Sezzle Inc. Q4 FY2024 earnings call

• 2024 showed strong financial performance with net income up tenfold and revenue outpacing the industry.
• Partnership with WebBank in September 2024 enabled launch of On-Demand, a Pay-in-4 product accepted everywhere Visa is used.
• MODS grew to 707,000 in Q4, a 130% year-on-year increase.
• Product marketplace orders grew 39% month-over-month in 2024.
• Couponing features rolled out to enhance shopper engagement and retention.
• On-Demand signed three enterprise-level merchants in Q4 and acts as a bridge to subscriptions.

In 2024, Sezzle's net income increased more than tenfold compared to 2023. Q4 revenue grew over 100% year-over-year. MODS (Monthly On-Demand & Subscriber users) reached 707,000 at quarter end, a 130% year-on-year increase. Revenue for 2024 was $271 million, a 70% increase from 2023. Transaction-related costs were managed, with provision for credit losses expected to be 2.5%-3% of GMV in 2025. The product marketplace saw orders grow 39% month-over-month on average in 2024.

• Revised 2025 EPS guidance to $13.25 from $12.
• Expect double-digit revenue growth in 2025 with pre-tax net income rising at least 55% compared to 2024.
• Provision for credit losses expected to be in the range of 2.5% to 3% of GMV in 2025.

• Potential challenges with credit losses due to higher loss rates in newer user groups.
• Market competition from longer-established peers with significant equity raised.
• Uncertainty in fully realizing benefits of new features like couponing and app enhancements in the short term.

Q: What were the biggest drivers of the 100% revenue growth in 4Q?

A: The partnership with WebBank, which unified the fee structure and allowed launching On-Demand, and the MODS growth contributing to revenue.

Q: Any comments on Anywhere and Premium?

A: Focus is on leading with On-Demand for lower barrier to entry, which acts as a bridge to subscriptions, with topline revenue from On-Demand similar to Premium.

Q: Monetization potential on couponing?

A: Experimenting with monetization channels for couponing, balancing attraction/retention with profitability.

Q: Capital allocation plans with strong cash generation?

A: Profitable company has options like buybacks, dividends, M&A; no rush, will evaluate options as they come.