Sezzle posts strong quarterly results despite slowed US economy

North American payment platform Sezzle (ASX: SZL) has posted a trajectory of solid growth across key operating metrics for the quarter ended 31 March, despite the global impacts of COVID-19.

The company’s underlying merchant sales surged to a record US$119.4 million while the number of active merchants grew by 27% on the previous quarter to 12,715.

The number of customers actively using the platform also jumped more than 25% on the previous quarter to sit at just over 1.1 million.

Chief executive officer and co-founder Charlie Youakim said Sezzle had been fortunate to experience minimal impact from the pandemic.

“Our record results throughout the first quarter show that our company has continued to thrive,”​ he said.

“C​onsumers are looking for a smarter way to budget and merchants are looking to add more flexible payment options to drive sales.”

Online shopping

Despite a slowed US economy in the March quarter, consumers and retailers have turned to online shopping, positioning Sezzle as a key partner for merchants looking to offer more flexible payment options.

“​Concerns surrounding coronavirus in the US and Canada have led to work-from-home and shelter-in-place orders and resulted in a shift away from traditional in-store shopping to eCommerce,” Mr Youakim said.

“End customers continue to utilise our payment product to budget through difficult conditions and we have not seen any impacts to credit quality or repayments.”

Sezzle continues to monitor its leading indicators and has taken proactive measures to protect against potential increases in loss rates.

US tax credits

The US government’s recently-signed Coronavirus Aid, Relief and Economic Security Act is anticipated to assist Sezzle, its merchant partners and end customers by allowing them to borrow forgivable loans at favourable, low-interest rates; and enable additional refundable tax credits for consumers based on their household income.

Given the demographic profile of Sezzle’s consumer base, Mr Youakim said many active users will be eligible for these credits – for example, individuals with adjusted gross income up to US$75,000 will receive the full payment of US$1200.

“O​ur financial position remains strong, giving us the runway to weather protracted effects from the global pandemic,” he said.

“​We have taken deliberate steps to streamline our business operations by doing even more with less and we have ample liquidity to support our growing business operations.”

At midday, shares in Sezzle were trading 18.64% higher at $1.305.