Purpose-driven instalment payment platform Sezzle [ASX:SZL] provided the market with an update on its key financial metrics for the month ended 28 February 2023, with total income for February having increased 29.1% year-on-year to US$10.7 million (AU$15.8M).
Total income as a percentage of underlying merchant sales (UMS) remained strong at 9.0%, with average daily UMS up 12.0% in February 2023 compared to January 2023.
SZL shares had risen nearly 6% by early afternoon on Monday, trading at around 55 cents a share at the time of writing.
Year-to-date, the fintech has improved nearly 34% in stock metrics; however, it’s fallen 5% in the last month, and is down in the past year on average in its sector by 46% and down 57% in the wider ASX 200:
Source: TradingView
Sezzle celebrates profitable February
February 2023 saw BNPL (buy-now-pay-later) provider Sezzle report a 29.1% increase in full group income on the same time last year, with a total of $15.8 million.
Sezzle said that its total income as a percentage of UMS was also on a continued strong streak at 9%, a 320-bps improvement year-on-year.
Average daily UMS was up 12% in the month, in comparison with January.
The fintech revealed it had a very profitable February, claiming positive net income on a GAAP measure and Adjusted EBITDA — non-GAAP — had both improved all round.
For February, the group said its net income of US$0.8 million had gone up to US$9.8 million year-on-year and US$0.9 million month-on-month, thanks to significant performance under the provision for uncollectible accounts.
It was a similar story for the group’s Adjusted EBITDA (earnings before interest, tax, depreciation, and amortisation), which moved into the green line by US$1.4 million.
Sezzle reported 138,000 active subscribers to its premium service by the end of last week, further boosting the group’s revenue as the focus moves into March.
As of the end of February, the group’s capital and liquidity were chalked up to US$68 million cash on hand, and the group also has US$53.3 million drawn on its US$100 million credit facility.
Sezzle on SVB crisis and the US
The group commented on its impact from the Silicon Valley Bank fallout last week and said that less than 2% of its funds were held at the SVB.
Those funds that were held by SVB have since been moved to other institutions and protected by the Federal Deposit Insurance Corporation, with no reported losses.
Sezzle is still angling for a Nasdaq listing in the hope of expanding its network of potential investors to the US. The BNPL group added that it won’t be seeking any funding from its shareholders in relation to the listing.
SZL will also remain on the ASX with a dual listing shared by the Nasdaq if successful with the US index.
Sezzle’s Chairman and CEO Charlie Youakim commented:
‘Although it has only been two months, we are on schedule to deliver profitability in 2023. Year-to-date we have delivered Net Income of US$0.6M, Adjusted EBTDA of US$2.4M, and Adjusted EBITDA of US$4.6M.
‘As mentioned in our 4Q22 update, we have yet to see the impact of the next round of initiatives, which we estimate will bring at least another US$10.0M in revenue and cost benefits. Yes, we are excited about the future.’
Source: SZL
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