Sezzle Inc. (NASDAQ: SEZL, ASX:SZL) (
Sezzle or
Company) // Purpose-driven digital payment platform, Sezzle,
is pleased to provide the market with an update on key financial
metrics for the month ended 31 August 2023.[1]
“August has proven to be yet another testament
to the efficacy and success of our latest product offerings. The
continuous growth in our active subscriber base has a ripple
effect, fortifying our UMS, Total Income, and Net Income,” stated
Sezzle's Chairman and CEO, Charlie Youakim. “We are excited about
the upcoming holiday period in the fourth quarter, as we have the
right economic model for us and our customers.”
- Total Income increased to US$14.0 million (A$21.6 million[2])
in August 2023, representing a 44.3% YoY and 11.7% MoM increase.
Total Income as a percentage of Underlying Merchant Sales
(UMS) increased 188 bps YoY to 8.7%.
- In August 2023, Sezzle recorded GAAP Net Income and Adjusted
EBITDA (a non-GAAP measure) of $0.6 million and $2.4 million,
respectively.
- As of 31 August 2023, Sezzle had US$60.7 million in cash on
hand (US$2.8 million of which is restricted) and US$71.7 million
drawn from its US$100.0 million credit facility.
- As of 31 August 2023, notes receivable (net) and merchant
accounts payable amounted to US$100.6 million and US$66.7 million,
respectively. The merchant interest program represented US$51.7
million of the merchant accounts payable balance.
- As of 19 September 2023, active subscribers enrolled in Sezzle
Premium and Anywhere exceeded 210,000 subscribers.
- Average daily UMS is up approximately 2.6% in September 2023
(through 18 September) versus the prior comparable period in August
2023.
Refer to the attachments below for GAAP Net Income,
Non-GAAP Adjusted EBITDA, and the Reconciliation of GAAP to
Non-GAAP Measures.
Investors should be aware that generally
accepted accounting principles prescribe when a company may reserve
for particular risks, including litigation exposures. Accordingly,
results for a given reporting period could be significantly
affected if and when we establish reserves for one or more
contingencies. Also, our regular reserve reviews may result in
adjustments of varying magnitude as additional information
regarding claims activity becomes known. Reported results,
therefore, may be volatile in certain accounting periods.
This August business update has been approved by
the Company’s Executive Chairman and CEO, Charlie Youakim, on
behalf of the Sezzle Inc. Board.
Contact Information
Lee Brading, CFAInvestor Relations+1 651 240
6001InvestorRelations@sezzle.com |
Justin ClyneCompany Secretary+61 407 123
143jclyne@clynecorporate.com.au |
Erin ForanMedia Enquiries+1 651 403
2184erin.foran@sezzle.com |
About Sezzle Inc.
Sezzle is a fintech company on a mission to
financially empower the next generation. Sezzle’s payment platform
increases the purchasing power for millions of consumers by
offering interest-free installment plans at online stores and
select in-store locations. Sezzle’s transparent, inclusive, and
seamless payment option allows consumers to take control over their
spending, be more responsible, and gain access to financial
freedom.
For more information visit sezzle.com.
Forward Looking Statements
This press release contains forward-looking
statements within the meaning of Section 27A of the Securities Act,
and Section 21E of the Securities Exchange Act of 1934, as amended.
We have based these forward-looking statements largely on our
current expectations and projections about future events and
financial trends affecting the financial condition of our business.
Forward-looking statements include our expectations, whether stated
or implied, regarding our financing plans and other future
events.
Forward-looking statements generally can be
identified by the use of words such as "anticipate," "expect,"
"plan," "could," "may," "will," "believe," "estimate," "forecast,"
"goal," "project," and other words of similar meaning. These
forward-looking statements address various matters including
statements regarding the timing or nature of future operating or
financial performance or other events. Each forward-looking
statement contained in this press release is subject to risks and
uncertainties that could cause actual results to differ materially
from those expressed or implied by such statement. Applicable risks
and uncertainties include, among others: impact of the “buy-now,
pay-later” (“BNPL”) industry becoming subject to increased
regulatory scrutiny; impact of operating in a highly competitive
industry; our ability to remain listed on the Nasdaq Capital
Market; impact of macro-economic conditions on consumer spending;
our ability to increase our merchant network, our base of consumers
and underlying merchant sales (UMS); our ability to effectively
manage growth, sustain our growth rate and maintain our market
share; our ability to meet additional capital requirements; impact
of exposure to consumer bad debts and insolvency of merchants;
impact of the integration, support and prominent presentation of
our platform by our merchants; impact of any data security
breaches, cyberattacks, employee or other internal misconduct,
malware, phishing or ransomware, physical security breaches,
natural disasters, or similar disruptions; impact of key vendors or
merchants failing to comply with legal or regulatory requirements
or to provide various services that are important to our
operations; impact of the loss of key partners and merchant
relationships; impact of exchange rate fluctuations in the
international markets in which we operate; our ability to protect
our intellectual property rights; our ability to retain employees
and recruit additional employees; impact of the costs of complying
with various laws and regulations applicable to the BNPL industry
in the United States and Canada; and our ability to achieve our
public benefit purpose and maintain our B Corporation
certification. The Company cautions investors not to place
considerable reliance on the forward-looking statements contained
in this press release. You are encouraged to read the Company's
filings with the SEC, available at www.sec.gov, and the
Company’s market announcements with the ASX, available at
https://www.asx.com.au/, for a discussion of these and other risks
and uncertainties. The forward-looking statements in this press
release speak only as of the date of this document, and the Company
undertakes no obligation to update or revise any of these
statements. The Company's business is subject to substantial risks
and uncertainties, including those referenced above. Investors,
potential investors, and others should give careful consideration
to these risks and uncertainties.
