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Sezzle (SEZL) 7 Aug 24 2024 Q2 Earnings call transcript

AInvestFriday, Aug 9, 2024 7:02 pm ET
2min read

In a recent earnings call, Sezzle Inc. (SEZ) presented a robust performance for the second quarter of 2024, highlighting significant revenue growth and increased profitability. The call, led by CEO Charles Youakim, CFO Karen Hartje, and Head of Corporate Development Lee Brading, provided valuable insights into the company's financial health and strategic outlook.

Financial Performance and Future Guidance

Sezzle reported a 6.2% year-on-year increase in revenue, driven by strong consumer purchase frequency and subscriber growth. The company's net income for the quarter stood at $29.7 million, with a notable onetime discrete income tax benefit of $16.8 million. Adjusted net income for the quarter was $13.1 million, reflecting a positive financial trajectory for the company.

Based on the strong Q2 results, Sezzle raised its fiscal 2024 guidance, projecting an adjusted net income of $40 million and adjusted net income per diluted share of $6.75. This upward revision indicates the company's confidence in its financial performance and growth prospects.

Subscriber Growth and Consumer Engagement

Sezzle's subscriber count increased by 91,000 during the quarter, bringing the total to 462,000. The company's consumer engagement has also grown, with the top 10% of consumers transacting an average of 70 times per year. Sezzle's focus on enhancing the consumer experience and increasing lifetime value is evident in its financial results and subscriber growth.

Strategic Initiatives and Future Plans

Sezzle's strategic initiatives, such as the launch of premium and anywhere subscription products, have contributed to the growth in consumer lifetime value. The company's efforts to attract first-time users and expand the pool of current users through targeted marketing have paid off, leading to a sequential increase in active users and a projected year-over-year growth starting in Q3.

Looking ahead, Sezzle is focused on driving profitability and enhancing the consumer experience through new product offerings and partnerships. The company's upcoming bank partnership is expected to unify its product construct across the United States and launch new products that will enhance user acquisition and consumer lifetime value expansion.

Financial Metrics and Investor Relations

Sezzle's financial metrics, including a 60.2% year-over-year increase in total revenue and a 32.9% second quarter adjusted EBITDA margin, demonstrate the company's strong financial position. The company's focus on improving bottom-line results is evident in its increased net income and guidance for the remainder of the fiscal year.

Investor relations were a key focus during the call, with the company addressing questions from analysts and shareholders about subscriber growth, product launches, and financial guidance. Sezzle's transparency and openness to investor inquiries underscore its commitment to maintaining strong relationships with its stakeholders.

Conclusion

Sezzle's Q2 earnings call painted a picture of a company with a strong financial performance, clear strategic direction, and a focus on enhancing the consumer experience. The company's guidance for the remainder of the fiscal year, along with its strategic initiatives and financial metrics, suggest a positive outlook for Sezzle's future growth and profitability. The company's commitment to driving profitability, enhancing consumer lifetime value, and maintaining strong investor relations positions it well for continued success in the buy now, pay later market.

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