sezzle The Responsible Way to Pay Fourth Quarter 2024 Earnings Presentation February 25, 2025 Sezzle Inc. | 4Q24 Presentation | 1 Disclaimer Cautionary Note Regarding Forward-Looking Statements This presentation (1b) e "Presentation"). Contains surgery information about the editidies of Sesentation The information The information in this Pesentation is of a exerc rintermation in the Presentation regrains subject to change without notiose. Also, the information in in the Pesentation should not be rebed upon ...

Sezzle Inc. (NASDAQ:SEZL) Q4 2024 Earnings Conference Call February 25, 2025 5:00 PM ET Company Participants Charlie Youakim - Executive Chairman and CEO Karen Hartje - Chief Financial Officer Lee Brading - Head, Corp Dev and IR Paul Paradis - President Conference Call Participants Mike Grondahl - Northland Hal Goetsch - B. Riley Operator Good day. And welcome to the Sezzle Inc. Fourth Quarter Financial Results Conference Call. All participants will be in listen-only mode. [Operator Instructions] After toda ...

Core Insights - Sezzle Inc. reported quarterly earnings of $4.39 per share, exceeding the Zacks Consensus Estimate of $3.12 per share, and showing a significant increase from $0.51 per share a year ago, resulting in an earnings surprise of 40.71% [1] - The company achieved revenues of $98.22 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 28.70%, compared to $48.9 million in the same quarter last year [2] - Sezzle Inc. shares have increased approximately 11.1% since the beginning of the year, outperforming the S&P 500's gain of 1.7% [3] Earnings Outlook - The future performance of Sezzle Inc. stock will largely depend on management's commentary during the earnings call and the company's earnings outlook, including current consensus earnings expectations for upcoming quarters [4][6] - The current consensus EPS estimate for the next quarter is $1.84 on revenues of $62.93 million, and for the current fiscal year, it is $12.61 on revenues of $331.95 million [7] Industry Context - The Financial Transaction Services industry, to which Sezzle Inc. belongs, is currently ranked in the top 50% of over 250 Zacks industries, indicating a favorable outlook as top-ranked industries tend to outperform lower-ranked ones by more than 2 to 1 [8]

Financial Data and Key Metrics Changes - In 2024, net income increased more than tenfold compared to 2023, with total revenue reaching $271 million, a 70% increase from 2024 [11][23] - Adjusted net income for Q4 was $26.5 million, and for the year it was $66.2 million, each up approximately ten times compared to the prior year's period [24] - The company achieved a revenue growth rate of over 100% year over year in Q4, meeting the rule of 40 and the rule of 100 on revenue growth alone [13][23] Business Line Data and Key Metrics Changes - The launch of the On Demand product contributed significantly to user engagement, with 707,000 Monthly On Demand and Subscriber Users (MODS) at the quarter end, representing a 130% year-on-year increase [14][19] - The product marketplace saw orders grow at an average rate of 39% month over month during 2024 [16] - The company maintained strong subscriber numbers while focusing on introducing new users to the On Demand product, which has better activation rates due to its lower barrier to entry [43][44] Market Data and Key Metrics Changes - The BNPL (Buy Now Pay Later) industry is projected to continue growing at double-digit annual rates for the next five to ten years [7] - The company has integrated directly with over 20,000 merchants, allowing consumers to shop at 598,000 different merchants during the year [21] Company Strategy and Development Direction - The company aims to enhance the shopper experience and launch new products that consumers want and need, with a near-term focus on maximizing the On Demand launch [12] - The strategy includes leveraging the On Demand product to create a bridge to subscription services, similar to how Uber introduces its subscription product [46] - The company is focused on improving its underwriting models to allow for increased approval rates while managing credit risk effectively [27][29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to continue gaining market share despite competition from larger peers, emphasizing the importance of executing at a high level [5][6] - The company anticipates double-digit revenue growth for 2025, with pre-tax net income expected to rise at least 55% compared to 2024 [12][34] - Management highlighted the importance of responsible repayment and the unique value proposition of their SezzleUp product for building credit history [9][8] Other Important Information - The company has a cash balance of $98.3 million and $39 million of unused borrowing capacity available at year-end [33] - The company plans to provide adjusted numbers for 2025 to remove non-recurring items and has increased its EPS guidance for 2025 to $13.25 [34] Q&A Session Summary Question: What were the biggest drivers of the year-over-year revenue growth acceleration from Q3 to Q4? - Management identified the partnership with WebBank and the launch of the On Demand product as the primary drivers of revenue growth, leading to increased gross margin and bottom line [36][37] Question: How did seasonality impact the revenue growth? - Management noted that the holiday season contributed to the year-over-year growth, but emphasized that the On Demand product allowed for more consistent shopping activity throughout the quarter [40][41] Question: How did the Anywhere and Premium products perform in Q4? - Management indicated that subscriber numbers were maintained, but the focus was on introducing new users to the On Demand product due to its better activation rates [43][44] Question: What is the monetization potential of the couponing feature? - Management confirmed that there are monetization channels for couponing, but they are currently focused on using it for customer attraction and retention [61][66] Question: What are the plans for capital allocation with increased cash generation? - Management stated that being a profitable company creates options for buybacks, dividends, and M&A, and they will evaluate these options as they continue to generate cash [62][63]

