Strong Top-Line and GMV Growth
Gross merchandise volume (GMV) grew 37.3% year‑over‑year to ~$1.1B in Q1; total revenue grew 29.2% year‑over‑year. Q1 GMV nearly matched the Q4 holiday GMV of $1.2B, indicating strong demand and momentum.
Sezzle Inc.
· SEZL
May 6th, 2026
Summary
- Earnings Call Date:
- 2026-05-06
- Change Since:
- +85.15%
- Next Earnings Date:
- 2026-08-12
Earnings Call Sentiment
PositiveThe call highlighted strong top‑line and bottom‑line performance: GMV (+37.3%) and revenue (+29.2%) growth, record profitability (GAAP net income margin 37.9%, adjusted EBITDA margin 52.5%), subscriber and engagement gains, and raised full‑year guidance. Management is investing heavily in marketing and product innovation (Pay‑in‑5, mobile plan, virtual card) with disciplined unit economics, while embedding AI to scale operations. Key cautionary points include seasonal distortion of Q1 margins, a YoY revenue‑yield decline (−80 bps), potential for slightly higher provisions as new products and users scale, ongoing antitrust litigation and the uncertain, lengthy bank charter process. Overall, the positive operational momentum, guidance raise, liquidity strength and profitability materially outweigh the manageable risks and seasonal caveats.
Company Guidance
Sezzle raised full‑year 2026 guidance after a strong Q1: revenue growth guidance was lifted from 25% to a new range of 30%–35%, adjusted net income guidance was increased by $10M to $180M, and adjusted EPS guidance was raised to $5.10 (from $4.70). Management also reiterated targets of 55%–65% for total revenue less transaction‑related costs and a provision for credit losses of 2.5%–3.0% of GMV, said top‑line growth should outpace non‑transaction OpEx, noted a marketing payback of under six months that supports continued investment, and emphasized the guidance excludes projections for new products.
Exceptional Profitability and Margins
GAAP net income was $51.3M, representing a 37.9% profit margin; adjusted EBITDA was $71.1M, a 52.5% adjusted EBITDA margin. Gross margins reached 74% of total revenue in the quarter (seasonal note acknowledged).
Raised Full-Year Guidance
Company raised full‑year guidance: total revenue growth target increased to a new range of 30%–35% (from prior 25%), adjusted net income guidance increased by $10M to $180M, and adjusted EPS guidance raised to $5.10 from $4.70.
Improved Engagement and Subscriber Growth
Total subscribers increased by 44,000 to 714,000 (≈+6.6% sequentially), and average quarterly purchase frequency rose to 7.1x from 6.1x year‑over‑year (≈+16.4%), indicating stronger repeat usage and engagement.
Successful Product and Ecosystem Expansion
Launched/expanded multiple products: Pay‑in‑5, enhanced long‑term lending, virtual card in Canada (select merchants), and Sezzle Mobile plan (AT&T unlimited starting at $29.99 for Sezzle Anywhere members). Earn tab generated 4.8M visits and produced a 55% increase in BNPL conversion within 30 days of first activity.
Marketing Investment with Attractive Payback
Marketing spend more than doubled year‑over‑year, yet management reports a payback period of under 6 months and continued ability to scale spend where returns meet targets.
Unit Economics and Cost Leverage
Revenue less transaction‑related costs and other unit economics improved: transaction expense benefited from shift to ACH, provision for credit losses fell YoY, net interest expense low at 0.3% of GMV. Management exceeded a Rule of 40 score of 80 in Q1 and targets revenue‑less‑transaction margins of 55%–65%.
Strong Liquidity and Capital Actions
Ended quarter with $147.4M cash (including $26.9M restricted) and $69M availability on line of credit; repurchased $24.8M of common stock during the quarter.
AI Deployment Driving Efficiency
AI support chatbot resolving ~60%–70% of chats without escalation; AI being embedded across product development, support, BI and underwriting to increase output and operating leverage.
Operator
Good afternoon, and welcome to Sezzle's First Quarter 2026 Earnings Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Charles Youakim, CEO and Executive Chairman of Sezzle. Please go ahead.
Charles Youakim
Thank you, and good afternoon, and welcome to Sezzle's First Quarter 2026 Earnings Call. I'm Charles Youakim, CEO and Executive Chairman of Sezzle. I'm joined today by our CFO, Lee Brading, and my Co-Founder and Company President, Paul Paradis. In conjunction with this conference call, we filed our earnings announcement with the SEC and posted it along with our earnings presentation on our investor website at sezzle.com. To retrieve the documents, please go to the Investor Relations section of the website. Please be advised of the cautionary note on forward-looking statements and the reconciliation of GAAP to non-GAAP measures included in the presentation, which also covers our statements on today's call. Before diving into the quarter, I want to start by touching on the big picture for 2026. We believe it is going to be an exciting year for Sezzle.
2025 was about enhancing our current consumer ecosystem. We improved the app experience, expanded engagement features, leaned back into higher-value consumers and continue to give our users more reasons to come back to Sezzle. But in 2026, we are pushing that strategy further. We are moving beyond being a product consumers think about only at checkout. Our ambition is to serve our consumers more broadly in their everyday lives and in the way they manage everyday spending. T...
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