Q3 2024 Sezzle Inc Earnings Call Transcript
Key Points
- Sezzle Inc (SEZL) reported a significant 71.3% year-over-year increase in quarterly revenue, driven by a rise in consumer purchase frequency and subscriber growth.
- The company achieved a net income of $15.4 million, with a net income margin of 22.1%, and an adjusted net income of $17.3 million, marking a new quarterly high.
- Sezzle Inc (SEZL) exceeded its own 'rule of 100' with a score of 151, showcasing strong financial performance with 71% revenue growth, a 55% gross margin, and a 25% adjusted net income margin.
- The launch of a banking program with Web Bank is expected to unify product contracts across the U.S., simplifying regulatory procedures and enhancing profitability.
- Sezzle Inc (SEZL) raised its 2024 guidance due to stronger-than-expected results and the impact of the new banking program, with a projected 20% growth in 2025 adjusted EPS over 2024.
- The company faced challenges with increased marketing costs due to political ads, which limited their advertising efforts during the quarter.
- There is potential volatility in subscriber counts as the new on-demand product may cause fluctuations, with subscribers possibly decreasing as on-demand usage increases.
- Sezzle Inc (SEZL) anticipates a roughly 20% tax headwind in 2025, which could impact future profitability.
- The company is experiencing seasonality in its business, with increased spending in Q4 due to the holiday season, which may lead to higher principal loss rates.
- Despite strong growth, Sezzle Inc (SEZL) acknowledges the need to balance between on-demand and subscription products, which may require adjustments and learning curves.
Good day and welcome to Sezzle Inc third quarter. Financial results call, all participants will be in listen-only mode.
If you need assistance, please signal conference specialist by pressing this R key followed by Z after today's presentation with an opportunity to ask questions. Please note that this event is being recorded.
I don't like the cold. Don't like to turn the conference over to Mr. Charlie Youakim. You know, CEO and executive Chairman. Please go ahead, sir.
Thank you. Good afternoon, everyone and welcome to Sezzle's 2024 3rd quarter earnings call. My name is Charlie Youakim. I'm the CEO and executive Chairman of Sezzle. I'm joined today by our Chief Financial Officer, Karen Hartje, our President, Paul Paradis and our head of Corp DEV and I are lee rating in conjunction with this conference call. We filed our earnings announcement with the SEC and posted it along with our earnings presentation on our investor website at Sezzle dotcom.
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