Sezzle Inc. · NASDAQ:SEZL
Sezzle — Investor Presentation (November 2024)
55 slides from Sezzle's investor presentation, Nov 12, 2024
Slide 1: The Responsible Way to Pay – Investor Presentation
@sezzle The Responsible Way to Pay Investor Presentation November 2024
Slide 2: Disclaimer
Disclaimer Cautionary Note Regarding Forward-Looking Statements This presentation (the Presentation”) contains summary information about the activities of Sezzle as of the date of this Presentation. The information in this Presentation is of a general nature and does not purport to be complete and t
Slide 3: Table of Contents
O1 O02 03 Table of Contents Growing Profitably Sezzle at a Glance O4 Through Strong Execution The Markets Sszvle We Serve O 5 Leadership Robust & Expanding Product Ecosystem 06 Appendices Sezzle Inc. | Investor
Slide 4: Sezzle at a Glance
Sezzle at a Glance Sezzle Ine. | Investor Presentation 14
Slide 5: Prized BNPL Platform
Prized BNPL Platform AWARDED BY Mb Forbes MOURAAL Hrs) Money BUSINESS JOURNAL FORTUNE BuySide isi Worth Termination of Launch of WebBank IPO on Australian Attained Planned Merger with Zip Co. Delisted from ASX Partnership Securities Exchange (ASX) B Corp Certification (Announced Feb 2022) (Listed on
Slide 6: 3Q24 Highlights
3Q24 Highlights 71.3% yw, FY2024 Guidance — 529,000 Total Revenue Growth © $58.0 million ® Active Subscribers? eee j a September 30, 2024) seed Adjusted Net Income (as of September ) $9.80 Adjusted Net Income per Diluted Share $15.4 million Net Income e ° $17.3 million eee | FY2025 Guidance | @ @ Ad
Slide 7: Our Mission
OUR MISSION Financially Empowering the Next Generation Justice Positively Financial accessibility, Diversity & inclusion, Affecting Profitability Employee security & wellness © Integrity Increasing Consumer © Governance & controls, Integrated j H Committed decision-making, Workplace culture Lifetime
Slide 8: Sezzle Investment Highlights
Sezzle Investment Highlights Profitable Pure-Play BNPL Delivering Shareholder Value Achieved Net Income for every quarter since 3Q22, driven by the Completed $20.0M of stock repurchase plans, delivered $17.3M in success of FY22 and FY23 Initiatives Adjusted Net Income! and ROE of 27.7% in 3Q24, and
Slide 9: The Markets We Serve
The Markets We Serve Sezzle Ine. | Investor Presentation 19
Slide 10: The Nascent and Growing BNPL Market
The Nascent and Growing BNPL Market Buy Now, Pay Later (BNPL) represents less than 2% Sezzle represents less than 1% of North America’s Total Commerce Transaction Value of North America’s Total BNPL Market Digital Other In-store Wallet Payment Financing 189 Products $129.98 3% Debit Card BNPL & POS
Slide 11: Projected U.S. BNPL Growth vs. Retail Sales Growth
Projected U.S. BNPL Growth vs. Retail Sales Growth U.S. Retail Sales Growth U.S. BNPL Growth 55% 20 24 (20%) Sezzle FY24 — Total Revenue Growth
Slide 12: Sezzle Footprint
Sezzle Footprint Core Markets r = United Represented 91.3% of the Company's total Underlying Merchant Sales (UMS) in — States FY23 . Represented 8.7% of the Company’s total UMS in FY23 (+) Canada . ce & most reviewed BNPL app in Canada’s App Store and Google . The only BNPL that offers consumers the
Slide 13: U.S. Consumer Credit Market Snapshot
