How did Sezzle (ASX:SZL) perform in December quarter?

 

Summary

  • The underlying merchant sales (UMS) for the quarter shot up by a massive 205.4 per cent YoY to US$320.8 million.
  • During the reported quarter, the cash receipts from the customers stood at US$284.3 million, up by 36.1 per cent over the previous quarter.
  • The stock has given a sharp rally from the beginning of the year, delivering a good return of over 30 per cent.

On 29 January 2021, Sezzle Inc. (ASX:SZL) has released an update regarding its business operations and cash flows for the quarter ended 31 December 2020. The underlying merchant sales (UMS) for the quarter shot up by a massive 205.4 per cent YoY to US$320.8 million, achieving an annualized run rate of US$1.36 billion. The average monthly UMS also increased to US$106.9 million compared to US$76.1 million in the previous quarter.

Image source: Sezzle’s ASX update, dated 29 January 2021

The merchant fee as a percentage of UMS was reported down by 0.1 per cent at 5.4 per cent, compared to 5.5 per cent in the previous quarter. This reflects the company’s expansion into a large enterprise. The number of active merchants grew by 166.6 per cent YoY to 26,690.

The company has achieved a milestone as the total number of signed up customers on the platform surpassed 5 million mark. The number of active customers reached 2.2 million mark during the reported quarter, which is a mammoth growth of 143.9 per cent YoY. The customer profile also improved as the active customers' repeat usage grew by 89.8 per cent, helping to lower the loss rates.

Read More: Sezzle Teams Up With Ally Lending

 

Cash Flow Update

As of 31 December 2020, the company reported total cash of US$89.1 million in the books which had US$84.3 million of cash and cash equivalents and the remaining US$4.8 million was restricted cash. The net cash reported was down by US$28.8 million as the company used a total of US$22.2 million for the operating activities. A further US$6.4 million was used in financing activities.

 

During the reported quarter, the cash receipts from customers stood at US$284.3 million, up by 36.1 per cent over the previous quarter. This was consistent with the US$285.3 million of cash payments made to the merchants.

Image source: Sezzle’s ASX update, dated 29 January 2021

The company spent a total of US$7.7 million on the product manufacturing and operating cost during the quarter, which was up by US$1.7 million from US$6 million spent in the previous quarter.

The cost incurred towards research and development stood at US$2.5 million, compared to US$2 million in Q3 FY20. The increase in the spending is attributable to integration and onboarding of large e-commerce platforms and enterprise merchants.

Read More: Sezzle Completes Capital Raising of A$79.1 million to Accelerate its Growth, Stock up ~20%

Stock Performance

On Friday, Sezzle’s share price fell by 2.54 per cent and closed the session at A$8.06. The stock has given a sharp rally from the beginning of the year, delivering a good return of over 30 per cent, within a month.     

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