Sezzle Inc. · NASDAQ:SEZL
Sezzle — Investor Presentation (February 2024)
46 slides from Sezzle's investor presentation, Feb 27, 2024
Slide 1: The Responsible Way to Pay – Investor Presentation
@sezzle The Responsible Way to Pay Investor Presentation February 2024
Slide 2: Disclaimer
Disclaimer This presentation (the “Presontation”) 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 the information in the Presentation remains subject 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 & Profitable BNPL Platform
Prized & Profitable BNPL Platform Fi = a sy ye _" a $6+ Billion 63+ Million 18+ Million 307,000 Underlying Merchant Sales Total Orders Total Sign-Ups Total Subscribers Since Launch Since Launch Since Launch (as of December 31, 2023) \ J 2 ) L P a . f % = ~~ 4.5% 18.8% 26.9% 45.9% Last 12-Months! Las
Slide 6: Our Mission
OUR MISSION Financially Empowering the Next Generation Committed to Driving Change ve - ™ f— ie | © ; © x) . ( Justice Integrity Stewardship Advancement + Financial accessibility + Governance and + Responsible lending + Product innovation controls + Diversity and inclusion + Environment and * Commun
Slide 7: Sezzle Investment Highlights
Sezzle Investment Highlights Profitable Pure-Play BNPL Delivering Shareholder Value Achieved GAAP Net Income for every quarter since 3Q22, driven Delivered $7.1 million in Net Income in FY23 and provided Net by the success of FY22 and FY23 Initiatives Income guidance of $20.0 million for FY24 Respon
Slide 8: The Markets We Serve
The Markets We Serve Sezzle Ine. | Investor Presentation Is
Slide 9: 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 POS Financing Wallet Payment 1 Products $u71B 4% pence BNPL & POS » mers $207.3B
Slide 10: 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 2024 2025 y 2026 ( > 2027 Sezzle Inc. | ion | 10
Slide 11: Sezzle Footprint
Sezzle Footprint Core Markets <= United Represented 91.3% of the Company’s total Underlying Merchant Sales (UMS) = States in FY23 . Represented 8.7% of the Company's total UMS in FY23 * Highest rated & most reviewed BNPL app in Canada’s App Store and Google (+) Canada Play Store . The only BNPL that
Slide 12: U.S. Consumer Credit Market Snapshot
U.S. Consumer Credit Market Snapshot Younger generations struggle with below average credit scores 2022 U.S. FICO Distribution® 2022 Average FICO by Generation® 760 U.S. Avg: 714 25% 21% 21% 742 16% 1% 706 i UL : Poor Fair Good Very Good Exceptional Silent Baby Generation X Millennials Generation Z
Slide 13: 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 72% of Sezzle Consumers are ages between 18 — 44 oy! 40% of BNPL users would leave carts without BNPL offered at checkout 1 71% of BNP
Slide 14: Robust & Expanding Product Ecosystem
Robust & Expanding Product Ecosystem
Slide 15: 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 ee crt cuidng Ree enced Sezzle Inc. | Investor Presentation | 15
Slide 16: 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 esezzie serie Example: $100 Purchase 50% | 50% 25% |25% || 25% | 25% Monthly With APR! $50 $50 $100 $25 $25 $25 $25
Slide 17: Helping Consumers Build Credit
Helping Consumers Build Credit The only BNPL provider in North America to offer credit reporting optionality through Pay-in-4 in the U.S. and Canada TransUnion EQUIFAX Sexperian. Innovis ) osezzle® . os Files Sezzle Up consumer purchase activities to all major credit bureaus in the U.S. ad Start You
Slide 18: Over 307,000 Subscribers across Premium and Anywhere
Over 307,000 Subscribers! across Premium and Anywhere 53 Premium Sezzle Premium Provides access to 350+ Premium Merchants through Affiliate and Gift Card platform partners Sezzle Anywhere Provides consumers the ability to shop online, in-store, and anywhere Visa is accepted, giving them a top-of- wa
Slide 19: Strong Engagement from Subscribers
