Sezzle Reports First Quarter 2026 Results
Rhea-AI Summary
Sezzle (NASDAQ:SEZL) reported strong 1Q26 results: GMV rose 37.3% YoY to $1.1B, Total Revenue grew 29.2% to $135.5M, and Adjusted Net Income reached $50.0M. Adjusted EBITDA was $71.1M (52.5% margin). The company raised FY2026 guidance, including Adjusted Net Income to $180M and Adj. Net Income per diluted share to $5.10.
Liquidity included $147.4M cash (including restricted cash) and $145.5M outstanding on a $225M credit facility; $24.8M of shares were repurchased in the quarter.
Positive
- GMV +37.3% YoY to $1.1 billion
- Total Revenue +29.2% YoY to $135.5 million
- Adjusted Net Income $50.0 million (up 41.5% YoY)
- Adjusted EBITDA $71.1 million; margin 52.5%
- Raised FY2026 Adjusted Net Income guidance to $180.0 million
Negative
- Total operating expenses rose 20.9% YoY to $66.5 million
- $145.5 million outstanding on $225.0 million credit facility
- Monthly On-Demand users declined sequentially amid subscription focus
Market Reaction – SEZL
Following this news, SEZL has gained 13.08%, reflecting a significant positive market reaction. Our momentum scanner has triggered 3 alerts so far, indicating moderate trading interest and price volatility. The stock is currently trading at $97.27. This price movement has added approximately $336M to the company's valuation.
Data tracked by StockTitan Argus (15 min delayed). Upgrade to Gold for real-time data.
Key Figures
Market Reality Check
Peers on Argus
Ahead of this earnings release, SEZL was down 0.9% while key credit peers were mixed: BFH +2.44%, ENVA +3.19%, WU -0.82%, QFIN -0.93%. Only one peer (LU) appeared in momentum scans, so moves looked stock-specific rather than a coordinated sector rotation.
Previous Earnings Reports
| Date | Event | Sentiment | Move | Catalyst |
|---|---|---|---|---|
| Feb 25 | Q4/FY2025 earnings | Positive | +3.3% | Record Q4 and FY2025 results with higher FY2026 growth and EPS guidance. |
| Nov 05 | Q3 2025 earnings | Positive | -12.5% | Strong GMV, revenue, EPS growth and guidance raise but shares fell sharply. |
| Aug 07 | Q2 2025 earnings | Positive | -34.3% | High GMV and revenue growth with solid profitability yet large negative reaction. |
| May 07 | Q1 2025 earnings | Positive | +42.1% | Exceptional growth across metrics and major FY2025 guidance increase. |
| Apr 30 | Earnings schedule | Neutral | +0.1% | Announcement of upcoming Q1 2025 results and investor conference attendance. |
Earnings releases have generally been strong fundamentally, but share reactions have been mixed, with both sharp rallies and notable selloffs. Average earnings-day move over the last five events was a modest -0.25%, reflecting no consistent upside bias despite repeated guidance raises.
Over the past year, Sezzle’s earnings reports have repeatedly highlighted rapid GMV and revenue growth, rising profitability, and multiple guidance increases. Q1 and Q3 2025 earnings showed strong operating leverage and higher EPS, yet the stock sometimes sold off sharply afterward. The Q4/FY 2025 release on Feb 25, 2026 again delivered record results and higher FY2026 guidance. Today’s Q1 2026 update continues that pattern of robust fundamentals and upwardly revised outlooks.
Historical Comparison
Across the last five earnings-related headlines, Sezzle’s average move was just -0.25%, with both sharp rallies and notable selloffs following fundamentally strong reports.
Earnings updates show a steady progression of guidance: FY2025 EPS raised to $3.38, preliminary FY2026 EPS at $4.35, then to $4.70, and now FY2026 adjusted EPS lifted again to $5.10 alongside higher revenue and income targets.
Market Pulse Summary
This announcement delivers strong Q1 2026 execution: GMV grew 37.3% YoY to $1.1B, revenue rose 29.2% to $135.5M, and net income increased 41.9% to $51.3M. Margins expanded, adjusted EBITDA reached $71.1M, and FY2026 guidance was raised across revenue growth, adjusted net income to $180M, and adjusted EPS to $5.10. Historically, earnings reactions have been mixed, so investors may watch future results, credit performance, and engagement metrics to see if this trajectory is maintained.
Key Terms
gross merchandise volume financial
adjusted ebitda financial
adjusted net income financial
provision for credit losses financial
net interest expense financial
variable interest entity financial
deferred tax asset financial
stock split financial
AI-generated analysis. Not financial advice.
