Core Viewpoint - Sezzle Inc. (SEZL) shows a significant improvement in earnings outlook, making it an attractive investment option as analysts continue to raise earnings estimates for the company [1][3]. Earnings Estimate Revisions - The upward trend in earnings estimate revisions indicates growing analyst optimism regarding Sezzle's earnings prospects, which is expected to positively impact its stock price [2]. - For the current quarter, Sezzle is projected to earn $0.56 per share, reflecting a 55.56% increase from the previous year [7]. - Over the last 30 days, the Zacks Consensus Estimate for Sezzle has risen by 39.13%, with two estimates moving higher and no negative revisions [7]. - For the full year, the earnings estimate is $3.24 per share, representing a 76.09% increase from the prior year [8]. - The consensus estimate for the current year has also seen positive revisions, with two estimates increasing and no negative changes [8]. Zacks Rank and Performance - Sezzle currently holds a Zacks Rank 1 (Strong Buy), indicating strong agreement among analysts in raising earnings estimates [9]. - The Zacks Rank system has a proven track record, with Zacks 1 Ranked stocks averaging a 25% annual return since 2008 [3]. - Stocks with Zacks Rank 1 and 2 significantly outperform the S&P 500, suggesting a favorable investment environment for Sezzle [9]. Stock Performance - Sezzle shares have increased by 125.6% over the past four weeks, indicating strong investor confidence in the company's earnings growth prospects [10].

However, it's not enough to look at the price change for around three months, as it doesn't reflect any trend reversal that might have happened in a shorter time frame. It's important for a potential winner to maintain the price trend. A price increase of 125.6% over the past four weeks ensures that the trend is still in place for the stock of this company. Moreover, SEZL is currently trading at 98.5% of its 52-week High-Low Range, hinting that it can be on the verge of a breakout. Looking at the fundamenta ...

Group 1 - Sezzle's shares have shown significant volatility, reflected in a high two-year beta of 4.41 [1] - The company has a high short interest of 10.75% and a small free float, indicating potential market concerns [1]

Core Insights - Sezzle's stock surged 51% following strong first-quarter results and an upward revision of guidance [1] - The company reported a 64.1% increase in gross merchandise volume (GMV) to $808.7 million, with customer purchase frequency rising from 4.5 to 6.1 times [3] - Revenue soared 123.3% to $104.9 million, significantly exceeding estimates of $64.8 million [3] - Operating income increased by 260.6% to $49.9 million, resulting in an operating margin of 47.6% [4] - GAAP earnings per share rose from $0.22 to $1.00, surpassing the consensus estimate of $0.32 [4] Company Performance - Sezzle had 658,000 users in the quarter, indicating strong user engagement [4] - CEO Charlie Youakim attributed the success to investments in innovation and consumer experience, leading to increased engagement and performance [5] - The company raised its 2025 net income guidance by nearly 50% to $120 million due to stronger consumer activity and repayment trends [5] Future Outlook - Management increased total revenue growth guidance for the year to 60%-65%, up from a previous estimate of 25%-30% [6] - Expected earnings per share were raised to $3.25 from $2.21 [6] - Sezzle is positioned as a competitive player in the BNPL market, offering unique features such as user control over credit bureau reporting [5] - The stock is considered reasonably valued with a price-to-earnings ratio of 25, suggesting potential for further growth [7]

