- Instalment payment platform Sezzle (SZL) has reported continued growth in the 12 months to the end of June, despite COVID-19 headwinds
- With nearly all Sezzle’s transactions coming via eCommerce, pandemic shutdowns have been a boon for the company’s finances
- As consumers increasingly move online, Sezzle is reporting increases in both repeat usage rates and purchase frequency
- Underlying merchant sales (UMS), have also increased by a formidable 348.6 per cent year-on-year to US$188 million (around A$269.8 million)
- The company’s quarterly is due on July 27; if the numbers stay on track with current projections, Sezzle is on track for its best year yet
- Sezzle shares are trading 16.7 per cent higher at $4.71 each
Instalment payment platform Sezzle (SZL) has reported continued growth in the 12 months to the end of June, despite COVID-19 headwinds.
Strong numbers on key metrics
With nearly all Sezzle’s transactions coming via eCommerce, the pandemic shutdowns have been a boon for the company’s finances as increasing numbers of consumers and retailers move online.
The company is reporting both higher repeat usage rates year-on-year (87.5 per cent for June quarter 2020, compared to 77.2 per cent in 2019), and purchase frequency.
Consumers who first used the platform in 2018 now employ it around 15 times per year, with subsequent cohorts adopting the platform at a more rapid rate than the 2018 users at related points in time.
This shows increased brand loyalty and accelerated uptake among users, suggesting greater customer engagement and brand recognition.
Sezzle Executive Chairman and CEO, Charlie Youakim, says the growth in the Sezzle brand and consumer uptake has underpinned the company’s increased revenue base.
“The undercurrent of organic growth that we are experiencing is exciting to see as our business matures,” Charlie said.
“The gains in repeat customer usage and frequency of purchases by cohorts are key drivers to lower loss rates and greater net transaction margin,” he added.
Increased traffic
Perhaps the greatest indicator of the company’s growth has been in underlying merchant sales (UMS), with a formidable 348.6 per cent increase year-on-year to US$188 million (around A$269.8 million).
Record growth in both active consumers and active merchants in the June quarter have accelerated the company’s UMS, with a monthly average of US$62.7 million (around A$90 million), easily eclipsing the company’s previous high of US$39.8 million (approximately A$57.1 million) recorded in the March 2020 quarter.
Merchant fees have also risen almost 400 per cent — generating a positive impact on the company’s overall income.
Outlook
Sezzle is now on track for an annualised run rate for UMS exceeding US$1 billion per annum (around A$1.435 billion), meaning if current rates were sustained over the year, the company would achieve that figure.
While it’s important to note the current figures are not finalised, improvements of the order of 300 to 400 per cent are still pretty solid, even if slightly overstated.
The company anticipates the release of its quarterly filing on July 27.
If the numbers stay on track with current projections, Sezzle is on track for its best quarter — and best year — yet.
Sezzle shares are trading 16.7 per cent higher at $4.71 each as at 2:25 pm AEST