- GMV increased
37.3% YoY to$1.1 billion , supported by record average quarterly purchase frequency of 7.1x - Total Revenue grew
29.2% YoY to$135.5 million , representing12.2% of GMV - Net Income and Adjusted Net Income1 increased
41.9% and41.5% YoY to$51.3 million and$50.0 million , respectively; Net Income per Diluted Share2 and Adjusted Net Income per Diluted Share2 were$1.47 and$1.43 , respectively - Adjusted EBITDA1 was
$71.1 million , with Adjusted EBITDA Margin reaching52.5% - The Company increased FY2026 guidance across all metrics: Total Revenue Growth to 30
-35% from 25-30% , Adjusted Net Income1 to$180.0 million from$170.0 million , and Adjusted Net Income Per Diluted Share2 to$5.10 from$4.70
MINNEAPOLIS, May 06, 2026 (GLOBE NEWSWIRE) -- Sezzle Inc. (NASDAQ:SEZL) (Sezzle or Company) // Purpose-driven digital payment platform, Sezzle, is pleased to update the market on key financial metrics for the quarter ended March 31, 2026.
“This quarter’s results demonstrate the impact of the consumer engagement strategy we advanced throughout 2025,” stated Charlie Youakim, Sezzle Executive Chairman and CEO. “Average quarterly purchase frequency reached a new Company high of 7.1x and Active Subscribers grew
First Quarter 2026 Highlights
- Gross Merchandise Volume (GMV) increased
37.3% YoY to$1.1 billion , supported by higher overall consumer purchase frequency and continued platform engagement. Average purchase frequency reached a quarterly record of 7.1x, up from 6.1x in 1Q25. - Total Revenue reached a quarterly high of
$135.5 million , up29.2% YoY and equal to12.2% of GMV. - Monthly On-Demand & Subscribers (MODS) totaled 887,000 (rounded to the nearest thousand) as of March 31, 2026, up
34.8% YoY. Active Subscribers increased48.4% YoY, while Monthly On-Demand users declined sequentially, reflecting a subscription-first acquisition strategy and the seasonal moderation that typically follows the fourth-quarter holiday shopping period. - Total Operating Expenses rose
20.9% YoY to$66.5 million , primarily reflecting higher marketing spend. As a share of Total Revenue and GMV, Operating Expenses fell 3.3 and 0.8 percentage points to new Company lows of49.1% and6.0% , respectively. - Transaction Related Costs3 improved to a Company-low
3.2% of GMV, down from3.8% in 1Q25. Provision for Credit Losses contributed most to the improvement, contracting to1.2% of GMV from1.6% in 1Q25 on sustained favorable consumer repayment performance. - Operating Income increased
38.4% YoY to$69.0 million . Operating Margin expanded 3.3 percentage points YoY to50.9% of Total Revenue and held at6.2% of GMV. - Total Revenue Less Transaction Related Costs3 increased
35.8% YoY to$100.3 million and reached74.0% of Total Revenue, up 3.6 percentage points YoY. As a percentage of GMV, the metric was9.0% , compared with9.1% in 1Q25. - Non-Transaction Related Operating Expenses3 increased
27.5% YoY to$34.3 million , with marketing expense accounting for$11.2 million versus$5.3 million in 1Q25 in support of subscriber acquisition, retention, and engagement initiatives. As a percentage of Total Revenue, the metric declined 0.3 percentage points YoY to25.3% .- Corporate Strategic Project Costs for the quarter totaled
$0.3 million , covering professional services tied to the ongoing antitrust litigation and bank charter application.
- Corporate Strategic Project Costs for the quarter totaled
- Net Income jumped
41.9% YoY to$51.3 million , a new Company quarterly high. Net Income Margin expanded 3.4 percentage points to37.9% , with Earnings per Diluted Share4 of$1.47 versus$1.00 in 1Q25.- Adjusted Net Income5 increased
41.5% YoY to$50.0 million in 1Q26, or36.9% of Total Revenue, translating to$1.43 per Diluted Share6 compared to$0.98 in 1Q25.
- Adjusted Net Income5 increased
- Adjusted EBITDA5 grew
38.3% YoY to$71.1 million . Adjusted EBITDA Margin reached52.5% of Total Revenue, 3.5 percentage points above 1Q25.
