The Sezzle Inc (ASX: SZL) share price is on watch after unveiling a huge March quarter with a record performance.
Sezzle’s March 2021 quarter
The buy now, pay later business reported that its underlying merchant sales (UMS) soared higher by 214.1% to US$375.1 million year on year. This was 16.9% quarter on quarter growth. March’s UMS beat December’s total by 30%.
Sezzle’s income as a percentage of UMS remained steady at 5.9%. Sezzle’s income jumped 216.2% to US$29.2 million. Seeing revenue grow is the most important business growth statistic at this stage, in my opinion.
Active consumers grew by 126.6% year on year to 2.6 million. It added around 400,000 active consumers during the quarter. This is a key part for delivering future growth of the Sezzle share price.
Sezzle said that its consumer profile continued to improve as active consumer repeat usage grew to 90.7%. Incredibly, that’s the 27th consecutive month of improvement. The top 10% of Sezzle consumer spenders, on average, now transact 49 times a year.
Active merchants rose by 167.5% to 34,000. It added 7,300 active merchants in the quarter, the largest quarterly increase in the company’s history.
Another highlight from the update was that it received B Corp certification status. It has joined innovative leaders across the world intent on advancing environmental, social and economic causes.
With the launch of Sezzle Up in the fourth quarter of 2020, the company has experienced a positive shift in payments toward ACH (Automated Clearing House) as a payment processing method.
In the first quarter of 2020, less than 3% of payment dollar volume was processed through ACH. In the first quarter of 2021, over 15% of dollar volume was through ACH. The company estimates that ACH payment processing fees are approximately 150 basis points lower than traditional forms of payment.
Management comments
Sezzle Executive Chairman and CEO Charlie Youakim said: “The strong momentum we ended 2020 with has continued in to 2021. Our 1Q results set new company highs in UMS, active consumers, active merchants, and repeat usage. Our monthly UMS in March 2021 was 30% greater than December 2020.
“We are also excited about our efforts to attract larger merchant enterprises as evidenced by our recent additions of Market America Global and Lamps Plus.”
Summary thoughts on the Sezzle share price
Sezzle is seeing very strong growth right now. It’s hard to say whether it will continue for the longer term or whether it’s just a short term boost.
It’s one of my preferred buy now, pay later providers. It’s doing very well in the huge market of the US. I’m not sure what the margins will be in the future though, so I’m cautious about buying at this level.
There are other ASX growth shares that I’m also keeping my eyes on.
