CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure. CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure.

Sezzle VS Openpay share price: 2020 earnings compared

We compare the first-half and full-year earnings results from two of Australia’s most prominent buy now pay later companies: Sezzle and Openpay.

BNPL stocks continue to trend higher

With all of Australia’s most important buy now pay later (BNPL) companies having now reported their full or half-year results, we compare the first-half (H1) and full-year (FY20) earnings figures from Sezzle (SZL) and Openpay (OPY)

Overall, investors and traders have remained bullish on ASX-listed BNPL stocks over the last month, bidding their shares up significantly in that period, despite a variety of headwinds facing economies across the globe. Indeed, since 28 July, Zip has seen its share price surge 44%, OpenPay has seen its stock rise 27%, Afterpay has gained 29% and Sezzle has skyrocketed 53%.

Openpay share price dips on FY20 release

As has come to be the norm from the sector, Openpay delivered strong growth across all its operational metrics in FY20, with active customers, merchants and total transaction volumes all increasing significantly.

Despite that, its share price fell at the open, last trading down 4.46%.

Looking at these results, in FY20 Openpay reported:

  • Total transaction values (TTV) of $192.8 million, up 98%
  • Revenue of $18.0 million, up 64%
  • A full-year earnings (EBITDA) loss of $30.1 million
  • Net transaction margin of 2.5%
  • Active customers of 109 thousand and active merchants of 2,162

'Looking forward, we expect continued momentum and rapid evolution of out BNPL business, enable by our “Buy now. Pay smarter.” Approach,’ Openpay’s CEO Michael Eidel, said.

Growth across the board, but Sezzle share price falls ~5% on H1 report

Like Openpay, over the last eight months, the North American and Canadian focused BNPL company Sezzle has seen its share price surge, with the stock up a staggering 585% in that period. Also like Openpay, Sezzle was bid lower in response to its latest earnings release, last trading down ~8%.

Despite that share price weakness, Sezzle also delivered a phenomenal operational performance over the first six months of fiscal 2020 – recording triple digit merchant sales growth.

Looking at these results, for the six months ending 30 June, Sezzle reported:

  • Underlying merchant sales (UMS) of $445.2 million, up 338%
  • Total income of $30.1 million, up 384%
  • A net transaction margin of 1.7%
  • Active consumers of 1,475,235 and active merchants of 16,112

Elsewhere, the company continues to witness increased levels of engagement from its customer base – noting that repeat usage hit 87.5% for the half ending 30 June, up from 77.2% in June 2019.

'The gains in repeat usage and frequency of purchases by cohort are key drivers to lower loss rates and greater net transaction margin,' said Sezzle's CEO Charlie Youakim. 'We are excited about the brand loyalty that is building, with subsequent cohorts outpacing previous cohorts at similar points in time.'

Looking forward, management reiterated their previously provided guidance of achieving FY20 annualized run rate underlying merchant sales of $1.0 billion.

What are your thoughts on Openpay and Sezzle...

Are you bullish or bearish on the BNPL sector? Whatever your view, you can use CFDs to trade both rising and falling markets, through IG’s world-class trading platform now.

For example, to buy (long) or sell (short) Sezzle using CFDs, follow these easy steps:

  1. Create an IG Trading Account or log in to your existing account
  2. Enter ‘Sezzle’ in the search bar and select it
  3. Choose your position size
  4. Click on ‘buy’ or ‘sell’ in the deal ticket
  5. Confirm the trade

This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

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