Balance Sheet and Liquidity
- As of March 31, 2026, Sezzle had
$147.4 million of cash, cash equivalents, and restricted cash,$26.9 million of which was restricted. - The Company had
$145.5 million outstanding on its$225.0 million credit facility as of quarter end. - During 1Q26, the Company repurchased
$24.8 million of common stock under its$100.0 million share repurchase program.
Guidance
The Company is raising its FY2026 guidance as follows:
| 2026 Guidance (November 2025) | 2026 Guidance (February 2026) | 2026 Updated Guidance | ||||
| Total Revenue Growth | Not provided | |||||
| Adjusted Net Income5 | Not provided | |||||
| Adjusted Net Income Per Diluted Share5 | ||||||
Initiatives Update
- Sezzle continued to advance its strategy of moving beyond checkout to become a broader part of consumers’ everyday spending. During 1Q26, the Company rolled out Pay-in-5 to consumers, while the Earn Tab continued to gain traction as a daily engagement hub, generating 4.8 million visits since its June 2025 launch.
- Subsequent to quarter end, Sezzle launched Agentic Commerce, a closed-end BNPL virtual card solution in Canada, and Sezzle Mobile. Additionally, Sezzle expanded its long-term lending functionality across its product suite. These launches broaden Sezzle’s payments, shopping, and financial-services capabilities, creating more reasons for consumers to engage with Sezzle in their everyday lives.
Upcoming Investor Events
- Sezzle Management will participate in the upcoming investor events:
- May 14, 2026: 21st Annual Needham Technology, Media, & Consumer Conference
- May 18, 2026: J.P. Morgan 2026 Global Technology, Media, and Communications Conference
- May 20, 2026: B. Riley Securities 2026 Annual Investor Conference
- June 17, 2026: Needham Non-Deal Roadshow
- June 23, 2026: Northland Growth Conference 2026
Quarterly Conference Call and Presentation
The Company will host its first quarter earnings conference call on May 6, 2026, at 5:00pm ET.
To register for the call, please navigate to: https://dpregister.com/sreg/10208550/103e1a867dc
All participants can access the webcast using the following link: https://event.choruscall.com/mediaframe/webcast.html?webcastid=eVoVHHdR
Upon registration, participants will receive the dial-in number. Those without internet access or unable to pre-register may dial in by calling: 1-866-777-2509 (US/CA toll free) or 1-412-317-5413 (international toll). A replay will be available until May 13, 2026. To access the replay dial 1-855-669-9658 (US toll free) or 1-412-317-0088 (International toll). Replay access code: 4160608.
In conjunction with the earnings call, the Company will release its presentation on the Sezzle Investor Relations website before the call. Please navigate to the Sezzle Investor Relations website for the presentation that management will review on the call.
1Q26 GAAP Operating Results
| For the three months ended | ||||||||
| ($ in thousands) | Mar. 31, 2026 | Mar. 31, 2025 | YoY Difference | |||||
| Total Revenue | $ | 135,539 | $ | 104,912 | 29.2 | % | ||
| Operating Expenses | $ | 66,503 | $ | 55,017 | 20.9 | % | ||
| Operating Expenses as % of Total Revenue | 49.1 | % | 52.4 | % | (3.3 ppt) | |||
| Operating Expenses as % of GMV | 6.0 | % | 6.8 | % | (0.8 ppt) | |||
| Operating Income | $ | 69,036 | $ | 49,895 | 38.4 | % | ||
| Operating Income as % of Total Revenue | 50.9 | % | 47.6 | % | 3.3 ppt | |||
| Operating Income as % of GMV | 6.2 | % | 6.2 | % | 0.0 ppt | |||
| Net Income | $ | 51,303 | $ | 36,164 | 41.9 | % | ||
| Net Income as % of Total Revenue | 37.9 | % | 34.5 | % | 3.4 ppt | |||
| Net Income per Diluted Share | $ | 1.47 | $ | 1.00 | 47.0 | % | ||
1Q26 Non-GAAP Operating Results7
| For the three months ended | ||||||||
| ($ in thousands) | Mar. 31, 2026 | Mar. 31, 2025 | YoY Difference | |||||
| Non-Transaction Related Operating Expenses | $ | 34,308 | $ | 26,899 | 27.5 | % | ||
