The Sezzle Inc (ASX: SZL) share price is in focus after the buy now, pay later business revealed its 2021 third quarter.
Sezzle’s 2021 third quarter
It said that underlying merchant sales (UMS) for the third quarter was US$460.7 million. That was an increase of 101.9% year on year and 12% quarter on quarter.
The total income for the third quarter went up 78.9% year on year to US$28.5 million.
Active merchants rose by 112.5% year on year to 44,400. This was a rise of 10.2% quarter on quarter. BigCommerce chose Sezzle as its preferred buy now, pay later partner. Sezzle also launched Sezzle Capital for merchants through its partnership with Wayflyer.
Active customers grew by 77.9% year on year and 10.7% quarter on quarter to 3.2 million. The top 10% of Sezzle users transacted an average of 49 times on average over the trailing 12 months to 30 September 2021.
Repeat usage continued to increase, rising for the 33rd consecutive month to 92.3%.
In-store UMS represented more than 5% of UMS in the quarter. Management said that this shows the opportunity of how Sezzle can be used both in-store and online (omnichannel).
Sezzle also said that it’s making progress in Canada and Europe. Canada now has 3,000 active merchants with a annual run rate of US$100 million of UMS. Europe is still in very early stages.
The buy now, pay later business also said that it significantly lowered its provision for uncollectable debts as it declined over 100 basis points (1.00%), going from 3.4% to 2.3% over the quarter.
Management comments
Sezzle CEO and Executive Chairman Charlie Youakim said:
“We are excited to report the 2021 third quarter results that reflect new highs, while concurrently making substantial progress in our receivable loss rates. We are also enthusiastic about the recent agreement with Alliance Data’s Bread, which brings another well-known partner to our long-term lending product.”
Summary thoughts on Sezzle and the share price
The business is still going at a strong rate and it’s good to see that the bad debt rate is coming down. I’m not sure if it’s a buy today or not because of the amount of competition there is in the sector. However, it continues to grow at a fast pace, which may be the important thing at the moment.