Core Insights - The Consumer Financial Protection Bureau (CFPB) will not classify buy now, pay later (BNPL) companies like credit card networks, allowing Sezzle to focus on consumer engagement and platform innovation [1] Financial Performance - Sezzle reported a gross merchandise volume (GMV) increase of 64.1% year over year, reaching $808.7 million, driven by higher subscriber and user engagement [4] - Total revenue rose by 123.3% to $104.9 million, achieving a new quarterly high, while net income increased over fourfold to $36.2 million, equating to $1.00 per diluted share [4] - Operating expenses decreased to 52.4% of revenue, an 18.2-point improvement from the previous year [5] - The company raised its 2025 net income forecast by nearly 50% to $120 million, reflecting management's confidence in sustaining growth [6] Product and Service Innovations - Sezzle introduced several new features, including a Pay-in-5 beta program, enhanced shopping tools, and a financial education module called Money IQ [2][3] - The Pay-in-5 feature is expected to grow, currently accounting for under 10% of volume but showing positive initial results [11] Market Strategy - The company is focusing on enterprise-level merchants and exploring new verticals like grocery, where BNPL adoption has been slower [7] - Sezzle's On Demand product is experiencing monthly sequential growth, indicating strong consumer interest and engagement [8] Customer Engagement - Consumer purchase frequency increased to 6.1 times per year from 4.5, indicating stronger user engagement and higher lifetime value [5] - The expansion of the merchant network and online communities aims to enhance customer loyalty and financial literacy [3]

Financial Performance - Sezzle's GMV增长了64.1%[10] - Total Revenue同比增长123.3%[10] - 净利润为3620万美元，净利润率为34.5%[10] - 公司将全年净利润预期从8040万美元上调至1.2亿美元，每股收益从2.21美元上调至3.25美元[10] - Total Revenue Less Transaction Related Costs占总收入的70.4%[10] User Engagement - Monthly On-Demand & Subscribers (MODS)达到65.8万，同比增长77.4%[10] - 平均季度购买频率为6.1次，高于去年同期的4.5次[10] Product Expansion - 公司推出了Pay-in-5 (beta), Sezzle Balance, Money IQ等新产品[10] - 改进了购物体验，包括Wishlist, Price Comparison & Auto-Couponing (beta)等功能[10] Balance Sheet - 现金和现金等价物总额为1.20869亿美元[61]

Financial Data and Key Metrics Changes - The company reported a 123% year-over-year increase in revenue, reaching $104.9 million [18] - Adjusted net income grew 286% year-over-year to $36.1 million, with a net income margin of 34.5% [18][23] - Gross margin for the quarter was 70.4%, reflecting strong unit economics [8][22] Business Line Data and Key Metrics Changes - Gross Merchandise Volume (GMV) rose 64% year-over-year, significantly outpacing the overall BNPL industry [8] - Monthly on-demand users and subscribers (referred to as mods) increased by 77% year-over-year to 658,000 [8][14] - The average quarterly purchase frequency increased from 4.5 to 6.1 times per quarter [15] Market Data and Key Metrics Changes - The company continues to represent less than 10% of the overall payments market, indicating significant growth potential [4] - The take rate increased to 13% at GMV, benefiting from strong subscriber engagement and the partnership with WebBank [19] Company Strategy and Development Direction - The company is focusing on expanding its product offerings, including new features like Pay in Five and auto couponing to enhance consumer experience [11][60] - There is a strategic push towards enterprise-level merchants and new categories such as grocery and bills, which have been slower to adopt BNPL [30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business model's strength amid market volatility, highlighting improved margins and rapid portfolio turnover [21] - The company raised its 2025 guidance, projecting revenue growth of 60% to 65% and earnings per share of $3.25, reflecting strong demand and credit performance [24][26] Other Important Information - A $50 million share repurchase program was announced, along with a six-for-one stock split to enhance liquidity [12] - The company has seen a significant increase in cash from operations, growing nearly $20 million year-over-year to $58.8 million [24] Q&A Session Summary Question: Can you tell us about your funnel of new merchants? - The company is focusing on enterprise-level merchants while also engaging with mid-sized merchants, expanding into new categories like grocery and bills [29][30] Question: What is the frequency or optimism you're seeing from on-demand products? - Monthly sequential growth indicates strong performance, with a lower barrier to entry for consumers [33] Question: Can you quantify the financial benefit from the WebBank partnership? - The partnership has improved revenue yield as a percentage of GMV, allowing for optimized product offerings [42] Question: What contributes to the stickiness of monthly subscribers? - The ease of use and seamless integration of the product into consumer shopping habits contribute to high retention rates [44][46] Question: How is the company managing credit quality? - The company maintains a focus on ROI and gross margins while being open to adjusting credit quality to support growth [50][52] Question: Can you describe the new features Pay in Five and auto couponing? - Pay in Five allows for an additional payment option, while auto couponing aims to enhance customer value and retention by providing unexpected savings [56][60]

