63.1% year-over-year increase, with a further 28.4% rise expected in 2026 [15] - Earnings estimates for 2025 are projected at $3.27 per share, indicating a 77.7% year-over-year surge, with an additional 32.1% increase anticipated in 2026 [15] Analyst Sentiment - Over the past 60 days, EPS estimates for both 2025 and 2026 have been revised upward, reflecting analysts' confidence in the company's growth potential [16] - Sezzle is considered a fundamentally strong stock, with a Zacks Rank of 2 (Buy), indicating positive sentiment among analysts [19]

Core Insights - Sezzle, a buy-now-pay-later (BNPL) fintech company, has shown remarkable stock performance, executing a 6-for-1 stock split shortly after going public [1] - Despite a recent decline of over 30% following its second-quarter earnings report, Sezzle's business fundamentals remain strong, with expectations of 60%-65% year-over-year revenue growth [2][3] - Sezzle's stock is still up more than 2,200% since its public debut at a split-adjusted price of $3.78 in August 2023, indicating significant long-term growth potential [3] Business Performance - In the second quarter, Sezzle's revenue grew by 76%, with a net margin of 28%, showcasing its profitability amidst rapid growth [3][4] - The company has a gross merchandise volume (GMV) of approximately $927 million, representing only 1.4% of the overall BNPL market, which indicates substantial growth opportunities [4][5] - Sezzle is effectively engaging customers and increasing payment frequency, with innovative features appealing to younger generations, such as credit scoring optionality [6] Profitability and Capital Allocation - Sezzle's adjusted net income increased by 92% year-over-year, with expectations to generate at least $170 million in adjusted EBITDA for the full year [7] - The company is prioritizing capital return to shareholders, which is uncommon for a fast-growing firm, and has authorized a $50 million share repurchase plan [8] Market Position and Valuation - Following a drop in stock price, Sezzle trades over 50% below its 52-week high and at a multiple of less than 24 times forward earnings expectations, suggesting potential for value investment if growth continues [10]

Company Performance - Sezzle Inc. reported quarterly earnings of $0.69 per share, exceeding the Zacks Consensus Estimate of $0.58 per share, and up from $0.36 per share a year ago, representing an earnings surprise of +18.97% [1] - The company posted revenues of $98.7 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 3.99%, compared to revenues of $55.97 million in the same quarter last year [2] - Sezzle Inc. has consistently surpassed consensus EPS estimates for the last four quarters [2] Stock Performance - Sezzle Inc. shares have increased approximately 234% since the beginning of the year, significantly outperforming the S&P 500's gain of 7.9% [3] - The current consensus EPS estimate for the upcoming quarter is $0.70 on revenues of $106.37 million, and for the current fiscal year, it is $3.26 on revenues of $441.77 million [7] Industry Outlook - The Financial Transaction Services industry, to which Sezzle Inc. belongs, is currently ranked in the top 40% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Sezzle Inc.'s stock performance [5]

