Sezzle (SEZL -2.25%), a financial technology provider specializing in buy now, pay later (BNPL) payment solutions, reported its earnings for the second quarter of fiscal 2025 on August 7, 2025. The latest results showed sustained top-line momentum and exceeded analyst expectations, with GAAP revenue of $98.7 million versus $94.93 million expected and non-GAAP earnings per share (EPS) of $0.69 compared to the $0.58 estimate. These figures represent sharp increases from the prior-year quarter. The company’s period was marked by robust consumer engagement and marked gains in operating leverage, though also by a doubling of the provision for credit losses (GAAP) compared to the prior year. Overall, Sezzle delivered a quarter of strong growth supported by heavy investment in new customers and product features with continued signals of aggressive expansion.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS – Diluted (Non-GAAP) | $0.69 | $0.58 | $0.35 | 97.1 % |
| Revenue | $98.7 million | $94.93 million | N/A | N/A |
| Operating Income | $36.1 million | $16.7 million | 116.1 % | |
| Adjusted EBITDA | $37.9 million | $18.4 million | 106.0 % | |
| Net Income | $27.6 million | $29.7 million | -7.1 % |
Source: Analyst estimates for the quarter provided by FactSet.
About Sezzle’s Business and Recent Focus
Sezzle provides digital payment solutions, enabling consumers to split purchases into smaller installments when shopping at participating online and in-store merchants. Its model appeals to younger generations seeking financial flexibility. The company earns revenue from processing fees charged to merchants, subscriptions like Sezzle Premium, and certain consumer fees, though it regularly waives some fees to enhance customer experience.
In the current period, its focus shifted toward innovation and scale. New product features, enhanced marketing, and deepening consumer engagement were central themes. Key success factors included maintaining a steady merchant base, managing credit losses, deploying new platform features, and driving user subscription growth.
Quarter in Review: Key Developments, Numbers, and Drivers
During the quarter, Sezzle set a new record for gross merchandise volume (GMV), with consumers spending $927.0 million through its platform, a 74.2% jump year-over-year. This increase supported a substantial rise in total revenue (GAAP), which grew 76.4%. Monthly On-Demand & Subscribers (MODS), representing subscribers to on-demand and premium payment services, reached 748,000 at period-end, up from 658,000 in the previous quarter.
User engagement metrics showed notable strength. Consumers averaged 6.1 purchases, compared with 4.8 in the prior year. The company’s core take rate, or revenue as a percentage of GMV, held steady at 10.6%. This means it managed to convert a stable portion of transaction volume into revenue even as overall volume increased rapidly.
Operating income (GAAP) more than doubled compared to last year, rising to $36.1 million. This boost in profitability came despite a sharp rise in operating expenses, led by an eightfold escalation in marketing outlays from $1.0 million to $8.8 million. The company’s operating margin expanded nearly seven percentage points to 36.6%. Adjusted EBITDA, a profitability metric that excludes interest, taxes, and one-time items, more than doubled as well, reaching $37.9 million.
Credit risk management emerged as a differentiator and potential pressure point. The provision for credit losses (GAAP) grew to $20.65 million, more than twice the prior-year level. This increase reflected a deliberate strategy to accelerate growth by widening access, even at the cost of higher risk expenses. At the same time, Transaction-related costs as a percentage of GMV narrowed slightly, aided by better payment processing and more widespread adoption of Automated Clearing House (ACH) payments.
The company continued to roll out new product features in an effort to boost consumer engagement. Recent additions included On-Demand payment options, Express Checkout, a browser extension, and Sezzle Balance, a product that lets consumers track their available funds. Its consumer Net Promoter Score (NPS), which measures willingness to recommend the product, was reported at 75 for the 30 days ended June 30, 2025, indicating strong advocacy. It also conducted a 6-for-1 stock split and repurchased $23.5 million in shares. No dividend was paid or declared.
Looking Ahead: Guidance and Priorities
For the full year, management projected total revenue growth between 60% and 65%, with adjusted net income expected to reach $120.0 million, or $3.25 per diluted share. Adjusted EBITDA is forecast in the $170–$175 million range. The company said it estimates a tax rate of about 25% for the second half, subject to discrete items. These projections, if met, would represent another year of brisk expansion and improving profitability.
Investors will want to watch for trends related to credit loss expenses and whether increases in marketing spending translate into durable subscriber and engagement growth. As the Buy Now, Pay Later landscape faces increased scrutiny from regulators—something Sezzle acknowledges in its filings—scrutiny over underwriting standards and risk may grow. The company remains a Public Benefit Corporation but Sezzle chose not to seek B Corp recertification, a signal of evolving sustainability and branding priorities. SEZL does not currently pay a dividend.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
