In This Article:
Release Date: February 25, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
-
Sezzle Inc (NASDAQ:SEZL) reported a 100% year-over-year revenue growth in Q4 2024, driven by a strong holiday season and the launch of new products.
-
The company achieved a significant increase in net income, more than tenfold compared to 2023, showcasing strong financial performance.
-
Sezzle Inc (NASDAQ:SEZL) introduced a new product, OnDemand, which has shown promising early results with a 130% year-on-year increase in monthly on-demand and subscriber users (mods).
-
The partnership with Webbank allowed Sezzle Inc (NASDAQ:SEZL) to unify its fee structure across the United States, leading to increased revenue and trust margin.
-
Sezzle Inc (NASDAQ:SEZL) anticipates double-digit revenue growth in 2025, with pre-tax net income expected to rise by at least 55% compared to 2024.
Negative Points
-
Sezzle Inc (NASDAQ:SEZL) faces challenges with higher loss rates among newer user groups, which could impact profitability.
-
The company expects a principal loss rate of 2.5% to 3% in 2025, indicating potential risks in credit losses.
-
There is a possibility of a decline in subscriber count due to the interplay between OnDemand and subscription products.
-
Sezzle Inc (NASDAQ:SEZL) is still in the early stages of rolling out new products like couponing, which may take time to show full benefits.
-
The company faces competition from larger peers with more significant financial resources, which could impact market share growth.
Q & A Highlights
Q: What were the biggest drivers of Sezzle's 100% year-over-year revenue growth in Q4 2024? A: Charlie, CEO and Executive Chairman, explained that the partnership with Webbank was a significant driver. This partnership allowed Sezzle to unify its fee structure across the United States, leading to increased revenue and trust margin. Additionally, the launch of the OnDemand product contributed to growth, with mods (monthly on-demand and subscriber users) increasing to 707,000 over the quarter.
Q: How did the holiday season impact Sezzle's revenue growth? A: Charlie noted that while the holiday season contributed to growth, the year-over-year comparison already accounts for seasonality. The introduction of OnDemand, which allows shopping at more places, helped maintain momentum throughout the quarter, shifting the peak shopping period from November to December.
Q: Can you provide insights into the performance of Sezzle's Anywhere and Premium products in Q4 2024? A: Charlie stated that while subscriber numbers remained stable, the focus was on introducing OnDemand to new consumers due to its lower barrier to entry. The strategy is to lead with OnDemand and eventually transition frequent users to subscription products, similar to how Uber introduces its subscription service.