| Non-Transaction Related Operating Expenses as % of Total Revenue | 25.3 | % | 25.6 | % | (0.3 ppt) | |||
| Transaction Related Costs | $ | 35,210 | $ | 31,032 | 13.5 | % | ||
| Transaction Related Costs as % of Total Revenue | 26.0 | % | 29.6 | % | (3.6 ppt) | |||
| Transaction Related Costs as % of GMV | 3.2 | % | 3.8 | % | (0.6 ppt) | |||
| Total Revenue Less Transaction Related Costs | $ | 100,329 | $ | 73,880 | 35.8 | % | ||
| Total Revenue Less Transaction Related Costs as % of Total Revenue | 74.0 | % | 70.4 | % | 3.6 ppt | |||
| Total Revenue Less Transaction Related Costs as % of GMV | 9.0 | % | 9.1 | % | (0.1 ppt) | |||
| Adjusted EBITDA | $ | 71,133 | $ | 51,446 | 38.3 | % | ||
| Adjusted EBITDA Margin | 52.5 | % | 49.0 | % | 3.5 ppt | |||
| Adjusted Net Income | $ | 49,993 | $ | 35,340 | 41.5 | % | ||
| Adjusted Net Income Margin | 36.9 | % | 33.7 | % | 3.2 ppt | |||
| Adjusted Net Income per Diluted Share | $ | 1.43 | $ | 0.98 | 45.9 | % | ||
Appendix - Reconciliation of GAAP to Non-GAAP Financial Measures
Reconciliation of Operating Expenses to Non-transaction Related Operating Expenses
| For the three months ended | ||||||
| ($ in thousands) | March 31, 2026 | March 31, 2025 | ||||
| Operating expenses | $ | 66,503 | $ | 55,017 | ||
| Transaction expense | (18,520 | ) | (15,317 | ) | ||
| Provision for credit losses | (13,675 | ) | (12,801 | ) | ||
| Non-transaction related operating expenses | $ | 34,308 | $ | 26,899 | ||
Reconciliation of Operating Expenses to Transaction Related Costs
| For the three months ended | ||||||
| ($ in thousands) | March 31, 2026 | March 31, 2025 | ||||
| Operating expenses | $ | 66,503 | $ | 55,017 | ||
| Personnel | (14,667 | ) | (15,048 | ) | ||
| Third-party technology and data | (4,415 | ) | (3,374 | ) | ||
| Marketing, advertising, and tradeshows | (11,246 | ) | (5,346 | ) | ||
| General and administrative | (3,980 | ) | (3,131 | ) | ||
| Net interest expense | 3,015 | 2,914 | ||||
| Transaction related costs | $ | 35,210 | $ | 31,032 | ||
Reconciliation of Operating Income to Total Revenue Less Transaction Related Costs
| For the three months ended | ||||||
| ($ in thousands) | March 31, 2026 | March 31, 2025 | ||||
| Operating income | $ | 69,036 | $ | 49,895 | ||
| Personnel | 14,667 | 15,048 | ||||
| Third-party technology and data | 4,415 | 3,374 | ||||
| Marketing, advertising, and tradeshows | 11,246 | 5,346 | ||||
| General and administrative | 3,980 | 3,131 | ||||
| Net interest expense | (3,015 | ) | (2,914 | ) | ||
| Total revenue less transaction related costs | $ | 100,329 | $ | 73,880 | ||
Reconciliation of Net Income to Adjusted EBITDA
| For the three months ended | |||||
| ($ in thousands) | March 31, 2026 | March 31, 2025 | |||
| Net income | $ | 51,303 | $ | 36,164 | |
| Depreciation and amortization | 436 | 274 | |||
| Income tax expense | 14,686 | 10,842 | |||
| Equity and incentive-based compensation | 1,321 | 1,273 | |||
| Other (income) expense, net | 32 | (25 | ) | ||
| Corporate strategic projects(1) | 340 | 4 | |||
| Net interest expense | 3,015 | 2,914 | |||
| Adjusted EBITDA | $ | 71,133 | $ | 51,446 | |
(1) Adjusted prior periods to include corporate strategic project costs.
Reconciliation of Net Income to Adjusted Net Income and Adjusted Net Income per Diluted Share
| For the three months ended | ||||||
| ($ in thousands, except for per share numbers) | March 31, 2026 | March 31, 2025 | ||||
| Net income | $ | 51,303 | $ | 36,164 | ||
| Discrete tax benefit(1) | (1,682 | ) | (803 | ) | ||
| Corporate strategic projects(1) | 340 | 4 | ||||
| Other (income) expense, net | 32 | (25 | ) | |||
| Adjusted net income | 49,993 | 35,340 | ||||
| Diluted weighted-average shares outstanding | 34,932 | 36,171 | ||||
| Adjusted net income per diluted share(2) | $ | 1.43 | $ | 0.98 | ||
(1) Adjusted prior periods to include the windfall/shortfall to income tax expense for equity-based compensation and corporate strategic project costs.
