Sezzle Inc.

Sezzle offers installment payments, subscriptions and related financial services to consumers and merchants. It earns consumer and merchant fees, subscription revenue and partner income. Its Premium and Anywhere subscriptions are central to a broader product range that includes cash advances and money transfers. Sezzle trades on Nasdaq as SEZL and has a December 31 fiscal year-end.

The operating record and annual target

Revenue and profit follow U.S. accounting rules. Adjusted earnings remove discrete tax items, strategic-project costs and other income or expense, including related tax effects. They retain stock compensation. The prior-year comparison shown in the table has been recast for the tax treatment.

The annual revenue-growth target moved from 35% in August to approximately 42.5% in November. The intervening August investor presentation retained the original target. Subscription revenue rose to $41.3 million in the third quarter from $24.3 million a year earlier.

The current full-year adjusted diluted earnings target is $5.45 to $5.50 a share, with a preliminary $7.20 target for 2027. The earlier $5.25 annual forecast was not recast for the new tax treatment. Management said the preliminary forecast includes products already launched, with more detailed revenue and margin expectations to follow.

Product development and credit costs

SezzleCash launched in June, and Sezzle Send expanded beyond its third-quarter beta in October. Management says both remain small relative to the core business. Sezzle Anywhere also soft-launched in Canada after the quarter.

Third-quarter operating profit benefited from a $3.7 million network incentive that reduced transaction expense. That is distinct from promotional incentive revenue. The provision for credit losses rose to $37.7 million from $32.2 million. Gross consumer receivables were $357.9 million at September 30, with a $39.6 million allowance for credit losses.

Cash, debt and capital returns

Nine-month operating cash flow was $227.9 million versus a restated $139.3 million. Net consumer-receivable funding used $142.3 million in investing cash. Additional cash investment included $0.9 million for property and equipment and $2.3 million for internally developed intangible assets.

September unrestricted cash and cash equivalents were $70.1 million, with another $37.7 million of restricted cash. The secured receivables facility had $104 million of principal outstanding and $169.3 million of collateral-based unused borrowing capacity within a $300 million commitment.

Sezzle repurchased $28 million under its public program during the first nine months. It made no program purchases in the third quarter; that quarter's $6.6 million of share purchases covered employee tax withholding.

Bank plans and reporting controls

Sezzle's October applications for a national bank charter and federal deposit insurance remain pending. Its WebBank arrangement lets the bank retain eligible SezzleCash and Sezzle Send loans. The initial $30 million retained-loan threshold may be increased to $150 million at WebBank's discretion.

A previously disclosed material weakness in cash-flow classification controls remained unresolved at September 30. The comparative cash-flow figures have been restated to classify consumer-note funding in investing activities. The latest filing says remediation is continuing.

Read our analysis of Sezzle's higher sales target and profit growth for the subscription, expense and funding details.