Sezzle Revenues Double on Strong Holiday Season BNPL Demand

Heavy engagement with the Sezzle platform and a surge in buy now, pay later (BNPL) demand during the holiday shopping season drove the company’s revenues and other metrics ahead of expectations, in results released after market close on Tuesday (Feb. 25).

The fourth quarter saw revenues double to $98.2 million. Gross merchandise volumes (GMV) were 42% higher to $855.4 million. Total active customers were up 4.8% to 2.7 million, and unique merchant tallies were 339,000 higher to 598,000.

Monthly On-Demand and Subscriber rosters grew by 400,000 year over year to a recent 707,000 customers. Consumer order frequency also grew to 14.1, from 10.2 last year. Repeat orders as a percentage of total orders was 96%.

Early Innings

Charlie Youakim, CEO, said on the conference call with analysts that BNPL and the company’s growth potential are considerable, noting that “to say that we are in early innings is an understatement. … While we continue to ride the BNPL wave, we also believe that we can continue to outpace and take share within the segment.”

As for the appeal of the payment method, “The BNPL product can give users greater flexibility in payments and match their payments to their budgeting needs. And in a worst case scenario, it can help users avoid the cycle of debt — because if they can’t make a payment, then they aren’t allowed to make another purchase. The same can’t be said for some other payment methods.”

He said that the On-Demand offering, launched through the banking partnership with WebBank, which lets consumers finance a purchase with a down payment while paying the remainder over time, has seen success.

“We are excited by this increase in activity as On-Demand was live on a limited basis in the quarter because we were still rolling it out to all users. We tend to roll out products gradually as we launch them,” said the CEO. Later in the call, he said that “On-Demand has a much lower barrier to entry than our subscription products. And over time, we believe it’ll become a bridge into subscriptions.”

Guidance Sends Stock Surging

In looking ahead, the company anticipates, as Youakim said, “double-digit revenue growth with our pretax net income rising at least 55% compared to 2024.” Company materials noted that the firm sees 25% to 30% top line growth for the full year 2025.

Shares rose 17% after hours.

In discussing other initiatives, Youakim said, “Our products marketplace continues to gain momentum, as orders placed there averaged a growth rate of 39 [percent] month-over-month growth during 2024.

“I’m also very excited about couponing. … We believe this product will solve a need for our customers, increasing their retention and loyalty to us, all while we pull in adjacent customer groups that we can introduce buy now, pay later to.”

The full impact of these products won’t be seen for a few quarters, he said. In the meantime, the activation rates of users downloading the Sezzle mobile app to placing an order have risen 35% from September to January, according to commentary on the call.

CFO Karen Hartje said on the call that credit performance was in line with expectations, and loss provisions should be in the range of 2.5% to 3% of gross merchandise value in 2025.

During the question-and-answer session with analysts, and asked about On-Demand, Youakim said, “Through 2025, we’re probably going to continue to lead with On-Demand, and then watch the customer utilize that product … and then probably start to introduce them to subscription again.”