Sezzle (SEZL) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue grew 60.2% year-over-year to $56.0 million, driven by higher consumer purchase frequency, subscriber growth, and increased transaction volume.

• Net income reached $29.7 million, including a $16.8 million discrete tax benefit; adjusted net income was $13.1 million.

• Active subscribers rose to 462,000 as of June 30, 2024, with strong engagement and product adoption.

• Underlying Merchant Sales (UMS) increased 38.9% year-over-year to $532.2 million, reflecting robust adoption of subscription products.

• The company is recognized for rapid growth, sustainability leadership, and outpacing the broader buy now, pay later industry.

Financial highlights

• Total revenue for the six months ended June 30, 2024 was $102.9 million, up 47.9% from the prior year period.

• Subscription revenue surged 288%-289.9% year-over-year, now comprising 34% of total revenue.

• Adjusted EBITDA margin reached 32.9%, up from 18.3% a year ago.

• Revenue as a percentage of UMS hit a record 10.5% in Q2.

• Operating income for Q2 2024 was $16.7 million, up 343.7% year-over-year.

Outlook and guidance

• FY24 guidance raised: total revenue expected to grow 35%-40% year-over-year, targeting $200 million.

• FY24 net income guidance increased to $55.0 million, with adjusted net income at $40.0 million.

• Adjusted net income per diluted share forecasted at $6.75; net income per diluted share at $9.25.

• Company expects a mid-single digit annualized effective tax rate for the remainder of FY24.

• Management expects continued growth in subscription revenue and UMS, supported by product innovation and Sezzle Anywhere expansion.