The buy-now, pay-later provider is set to finish the week in the red
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During mid-morning trade, the buy-now, pay-later (BNPL) provider’s shares are down 8.52% to $7.41.
How did Sezzle perform in Q2 FY21?
Investors are selling Sezzle shares despite the company reporting record growth across a number of key metrics. This relates to underlying merchant sales (UMS), active customers, active merchants, and repeat usage.
For the 3 months ending June 30, Sezzle achieved UMS of US$411.1 million (A$550.4 million), a 118.7% increase year-on-year (YoY). The average monthly UMS stood at US$137 million (A$183.5 million), lifting 9.6% from the previous quarter (Q1 FY21).
Sezzle income came in at US$24.1 million (A$32.3 million), a 122.6% jump YoY. As a percentage of UMS, Sezzle income remained relatively flat at 5.9%.
Active customers grew by 250,000 to a total of 2.9 million for the quarter, a 95.5% lift YoY. The company’s consumer profile improved as retuning customers continued to make orders, reflecting the 30th consecutive month of growth.
Active merchants grew on the Sezzle platform by 6,200 to a total count of 40,200 active merchants. This represented a 150% gain on YoY and 18.4% lift quarter-on-quarter (QoQ).
Furthermore, the company said it was making great strides in both the Canadian and Indian market. UMS run-rate of more than US$100 million was achieved during the quarter in Canada. In India, consumer growth is tracking similarly to the United States.
The company declared a cash on hand balance of US$61 million. Although this declined by US$6.4 million during Q2 FY21, Sezzle noted US$7.3 million was used predominantly in paying down debt.
At the end of June, the company had US$21 million drawn on line of credit.
Sezzle executive chair and CEO Charlie Youakim commented:
We are excited to report a quarter that reflects new highs in UMS, active consumers, active merchants, and repeat usage. Further, our recent announcements with one of the largest retailers in the United States — Target — and one of the largest card issuers in the United States — Discover — reflect our positive market positioning.
About the Sezzle share price
It’s been a volatile 12 months for Sezzle shares, having moved between its 52-week range of $5.16 and $11.99. The company’s share price is up around 10% in the past year, and about 22% year to date.
Sezzle presides a market capitalisation of roughly $798.5 million, with 103 million shares on its registry.
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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.