I hold a position in Sezzle and, after seeing the market reaction to the results, I wanted to take a step back and look at the business rather than just the share price.
A nearly 20% drop obviously hurts, especially after such a strong run, but looking at the actual numbers, I don’t see a business that is deteriorating.
Revenue grew 51.7% YoY to $149.7M, beating expectations. Adjusted EPS came in at $1.13 versus $1.03 expected, net income increased almost 48%, GMV grew 37.9% and active subscribers jumped 76% to 854k.
The company also raised its 2026 guidance again, now expecting $185M of adjusted net income and $5.25 adjusted EPS.
So why the sell off?
For me, this is mainly about expectations. After a stock has gained more than 180% in a year, investors are no longer satisfied with very good results. They want exceptional results and a much bigger increase in guidance.
What keeps me interested is what is happening underneath the headline numbers.
Sezzle is slowly becoming much more than a traditional BNPL company. Pay in 5, Sezzle Mobile, deposit accounts, cash management and longer term lending are all part of a strategy to make Sezzle a much bigger part of its customers’ everyday financial lives.
I particularly like the engagement side of the story. More subscribers, more usage, higher purchase frequency and better customer data can create a very powerful flywheel.
The company is also investing heavily in marketing while maintaining a target payback period of less than six months. At the same time, credit performance remains strong and management continues to invest in underwriting, machine learning and AI.
Of course there are risks. The valuation is still not cheap, credit losses need to be monitored, margins will probably normalize from the unusually strong levels we have seen and growth is expected to slow somewhat in the second half of the year.
But I don’t see anything in these results that fundamentally changes my thesis.
I believe Sezzle has the potential to become a genuine fintech platform rather than simply another BNPL provider.
The interesting part is that the current guidance doesn’t even assume a meaningful contribution from several of the new products still being developed.
So yes, the correction hurts. But I haven’t changed my view of the business because the stock dropped 20%.
For me, the question isn’t whether Sezzle can grow. The numbers already show that it can.
The real question is how big this platform can become while maintaining these economics.