Sezzle (ASX:SZL) shares skyrocket 40% on quarterly update

July 29, 2022 12:05 PM AEST | By Sonal Goyal

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Image source: © Piter2121 | Megapixl.com

Key financial metrics for the 2QFY22

Image source: © Abdone | Megapixl.com

Underlying merchant sales (UMS) increased by 1.9% in a year to AU$617.3 million.
Total income increased by 6.8% to US$29.3 million year-over-year. Merchant fee income makes up 80% of the total revenue.
Active merchants grew by 19.0% YoY to 47,900.
Towards the culmination of given period, there were3.4 million active consumers.
For the 42nd consecutive month, the repeat usage has improved by 93.5%.
Sezzle Canada reported robust performance during the second quarter of FY22. Active merchants increased by 58% YoY, active consumers surged by 68.2% YoY, and UMS increased by 52.9% YoY.
As of 30 June, the company had US$63.3 million cash in hand.
In 2QFY22, the company delivered net operating cash outflows of US$1.7 million.

What major events took place during the June quarter?

In June 2022, the company launched a subscription service called Sezzle Premium. This product offers additional features and benefits to the customers in comparison to the company’s core product.

In July 2022, the company agreed to mutually terminate the proposed merger by Zip Co Limited (ASX:ZIP). On termination, Sezzle received US$11.0 million to cover the costs associated with the transaction.

Sezzle to accelerate its path of profitability. Here’s how.

According to today’s release, Sezzle has launched US$40 million in annualised revenue and cost-saving initiatives. Here’s the list of those initiatives.

Renegotiated rates or offboarded some merchants
Workforce reduction
Virtual card network improvement
Scaling back the Brazilian and European operations
Ending payment processing in India
Launched a paid subscription service
Decreasing third-party spend

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