(2) Effective March 28, 2025, we performed a 6-for-1 stock split of the Company’s common stock, effected through a stock dividend. Share and per-share amounts have been retroactively adjusted.
Investors should be aware that generally accepted accounting principles prescribe when a company may reserve for particular risks, including litigation exposures. Accordingly, results for a given reporting period could be significantly affected if and when we establish reserves for one or more contingencies. Also, our regular reserve reviews may result in adjustments of varying magnitude as additional information regarding claims activity becomes known. Reported results, therefore, may be volatile in certain accounting periods.
Contact Information
| Jack Fagan Investor Relations +1 651 240 6001 InvestorRelations@sezzle.com | Erin Foran Media Inquiries +1 651 403 2184 erin.foran@sezzle.com |
About Sezzle Inc.
Sezzle is a forward-thinking fintech company committed to financially empowering the next generation. Through its purpose-driven payment platform, Sezzle enhances consumers' purchasing power by offering access to point-of-sale financing options and digital payment services—connecting millions of customers with its global network of merchants. Centered on transparency, inclusivity, and ease of use, Sezzle empowers consumers to manage spending responsibly, take charge of their finances, and achieve lasting financial independence.
For more information visit sezzle.com.
Consolidated Balance Sheets
| As of | ||||||
| March 31, 2026 | December 31, 2025 | |||||
| (in thousands, except per share amounts) | (unaudited) | (audited) | ||||
| Assets | ||||||
| Current Assets | ||||||
| Cash and cash equivalents, including amounts held by variable interest entity (“VIE”) of | $ | 120,448 | $ | 64,054 | ||
| Restricted cash, current, including amounts held by VIE of | 4,745 | 8,413 | ||||
| Notes receivable | 282,761 | 283,400 | ||||
| Allowance for credit losses | (19,794 | ) | (28,505 | ) | ||
| Notes receivable, net, including amounts held by VIE of | 262,967 | 254,895 | ||||
| Other current assets | 23,030 | 24,502 | ||||
| Total current assets | 411,190 | 351,864 | ||||
| Non-Current Assets | ||||||
| Internally developed intangible assets, net | 3,743 | 3,331 | ||||
| Operating right-of-use assets | 628 | 665 | ||||
| Restricted cash, non-current | 22,193 | 30,134 | ||||
| Deferred tax asset | 15,721 | 13,615 | ||||
| Other assets | 830 | 620 | ||||
| Total Assets | $ | 454,305 | $ | 400,229 | ||
| Liabilities and Stockholders' Equity | ||||||
| Current Liabilities | ||||||
| Merchant accounts payable | $ | 57,568 | $ | 56,374 | ||
| Other payables, including amounts held by VIE of | 21,969 | 6,908 | ||||
| Deferred revenue | 5,669 | 5,431 | ||||
| Other current liabilities, including amounts held by VIE of | 27,396 | 21,053 | ||||
| Total current liabilities | 112,602 | 89,766 | ||||
| Non-Current Liabilities | ||||||
| Operating lease liabilities | 609 | 661 | ||||
| Line of credit, net of unamortized debt issuance costs of | 144,372 | 139,991 | ||||
| Total Liabilities | 257,583 | 230,418 | ||||
| Stockholders' Equity | ||||||
| Common stock and additional paid-in capital, | 194,210 | 194,890 | ||||
| Treasury stock, at cost: 1,346 and 1,332 shares, respectively | (25,000 | ) | (24,072 | ) | ||
| Accumulated other comprehensive loss | (761 | ) | (683 | ) | ||
| Accumulated earnings (deficit) | 28,273 | (324 | ) | |||
| Total Stockholders' Equity | 196,722 | 169,811 | ||||
| Total Liabilities and Stockholders' Equity | $ | 454,305 | $ | 400,229 | ||
Consolidated Statements of Operations and Comprehensive Income (unaudited)
| For the three months ended March 31, | ||||||
| (in thousands, except per share amounts) | 2026 | 2025 | ||||
| Total revenue | $ | 135,539 | $ | 104,912 | ||
| Operating Expenses | ||||||
| Personnel | 14,667 | 15,048 | ||||
| Transaction expense | 18,520 | 15,317 | ||||
| Third-party technology and data | 4,415 | 3,374 | ||||
| Marketing, advertising, and tradeshows | 11,246 | 5,346 | ||||
| General and administrative | 3,980 | 3,131 | ||||
| Provision for credit losses | 13,675 | 12,801 | ||||
| Total operating expenses | 66,503 | 55,017 | ||||
| Operating Income | 69,036 | 49,895 | ||||
| Other Income (Expense) | ||||||
| Net interest expense | (3,015 | ) | (2,914 | ) | ||
| Other income (expense), net | (32 | ) | 25 | |||
| Income before taxes | 65,989 | 47,006 | ||||
| Income tax expense | 14,686 | 10,842 | ||||
| Net Income | 51,303 | 36,164 | ||||
| Other Comprehensive (Loss) Income | ||||||
| Foreign currency translation adjustment | (78 | ) | 93 | |||
| Total Comprehensive Income | $ | 51,225 | $ | 36,257 | ||
| Net income per share*: | ||||||
| Basic | $ | 1.52 | $ | 1.07 | ||
| Diluted | 1.47 | 1.00 | ||||
| Weighted-average shares outstanding*: | ||||||
| Basic | 33,764 | 33,852 | ||||
| Diluted | 34,932 | 36,171 | ||||
-
- Effective March 28, 2025, we performed a 6-for-1 stock split of the Company’s common stock, effected through a stock dividend. Share and per-share amounts have been retroactively adjusted.
