Sezzle's Q1 Revenues Skyrocket 123%: What's Behind This Outcome?

Sezzle SEZL reported an astounding 123.3% year-over-year upsurge in the top line in the first quarter of 2025 to $104.9 million, marking a new quarterly high.

A surge in transaction volume, evidenced by a 64.1% year-over-year jump in the gross merchandise volume (GMV), led to the top-line growth. The transaction volume growth was dictated by higher engagement from its user base. Recently launched products, including price comparison and the Pay-in-5 option, have improved customer engagement.

One of the most prominent top-line drivers was the rise in annual consumer purchase frequency. It increased to 6.1 times in the first quarter of 2025 from the year-ago quarter’s 4.5 times. This hints at the existing users utilizing SEZL’s platform more often for purchases, leading to higher transactions that translate into greater revenues. 

Merchant network expansion benefited the top line as well. Notable partners include Scheels, a sporting goods company, and WHOP, a platform to sell digital products and services. As the prominent Buy Now, Pay Later platform, SEZL expands its merchant network and experiences an influx of customers, which contributes to GMV growth.

Furthermore, the partnership with WebBank plays has played a vital role. Sezzle is reaping benefits since the partnership was forged in August 2024. SEZL has been provided with a funding mechanism and its operational capabilities have improved, enabling it to cater to a large customer base and process a greater volume of transactions. The main goal of this partnership is to originate and finance products on the Sezzle platform, translating directly to increased revenues for the company.

How Do AFRM & PYPL Play Against SEZL?

SEZL’s revenue growth outpaced that of both Affirm AFRM and PayPal PYPL on a percentage basis in the March-end quarter. While Affirm displayed a substantial top-line improvement, PayPal's revenue growth was marginal. Affirm’s 36% year-over-year rise in revenues was facilitated by a surge in transaction volume, evidenced by a GMV growth of 36%. PayPal showed a 1% year-over-year rally in its top line, focussing more on margin expansion and bottom-line enhancement.

SEZL’s Price Performance, Valuation & Estimates

The stock has surged a whopping 661.6% in the past year, significantly outperforming the industry’s 28.2% rally and the 12.8% rise of the Zacks S&P 500 composite.

1-Year Price Performance

From a valuation standpoint, SEZL trades at a forward price-to-earnings ratio of 31.23, above the industry’s 23.39. It carries a Value Score of F.

The Zacks Consensus Estimate for Sezzle’s earnings for 2025 has risen 46.6% over the past 30 days.

SEZL currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research