U.S. Consumer Credit Market Snapshot Younger generations struggle with below average credit scores 2023 U.S. FICO Distribution? 2023 Average FICO by Generation® 28% 760 22% 21% 745 7% 709 9 oO U L] Poor Fair Good Very Exceptional Silent Baby Boomers GenerationX Millennials Generation Z 300-579 580-6
Slide 14: Why Millions of Consumers Choose Sezzle
Why Millions of Consumers Choose Sezzle Increasing financial inclusion by providing credit to those who often face challenges in accessing traditional credit options 1 76% of Sezzle Consumers are ages between 18 — 46 (Gen Z & Millennial) of2 40% of BNPL users would leave carts without BNPL offered a
Slide 15: Robust & Expanding Product Ecosystem
Robust & Expanding Product Ecosystem
Slide 16: We're Building an All-Encompassing Services Platform
We’re Building an All-Encompassing Services Platform From credit building to paying later anywhere, we are constantly evolving to match the needs of our users baad Re eee terete Proiict Virtual Card Note: Pay-in-4 and Pay-in-2 loans are originated by WebBank expect loans in lowa Sezzle Inc. | Invest
Slide 17: Comprehensive Suite of Payment Options
Comprehensive Suite of Payment Options Offering a full suite of payment options, allowing consumers to choose based on their schedule and needs Pay-in-Full Pay-in-2 Pay-in-4 Long-Term esexzle @sezzle Compete your ordar Example: $100 Purchase 100% 50% 50% 25% 25% 25% 25% Monthly With APR’ $100 $50 $5
Slide 18: Helping Consumers Build Credit through Sezzle Up
Helping Consumers Build Credit through Sezzle Up The only BNPL platform in North America to offer credit reporting optionality through Pay-in-4 in the U.S. and Canada TransUnion EQUIFAX Sexperian. Innovis ) Files Sezzle Up consumer purchase activities to all major credit bureaus in the U.S. Start Yo
Slide 19: Sezzle Subscriptions
Sezzle Subscriptions ~! Laer ~39% x E ccaawen In-store Orders as % Top 10% Anywhere Wile letel sete be deplores of Total Anywhere Subscribers 90-days Subscrners ve NCD © Prot tones Subscribers during 2 S Up 101% bok on purchases pid upont Orders: Frequency 3Q24 on Average © 101 monty Seale Spend Del
Slide 20: Fostering Financial Responsibility Through Gamification
Fostering Financial Responsibility Through Gamification Payment Streaks Level Up Tiers > es Don't Drop the Ball Sezzle Ine. | Investor Presentation | 20 Seamlessly manage payments, unlock perks, and embark on a journey towards financial wellness Ascend through loyalty tiers for consistent & timely p
Slide 21: First Product Launch with WebBank
First Product Launch with WebBank On-Demand!’ Pay-in-4 Just Got More Flexible How it Works Benefits for Sezzle Shop any brand in the NY Sezzle app or anywhere? @, Enhances the ability to compete : for enterprise merchants Request single-use amount needed ®sezzle Pay 25% + a service fee at Early data
Slide 22: Unlocking Growth For Our Merchant Partners
Unlocking Growth For Our Merchant Partners Driving traffic and incremental revenue through a frictionless checkout experience and customized marketing capabilities Merchant Benefits Ad Integration Product Marketplace In-App Placement <6 Months’ Payback period Up to 57%' Average Order Value Lift T1lO
Slide 23: Initial Business Model: Expanding Our Ecosystem
Initial Business Model Expanding Our Ecosystem Launched in 2Q22 Launched in 2Q23 Launched in 4Q24 e e e > \ shopify MMegent WiXcor (CoD commence Premium ee tnd Direct & Virtual Card Integration Economics for Sezzle: + Merchant discount rate (MDR) + Interchange revenue (VC integration) On-Demand (Any
