Sezzle (SEZL) Q3 2024 earnings summary

Executive summary

• Achieved 71.3% year-over-year revenue growth in Q3 2024 to $70.0M, with net income of $15.45M and a net income margin of 22.1%, driven by higher consumer engagement and subscriber growth.

• Active subscribers reached 529,000 as of September 30, 2024, up 319,000 year-over-year, and active consumers totaled 2.7 million.

• Launched a five-year exclusive lending partnership with WebBank, enabling new product innovations and regulatory efficiency.

• Recognized among CNBC's World's Top 250 Fintech Companies and Minnesota's fastest-growing public companies.

• Raised FY2024 guidance on net income, revenue growth, and adjusted metrics due to sustained momentum and new banking initiatives.

Financial highlights

• Underlying Merchant Sales (UMS) rose 40.6% year-over-year to $659.9M in Q3 2024.

• Adjusted net income for Q3 2024 was $17.3M (24.7% margin), and adjusted EBITDA margin improved to 32.2%.

• Transaction income increased 34.6% year-over-year to $36.4M; subscription revenue grew 167.2% to $22.9M.

• Cash and cash equivalents at quarter-end were $88.3M, with $95.0M drawn on a $150.0M credit facility.

• Provision for credit losses rose 130.7% year-over-year to $15.4M for Q3, reflecting higher UMS and changes in underwriting.

Outlook and guidance

• FY2024 guidance: $58.0M adjusted net income, $9.80 adjusted net income per diluted share, and 55% total revenue growth.

• FY2025 preliminary guidance: $12.00 adjusted net income per diluted share, assuming a 20–25% effective tax rate.

• Management expects existing cash, equivalents, restricted cash, unused borrowing capacity, and operating cash flows to be sufficient for working capital and investment needs beyond the next 12 months.

• Seasonality is expected, with Q4 typically the strongest due to holiday spending.