Sezzle (ASX:SZL) reduces cash burn to US$1.8M in July 2022; shares zoom

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Highlights:

  • In the month ended 30 July 2022, Sezzle has recorded 9.5% rise in its underlying Merchant Sales.
  • Also, July cash burn has reduced to US$1.8 million due to some special initiatives taken by the company.
  • Sezzle shares have been reacting positively to the update, have gained more than 22% as of 10:45 AM AEST.  

Fintech giant, Sezzle Inc. (ASX:SZL), on Thursday (18 August 2022), shared its July 2022 update. Claiming to close the gap to profitability, Sezzle stated that the ‘Total Income Less Transaction Related Costs Less Adjusted Operating Expenses’, also known as ‘cash burn’, reduced to US$1.8 million or AU$2.6 million in the given period (for the month ended 31 July 2022).

Post the update, shares of Sezzle lightened up the ASX charts as they zoomed up 22.758% to trade at AU$0.890 apiece at 10:45 AM AEST.

Key takeaways from July 2022 business update

  • Underlying Merchant Sales (UMS) for July 2022 increased 9.5% MoM (month on month) to US$141.2 million or AU$202.1 million.
  • Total Income growing 4.0% MoM to US$10.2 million or AU$14.5 million.
  • The Company’s current initiatives, expected to generate US$40.0 million in annualised revenue and cost savings, continue to help drive the Company towards positive free cash flow and profitability. The initiatives include: Offboarding/ renegotiating rates with merchants and network partners; reducing workforce; scaling back efforts in Europe and Brazil; ceasing payment processing in India; reducing third-party spend, and launching the Sezzle Premium subscription product. As a result of these initiatives, July cash burn came down to US$1.8 million.
  • Consumer adoption and usage of Sezzle Premium (launched in June 2022) remains strong with 64,000 subscribers as of 16 August 2022.
  • Sezzle is preparing the launch of a Convenience Fee for U.S. consumers who will be using debit or credit card for installment payments.

 

Sezzle’s share price movement in recent times:

The purpose-driven installment payment platform has been on investors' radar throughout the year. On ASX, Sezzle shares have skyrocketed 321.43% in last one month. However, in last six months, the value has depreciated by 52.16%. In last one year, the stock has fallen 86.69% and on year-to-date basis, the stock came down 71% (as of 10:59 AM AEST, 18 August 2022).


 


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