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]

Core Insights - Sezzle Inc. reported significant growth in key financial metrics for Q2 2025, with Gross Merchandise Volume (GMV) reaching $927.0 million, a 74.2% increase year-over-year [2] - The company emphasized a strategic approach to growth, focusing on intentional scaling and effective marketing initiatives that have led to increased consumer engagement [2] Financial Performance - GMV increased by 74.2% YoY to $927.0 million, with consumers averaging 6.1 purchases per quarter compared to 4.8 in the previous year [2] - Total Revenue rose 76.4% YoY to $98.7 million, with Total Revenue as a percentage of GMV at 10.6% [2] - Monthly On-Demand & Subscribers (MODS) reached 748,000, up from 658,000 in the previous quarter [2] - Total Operating Expenses increased by 59.5% YoY to $62.6 million, but as a percentage of Total Revenue, they decreased by 6.8 points to 63.4% [2] - Operating Income grew 116.1% YoY to $36.1 million, with Operating Margin expanding to 36.6% of Total Revenue [2] - Net Income for Q2 2025 was $27.6 million, representing 28.0% of Total Revenue, with Earnings per Diluted Share falling 4.9% to $0.78 [2] Cost Management - Transaction Related Costs as a percentage of GMV declined from 4.5% to 4.1% YoY, attributed to improved payment processing efficiency and increased consumer adoption of ACH payments [2] - Non-Transaction Related Operating Expenses increased 50.4% YoY to $27.7 million, but as a percentage of Total Revenue, they decreased by 4.8 points to 28.1% [2] Adjusted Metrics - Adjusted Net Income rose 91.8% YoY to $24.4 million, or 24.7% of Total Revenue, with Adjusted Net Income per Diluted Share increasing 97.1% YoY to $0.69 [2] - Adjusted EBITDA increased 106.0% YoY to $37.9 million, accounting for 38.4% of Total Revenue [2] Shareholder Returns - The company repurchased 678,529 shares for $23.5 million under its $50 million stock repurchase plan [2] Balance Sheet and Guidance - As of June 30, 2025, Sezzle had $120.0 million in cash and cash equivalents, with $31.0 million restricted [8] - The company provided FY2025 guidance, expecting Total Revenue Growth of 60-65% and Adjusted Net Income of $120.0 million [8]

Core Insights - Sezzle Inc. (SEZL) is set to report its second-quarter 2025 results on August 7, with revenue expectations of $94.9 million, reflecting a 69.6% year-over-year increase, and earnings per share estimated at 58 cents, indicating a 61.1% rise from the previous year [1][2]. Financial Performance - In Q1 2025, Sezzle's revenue surged by 123.3% year-over-year, driven by a 64.1% increase in gross merchandise volume, and operating income rose by 260.6% year-over-year, showcasing significant operating leverage and scalability [16][17]. - Sezzle's return on equity reached 114.4%, significantly higher than the industry average of 48.6%, and its return on invested capital was 63.5%, surpassing the industry's 22.2% [17]. Product Innovation - Sezzle's product innovation strategy, including the launch of Sezzle On-Demand, has led to increased user engagement, with customer purchase frequency rising from 4.5 times to 6.1 times year-over-year [5][6]. - The company aims to enhance customer experience through diversification, allowing users to pay in installments wherever Visa is accepted, thus expanding beyond direct merchant partnerships [6]. Market Performance - SEZL shares have increased by 1103% over the past year, outperforming the industry growth of 22.9% and the Zacks S&P 500 composite's 19.6% rise [7][8]. - Despite this impressive growth, SEZL's current price-to-earnings ratio stands at 40.79X, which is higher than the industry's 21.14X and significantly above peers like Corpay and Fiserv [11]. Regulatory Environment - Sezzle faces increasing regulatory scrutiny from the Consumer Financial Protection Bureau, which may lead to higher compliance costs and stricter affordability checks due to new buy now, pay later regulations in various states [18][20]. - These regulatory challenges could impact Sezzle's operational costs and overall business model, raising concerns for potential investors [20]. Investment Considerations - Sezzle has established a strong position in the fintech space by catering to the underbanked population, which is expected to drive long-term growth as digital payments gain traction in the U.S. [14][19]. - However, the high valuation and lower chances of an earnings beat may deter new investors, suggesting that current shareholders should refrain from additional purchases until after the earnings release [20].