Financial Data and Key Metrics Changes - Total revenue for Q2 2025 grew 76.4% year over year to $98.7 million, with adjusted net income nearly doubling, increasing 91.8% year over year to $24.4 million [22] - GAAP net income decreased slightly to $27.6 million due to a significant discrete tax benefit in the previous year [22] - Gross margins improved to 61%, with a net income margin of 28% [10][22] - The adjusted EBITDA margin increased to 38.4% of total revenue, reflecting strong operational efficiency [28] Business Line Data and Key Metrics Changes - Monthly active users rose 52% year over year, with revenue-generating user engagement increasing 138% [14] - The number of mods increased 14% sequentially and 62% year over year, indicating strong growth in user engagement [15] - The Anywhere product line showed the highest lifetime value among offerings, with 37% of orders being in-store [16] Market Data and Key Metrics Changes - GMV (Gross Merchandise Volume) grew 74.2% year over year, driven by new product adoption and higher consumer engagement [23] - The take rate improved slightly year over year to 10.6% [23] - The company served 412,000 different merchants during the quarter, indicating a broadening market presence [18] Company Strategy and Development Direction - The company is focused on efficient customer acquisition and retention, with marketing spend increasing significantly to $8.8 million from $1 million in the prior year [11] - A shift in marketing strategy towards more efficient channels is expected to yield long-term benefits [12] - Continuous innovation and product enhancements are central to the company's strategy, with a strong emphasis on customer engagement [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to adapt to changing economic conditions, highlighting the flexibility of their underwriting process [45] - The competitive landscape remains stable, with no significant changes in pricing or offerings from major competitors [48] - The company reaffirmed its full-year guidance across all key financial metrics, indicating sustained growth and strength in engagement, frequency, and retention [30] Other Important Information - The company ended the quarter with $120 million in cash, including $31 million of restricted cash [29] - A lawsuit with Shopify is ongoing, with no major updates expected in the near term [49] Q&A Session Summary Question: Can you discuss the mix of mods between on-demand, premium, and anywhere? - The primary growth in mods was from on-demand, which has a lower barrier to entry, while subscribers have held steady [34] Question: How does profitability differ between on-demand and premium or anywhere? - Anywhere is the most profitable due to high usage, followed by premium, while on-demand has the lowest margins and lifetime value [36][38] Question: What is the outlook for underwriting and expense management in a volatile macro environment? - The company monitors default rates daily and can adjust credit limits quickly, providing flexibility in managing risk [45] Question: Any updates on the competitive landscape and pricing changes? - There have been no significant changes in pricing or offerings from competitors like Klarna and Zip [48] Question: Update on the lawsuit with Shopify? - No major updates are available, and the process may take several years [50]