Strong Engagement from Subscribers Key Performance Metrics Most Popular Anywhere Verticals Of _ In-store Orders as % of ~33% Total Anywhere Orders! General Merchandise 46% @anywhere Discount & Specialty Stores 22% sezzle Increase in Purchase Grocery Stores & 2.2x Frequency? vs. Non- sasennarkats 1%
Slide 20: 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 Up to 57% 28K 250K+ Average Order Value Lift Number of Active Integrated Number of Unique Merchants Merchant Partners Shopped in FY2023
Slide 21: Expanding Our Merchant Ecosystem
Expanding Our Merchant Ecosystem Initial Business Model Launched in 2Q22 Launched in 2Q23 @ > A shopity commen IB) afflconmence (uecommence Direct & Virtual Card : - Premium Anywhere Integration 28,000 Active Merchants 350+ Merchants Anywhere VISA is Accepted Economics for Sezzle: Economics for Sezz
Slide 22: Building An All-Encompassing Services Platform
Building An All-Encompassing Services Platform More to Come Anywhere . arr * Innovations to offer more financial products & services and merchandising to consumers Premium Subscription (2022 & 2023) + Premium: Access to 350+ Premium Merchants & Gift Card platform partners * Anywhere: Provides consum
Slide 23: Growing Profitably Through Strong Execution
Growing Profitably Through Strong Execution
Slide 24: 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 25: Early Focus on Profitability
Early Focus on Profitability Beginning in FY22 Revenue Initiatives * Introduced Sezzle Premium + Offboarded or renegotiated pricing with merchants and network partners + Affiliate merchant enhancements Incentivized consumers to shift from card to ACH Introduced Pay-in-Full Cost Initiatives + Improve
Slide 26: Initiatives Drive Profitability
Initiatives Drive Profitability Initiatives Exceeding Expectations $71M + Successful subscription products; Product Anywhere launch (2023) and continued Innovations adoption of Premium (2022) FY22 Initiatives ir ingest + Affiliate payment models and pay-per- Ratan Monetization click driving incremen
Slide 27: YoY Progression Overview
YoY Progression Overview 4Q22 4Q23 FY22 FY23 Latest product offerings and product Total Income $38.3M $48.9M% $125.6M $159.4M% enhancements continue to support revenue growth Net Income (Loss) $0.6M $2.9M ($38.1M) = $7.1M_ Net income increased in 4023 and FY23 relative to comparable period in the ye
Slide 28: FY23 Sezzle Scorecard
FY23 Sezzle Scorecard Active’ Consumers Repeat Usage As A % Of Total Orders (Cumulative) 9, 1023 NT 260,000 11.8% | aca 96.3% +118 4022 I) 2.950.000 YoY 4022 98.2% Bps 92.8% Consumer Order Frequency (Weighted Total Subscribers? (Premium & Anywhere) Average of Monthly Cohorts Annualized) +188k 4s ET
Slide 29: Total Income & UMS
Total Income & UMS Total Income $159.4 1 9.4%) 9.1% (57%) $38.3 $347 $34.9 $40.8 4022 1023 2023 3Q23 4023 FY2022 FY2023 mmm Total Income ($ in millions) % of UMS sm Total Income ($ in millions) % of UMS Underlying Merchant Sales (UMS) $1,743.4 $1,824.3 4Q22 1023 2023 3Q23 4023 FY2022 FY2023 = UMS ($
Slide 30: Transaction Expense
Transaction Expense $40.8 439.2 f {2.19%} {2.1%} {2.2%] $13.1 Soo oe 4022 1023 2023 3023 4023 FY2022 FY2023 (@mm Transaction Expense ($ in millions) % of UMS lame Transaction Expense ($ in millions) % of UMS. Sezzle Ine. | Investor Presentation | 30
Slide 31: Provision for Credit Losses
Provision for Credit Losses $29.4 4Q22 1Q23 2Q23 3Q23 4Q23 FY2022 FY2023 ‘=m Provision for Credit Losses ($ in millions) % of UMS f= Provision for Credit Losses ($ in millions) % of UMS Sezzle Inc. | Investor Presentation | 31
Slide 32: Total Income Less Transaction Related Costs
Total Income Less Transaction Related Costs! $81.0 4Q22 1Q23 2Q23 3Q23 4Q23 FY2022 FY2023 mmm Total Income ex. Transaction Related Costs ($ in millions) mmm Total Income ex. Transaction Related Costs ($ in millions) % of UMS % of UMS. $81.0 4Q22 1Q23 2Q23 3Q23 4Q23 FY2022 FY2023 =m Total Income ex.
