In This Article:
Release Date: May 07, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Sezzle Inc (NASDAQ:SEZL) reported a 123% year-over-year increase in revenue, driven by a 77% growth in monthly on-demand users and subscribers.
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The company achieved a net income of $36.2 million for the quarter, with a net income margin of 34.5%.
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Sezzle Inc (NASDAQ:SEZL) raised its 2025 net income guidance by almost 50% to $120 million, and EPS guidance from $2.21 to $3.25 per share.
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The partnership with Webbank has started to show full benefits, contributing to the company's strong performance.
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Sezzle Inc (NASDAQ:SEZL) announced a $50 million share repurchase program and completed a 6-for-1 stock split to increase liquidity and appeal to investors.
Negative Points
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Despite strong performance, Sezzle Inc (NASDAQ:SEZL) still represents less than 10% of the payments market, indicating significant competition.
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The company acknowledges a heightened level of uncertainty in the economy, which could impact consumer sentiment and spending.
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Provision for credit losses is expected to trend higher over the remaining quarters of 2025, within a guided range of 2.5% to 3%.
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The company is facing seasonal drops in GMV activity, which affects sequential growth metrics.
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Sezzle Inc (NASDAQ:SEZL) is still in the early stages of rolling out new product enhancements, meaning the full impact on growth may not be realized until later quarters.
Q & A Highlights
Q: Can you tell us about your funnel of new merchants and the types of retailers you are targeting? A: We are focusing more on enterprise-level merchants, although we also have a mid-size funnel. Many of these merchants are not well-known brands, so you might not see announcements for these deals. We are also pushing into new categories where BNPL has been late to be adopted, such as grocery bills. (Charlie Yin, CEO)
Q: Are you typically the sole BNPL provider for new verticals, or do merchants use multiple providers? A: Merchants often start with one BNPL provider and sign an exclusive contract for a period. After that, they might add more providers to capture different customer bases. We are seeing more merchants adding multiple BNPL providers. (Paul Perdis, President)
Q: Can you share details about the performance of your on-demand product compared to monthly subscribers? A: We are seeing monthly sequential growth in on-demand, indicating it's a successful product. The gross margin per user is similar to our premium subscription products. On-demand has a lower barrier to entry, allowing us to bring more consumers into the funnel. Once they are using on-demand, we market our subscription products to them. (Charlie Yin, CEO)