Sezzle Reports First-Quarter 2024 Results

Minneapolis, MN, May 08, 2024 (GLOBE NEWSWIRE) -- Sezzle Inc. (NASDAQ:SEZL) (Sezzle or Company) // Purpose-driven digital payment platform, Sezzle, is pleased to update the market on key financial metrics for the quarter ended March 31, 2024.

“This quarter’s results are a testament to the Company’s commitment and strategic focus on profitable growth, as GAAP Net Income for 1Q24 exceeded GAAP Net Income for all of 2023,” noted Charlie Youakim, Sezzle Chairman and CEO. “Further, the successful refinancing of our credit facility, putting us on a solid foundation, coupled with our strategic initiatives gives us the confidence to increase our FY2024 GAAP Net Income guidance from $20.0 million to $30.0 million.”

First-Quarter 2024 Highlights

• Underlying Merchant Sales (UMS) rose by 33.2% YoY to $492.7 million, setting a new non-holiday UMS record. The YoY growth was driven by increased consumer engagement, as evidenced by the overall consumer purchase frequency increasing to 4.5 times in 1Q24 from 3.1 times in 1Q23[1].

• • The top 10% of consumers, as measured by UMS, transacted 53 times per year based on transaction activity during the rolling twelve-month period ending March 31, 2024.

• Total Income for the quarter was $47.0 million, representing a YoY increase of 35.5%. As a percentage of UMS, Total Income reached an all-time high of 9.5%.

• In 1Q24, Total Operating Expenses increased 13.3% YoY to $33.1 million. The increase was due to the YoY increase in Transaction Expense and Provision for Uncollectible Accounts, resulting from increased transaction volume. However, as a percentage of UMS and Total Income, Total Operating Expenses decreased 1.2 and 13.8 percentage points, respectively, to 6.7% and 70.6%.

• Transaction Related Costs as a percentage of UMS and Total Income increased YoY from 3.6% and 38.4% to 4.3% and 44.7%, respectively. The increase in costs as a percentage of UMS and Total Income was primarily due to the outperformance of the Provision for Credit Losses in 1Q23 relative to 1Q24.

• Non-transaction Related Operating Expenses decreased 16.1% YoY to $16.2M. As a percentage of Total Income, Non-transaction Related Operating Expenses fell 21.2 percentage points YoY to 34.5% from 55.7%, reflecting the Company’s commitment to accelerating top-line growth while lowering operating expenses.

• Due to robust top-line performance and a continued focus on operating efficiency, Operating Income surged by 155.3% YoY to a record $13.8 million. This represents a 13.8 percentage point increase in Operating Margin from 15.6% in 1Q23 to 29.4% in 1Q24.

• Total Income Less Transaction Related Costs rose to $26.0 million in 1Q24 compared to $21.4 million in the prior year driven by top-line growth and declined as a percentage of Total Income to 55.3% due to higher Transaction Related Costs.

• GAAP Net Income reached a new quarterly high of $8.0 million in 1Q24, exceeding FY23 GAAP Net Income of $7.1 million. The resulting GAAP Diluted Earnings per Share[2] came in at $1.34 for 1Q24, compared to $0.31 in 1Q23 and $1.25 for FY23.

• The Company posted Adjusted EBTDA and Adjusted EBITDA (non-GAAP financial measures) of $10.9 million and $15.0 million, respectively, for the quarter ended March 31, 2024.

First-Quarter Balance Sheet and Liquidity