Financial Data and Key Metrics Changes - The company reported a 123% year-over-year increase in revenue, reaching $104.9 million, and a 286% year-over-year growth in adjusted net income to $36.1 million [18][10][24] - The gross margin for the quarter was 70.4%, with a net income margin of 34.5% [10][24] - Cash and cash equivalents increased by $15.7 million quarter-over-quarter, with cash from operations growing nearly $20 million year-over-year to $58.8 million [25][24] Business Line Data and Key Metrics Changes - Gross Merchandise Volume (GMV) rose 64% year-over-year, significantly outpacing the overall Buy Now Pay Later (BNPL) industry [8] - Monthly on-demand users and subscribers (referred to as mods) grew by 77% year-over-year to 658,000 [8][15] - The average quarterly purchase frequency increased from 4.5 to 6.1 times per quarter, indicating stronger consumer engagement [16] Market Data and Key Metrics Changes - The company continues to represent less than 10% of the overall payments market, indicating significant growth potential within the BNPL sector [4] - The take rate increased to 13% at GMV, reflecting improved monetization strategies [20] Company Strategy and Development Direction - The company is focusing on expanding its product offerings, including new features like Pay in Five and auto couponing, aimed at enhancing consumer experience and retention [12][56] - There is a strategic push towards enterprise-level merchants and new categories such as grocery and bills, which have been slower to adopt BNPL solutions [30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to thrive despite economic uncertainties, highlighting the demand for flexible payment options during challenging times [4][26] - The company raised its 2025 guidance for net income by nearly 50% to $120 million and adjusted EPS from $2.21 to $3.25, reflecting strong performance and market conditions [9][25] Other Important Information - The company announced a $50 million share repurchase program and completed a six-for-one stock split to enhance liquidity [13] - The partnership with WebBank has begun to show significant benefits, contributing to improved revenue yield and operational efficiency [39] Q&A Session Summary Question: Can you tell us about your funnel of new merchants? - The company is focusing on enterprise-level merchants while also maintaining a mid-sized funnel, with a push into new categories like grocery and bills [28][30] Question: What is the frequency or optimism you're seeing from on-demand products? - Monthly sequential growth indicates strong performance, with a lower barrier to entry for users, enhancing the potential for upselling subscription products [32][33] Question: Can you quantify the financial benefit from the WebBank partnership? - The partnership has improved revenue yield as a percentage of GMV, with operational efficiencies realized across various states [39] Question: How is the company managing credit quality? - The company is maintaining profitability levels while being open to higher costs, ensuring gross margins are preserved [48][50] Question: Can you describe the new features like Pay in Five and auto couponing? - Pay in Five allows for an additional payment option, while auto couponing aims to enhance customer loyalty by providing unexpected savings [52][56]

