ASX BNPL stock Sezzle [ASX:SZL] saw underlying merchant sales growth slow to 0.6% in 3Q22 to US$421.5 million.
Sezzle did report that total income rose 4% QoQ to US$30.4 million.
SZL’s business update comes after BNPL rival Zip Co [ASX:Z1P] yesterday provided its results for the September quarter.
Year to date, SZL shares are down 80%, while ZIP shares are down 85%:
Source: Tradingview.com
Sezzle presents September’s business highlights
Sezzle gave a brief business update for the reporting period, which ended 30 September.
The BNPL will release a full set of numbers for 3Q22 on 31 October 2022.
Here are the key metrics Sezzle highlighted in Friday’s update:
- Underlying Merchant Sales (UMS) inched 0.6% higher QoQ to US$421.5 million
- Total income rose 4.0% QoQ to US$30.4 million
- Gap between total income less transaction-related costs and adjusted operating expenses ‘narrowed significantly from the peak level of a negative US$24.5M in 4Q21 (average monthly US$8.2M) to only a negative US$3.5M in 3Q22’
Sezzle also made known a variation of certain key initiatives throughout 2022 and expects these strategies to bring about US$60 million in annual revenue and cost savings.
These savings are most likely anticipated around the full rollout of the initiatives. However, these won’t be until the first quarter of 2023.
An outline of the initiatives consisted of offboarding or renegotiating rates with merchants and network partners, workforce reductions, scaling back European and Brazilian business segments, pulling back from India, and reducing third-party spending.
The payments company stated it has already completed its workforce reductions and stopped processing payments in India.
While it has already finalised negotiated rates with merchants and partners, it will continue to keep an eye on these elements.
Sezzle has also launched its premium subscription product, with active subscribers already counted at 95,000 (as at 20 October).
The company has also now implemented convenience fees and adjusted merchant pricing in the hope of boosting revenue further.
SZL’s Chairman and CEO, Charlie Youakim, commented:
‘Earlier this month, we announced our new US$100.0 million credit facility, which will provide us greater liquidity and capacity. Now, we are excited to update investors on the progress of our initiatives.
‘We have clearly made great strides in the past year, as our “burn” in 3Q22 was a negative US$3.5 million compared to a negative US$13.0 million in 3Q21.’
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Regards,
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For Money Morning
