Sezzle Inc (SEZL) Q4 2025 Earnings Call Highlights: Record Revenue Growth and Strategic Shifts

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Thu, February 26, 2026 at 2:02 PM GMT+9 3 min read

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This article first appeared on GuruFocus.

Release Date: February 25, 2026

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Sezzle Inc (NASDAQ:SEZL) reported a 32.2% revenue growth for Q4 2025, contributing to a total annual revenue growth of 66.1%.

Net income reached $42.7 million for the quarter, with a full-year net income of $133.1 million.

The company achieved a return on equity exceeding 100% for the full year 2025.

Sezzle Inc (NASDAQ:SEZL) completed a 6-for-1 stock split and expanded its capital return program with a $100 million share repurchase authorization.

The company is leveraging AI to improve efficiency, aiming to turn a team of 400 into the equivalent of a team of 4,000.

Negative Points

Sezzle Inc (NASDAQ:SEZL) faces potential regulatory challenges, particularly with state-level regulations that could impact its operations.

The company experienced a slight decrease in merchant accounts from 474,000 in Q3 to 463,000 in Q4.

There is a concern about the political trend of states wanting to regulate every product, which could affect the BNPL sector.

The company anticipates a provision for credit losses to increase to a range of 2.5% to 3% in 2026, up from 2.3% in 2025.

Sezzle Inc (NASDAQ:SEZL) is exploring a banking charter, which is a long and non-guaranteed process, adding uncertainty to its strategic initiatives.

Q & A Highlights

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Q: Can you comment on the state of New York’s regulations and your exposure there? A: Charlie Yam, CEO and Executive Chairman: We don’t expect a significant impact this year as it takes time for regulations to be implemented. The regulations largely mimic the CFPB’s guidance with minor differences. We’re exploring an Industrial Loan Company (ILC) to strengthen our national presence and resilience against such regulatory changes.

Q: Why didn’t you provide annual guidance for revenue less transaction margin and adjusted EBITDA? A: Lee Brady, CFO: We have a gross margin target of 55% to 65%. We expect to continue leveraging non-transaction related operating expenses, allowing you to model within that range.

Q: What led to the decision to de-emphasize the on-demand product in favor of subscriptions? A: Charlie Yam, CEO and Executive Chairman: We found that the on-demand model wasn’t transitioning well to subscriptions. By leading with subscription options, we saw better consumer commitment and loyalty.

Story Continues  

Q: Can you provide clarity on the quarterly cadence for revenue and earnings? A: Charlie Yam, CEO and Executive Chairman: Seasonality is key. The first quarter sees a slowdown in GMV post-holidays, affecting take rates and gross margins. The second and third quarters are more stable, while the fourth quarter sees increased spending and lower take rates.

Q: Why did you tighten provisions in the fourth quarter, and was there a trade-off with GMV? A: Charlie Yam, CEO and Executive Chairman: Concerns about consumer health led to slight tightening. However, the consumer proved healthier than expected, resulting in lower provisions. We launched new models with higher performance, and while hindsight suggests we could have pushed for more GMV, we see opportunities to expand further.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

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