[PART I - FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents the unaudited consolidated financial statements for Q1 2025, including Balance Sheets, Statements of Operations, Stockholders' Equity, and Cash Flows, detailing significant accounting policies and notes, and highlighting a 6-for-1 stock split and substantial growth in revenue and net income [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) Consolidated Balance Sheet Highlights (in thousands of dollars) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $88,893 | $73,185 | | Notes receivable, net | $146,628 | $164,562 | | Total Assets | $298,074 | $298,372 | | **Liabilities & Equity** | | | | Line of credit, net | $69,890 | $103,992 | | Total Liabilities | $172,312 | $210,537 | | Total Stockholders' Equity | $125,762 | $87,835 | - A 6-for-1 stock split was affected through a stock dividend, effective March 28, 2025, with all share and per-share amounts retroactively adjusted[15](index=15&type=chunk) [Consolidated Statements of Operations and Comprehensive Income](index=6&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) Statement of Operations Highlights (in thousands of dollars, except per share) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total revenue | $104,912 | $46,979 | | Operating Income | $49,895 | $13,835 | | Net Income | $36,164 | $8,007 | | Diluted EPS | $1.00 | $0.22 | [Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity) - Total stockholders' equity increased from **$87.8 million** at the beginning of 2025 to **$125.8 million** as of March 31, 2025, primarily driven by a net income of **$36.2 million**[19](index=19&type=chunk) - The company repurchased common stock for **$2.4 million** during the first quarter of 2025[19](index=19&type=chunk) [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Cash Flow Highlights (in thousands of dollars) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Cash Provided from Operating Activities | $58,837 | $38,613 | | Net Cash Used for Investing Activities | ($308) | ($340) | | Net Cash Used for Financing Activities | ($36,114) | ($26,761) | | Net increase in cash, cash equivalents, and restricted cash | $22,415 | $11,512 | - Financing activities in Q1 2025 were primarily driven by net payments of **$34.2 million** on the line of credit and **$2.4 million** in common stock repurchases[21](index=21&type=chunk)[130](index=130&type=chunk) [Notes to the Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) - The company's Board of Directors approved a 6-for-1 stock split, effective March 28, 2025, with all share and per-share amounts in the financial statements retroactively adjusted[31](index=31&type=chunk) Disaggregation of Total Revenue - Q1 2025 vs Q1 2024 (in thousands of dollars) | Revenue Category | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Transaction income | $58,166 | $26,618 | | Subscription revenue | $23,428 | $14,673 | | Income from other sources | $23,318 | $5,688 | | **Total revenue** | **$104,912** | **$46,979** | - The allowance for credit losses on notes receivable was **$20.5 million** as of March 31, 2025, with a provision of **$12.8 million** recorded for the quarter[52](index=52&type=chunk) - As of March 31, 2025, the company had an outstanding principal of **$70.8 million** on its line of credit and an unused borrowing capacity of **$52.2 million**[62](index=62&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's performance, highlighting significant growth in key metrics such as **64.1% YoY GMV increase to $808.7 million** and **123.3% total revenue growth to $104.9 million**, driven by diverse income sources, and confirms strong liquidity [Key Operating Metrics](index=22&type=section&id=Key%20Operating%20Metrics) Key Metrics Comparison | Metric | Q1 2025 | Q1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Gross Merchandise Volume (GMV) | $808.7M | $492.7M | +64.1% | | Active Consumers (as of period end) | 2.73M | N/A | +0.3% (vs Q4'24) | - The increase in GMV was driven by growth in subscription products and On-Demand services, as well as changes to consumer underwriting to promote acquisition[84](index=84&type=chunk) - Monthly On-Demand Users and Subscribers (MODS) decreased to **658,000** from **707,000** at the end of Q4 2024, attributed to seasonality following the holiday season[85](index=85&type=chunk)[86](index=86&type=chunk) [Results of Operations](index=26&type=section&id=Results%20of%20Operations) Revenue Breakdown - Q1 2025 vs Q1 2024 (in thousands of dollars) | Revenue Category | Q1 2025 | Q1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Transaction income | $58,166 | $26,618 | +118.5% | | Subscription revenue | $23,428 | $14,673 | +59.7% | | Income from other sources | $23,318 | $5,688 | +310.0% | | **Total revenue** | **$104,912** | **$46,979** | **+123.3%** | - The increase in 'Income from other sources' was primarily driven by consumer late payment fees, which rose to **$16.8 million** in Q1 2025 from **$2.7 million** in Q1 2024[107](index=107&type=chunk) - Provision for credit losses increased by **149.0%** to **$12.8 million**, attributed to higher GMV and changes in consumer underwriting to promote growth[115](index=115&type=chunk) - Net interest expense decreased by **28.6%** to **$2.9 million** due to a lower interest rate on a new line of