Slide 33: Non-Transaction Related Operating Expenses
Non-Transaction Related Operating Expenses! $94.8 55.7% % 48.6% = SOM $18.6 $19.3 $18.9 4022 1923 2923 3023 4Q23 FY2022 FY2023 mam Non-Transaction Related Operating Expenses ($ in millions) sams Non-Transaction Related Operating Expenses ($ in millions) % of Total Income '% of Total Income 'y Techno
Slide 34: Net Income (Loss) And Adjusted EBITDA
Net Income (Loss) And Adjusted EBITDA! GAAP Net Income (Loss) (s0.6} {$17} {1} {si.3} {$2.9} $38.3 $37.6 $34.7 $32.9 $34.9$33.8 $40.8$39.5 $48.9 $46.0 Ee ee eee ee 4022 1023 2023 3023 4Q23 mmm Total Income ($ in millions) l= Operating Expenses and Other Income and Expense ($ in millions) —Net Income
Slide 35: Select Balance Sheet Metrics
$ in Thousands Cash and Cash Equivalents Restricted Cash Total Cash Total Notes Receivables, Net Merchant Accounts Payable Drawn on Line of Credit Availability on Line of Credit Total Stockholders’ Equity Select Balance Sheet Metrics Audited Unaudited Dec 31, 2022 Sep 30, 2023 $68,280 $65,150 $1,243
Slide 36: FY2024 Outlook
FY2024 Outlook Annual Net Income (Loss) ($ in millions) 2024 Guidance + Net Income: $20.0 million * Total Income YoY Growth: 20% * Total Income less Transaction Related Costs: 50% of Total Income FY22 FY23 FY24 Sezzle Inc. | Investor Presentation | 36
Slide 37: Our Long-Term Vision
Our Long-Term Vision Launch of Sezzle Up in the U.S. DONTE seteeeeseesooes 2020 2021 2022 2023 2024 & Future i Sezzle Inc. | Investor Presentation | 37
Slide 38: Sezzle Recap
i, + Only profitable pure-play BNPL Financial * Prudent, simple, and sustainable capital structure Performance Sezzle 1) + Responsible and transparent lending practices Recap Product * Providing financial access to the Next Generation Innovation oO + Only B-Corp Certified BNPL Stakeholder-focused ap
Slide 39: Sezzle Leadership
Sezzle Leadership Sezzle Inc. | Inv
Slide 40: 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 Inc. | Investor Presentation | 40
Slide 41: Appendices
Appendices Sezzle Ine. | Investor Presentation 141
Slide 42: Appendix I: Reconciliation of GAAP to Non-GAAP Measures
Appendix |: Reconciliation of GAAP to Non-GAAP Measures Total Income Less Transaction Related Costs For the three months ended For the twelve months ended Go $ thousands) December 31, 2023 September 30,2023 June 30, 2023 March 31,2023 December 31, 2022 December 31,2023 December 31, 2022 Operating in
Slide 43: Appendix II: Reconciliation of GAAP to Non-GAAP Measures
Appendix II: Reconciliation of GAAP to Non-GAAP Measures Adjusted Operating Expenses For the three months ended For the twelve months ended (in $ thousands) December 31,2023 September 30,2023 June 30,2023 March 31,2023 December 31,2022 _ December 31, 2023 December 31, 2022 Operating expenses, $ 4123
Slide 44: 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 income less transaction related costs; non-iransaction related operating exp
Slide 45: 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 to evaluate our operating performance, guide future operating plans, and make strategic decisions, including those relating to operating expenses and the al
Slide 46: 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 | 46