Here’s why the Sezzle (ASX:SZL) share price is dropping lower

The Sezzle Inc (ASX:SZL) share price is trading lower on Friday afternoon. Here’s what you need to know…
The post Here’s why the Sezzle (ASX:SZL) share price is dropping lower appeared first on The Motley Fool Australia. –

red arrow pointing down, falling share price

The Sezzle Inc (ASX: SZL) share price is trading lower on Friday following the release of its fourth quarter update.

In afternoon trade, the buy now pay later provider’s shares are down 2% to $8.12.

How did Sezzle perform in the fourth quarter?

For the three months ended 31 December, Sezzle reported a 205.4% increase in underlying merchant sales (UMS) to US$320.8 million ($419.8 million). This was also a 40.6% quarter on quarter increase.

This meant that at the end of the period, Sezzle’s annualised run rate UMS reached US$1.36 billion.

According to the release, this strong growth was driven by an increase in active customers, merchants, and repeat usage.

In respect to customer numbers, Sezzle’s customers broke through the 2 million mark for the first time and stood at 2.2 million at the end of the period. This was up 143.9% over the 12 months.

As for merchant numbers, they increased 166.6% to 26,690. Management notes that its move up the merchant enterprise spectrum toward large enterprise is gaining traction. In addition to GameStop, Sezzle is now available at a number of mid-size merchants such as UNTUCKit, Thursday Boots, Galls, Guidefitter, and Pure Hockey.

And finally, repeat usage improved for the 24th consecutive month. Active Consumer repeat usage grew to 89.8% and supported lower loss rates.

At the end of the period, the company had total cash on hand of US$89.1 million, consisting of US$84.3 million of cash and cash equivalents and US$4.8 million of restricted cash.

Sezzle’s Executive Chairman and CEO, Charlie Youakim, was pleased with the quarter and particularly the company’s performance in December.

He commented: “We are very excited about our momentum as December’s UMS outpaced November’s for the first time in the Company’s history. Further, each month throughout 4Q20 represented new records for UMS, Active Consumers, Active Merchants, and Repeat Usage.”

“Our efforts toward large enterprise merchants is paying dividends, as evidenced by our recent addition of GameStop and a number of mid-sized merchants such as UNTUCKit, Thursday Boots, Galls, Guidefitter, and Pure Hockey,” he concluded.

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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Sezzle Inc. The Motley Fool Australia has recommended Sezzle Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Here’s why the Sezzle (ASX:SZL) share price is dropping lower appeared first on The Motley Fool Australia.

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