Non-GAAP Financial MeasuresTo supplement
our operating results prepared in accordance with generally
accepted accounting principles in the United States (“GAAP”), we
present the following non-GAAP financial measures: Adjusted
earnings before taxes, depreciation, and amortization (“Adjusted
EBTDA”); and adjusted earnings before interest, taxes,
depreciation, and amortization (“Adjusted EBITDA”). Definitions of
these non-GAAP financial measures and summaries of the reasons why
management believes that the presentation of these non-GAAP
financial measures provide useful information to the Company and
investors are as follows:
- Adjusted EBTDA is defined as GAAP net income (loss), adjusted
for certain non-cash and non-recurring charges including
depreciation, amortization, equity and incentive–based
compensation, and merger-related costs as detailed in the
reconciliation table of GAAP net income (loss) to adjusted EBTDA.
We believe that this financial measure is a useful measure for
period-to-period comparison of our business by removing the effect
of certain non-cash and non-recurring charges that may not directly
correlate to the underlying performance of our business.
- Adjusted EBITDA is defined as GAAP net income (loss), adjusted
for certain non-cash and non-recurring charges including
depreciation, amortization, equity and incentive–based
compensation, and merger-related costs, as well as net interest
expense as detailed in the reconciliation table of GAAP net income
(loss) to adjusted EBITDA. We believe that this financial measure
is a useful measure for period-to-period comparison of our business
by removing the effect of certain non-cash and non-recurring
charges, as well as funding costs, that may not directly correlate
to the underlying performance of our business.
- Adjusted operating expense is defined as GAAP operating
expenses plus net interest expense; and less depreciation and
amortization, equity and incentive-based compensation, and other
non-recurring or non-cash charges as detailed in the reconciliation
table of adjusted operating expense to GAAP operating expense
above. We believe that adjusted operating expense is a useful
financial measure to both management and investors for evaluating
our operating performance without the impact of certain non-cash
and non-recurring charges that do not necessarily correlate to the
underlying performance of our business.
Additionally, we have included these non-GAAP
measures because they are key measures used by our management to
evaluate our operating performance, guide future operating plans,
and make strategic decisions, including those relating to operating
expenses and the allocation of resources. Therefore, we believe
these measures provide useful information to investors and other
users of this press release to understand and evaluate our
operating results in the same manner as our management and board of
directors. However, non-GAAP financial measures have limitations,
should be considered supplemental in nature, and are not meant as a
substitute for the related financial information prepared in
accordance with U.S. GAAP. These limitations include the
following:
- Adjusted EBTDA and adjusted EBITDA exclude certain recurring,
non-cash charges such as depreciation, amortization, and equity and
incentive–based compensation, which have been, and will continue to
be for the foreseeable future, recurring GAAP expenses. Further,
these non-GAAP financial measures exclude certain significant cash
inflows and outflows, such as merger-related costs (which are
comprised of legal fees in connection with our terminated proposed
merger with Zip Co Limited) and reimbursements for such
merger-related costs, which have a significant impact on our
working capital and cash.
- Adjusted EBITDA excludes net interest expense, which has a
significant impact on our GAAP net income, working capital, and
cash.
- Long-lived assets being depreciated or amortized may need to be
replaced in the future, and these non-GAAP financial measures do
not reflect the capital expenditures needed for such replacements,
or for any new capital expenditures or commitments.
- These non-GAAP financial measures do not reflect income taxes
that may represent a reduction in cash available to us.
- Non-GAAP measures do not reflect changes in, or cash
requirements for, our working capital needs.
--------------------------------------------------------------------------------
- Other companies, including companies in our industry, may
calculate the non-GAAP financial measures differently or not at
all, which reduces their usefulness as comparative measures.
Because of these limitations, you should not
consider these non-GAAP financial measures in isolation or as
substitutes for analysis of our financial results as reported under
GAAP, and these non-GAAP financial measures should be considered
alongside other financial performance measures, including net
income (loss) and other financial results presented in accordance
with GAAP. We encourage you to review the related GAAP financial
measures and the reconciliations of these non-GAAP financial
measures to their most directly comparable GAAP financial measures
and not rely on any single financial measure to evaluate our
business.
[1] Results are unaudited preliminary financial results.
[2] A$ to US$ exchange rate of $0.6470 as of 31 August
2023.
- Reconciliation of GAAP to Non-GAAP Measures
- GAAP Net Income and Non-GAAP Adjusted EBITDA
Erin Foran
Sezzle
6514032184
erin.foran@sezzle.com
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