Consolidated Statements of Cash Flows (unaudited)
| For the three months ended March 31, | ||||||
| (As restated) | ||||||
| (in thousands) | 2026 | 2025 | ||||
| Operating Activities: | ||||||
| Net income | $ | 51,303 | $ | 36,164 | ||
| Adjustments to reconcile net income to net cash provided from operating activities: | ||||||
| Depreciation and amortization | 436 | 274 | ||||
| Provision for credit losses | 13,675 | 12,801 | ||||
| Provision for other credit losses | 6,855 | 3,956 | ||||
| Discount on notes receivable | (345 | ) | (1,224 | ) | ||
| Equity based compensation and restricted stock vested | 1,321 | 1,273 | ||||
| Amortization of debt issuance costs | 241 | 109 | ||||
| Impairment losses on long-lived assets | — | 66 | ||||
| Gain on sale of fixed assets | 2 | — | ||||
| Deferred income taxes | (2,106 | ) | 5,289 | |||
| Changes in operating assets and liabilities: | ||||||
| Other assets | (5,374 | ) | (4,385 | ) | ||
| Merchant accounts payable | 1,322 | (3,631 | ) | |||
| Other payables | 15,074 | 2,779 | ||||
| Other liabilities | 6,329 | (898 | ) | |||
| Deferred revenue | 240 | (109 | ) | |||
| Operating leases | 5 | 15 | ||||
| Net Cash Provided from Operating Activities | 88,978 | 52,479 | ||||
| Investing Activities: | ||||||
| Purchases and originations of notes receivable, net of proceeds from repayments | (21,404 | ) | 6,358 | |||
| Purchase of property and equipment | (351 | ) | (27 | ) | ||
| Internally developed intangible asset additions | (738 | ) | (281 | ) | ||
| Net Cash (Used for) Provided from Investing Activities | (22,493 | ) | 6,050 | |||
| Financing Activities: | ||||||
| Proceeds from line of credit | 100,000 | 15,000 | ||||
| Payments to line of credit | (95,760 | ) | (49,200 | ) | ||
| Payments of debt issuance costs | (100 | ) | (10 | ) | ||
| Proceeds from stock option exercises | 111 | 540 | ||||
| Repurchase of common stock | (25,746 | ) | (2,444 | ) | ||
| Net Cash Used for Financing Activities | (21,495 | ) | (36,114 | ) | ||
| Effect of exchange rate changes on cash | (205 | ) | 144 | |||
| Net increase in cash, cash equivalents, and restricted cash | 44,990 | 22,415 | ||||
| Cash, cash equivalents, and restricted cash, beginning of period | 102,601 | 98,310 | ||||
| Cash, cash equivalents, and restricted cash, end of period | $ | 147,386 | $ | 120,869 | ||
Consolidated Statements of Cash Flows (unaudited) (continued)
| For the three months ended March 31, | ||||
| (As restated) | ||||
| (in thousands) | 2026 | 2025 | ||
| Noncash investing and financing activities: | ||||
| Conversion of accrued profit-sharing incentive plan liabilities to stockholders' equity | $ | — | $ | 2,301 |
| Supplementary disclosures: | ||||
| Interest paid | $ | 3,795 | $ | 3,217 |
| Income taxes paid | 87 | 94 | ||
Forward Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We have based these forward-looking statements largely on our management’s current expectations and projections about future events and financial trends affecting the financial condition of our business.