[Filing Information](index=1&type=section&id=Filing%20Information) This section details Sezzle Inc.'s registration information and its status as an emerging growth company [Registrant Details](index=1&type=section&id=Registrant%20Details) This section provides Sezzle Inc.'s core identification details and lists its registered securities | Detail | Value | | :--- | :--- | | Exact name of registrant | Sezzle Inc. | | State or other jurisdiction of incorporation | Delaware | | Commission File Number | 001-41781 | | I.R.S. Employer Identification No. | 81-0971660 | | Address of principal executive offices | 700 Nicollet Mall, Suite 640, Minneapolis, MN 55402 | | Registrant's telephone number | +1 (651) 240 6001 | | Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered | | :--- | :--- | :--- | | Common Stock, par value $0.00001 per share | SEZL | The Nasdaq Stock Market LLC | [Filing Status](index=1&type=section&id=Filing%20Status) Sezzle Inc. is identified as an emerging growth company and has not opted for an extended transition period for new accounting standards - Sezzle Inc. is an emerging growth company[3](index=3&type=chunk) - The registrant has not elected to use the extended transition period for complying with any new or revised financial accounting standards[3](index=3&type=chunk) [Current Report Items](index=3&type=section&id=Current%20Report%20Items) This section outlines the company's financial results announcement and lists the accompanying exhibits [Item 2.02. Results of Operations and Financial Conditions](index=3&type=section&id=Item%202.02.%20Results%20of%20Operations%20and%20Financial%20Conditions) Sezzle Inc. will release its Q2 2025 financial results and host a conference call on August 7, 2025 - Sezzle Inc. will release its second quarter 2025 results on Thursday, August 7, 2025[4](index=4&type=chunk) - A conference call to discuss the Q2 2025 results will be hosted on August 7, 2025, at 5:00 p.m. Eastern Time[4](index=4&type=chunk) - A copy of the press release announcing the conference call is attached as Exhibit 99.1[4](index=4&type=chunk) [Item 9.01. Financial Statements and Exhibits](index=3&type=section&id=Item%209.01.%20Financial%20Statements%20and%20Exhibits) This section lists the exhibits furnished with the Form 8-K, including a press release and interactive data file | Exhibit No. | Description | | :--- | :--- | | 99.1 | Press Release dated July 21, 2025 | | 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | [SIGNATURE](index=3&type=section&id=SIGNATURE) This section confirms the official signing and authorization of the report by the Chief Executive Officer [Authorization and Signing](index=3&type=section&id=Authorization%20and%20Signing) The report was officially signed by Charles Youakim, Chief Executive Officer of Sezzle Inc., on July 21, 2025 - The report was signed on behalf of Sezzle Inc. by Charles Youakim, Chief Executive Officer[8](index=8&type=chunk)[9](index=9&type=chunk)[10](index=10&type=chunk) - The report was dated and signed on July 21, 2025[10](index=10&type=chunk)

Core Insights - Sezzle Inc. will release its second quarter 2025 results on August 7, 2025, after market close, followed by a conference call at 5:00pm ET [1] - The earnings presentation will be available on the Investor Relations website shortly after the market closes on the same day [3] - Sezzle is a fintech company focused on empowering consumers through its digital payment platform, offering point-of-sale financing options and enhancing purchasing power [6] Conference Call Details - Participants can register for the conference call or webcast via a provided link, receiving dial-in credentials and a link to the live webcast upon registration [2] - A replay of the conference call will be available on the Investor Relations website after the event [2] Investor Conference Participation - Sezzle Management will participate in several upcoming investor conferences, with the latest investor presentation available on the Investor Relations page ahead of these events [4][8] - Notable conferences include the Oppenheimer 28th Annual Technology, Internet & Communications Conference on August 11, 2025, and the 7th Annual Needham FinTech & Digital Transformation Virtual 1×1 Conference on August 14, 2025 [8] Company Overview - Sezzle is committed to financial empowerment for the next generation, focusing on transparency, inclusivity, and ease of use in its services [6] - The company connects millions of customers with a global network of merchants, aiming to help consumers manage spending responsibly and achieve financial independence [6]

Core Insights - Both Nu Holdings (NU) and Sezzle (SEZL) are positioned in the rapidly growing fintech sector, with NU serving over 118 million customers across Mexico, Brazil, and Colombia, while SEZL focuses on providing payment solutions for the underbanked population [1][7]. Group 1: Nu Holdings (NU) - NU's cloud-centric, mobile-first infrastructure allows it to serve customers at a lower cost compared to traditional banks, contributing to a 19% year-over-year growth in customers during Q1 2025 [3]. - The company reported a 40% year-over-year growth in revenues and a 74% increase in net income for Q1 2025, with EBITDA margin rising by 440 basis points and net margin increasing by 400 basis points [4]. - NU has successfully expanded its customer base in Mexico and Colombia, with over 6 million and 1.5 million customers respectively, leveraging its scalable model to gain a first-mover advantage in these markets [5]. - Despite its strengths, NU faces competitive pressure from established players like SoFi, which could impact its market share [6]. Group 2: Sezzle (SEZL) - SEZL targets the underbanked population, with the digital payment market expected to grow at an 11.8% CAGR from 2023 to 2028, providing significant growth opportunities [7]. - The company has seen a 123.3% year-over-year increase in revenues and a 260.6% rise in operating income during Q1 2025, driven by an increase in customer purchase frequency from 4.5X to 6.5X [8]. - SEZL's product innovation, such as the On-Demand feature, enhances customer experience and flexibility, solidifying its position in the fintech space [9]. - However, the BNPL sector faces regulatory scrutiny, which could increase compliance costs and impact SEZL's customer acquisition and margins [11]. Group 3: Financial Estimates and Valuation - The Zacks Consensus Estimate for NU's 2025 sales is $14.9 billion, indicating a 29.4% year-over-year growth, with earnings estimated at 54 cents per share, reflecting a 20% increase [12]. - For SEZL, the 2025 sales estimate is $441.8 million, implying a 62.9% year-over-year growth, with earnings projected at $3.26, a 77.2% rise from the previous year [13]. - NU is trading at a forward P/E ratio of 20.7X, slightly above its 12-month median, while SEZL trades at 36.97X, indicating that NU is a cheaper stock compared to SEZL [15]. Group 4: Investment Outlook - NU is considered a better investment option due to its strong financials, effective credit risk management, and lower valuation compared to SEZL, despite both companies being fundamentally strong [17][18].