credit, despite higher outstanding borrowings[116](index=116&type=chunk) [Liquidity and Capital Resources](index=29&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity Position (in millions of dollars) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $88.9 | $73.2 | | Restricted cash | $32.0 | $25.1 | | Working capital | $164.3 | $151.9 | | Unused line of credit capacity | $52.2 | $39.0 | - The company believes its existing cash, unused borrowing capacity, and cash flows from operations will be sufficient to meet working capital and investment needs for more than the next twelve months[122](index=122&type=chunk) - Net cash provided by operating activities increased to **$58.8 million** in Q1 2025 from **$38.6 million** in Q1 2024, driven by increased profitability[124](index=124&type=chunk)[128](index=128&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=33&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company identifies interest rate risk from its floating-rate line of credit and foreign currency risk from Canadian dollar transactions, concluding that hypothetical adverse changes would not materially impact financial results, and does not employ hedging instruments - The company is exposed to interest rate risk on its line of credit, which had a balance of **$70.8 million** as of March 31, 2025, where a hypothetical **100 basis point** adverse change in SOFR would have resulted in an additional **$0.2 million** of interest expense for the quarter[139](index=139&type=chunk) - Foreign currency risk from transactions in Canadian dollars is considered immaterial, and the company does not currently use derivatives to hedge this exposure[141](index=141&type=chunk) [Item 4. Controls and Procedures](index=34&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting identified during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures are effective as of March 31, 2025[144](index=144&type=chunk) - No changes in internal control over financial reporting occurred during the first quarter of 2025 that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[145](index=145&type=chunk) [PART II - OTHER INFORMATION](index=35&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=35&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any material legal proceedings expected to have a material adverse effect on its financial condition or operations, beyond routine litigation incidental to its business - Sezzle is not involved in any material legal proceedings that would have a material adverse effect on its consolidated balance sheets, operations, or cash flows[147](index=147&type=chunk) [Item 1A. Risk Factors](index=35&type=section&id=Item%201A.%20Risk%20Factors) As a smaller reporting company, Sezzle is not required to provide this information and confirms no material changes to the risk factors previously disclosed in its 2024 Annual Report on Form 10-K - There have been no material changes to the risk factors described in the company's 2024 Annual Report on Form 10-K[148](index=148&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=35&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's repurchase of **56,778 shares** at an average price of **$43.04 per share** during the quarter, primarily for employee tax obligations, and notes the authorization of a new **$50 million** stock repurchase program commencing in April 2025 - During Q1 2025, the company repurchased **56,778 shares** at an average price of **$43.04 per share**, which were surrendered by employees to satisfy minimum statutory tax obligations for vested stock units[149](index=149&type=chunk)[151](index=151&type=chunk)[152](index=152&type=chunk) - On March 10, 2025, the Board of Directors authorized a new stock repurchase program for up to **$50 million** of outstanding shares, which commenced on April 7, 2025[152](index=152&type=chunk) [Item 3. Defaults Upon Senior Securities](index=36&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports no defaults upon senior securities during the period - None[153](index=153&type=chunk) [Item 4. Mine Safety Disclosures](index=36&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[154](index=154&type=chunk) [Item 5. Other Information](index=36&type=section&id=Item%205.%20Other%20Information) The company reports that no officers or directors adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the quarter ended March 31, 2025 - During the quarter ended March 31, 2025, no officers or directors adopted or terminated a Rule 10b5-1 trading arrangement[155](index=155&type=chunk) [Item 6. Exhibits](index=37&type=section&id=Item%206.%20Exhibits) This section provides a list of all exhibits filed with the Form 10-Q, including management compensation plan forms, CEO and CFO certifications, and Inline XBRL financial data files - The report includes a list of filed exhibits, such as CEO and CFO certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002[156](index=156&type=chunk)

Financial Results Announcement - Sezzle Inc. will release its Q1 2025 results on May 7, 2025, and host a conference call at 5:00 p.m. Eastern Time on the same day[5] - The press release regarding the conference call is attached as Exhibit 99.1[7] Company Classification - The company is classified as an emerging growth company under the Securities Act of 1933[4]