Sezzle share price rises as 214,611 users added in Q3

The Sezzle (ASX: SZL) share price rose just a shade today, even after the young buy now pay later (BNPL) company posted stellar Q3 results.

Here, all of Sezzle’s key metrics improved, with active customers, active merchants and merchant fees all getting a boost; Q4 guidance also appears upbeat.

The explanation for today’s flat start (and slightly less flat afternoon) is relatively simple mind you; the market had already run the company’s stock up during the prior day’s session: with Sezzle’s share price gaining just over 10% between Thursday and Friday last week.

Sezzle share price: Q3 at a glance

The correlation between customer and merchant growth cannot be understated in the BNPL space. In Australia, walk through any shopping centre and you’ll invariably see an appeal to Afterpay your next purchase. Lay buy has gone the way of the dodo.

And while Sezzle (ASX: SZL) doesn’t have a prominent presence in Australia, as the third quarter results today showed: it has grown its merchant foot-prints in its most developed geographies (US and Canada) significantly.

Active Merchants reached 7,507 in the third quarter for example, up from 5,048 in Q2. On a quarter-over-quarter basis, this represents an increase of 48.7%.

Active customers using Sezzle's platform also surged in Q3 – increasing by more than 200,000 to reach 644,509.

That figure, as the company was keen to point out: means that more than 2,300 customers were added per day during Q3.

As a consequence of all this, merchant fees rose in step with Sezzle’s fast growing user and merchant base – jumping 68.9% during the quarter – to hit US$3.6 million.

Speaking of these results, Sezzle’s Executive Chairman and CEO, Charlie Youakim said:

'The September Quarter represents our first quarter as a listed company, and we are very pleased to report ongoing strong results. The Company's operational metrics grew circa 50% quarter-on-quarter, while the key financial metrics continued to show marked improvement.'

The Visa partnership

Though previously announced, Sezzle’s management also used today’s Q3 release to remind the market of the company’s recent parternship with Visa’s CyberSource platform.

Here the company noted that, ‘over 400,000 businesses use CyberSource solutions and Sezzle's payment solution is now available to CyberSource users worldwide.’

The outlook for the next quarter?

By the looks of things, Sezzle has started the fourth quarter well, with management suggesting strong momentum across its key operational metrics. Specifically, it was noted that:

'Early indications of momentum in Q4 without core North American markets are strongly positive and the Company expects to see continued strong growth in its key operating metrics in the current Quarter.'

Positive yes: but evidently not positive enough for the market to boost the stock up that much higher today. Ultimately, it will be interesting to see how investors digest these results in the coming few weeks.

At the time of writing, the Sezzle (ASX: SZL) share price sits at A$2.71 – up 1.50% since the open.

For those who got in at Sezzle’s IPO price of A$1.22 per share, they are likely relatively pleased with their investment at this point.

Who said 2019 was a bad year for IPOs!

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