The Sezzle Inc (ASX: SZL) share price is rocketing higher on Thursday morning.
At the time of writing the buy now pay later provider's shares are up 16% to $2.12.
Why is the Sezzle share price on the rise?
Investors have been buying the shares of the Afterpay Ltd (ASX: APT) rival after the release of an update this morning.
That update revealed that Sezzle has built on its record first quarter performance with a strong start to the second quarter.
In the first quarter Sezzle delivered a 321% increase in underlying merchant sales to a record of US$119.4 million. This equates to an average of US$41.3 million per month according to the company's figures.
In April Sezzle smashed this average with record monthly underlying merchant sales of US$57.9 million. This represents a 40% increase on the average monthly sales it recorded in the first quarter.
Management notes that over 80% of Sezzle's categories have exhibited positive growth during COVID-19.
This has been driven partly by record monthly active customer and merchant additions. During April Sezzle added 114,400 active customers and 1,100 active merchants. The former compares to an average of 78,120 monthly active customer additions during the first quarter.
Other positives that caught my eye include its improving leading loss indicators, resilient merchant fees, and its positive net transaction margin trajectory.
Balance sheet strength.
Sezzle's balance sheet remains strong and leaves it well-positioned for future growth.
At the end of the period the company had US$36.6 million in cash and cash equivalents. It also has a US$100 million funding facility, with only US$25.7 million drawn down.
Today's update appears to show that the buy now pay later industry continues to grow in popularity despite the global pandemic. This could be good news for the likes of industry heavyweights Afterpay and Zip Co Ltd (ASX: Z1P).
