Key points
- Sezzle delivered strong growth during the fourth quarter
- Customer and merchant numbers continue to rise
- Key merchant additions expected to boost its performance in FY 2022
The Sezzle Inc (ASX: SZL) share price is on the move on Monday morning following the release of its fourth quarter update.
In early trade, the buy now pay later (BNPL) provider's shares are up 2% to $2.39.
Sezzle share price rises on strong Q4 growth
- Underlying merchant sales (UMS) up 74.9% to US$561 million (A$772.2 million)
- Fourth quarter total income grew 49.1% to US$32.9 million
- Total income to UMS margin of 5.9%
- Active merchants rose 76% year on year and 5.8% quarter on quarter to 47,000
- Active consumers reached 3.4 million at year end, up 51.5% year on year and 6.5% quarter on quarter
- IKEA signs up in USA and Canada
What happened in the fourth quarter?
For the three months ended 31 December, Sezzle's UMS grew 74.9% over the prior corresponding period and 21.8% quarter on quarter to US$561 million (A$772.2 million).
A key driver of this strong growth was its performance during the key holiday period. For the four-day period of Black Friday through to Cyber Monday, Sezzle's UMS rose 53% year on year. This reflects instore growth of 783% and online growth of 46%.
Also supporting its growth were further rises in its customer and merchant numbers. Active customers rose 51.5% to 3.4 million year on year and active merchants rose 76% year on year to 47,000. Among those merchants is IKEA in the US and Canada after the retail giant selected Sezzle as its preferred BNPL partner in these markets.
While the company reported a slight contraction in its total income to UMS margin to 5.9%, Sezzle still delivered strong total income growth of 49.1% to US$32.9 million. Positively, as a percentage of UMS, the provision for uncollectible accounts receivable and transaction expense remains flat year on year.
At the end of the period, Sezzle had total cash on hand of US$78.9 million.
Management commentary
Sezzle's Executive Chairman and CEO, Charlie Youakim, was pleased with the quarter.
He commented: "Our 4Q21 results demonstrate our strong secular growth, as we reached new highs in UMS, Active Merchants, and Active Consumers. We are also enthusiastic about our in-store growth reflecting the significant opportunity to be more than just an online option for consumers."
No further updates were given on its potential merger with Zip Co Ltd (ASX: Z1P).
