Sezzle (NASDAQ:SEZL) shares dropped 23% in premarket trading to around $137.50 after the buy now, pay later provider reported second-quarter 2026 results that beat analyst expectations but warned that revenue growth is expected to slow during the second half of the year.
Although the company delivered record quarterly revenue and gross merchandise volume, investors focused on management’s more cautious outlook, triggering a sharp sell-off.
Revenue Beats Expectations but Growth Set to Moderate
Sezzle reported second-quarter revenue of $149.7 million, an increase of 51.7% from a year earlier and comfortably ahead of analyst forecasts of approximately $136 million.
Gross merchandise volume also reached a record $1.28 billion, representing year-over-year growth of 37.9%.
Despite those strong results, management said revenue growth is expected to ease to around 30% during the second half of 2026. The company also expects revenue yield, which benefited results in the second quarter, to return to a more typical level of roughly 11.4%.
Those comments overshadowed the otherwise strong quarterly performance.
Company Raises Full-Year Guidance
Sezzle increased its full-year 2026 outlook, forecasting revenue growth of 35%, adjusted net income of $185 million and earnings per share of $5.25.
Management also outlined several strategic initiatives, including plans to apply for a national bank charter during the third quarter and the introduction of new products, SezzleCash and Sezzle Send.
However, the company acknowledged that these initiatives are unlikely to make a meaningful financial contribution in the near term.
Valuation Concerns Amplify Market Reaction
The broader US market was broadly positive, with the S&P 500 edging 0.1% higher and the Nasdaq gaining around 0.5%, indicating that Sezzle’s decline was driven almost entirely by company-specific factors.
Investor caution had already been building ahead of the earnings release after analysts at Oppenheimer and Keefe Bruyette downgraded their recommendations in recent weeks, citing the stock’s elevated valuation following its strong rally.
With Sezzle having traded close to its 52-week high of $195.71 only weeks earlier, the premium valuation left little room for disappointment.
The combination of slowing growth expectations, normalising revenue yields and already elevated investor expectations outweighed the company’s earnings beat and higher full-year guidance, sending the shares sharply lower before the opening bell.
Sezzle stock price