Slide 24: Expanding Reach & Consumer Impact through Innovation
Expanding Reach & Consumer Impact through Innovation Potential Future Products Subscription (2022 & 2023) Credit Reporting Direct Integration 02} (2017) R eae s cust ome Financial Tools Shopping Tools o On-Demand Product Marketplace Price Comparisons Premium & Anywhere zzl + Premium: Access to 350+
Slide 25: Saving with Sezzle
Saving with Sozzle Back-To-School Building Consumer Connections Edition és : through Strategic Marketing on @ Expanding Engagement Strategies Increasing Awareness, Personalization, & Testing C) * Official Jersey Patch Partner of the Minnesota Timberwolves + Expanding direct-to-consumer campaigns via
Slide 26: Growing Profitably Through Strong Execution
Growing Profitably Through Strong Execution
Slide 27: Early Focus on Profitability
Early Focus on Profitability $10 million Announced reduction of workforce Beginning in FY22 o Rr) Revenue Initiatives April $17+ million 21k Announced initiatives to accelerate path to profitability * Introduced Sezzle Premium + Incentivized consumers to shift from card to ACH * Offboarded or renego
Slide 28: Initiatives Drive Profitability
($41.5M) 2022 Adjusted Net Loss ($38.1) Million Initiatives Drive Profitability Initiatives Exceeding Expectations $58.0M 2024 Adjusted Net Income j ° ° ° $5.6M $71.5 Million 2023 Adjusted Net Income = 2023 Net Income 2024 Net Income 9 Net Impact Guidance ° of the Profitability o Initiatives 2022 Ne
Slide 29: Propelling Growth through a Bank Partner
Propelling Growth through a Bank Partner WebBank Partnership ®sezzle Launch of unified fees IW] WebBank : A STEEL PART S COMPANY + WebBank is a Utah-chartered Streamlined industrial bank regulatory approach + Entered 5-year strategic partnership program on August 26!", 2024; launched at the end of S
Slide 30: Increasing Operational Efficiency & Productivity with Proprietary A.I. Models
Increasing Operational Efficiency & Productivity with Proprietary A.I. Models Enhanced Underwriting Payment Processing (near future) Improved payment processing flow (e.g... minimize payment processing costs) Baby Prophet (new consumers signups), Prophet(v4) (existing consumers) models evaluate cred
Slide 31: Robust & Proprietary In-House Underwriting Strategy
Robust & Proprietary In-House Underwriting Strategy False Prophet & | | | | a | ° | 3 San Nose Fraud Existing 3 Party ML Models Fraud Baby Prophet | > | Underwriting | CEneUGLS | Pan | e | Underwriting | aan 5 ™Baby Prophet = FICO 5 © 2 « > & = fa 2 fe} 5 2 j 3 eee 3 5 1 2 3 4 5 6 7 8 2 10 sky Consu
Slide 32: Annual Snapshot
Annual Snapshot 2022 Actual 2023 Actual 2024 Guidance Total Revenue $125.6M $159.4M 55% Growth Net Income (Loss) ($38.1M) $7.1M $71.5M Adjusted Net Income (Loss)! ($41.5M) $5.6M $58.0M Adjusted Net Income (Loss)! Per Diluted Share ($7.63) $0.99 $9.80 Total Revenue Less Transaction Related Costs? as
Slide 33: Quarter Snapshot
Quarter Snapshot 3Q23 3Q24 YoY Change Total Revenue $40.8M $70.0M 71.3% tf Net Income $1.3M $15.4M 1,093.3% ¥ Adjusted Net Income! $1.2M $17.3M 1,349.2% f Adjusted EBITDA Margin? 18.5% 32.2% 13.7Pts ff Related cori ane sor Tota Revers | 47.2% 55.0% 5.8 Pts f Nod Frage eee PEN 46.2% 30.0% -16.2 Pts ¥
Slide 34: 3Q24 YoY Engagement Metrics
