Sezzle Inc. SEZL

The business

Sezzle lets shoppers split a purchase into interest-free installments, most commonly four payments over six weeks, and increasingly a pay-in-five product. It makes money three ways: a merchant fee on each transaction, consumer fees (including the high-margin standardized pricing on its core product), and a paid subscription, Sezzle Premium, plus on-demand passes that let consumers use the service at merchants that have not signed up. The receivables are very short-duration, so the credit risk turns over in weeks rather than years. The engine doing most of the work is transaction monetization on rising volume: FY25 revenue of $450.3M was up 66% on GMV of $3.94B that grew 55%, meaning revenue grew faster than volume because the take rate expanded. That take-rate expansion, from roughly 11.4% for FY25 to 12.2% in Q1 2026, is the real story, and it came from mix shift toward higher-margin consumer fees and subscription rather than from raising merchant rates.

The fact the headline numbers hide is that this is consumer credit with a very fast clock. Because receivables roll over in weeks, the loss rate, reported as provision for uncollectible accounts as a % of GMV, is the single most important risk metric, and it reacts quickly to consumer stress. That cuts both ways: it improved to 1.2% of GMV in Q1 2026 from 1.6% a year earlier on strong repayment, but it can deteriorate just as fast if the consumer rolls over. The other change worth noting is the subscriber pivot: monthly on-demand and subscribers (MODS) reached 887,000 at Q1 2026, up about 35% year-over-year, and the shift toward subscription and consumer-fee revenue is what is driving operating margins toward the mid-70s and the take rate higher.