Forward-looking statements generally can be identified by the use of words such as "anticipate," "expect," "plan," "could," "may," "will," "believe," "estimate," "forecast," "goal," "project," other words or expressions of similar meaning (or the negative versions of such words or expressions). These forward-looking statements address various matters including the timing and nature of anticipated new products, our business strategy, future operations, financial performance or other future events. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied. Applicable risks and uncertainties include, among others: impact of the “buy-now, pay-later” (“BNPL”) industry becoming subject to increased regulatory scrutiny; impact of operating in a highly competitive industry; impact of macro-economic conditions on consumer spending; our ability to increase our merchant network, our base of consumers, and gross merchandise value (GMV); our ability to effectively manage growth, sustain our growth rate and maintain our market share; our ability to maintain adequate access to capital in order to meet the capital requirements of our business; impact of exposure to consumer bad debts and insolvency of merchants; our ability to comply with the applicable requirements of Visa and other payment processors; impact of the integration, support and prominent presentation of our platform by our merchants; impact of any data security breaches, cyberattacks, employee or other internal misconduct, malware, phishing or ransomware, physical security breaches, natural disasters, or similar disruptions; impact of key vendors or merchants failing to comply with legal or regulatory requirements or to provide various services that are important to our operations; our ability to protect our intellectual property rights and third party allegations of the misappropriation of intellectual property rights; impact of the costs of complying with various laws and regulations applicable to the BNPL industry in the United States and Canada; the impact of litigation, regulatory investigations and actions, and compliance issues on our business; significant and sudden declines or volatility in the trading price of our common stock and market capitalization; and other factors identified in the “Risk Factors” section of our most recent Annual Report on Form 10-K (the “Annual Report”) and the Company’s subsequent filings filed with the SEC. Investors should not place undue reliance on forward-looking statements contained in this press release, including any accompanying attachments or oral forward-looking statements that we or persons acting on our behalf may issue, which, except as otherwise noted, speak only as of the date of this press release. Except as required by law, we undertake no obligation to update or revise any forward-looking statements contained in this press release, any accompanying materials, or oral forward-looking statements made in connection with this press release.
Non-GAAP Financial Measures
To supplement our operating results prepared in accordance with generally accepted accounting principles in the United States (“GAAP”), we present the following non-GAAP financial measures: Total revenue less transaction related costs; transaction related costs; non-transaction related operating expenses; adjusted net income; adjusted net income margin; adjusted net income per diluted share; adjusted earnings before interest, taxes, depreciation, and amortization (“Adjusted EBITDA”); and Adjusted EBITDA margin. Definitions of these non-GAAP financial measures and summaries of the reasons why management believes that the presentation of these non-GAAP financial measures provide useful information to the Company and investors are as follows:
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- Total revenue less transaction related costs is defined as GAAP total revenue less transaction related costs. Transaction related costs is the sum of GAAP transaction expense, provision for credit losses, and net interest expense less certain non-recurring charges as detailed in the reconciliation table of GAAP operating income to non-GAAP total revenue less transaction related costs above. We believe that total revenue less transaction related costs is a useful financial measure to both management and investors for evaluating the economic value of orders processed on the Sezzle Platform.
- Non-transaction related operating expenses is defined as the sum of GAAP personnel; third-party technology and data; marketing, advertising, and tradeshows; and general and administrative operating expenses. We believe that non-transaction related operating expenses is a useful financial measure to both management and investors for evaluating our management of operating expenses not directly attributable to orders processed on the Sezzle Platform.
- Adjusted EBITDA is defined as GAAP net income, adjusted for certain charges including depreciation, amortization, equity and incentive–based compensation, and corporate strategic project costs, as well as net interest expense as detailed in the reconciliation table of GAAP net income to adjusted EBITDA. We believe that this financial measure is a useful measure for period-to-period comparison of our business by removing the effect of certain non-cash and non-recurring charges, as well as funding costs, that may not directly correlate to the underlying performance of our business.
- Adjusted EBITDA margin is defined as Adjusted EBITDA divided by GAAP total revenue. We believe that this financial measure is a useful measure for period-to-period comparison of our business’ unit economics by removing the effect of certain non-cash and non-recurring charges, as well as funding costs, that may not directly correlate to the underlying performance of our business.