3Q24 YoY Engagement Metrics Active Subscribers? (Premium & Anywhere) 3Q24 3Q23 3022 |) 88,000 210,000 +319k YoY 529,000 Repeat Usage As A % Of Total Orders (Cumulative) cot ET 25:7 +71 Bps YoY Active! Consumers Quarterly Purchase Frequency (Average) 1O, oct I 2,207,000 +3.7% || :0:1 ss. | +1.3x soz
Slide 35: Last Twelve Months (LTM) QoQ Engagement Metrics
Last Twelve Months (LTM) QoQ Engagement Metrics Active Subscribers? (Premium & Anywhere) Active! Consumers Unique Merchants? Shopped at by Consumers 529,000 462,000 371,000 307,000 a 4Q23 1024 2024 3Q24 2,667,000 2,601,000 2,594,000 2,612,000 | 4Q23 1Q24 2024 3Q24 208,000 178,000 173,000 7 4023 1024
Slide 36: Total Revenue & UMS
Total Revenue & UMS Total Revenue Underlying Merchant Sales (UMS) +40.6% YoY $659.9 $601.9 $70.0 $532.2 $469.5 $492.7 3Q23 4Q23 1924 2Q24 3Q24 3Q23 4Q23 1024 2Q24 3Q24 jam Total Revenue ($ in millions) ‘% of UMS. BUMS ($ in millions) Sezzle Inc. | Investor Presentation | 36
Slide 37: Transaction Related Costs
Transaction Related Costs Transaction Expense Provision for Credit Losses Net Interest Expense 2.3% [2m Lae 2.0% }{_1.9% 0.9% Ff 0.8% }1_0.8% $51 se gay $128 = (rox } $10.5 $10.1 Beee wae see cc Oo eo 3Q23 4Q23 1924 2Q24 3Q24 3Q23 4Q23 1924 2Q24 3Q24 3Q23 4Q23 1924 2Q24 3Q24 mmm Transaction Expense
Slide 38: Total Revenue Less Transaction Related Costs
Total Revenue Less Transaction Related Costs’ As a % of Total Revenue As a % of UMS $38.5 $38.5 3Q23 4Q23 1Q24 2Q24 3Q24 3Q23 4Q23 1024 2Q24 3Q24 ‘mmm Total Revenue Less Transaction Related Costs ($ in millions) tm Total Revenue Less Transaction Related Costs ($ in millions) % of Total Revenue % of
Slide 39: Non-Transaction Related Operating Expenses
Non-Transaction Related Operating Expenses % of Total Revenue Total Revenue Less Transaction Related Costs vs. Non-Transaction Related OpEx' $21.0 —— | _[ $20.8 | = $20.1 3Q23 4Q23 1924 2Q24 3Q24 3Q23 4Q23 1924 2Q24 3Q24 lames Non-Transaction Related Operating Expenses ($ in millions) —— Non-Transac
Slide 40: Net Income and Adjusted Net Income
Net Income and Adjusted Net Income Net Income Adjustments Adjusted Net Income! Includes $16.8 million discrete income tax } benefit from the release of the valuation | allowance previously recorded on deferred tax assets el = 2 $17.3 5164 GON 0.4) $13. $9.4 $8.0 gs $29 gio 826 —_—_ = ($16.6) —_ i 3Q
Slide 41: Net Income and Adjusted EBITDA
Net Income and Adjusted EBITDA’ Net Income & Adjusted Net Income? Non-GAAP Adjusted EBITDA $29.7 $22.5 17.3 36.42 $13.1 $8.0 $94 $2.9 $2.6 $13. $1.2 : a | 3023 4023 1024 2024 3Q24 3023 4Q23 1024 2024 3Q24 Net Income ($ in millions) '§ Adjusted Net Income ($ in millions) (mmm Adjusted EBITDA ($ in mi
Slide 42: Select Balance Sheet Metrics
Select Balance Sheet Metrics Unaudited Unaudited Unaudited $ in Thousands Mar 31, 2024 Jun 30, 2024 Sep 30, 2024 Key Assets N Cash and cash equivalents! $77,785 $58,026 $80,063 Restricted cash $4,400 $5,966 $8,281 Total cash $82,185 $63,992 $88,343 Total notes receivables, net $103,332 $119,235 $132
Slide 43: Credit Facility
Credit Facility Lender rs BASTION Size $150 million plus $75 million accordion Term 3 years Spread 3-month Term Secured Overnight Financing Rate (SOFR) + 6.75% with a SOFR floor of 2.00% Advance 85% - 90% of eligible originations, dependent upon receivable performance Unused Additional Interest | 0.
