SEZL's GMV Soars: Is Customer Engagement Strategy Paying Off?

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]