Sezzle Inc. ((SEZL)) has held its Q1 earnings call. Read on for the main highlights of the call.
Sezzle Inc. Reports Strong Financial Performance and Optimistic Outlook
Sezzle Inc.’s recent earnings call conveyed a positive sentiment, highlighting robust revenue growth and improved profitability. The company reported a significant increase in net income guidance, which overshadowed concerns about seasonal declines in MODS and anticipated credit losses. Overall, the sentiment was buoyant, driven by strong financial results and a promising future outlook.
Robust Revenue Growth
Sezzle reported an impressive 123% year-over-year increase in revenue, primarily fueled by a 77% rise in monthly on-demand users and subscribers (MODS). This substantial growth underscores the company’s ability to expand its user base and capitalize on the growing demand for its services.
Strong GMV Performance
The company’s Gross Merchandise Volume (GMV) rose by 64% year-over-year, significantly outperforming the overall Buy Now Pay Later (BNPL) industry. This strong performance indicates Sezzle’s competitive edge and its ability to capture a larger market share.
Improved Profitability
Sezzle achieved a net income of $36.2 million for the quarter, with a net income margin of 34.5% and an adjusted EBITDA margin of 49%. These figures reflect the company’s effective cost management and operational efficiency.
Increased Guidance for 2025
Sezzle has raised its 2025 net income guidance by nearly 50% to $120 million, up from $80.4 million, and increased its EPS guidance from $2.21 per share to $3.25 per share. This upward revision is a testament to the company’s confidence in sustaining its growth trajectory.
Successful Product Launches
New product enhancements, such as Pay-in-5 and Auto-Couponing, are currently in beta testing and have shown promising results. These innovations are expected to enhance consumer experience and drive further engagement.
Seasonal Decline in MODS
Despite the positive overall performance, Sezzle experienced a seasonal decline in MODS, consistent with the typical drop in GMV activity from Q4 to Q1. This trend is expected and does not detract from the company’s strong growth metrics.
Provision for Credit Losses Projection
While credit performance exceeded expectations, Sezzle anticipates an increase in the provision for credit losses over the remaining quarters of 2025, within the guided range of 2.5% to 3%. This projection reflects the company’s cautious approach to credit risk management.
Forward-Looking Guidance
Sezzle’s forward-looking guidance is notably optimistic, with a significant increase in its 2025 net income and EPS forecasts. The company plans to continue enhancing consumer experience and expanding its product offerings, while also focusing on strategic expansion into new retail categories. These initiatives are expected to drive sustained growth and shareholder value.
In conclusion, Sezzle Inc.’s earnings call painted a positive picture of the company’s financial health and future prospects. With robust revenue growth, improved profitability, and increased guidance for 2025, Sezzle is well-positioned to capitalize on market opportunities and deliver value to its stakeholders.