Slide 44: Equity Capital Management
Equity Capital Management Evaluating Capital Return Options for Shareholders December 22, 2023 June 20, 2024 July 9, 2024 -@ -@ t ) > Announcement of Sezzle’s Announcement of Sezzle’s Completion of the Company’s First Share Repurchase Plan Second Share Repurchase Plan Stock Repurchase Plans Sezzle I
Slide 45: FY24 Outlook Provided with 3Q24 Earnings
FY24 Outlook Provided with 3Q24 Earnings coms (ee iste; | esis Total Revenue $159.4M 55% Growth 35% - 40% Growth $200M; up 25% or see oe so e60% e60% 200% Net Income $7.1IM $71.5M $55.0M $30.0M Net Income Per Diluted Share $1.25 $12.05 $9.25 $5.00 Adjusted Net Income? $5.6M $58.0M $40.0M N/A - New g
Slide 46: Sezzle Recap
Sezzle Recap i) Financial Performance + Prudent, simple, and sustainable capital structure * Continuous assessment of capital return options for shareholders, including special dividends, share repurchases, or both g Product Innovation + Responsible and transparent lending practices Providing financ
Slide 47: Sezzle Leadership
Sezzle Leadership Sezzle Ine. | Investor Presentation 147
Slide 48: Executive Team
Executive Team » 2 ain Charlie Youakim Paul Paradis Karen Hartje Amin Sabzivand Co-founder, Co-founder, Chief Financial Officer Chief Operating Officer Executive Chairman & CEO. Chief Revenue Officer Sezzle Ine. | Investor Presentation | 48
Slide 49: Appendices
Appendices Sezzle Ine. | Investor Presentation | 49
Slide 50: Appendix I: Reconciliation of GAAP to Non-GAAP Measures
Appendix I: Reconciliation of GAAP to Non-GAAP Measures Total Revenue Less Transaction Related Costs For the three months ended For the twelve months ended (in $ thousands) September 30.2024 June 30.2024 March 31.2024 December 31,2023 September 30.2023 December 31,2023 December 31, 2022 ‘Operating i
Slide 51: Appendix II: Reconciliation of GAAP to Non-GAAP Measures
Appendix II: Reconciliation of GAAP to Non-GAAP Measures Transaction Related Costs For the three months ended (in $ thousands) September 30, 2024 June 30, 2024 March 31, 2024 December 31,2023 September 30, 2023 Operating expenses $ 49,117 $ 39,269 $ 33,144 $ 41,234 $ 35,494 Personnel (13,424) (12,73
Slide 52: Appendix III: Reconciliation of GAAP to Non-GAAP Measures
Appendix III: Reconciliation of GAAP to Non-GAAP Measures Adjusted Net Income (Loss) For the three months ended For the twelve months ended fin $ thousand: except per share amounts) September 30,2024 June 30,2024 March31, 2024 December 31, 2023 September 30, 2023 December 31,2023 December 31, 2022 N
Slide 53: Non-GAAP Financial Measures
Non-GAAP Financial Measures To supplement our operating results prepared in accordance with generally accepted accounting principles in the United States ("GAAP"), we present the following non-GAAP financial measures: Total revenue less transaction related costs; transaction related costs; non-trans
Slide 54: Non-GAAP Financial Measures (Cont.)
Non-GAAP Financial Measures (Cont.) Additionally, we have included these non-GAAP measures because they are key measures used by our management fo evaluate our operating performance, guide future operating plans, and make strategic decisions, including those relating to operating expenses and the al
Slide 55: Thank You
Thank You Lee Brading, CFA SVP, Corporate Development & Investor Relations InvestorRelations@sezzle.com Erin Foran Media & PR MediaRelations@sezzle.com Sezzle Ine. | Investor Presentation | 55