Sezzle (SEZL)2024-02-27 03:15Financial Data and Key Metrics Changes - In 2023, the company achieved over $159 million in revenue, a 27% year-over-year increase, and a net income of over $7 million, marking an $82 million improvement in net income over two years [27][36] - The EBITDA margin improved from a negative 16% in 2022 to a positive 18.8% in 2023, with a goal to achieve a net income margin of 20% in the future [11][16] - The gross margin improved to 50.8% of total income from 37.5% in the previous year [16] Business Line Data and Key Metrics Changes - The subscription service, Sezzle Premium and Sezzle Anywhere, has grown to over 300,000 members, indicating strong consumer engagement [3][6] - The company reported a 33% increase in UMS (User Merchant Spend) in Q4 2023, contributing to a total income increase of 28% year-over-year for the quarter [33] Market Data and Key Metrics Changes - The company has processed over $6 billion in volume and initiated over 63 million transactions since its launch, showcasing its market penetration [3] - The active consumer metric showed a slight increase compared to Q3 2023, indicating a potential stabilization after a previous decline [17] Company Strategy and Development Direction - The long-term goal is to build a comprehensive financial services platform, focusing on increasing customer lifetime value and expanding product offerings in 2024 [13][36] - The company aims to maintain a vigilant approach to cost management while pursuing profitable growth, having exited several international markets to focus on North America [10][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to achieve profitability through innovative product offerings and cost management strategies [40][41] - The company plans to double its net income to $20 million in 2024, driven by growth and expense management [36] Other Important Information - Sezzle is the only buy-now-pay-later company that is a certified B Corp, emphasizing its commitment to stakeholder engagement and financial empowerment for consumers [12] - The company has implemented AI technologies to enhance productivity and improve underwriting and fraud detection processes [31] Q&A Session Summary Question: How has the company achieved profitability compared to competitors? - Management highlighted a vigilant approach to both revenue innovation and cost management as key factors in achieving profitability [40][41] Question: How does the company view its competitors? - Management identified Affirm and Afterpay as closer competitors, emphasizing a long-term perspective on market valuation [42] Question: Did the company buy back any stock in the quarter? - Management stated that they could not disclose stock buyback details at this time [43] Question: Is the term "total income" just a reference to revenue? - Management confirmed that "total income" refers to traditional revenue as per GAAP dynamics [45] Question: What is the revenue growth guidance for 2024? - Management confirmed a guidance of 20% year-over-year revenue growth for 2024 [46] Question: What are the company's targets for EBITDA margin? - Management expressed a desire to improve EBITDA margins further, aiming for a target of 20% net income margins [49]