Sezzle Inc. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total Revenue grew 42.6% YoY to a record $166.5 million, outpacing Total Transaction Volume (TTV) growth by 7.7 percentage points.
• TTV reached $1.4 billion, representing 34.9% YoY growth.
• Net Income increased 79.3% YoY to $47.8 million ($1.38 per diluted share), up 84.0% from $0.75 per share in the prior year period.
• Adjusted Net Income rose 89.9% YoY to $47.7 million, with Adjusted Net Income per diluted share increasing 95.7% to $1.37.
• Adjusted EBITDA climbed 77.1% YoY to $70.2 million, with an Adjusted EBITDA Margin of 42.1%.
• Operating Income grew 80.7% YoY to $64.3 million, with an Operating Margin of 38.6%.
• Total Operating Expenses increased 25.9% YoY to $102.3 million, representing 61.4% of Total Revenue.
• Transaction Related Costs decreased 1.0 percentage point YoY to 4.2% of TTV ($58.8 million), driven by a Provision for Credit Losses of 2.7% of TTV, Transaction Expense of 1.3% of TTV, and Net Interest Expense of 0.2% of TTV.
• Non-Transaction Related Operating Expenses rose 46.2% YoY to $46.2 million.
• Cash, cash equivalents, and restricted cash totaled $107.9 million as of September 30, 2026, with $37.7 million restricted.
• Outstanding debt on the $300.0 million credit facility was $104.0 million.
• Deferred revenue increased to $7.66 million from $5.43 million in the prior year period.

Guidance and Future Outlook:

• Raised FY2026 guidance to approximately 42.5% Total Revenue growth, $190.0 million Adjusted Net Income (48.8% YoY growth), and $5.45–$5.50 Adjusted Net Income per diluted share.
• Introduced preliminary FY2027 guidance for Adjusted Net Income per diluted share of $7.20, representing 30.9%–32.1% growth over FY2026 guidance.
• Targeted FY2026 Provision for Credit Losses is now approximately 2.5% of TTV, down from a prior target range of 2.5%–3.0%.

Business Segments and Product Lines:

• Active Subscribers grew 68.1% YoY to 955,000.
• SezzleCash completed its first full quarter with encouraging traction; over 15% of SezzleCash-eligible new Anywhere Subscribers made their first transaction through SezzleCash, and over 60% of those subsequently shopped with Sezzle at checkout.
• Sezzle Send launched in beta during Q3 2026 and rolled out to all users in October.
• Sezzle Up (credit reporting program) saw average weekly enrollments approximately double in the 30 days following September enhancements.
• Sezzle Anywhere soft-launched in Canada subsequent to quarter end, featuring Canada's only BNPL virtual card.
• Average quarterly transaction frequency reached a company high of 7.8x, up from 6.5x in the prior comparable period.

Market and Competitive Landscape:

• No specific market share data or direct competitor comparisons were provided in the press release.

Risks and Challenges:

• Corporate Strategic Project Costs were $2.4 million, reflecting professional services for an antitrust suit and national bank charter application.
• Forward-looking statements note risks including potential delays or denial of the national bank charter application, increased regulatory scrutiny of the BNPL industry, macro-economic conditions affecting consumer spending, and reliance on originating bank partners.

Management Commentary and Tone:

• CEO Charlie Youakim stated the company is entering the holiday season with Subscribers approaching one million and transaction frequency at a company high.
• Management expressed confidence in SezzleCash results, noting it brings new Subscribers onto the platform who subsequently shop with Anywhere at checkout.
• Management highlighted raising FY2026 guidance for the fourth time.

Other Key Points:

• In October 2026, Sezzle filed an application with the Office of the Comptroller of the Currency to establish Sezzle Bank, N.A., and applied to the FDIC for federal deposit insurance.
• Sezzle entered into a retention arrangement with WebBank to originate and hold eligible SezzleCash and Sezzle Send loans off the balance sheet while Sezzle services the loans.
• Sezzle repurchased common stock for $39.36 million during the nine months ended September 30, 2026.
• Management will participate in upcoming investor events including Citi's 15th Annual FinTech Conference (Nov 10), KBW Fintech Ecosystem Conference (Nov 11), TD Cowen 2026 Financials & Fintech Conference (Nov 17), and Needham Midwest Non-Deal Roadshow (Dec 9).