Move over Zip Co Ltd (ASX: ZIP), another ASX buy now, pay later (BNPL) share has beat the former market darling to the profit pie.
All Ordinaries Index (ASX: XAO) constituent Sezzle Inc (ASX: SZL) has officially posted what could be the sector's first monthly profit.
Here's how the smaller ASX BNPL share has performed compared to Zip as of late. As the chart below shows, Sezzle stock has dumped a whopping 82% over the last 12 months.
While that might appear disastrous, it's a better performance than that posted by Zip shares. They've plunged 85% in that time.
For comparison, the All Ordinaries Index has slipped 4% since this time last year.
Let's take a look at today's news from the smaller ASX BNPL company.
Image source: Getty Images
Another ASX BNPL share beats Zip to profitability
It's been a big year for ASX BNPL shares. Former favourite Afterpay was taken off the market, all but one member of Humm Group Ltd (ASX: HUM)'s board stormed out, and Zip proposed then cancelled a plan to acquire Sezzle.
And with just eight trading days left on the year, the former takeover target has dropped another bombshell – its maiden monthly profit.
Sezzle posted US$200,000 of net income and US$1.5 million of adjusted earnings before tax, depreciation, and amortisation (EBTDA) for the month of November. That's up from respective average monthly losses of US$8.6 million and US$8.2 million in the fourth quarter of 2021.
"To say we are excited is an understatement," said Sezzle chair and CEO Charlie Youakim, continuing:
[T]his puts us in a strong position entering 2023.
We believe we are the first in our segment to reach profitability, but one month does not make a trend. Our goal for 2023 is to achieve positive net income and Adjusted EBTDA.
The smaller BNPL provider's total income came to $19.9 million in November – leaving its total income as a percentage of underlying merchant sales at a record 8.1%.
The Zip share price lifted 1.6% in late October on the back of the larger BNPL company's latest earnings. Its revenue reached $163.2 million over the three months ended 30 September – up 19% quarter-on-quarter.
Zip CEO Larry Diamond also recently told investors the company is expecting to operate in the EBTDA cash flow green by the first half of financial year 2024.