Financial Performance - Total revenue for Q2 2025 reached $98,702,000, a 76.2% increase from $55,969,000 in Q2 2024[17] - Operating income for the first half of 2025 was $85,981,000, compared to $30,533,000 in the same period of 2024, reflecting a 181.5% increase[17] - Net income for Q2 2025 was $27,604,000, slightly down from $29,702,000 in Q2 2024, while net income for the first half of 2025 was $63,768,000, up from $37,709,000 in 2024[17] - Total revenue for the six months ended June 30, 2025, was $203.6 million, up from $102.9 million in 2024, reflecting a growth of 97.5%[37] - Total revenue for the three months ended June 30, 2025, was $98.7 million, a significant increase from $56.0 million in the same period of 2024, representing a growth of 76.0%[43] - Transaction income for the three months ended June 30, 2025, was $23.8 million, compared to $18.8 million in 2024, an increase of 26.6%[39] - Transaction income for the six months ended June 30, 2025, reached $109.8 million, up from $55.7 million in 2024, indicating a growth of 96.9%[43] - Income from other sources increased to $24.5 million for the three months ended June 30, 2025, compared to $7.0 million in 2024, reflecting a growth of 249.0%[43] - Subscription revenue increased by 13.8% to $22.6 million for the three months ended June 30, 2025, compared to $19.8 million in 2024[105] Assets and Liabilities - Total current assets increased to $311,533,000 as of June 30, 2025, compared to $257,619,000 at the end of 2024, marking a 21% growth[15] - Total assets grew to $350,552,000 as of June 30, 2025, up from $298,372,000 at the end of 2024, representing a 17.5% increase[15] - Total liabilities increased to $220,154,000 as of June 30, 2025, compared to $210,537,000 at the end of 2024, a rise of 4.8%[15] - Stockholders' equity rose to $130,398,000 as of June 30, 2025, up from $87,835,000 at the end of 2024, indicating a 48.4% increase[15] - The company’s total assets as of June 30, 2025, were $304,909,000, with liabilities totaling $130,501,000, resulting in a debt-to-asset ratio of approximately 42.8%[27] Cash Flow and Financing - Cash, cash equivalents, and restricted cash at the end of the period were $119,969,000, compared to $63,992,000 at the end of the same period in 2024, an increase of 87.2%[23] - The company reported a net cash provided from operating activities of $22,522,000 for the six months ended June 30, 2025, down from $34,218,000 in 2024, a decrease of 34.2%[23] - The company raised $95,000,000 from a line of credit during the six months ended June 30, 2025, compared to $46,727,000 in 2024, an increase of 102.4%[23] - The company had an unused borrowing capacity of $4.0 million as of June 30, 2025, down from $39.0 million as of December 31, 2024[62] - Net cash used for financing activities was $0.8 million for the six months ended June 30, 2025, significantly lower than $40.0 million in 2024, indicating a reduction of 98%[136] Credit Losses and Provisions - The company reported a provision for credit losses of $20,646,000 in Q2 2025, compared to $10,094,000 in Q2 2024, reflecting a 104.4% increase[17] - The company incurred a provision for credit losses of $33,447,000 for the six months ended June 30, 2025, compared to $15,234,000 in 2024, an increase of 119.9%[23] - The allowance for credit losses at the end of June 2025 was $23.6 million, up from $11.8 million at the end of June 2024, indicating a year-over-year increase of 100.3%[54] - The company actively manages credit risk through proprietary systems and third-party collection strategies to minimize loss rates[80] - The company expects that increases in GMV and revenue will likely result in higher absolute amounts of credit losses moving forward[120] 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 company repurchased a total of 793,416 shares during the three months ended June 30, 2025, at an average price of $35.58 per share[160] - The stock repurchase program authorized by the Board of Directors allows for the repurchase of up to $50 million of outstanding shares, set to expire on April 7, 2026[161] Legal and Compliance - The company filed a lawsuit against Shopify Inc. for federal and state antitrust violations, seeking damages that could be tripled under applicable laws[154] - The company has not been involved in any material legal proceedings other than routine litigation incidental to the business[153] - The financial statements fairly present the financial condition and results of operations of Sezzle Inc. as of the quarter ended June 30, 2025[176] - The Chief Financial Officer confirmed that the report does not contain any untrue statements or omissions of material facts[172] - The report was filed with the Securities and Exchange Commission on August 7, 2025[175] Operational Highlights - Gross Merchandise Volume (GMV) for Q2 2025 reached $926,981,000, a 74.2% increase from $532,236,000 in Q2 2024[84] - Active Consumers increased to 2,860,000 as of June 30, 2025, up 4.9% from 2,725,000 as of December 31, 2024[86] - Monthly On-Demand Users and Subscribers (MODS) rose to 748,000, reflecting a 5.8% increase from 707,000 in the previous period[86] - The company launched several new products in 2024 and 2025, including Payment Streaks and Sezzle On-Demand, aimed at enhancing consumer engagement and retention[78] - Seasonal trends show that Q4 typically generates the highest revenue and GMV, aligning with holiday shopping patterns, but also leads to increased charge-offs[83]

Financial Performance - Sezzle achieved a Gross Merchandise Volume (GMV) growth of 74.2% year-over-year (YoY) in 2Q25[10] - Total revenue grew by 76.4% YoY, reaching $98.7 million in 2Q25[10, 34] - The company reported a net income of $27.6 million with a net income margin of 28.0% in 2Q25[10] - Adjusted EBITDA for 2Q25 was $37.9 million, representing a margin of 38.4%[10] - Total revenue less transaction-related costs accounted for 61.1% of total revenue[10] User Engagement - Monthly On-Demand & Subscribers (MODS) reached 748,000, a 62.0% YoY increase[10] - Average quarterly purchase frequency increased from 4.8x in 2Q24 to 6.1x in 2Q25[10] - Revenue Generating Users increased by 52% YoY[21] - Monthly Sessions increased by 112% YoY[21] Future Outlook - The company projects an adjusted net income of $120.0 million for FY2025, an 85.8% YoY increase[11] - Adjusted EBITDA is projected to be between $170.0 million and $175.0 million, representing a 92-98% YoY increase[11]