BNPL

Sezzle growth fizzles to 6.2% as net losses double in the March quarter

Tue 17 May 22, 1:26pm (AEST)
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Key Points

  • Sezzle revenues rose just 6.2% to US$27.6m in the March quarter
  • Sezzle continued to ramp up expenses, more than doubling its net loss to -US$28m
  • Will the Zip proceed with its Sezzle merger after such abysmal results?

Sezzle (ASX: SZL) seems to be a shell of its former self, delivering just 6.2% revenue growth to US$27.6m in the March quarter.

The weak top-line figure was the least of its worries.

The US-based BNPL hopeful continued to ramp up operating expenses, burning through cash as if interest rates were back at zero.

Expenses across the board jumped significantly, notably:

  • Transaction expenses: US$11.8m, up 32%

  • Marketing and advertising: US$5.3, up 248%

  • General and admin: US$7.7m, up 225%

  • Provision for uncollectible accounts: US$10.5m, up 22%

From an operational standpoint:

  • Underlying merchant sales of US$450.5m, up 20.1%

  • Active merchants of 49,000, up 44%

  • Active customers of 3.46m, up 33%

For the March quarter, Sezzle reported a net loss of -US$28m compared to -US$11.4m a year ago.

A going concern

Management said that the implementation of cost saving plans and proceeds from line of credits will allow the company to remain solvent through to at least May 16, 2023.

Among the company cost saving initiatives, management said it was exploring scaling back its international operations to further reduce future expenses.

Zip merger

The merger agreement between Zip (ASX: ZIP) and Sezzle is still in place. Though, subject to both Sezzle and Zip shareholder approval.

The proposed transaction will offer Sezzle shareholders 0.98 Zip shares for every Sezzle stock owned.

2022-05-17 12 41 31-Window
Sezzle 12-month price chart

 

Written By

Kerry Sun

Finance Writer & Social Media

Kerry holds a Bachelor of Commerce from Monash University. He is an avid swing trader, focused on technical set ups and breakouts. Outside of writing and trading, Kerry is a big UFC fan, loves poker and training Muay Thai. Connect via LinkedIn or email.

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