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Sezzle share price: Everything you need to know about the Q4

We examine the highlights from Sezzle’s latest quarterly report.

The Sezzle (SZL) share price has edged higher over the last two sessions following the release of a record set of quarterly (Q4) results on Tuesday, January 12.

These results highlighted another strong quarter for the company – with Sezzle’s underlying merchant sales, active customers and repeat usage statistics all rising during the fourth quarter.

Commenting on these results, Sezzle's Chairman and Chief Executive Officer Charlie Youakim said:

'We are extremely excited by the strong momentum in our business. In 4Q2020, each month we achieved net records for UMS, Active Consumers, Active Merchants, and Repeat Usage. December's UMS outpaced November's (unlike last year), even with Cyber Monday moving from December in 2019 to November this year.'

'Our large enterprise and international expansion efforts are paying dividends as evidence by our recent addition of GameStop and the growth rates we are experiencing in Canada and India that are exceeding the U.S.'

Below we look at some of the key things we learnt from Sezzle’s Q4:

On the top-line, Sezzle recorded record Underlying Merchant Sales (UMS; transaction volumes), reporting UMS of US$320.8 million during the fourth quarter, representing a year-over-year increase of 205.4%.

On a more granular level, average monthly UMS hit US$106.9 million in Q4 – ahead of the average monthly UMS of US$76.1 million record in Q3 2020.

Despite that jump in UMS, merchant fees, represented as an overall percentage of these transaction volumes fell to 5.4%, down from 5.5% yoy, in a shift the company attributed to 'the expansion into large enterprise'.

Looking at other growth metrics, Sezzle saw its active consumers more than double by the end of the fourth quarter, hitting 2.2 million; while Active Merchants reached 26,690 by the end of the quarter.

Yet maybe the company’s most important metric – repeat usage – also continued to show signs of improvement, with Sezzle saying that that consumer repeat usage came in at an impressive 89.8%. This metric, according to the company, is a ‘key driver to lower loss rates’.

Will a year of volatility continue

Ultimately, it’s been a volatile year for Sezzle. Investors seem disinterested in the stock during the first quarter of CY20 – before demand for the stock really flared. By August 2020 the stock had surged above $11 per share – currently representing the stock’s 52-week and all-time high.

Looking at its performance more broadly, SZL has pulled back since its August 2020 peak, but remains well up on a one year basis – up ~260% in that period.

Sezzle opened Wednesday’s session at $6.50 per share.

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