- Adjusted net income is defined as GAAP net income, adjusted for certain charges including discrete tax items, fair value adjustments on warrants, losses on the extinguishment of our lines of credit, corporate strategic project costs, and other income and expense, as detailed in the reconciliation table of GAAP net income to adjusted net income. We believe that this financial measure is useful for period-to-period comparison of our business by removing the effect of certain charges that, in management's view, does not correlate to the underlying performance of our business during a given period.
- Adjusted net income margin is defined as Adjusted net income divided by GAAP total revenue. We believe that this financial measure is a useful measure for period-to-period comparison of our business by removing the effect of certain charges that, in management's view, does not correlate to the underlying performance of our business during a given period.
- Adjusted net income per diluted share is defined as non-GAAP adjusted net income divided by GAAP weighted-average diluted shares outstanding. We believe that this financial measure is a useful measure for period-to-period comparison of shareholder return by removing the effect of certain charges that, in management's view, does not correlate to the underlying performance of our business during a given period.
Additionally, we have included these non-GAAP measures because they are key measures used by our management to evaluate our operating performance, guide future operating plans, and make strategic decisions, including those relating to operating expenses and the allocation of resources. Therefore, we believe these measures provide useful information to investors and other users of this press release to understand and evaluate our operating results in the same manner as our management and board of directors. However, non-GAAP financial measures have limitations, should be considered supplemental in nature, and are not meant as a substitute for the related financial information prepared in accordance with U.S. GAAP. These limitations include the following:
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- Total revenue less transaction-related costs is not intended to be measures of operating profit or cash flow profitability as they exclude key operating expenses such as personnel, general and administrative, and third-party technology and data, which have been, and will continue to be for the foreseeable future, significant recurring GAAP expenses.
- Transaction related costs exclude significant expenses such as personnel, general and administrative, and third-party technology and data, which have been, and will continue to be for the foreseeable future, significant recurring GAAP expenses.
- Non-transaction related operating expenses exclude significant expenses, including transaction expense and provision for credit losses, which have been, and will continue to be for the foreseeable future, significant recurring GAAP expenses.
- Adjusted EBITDA and adjusted EBITDA margin exclude certain charges such as depreciation, amortization, and equity and incentive–based compensation, which have been, and will continue to be for the foreseeable future, recurring GAAP expenses. Further, these non-GAAP financial measures exclude certain significant cash inflows and outflows, which have a significant impact on our working capital and cash.
- Adjusted EBITDA and adjusted EBITDA margin excludes net interest expense, which has a significant impact on our GAAP net income, working capital, and cash.
- Adjusted net income, adjusted net income margin, and adjusted net income per diluted share excludes certain charges such as losses on the extinguishment of our lines of credit, fair value adjustments on our warrants, other income and expense, and discrete tax items which have been, and may be in the future, recurring GAAP expenses. Further, these non-GAAP financial measures exclude certain significant cash inflows and outflows, which have a significant impact on our working capital and cash.
- Long-lived assets being depreciated or amortized may need to be replaced in the future, and these non-GAAP financial measures do not reflect the capital expenditures needed for such replacements, or for any new capital expenditures or commitments.
- These non-GAAP financial measures do not reflect income taxes that may represent a reduction in cash available to us.
- Non-GAAP measures do not reflect changes in, or cash requirements for, our working capital needs.
- Other companies, including companies in our industry, may calculate the non-GAAP financial measures differently or not at all, which reduces their usefulness as comparative measures.
Because of these limitations, you should not consider these non-GAAP financial measures in isolation or as substitutes for analysis of our financial results as reported under GAAP, and these non-GAAP financial measures should be considered alongside other financial performance measures, including net income and other financial results presented in accordance with GAAP. We encourage you to review the related GAAP financial measures and the reconciliations of these non-GAAP financial measures to their most directly comparable GAAP financial measures and not rely on any single financial measure to evaluate our business.
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1 See appendix for a reconciliation of non-GAAP financial measures.
2 Per diluted share figures reflect 6-for-1 common stock split effective March 28, 2025.
3 See appendix for a reconciliation of non-GAAP financial measures.
4 Per diluted share figures reflect 6-for-1 common stock split effective March 28, 2025.
5 See appendix for a reconciliation of non-GAAP financial measures. FY2026 Non-GAAP adjusted financial guidance reflects add-backs for estimated FY2026 expenses associated with Corporate Strategic Projects.
6 Per diluted share figures reflect 6-for-1 common stock split effective March 28, 2025.
7 See appendix for a reconciliation of non-GAAP financial measures.