Core Viewpoint - Sezzle Inc. is expected to report strong fourth-quarter results, with significant year-over-year growth in earnings and revenues, driven by an expanding consumer base and effective marketing strategies [2][6][16]. Financial Performance - The consensus estimate for earnings is $0.0985 per share, indicating over 100% year-over-year growth [2]. - Revenue expectations for the upcoming quarter are set at $249.2 million, reflecting a 56.4% increase compared to the previous year [2]. - In the third quarter of 2024, Sezzle's revenues increased by 71% year-over-year, supported by a 41% rise in underlying merchant sales and a 167% surge in subscription revenues [15]. Market Position and Strategy - Sezzle's customer acquisition strategy, including a banking program and sponsorship initiatives, has contributed to its revenue growth and brand awareness [6][7][14]. - The company's stock has appreciated by 153.1% over the past six months, outperforming its industry and the broader market [8][12]. Valuation Metrics - Sezzle's current trailing 12-month price-to-earnings ratio stands at 23.2, which is below the industry average of 25.7 [12]. Growth Drivers - The increase in consumer purchase frequency and subscriber count is expected to drive top-line growth [6][14]. - The successful launch of new products and a raised financial outlook are seen as positive indicators for future performance [15][16].

Company Overview - Sezzle Inc. is a purpose-driven digital payment platform that aims to financially empower the next generation by enhancing consumers' purchasing power through point-of-sale financing options and digital payment services [5] Upcoming Financial Results - Sezzle will release its fourth quarter 2024 results after the market close on February 25, 2025, followed by a conference call at 5:00 PM ET on the same day [1] Conference Participation - Sezzle management will participate in investor conferences, with the latest Investor Presentation available on its Investor Relations page ahead of these events [3] Contact Information - For investor relations, Lee Brading, CFA, can be contacted at +651 240 6001 or via email at investorrelations@sezzle.com [4] - For media inquiries, Erin Foran can be reached at +651 403 2184 or via email at erin.foran@sezzle.com [4] Future Events - Sezzle will participate in the Oppenheimer 10th Annual Emerging Growth Conference on February 26, 2025, and the Wolfe FinTech Forum 2025 on March 11, 2025 [7]

Core Viewpoint - The article emphasizes the importance of investing in high-quality growth and momentum stocks that are reasonably priced, with a focus on long-term performance and market outperformance [1]. Group 1: Investment Strategy - The investment strategy involves focusing on growth and momentum stocks that are expected to outperform the market over the long term [1]. - The analyst has a history of advising investors to buy at market lows, specifically mentioning a recommendation in March 2009 during the financial crisis, which led to significant market gains [1]. Group 2: Market Performance - From 2009 to 2019, the S&P 500 increased by 367%, while the Nasdaq saw an increase of 685%, highlighting the potential for substantial returns in the stock market [1]. Group 3: Investor Guidance - The article aims to assist investors in making money through investments in high-quality growth stocks, indicating a commitment to guiding investment decisions [1].

Core Viewpoint - Pomerantz LLP is investigating claims on behalf of investors of Sezzle Inc. regarding potential securities fraud or unlawful business practices by the company and its officers or directors [1][2]. Group 1: Allegations and Impact - Hindenburg Research published a report on December 18, 2024, alleging that Sezzle was inflating its subscription numbers through questionable enrollment practices, including enrolling users into recurring subscriptions without their knowledge [2]. - Following the report's publication, Sezzle's stock price dropped by $73.01 per share, representing a 23.16% decline, closing at $242.17 per share on the same day [2]. Group 2: Pomerantz LLP Background - Pomerantz LLP is recognized as a leading firm in corporate, securities, and antitrust class litigation, with a history of over 85 years in fighting for victims of securities fraud and corporate misconduct [3]. - The firm has successfully recovered billions of dollars in damages for class members, continuing the legacy of its founder, Abraham L. Pomerantz [3].

Core Viewpoint - Bronstein, Gewirtz & Grossman LLC has announced an investigation into Sezzle Inc. to determine whether the company has violated securities laws, encouraging investors to reach out to the firm for more information [1] Group 1 - The investigation is focused on potential violations of securities laws by Sezzle Inc. [1] - Investors are being encouraged to contact the firm for further details regarding the investigation [1]

Core Viewpoint - Bronstein, Gewirtz & Grossman, LLC is conducting an investigation into Sezzle Inc. (SEZL) and is encouraging stockholders to connect with the firm for further information [1] Group 1 - The investigation is focused on potential violations of securities laws by Sezzle Inc. [1] - Stockholders are urged to reach out to the firm to discuss their rights and potential claims [1] - The investigation may lead to legal actions depending on the findings related to Sezzle Inc. [1]