Slide 1: 4Q22 Earnings Presentation
4Q22 EARNINGS PRESENTATION 3 1 D e c e m b e r 2 0 2 2 This presentation has been approved by the Company’s Executive Chairman and CEO, Charlie Youakim, on behalf the Sezzle Inc. Board
Slide 2: Disclaimer
SEZZLE INC 4Q22 Presentation | 2 D ISCLAIMER Cautionary Note Regarding Forward-Looking Statements This presentation (the “Presentation”) contains summary information about the activities of Sezzle as at the date of this Presentation. The information in this Presentation is of a general nature and do
Slide 3: The Way Forward: Financially Empowering the Next Generation
SEZZLE INC 4Q22 Presentation | 3 THE WAY FORWARD FINANCIALLY EMPOWERING THE NEXT GENERATION Credit BuildingCertified B Corp Driving Change for our Stakeholders Placing Purpose alongside Profits Helping Consumers Spend Responsibly with Sezzle Up I love being able to responsibly treat myself, and my s
Slide 4: 4Q22 Update
4Q22 UPDATE
Slide 5: 4Q22 Performance and Financial Scorecard
4Q22 PERFORMANCE AND FINANCIAL SCORECARD 1 Adjusted EBITDA and Adjusted EBTDA are non-GAAP financial measures. For a reconciliation of GAAP Net Income (Loss), Adjusted EBITDA, and Adjusted EBTDA see Appendix II for reconciliation. 2 Transaction Related Costs is a non-GAAP financial measure equal to
Slide 6: 4Q22 Engagement Scorecard
SEZZLE INC 4Q22 Presentation | 6 4Q22 ENGAGEMENT SCORECARD 1 Active is defined as having had at least one transaction through the Sezzle Platform in the last twelve months, not subject to a minimum required number of transactions criteria (Merchants and Consumers rounded to nearest thousand). 2 App
Slide 7: Exited 2022 with US$70M+ in Initiatives
EXITED 2022 WITH US$70M+ IN INITIATIVES Revenue-Related Cost-Related • Sezzle Premium • Offboarded or renegotiated pricing with merchants and network partners • Affiliate merchant enhancements (e.g., expanded enterprise affiliates, monetizing app placement) • Convenience fees in the US • Introduced
Slide 8: Initiatives & Underwriting Drive Profitability
SEZZLE INC 4Q22 Presentation | 8 INITIATIVES & UNDERWRITING DRIVE PROFITABILITY 1 3 2 4 1 2 3 4 Provision Improvement Cost Initiatives Other Revenue Initiatives • Composed 40% of total impact from initiatives. • Provision for uncollectible accounts reduced from 3.5% in 4Q21 to 1.2% in 4Q22. • Compos
Slide 9: Improved Underwriting with New Risk Model
IMPROVED UNDERWRITING WITH NEW RISK MODEL • The Prophet Model (probability of default predictor1) has been a significantly better barometer in identifying high-risk consumers compared to FICO and alternative third-party providers. • Since the introduction of the model, the Company has been able to b
Slide 10: Progression to Profitability
SEZZLE INC 4Q22 Presentation | 10 PROGRESSION TO PROFITABILITY 4 Q 2 1 4 Q 2 2 F Y 2 3 I N I T I A T I V E S Unit Economics1 Sezzle plans to launch several initiatives over the next 18 months Initiatives include: 2022 2023 Underwriting Capability3 Income Streams2 Product Innovation Monetization Part
Slide 11: 4Q22 Financials
4Q22 FINANCIALS
Slide 12: Total Income & UMS
SEZZLE INC 4Q22 Presentation | 12 TOTAL INCOME & UMS COMMENTARY • Total Income grew 16.2% YoY to a record high of US$38.3 million. Despite the drop in UMS compared to 4Q21, revenue and monetization initiatives drove Total Income as a percentage of UMS to a record high of 8.5%. • Consumers remained
Slide 13: Transaction Expense
SEZZLE INC 4Q22 Presentation | 13 TRANSACTION EXPENSE $13.9 $11.8 $10.1 $9.3 $9.5 2.5% 2.6% 2.4% 2.2% 2.1% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% $0.0 $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 $14.0 $16.0 4 Q 2 1 1 Q 2 2 2 Q 2 2 3 Q 2 2 4 Q 2 2 T R AN S A C T I O N E X P E N S E Transaction Expense ($US in millions) T
Slide 14: Provision for Uncollectible Accounts
SEZZLE INC 4Q22 Presentation | 14 PROVISION FOR UNCOLLECTIBLE ACCOUNTS $19.7 $10.5 $7.9 $5.7 $5.4 3.5% 2.3% 1.9% 1.3% 1.2% -1.0% -0.5% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% $0.0 $5.0 $10.0 $15.0 $20.0 $25.0 $30.0 $35.0 4 Q 2 1 1 Q 2 2 2 Q 2 2 3 Q 2 2 4 Q 2 2 P R OV I S I O N FOR U N COL L E C T I
Slide 15: Total Income Less Transaction Related Costs
SEZZLE INC 4Q22 Presentation | 15 TOTAL INCOME LESS TRANSACTION RELATED COSTS COMMENTARY 1 Transaction Related Costs is a non-GAAP financial measure equal to the sum of Transaction Expense, Provision for Uncollectible Accounts, Net Interest Expense, and write-off of non-recurring unamortized debt is
Slide 16: Non-Transaction Related Operating Expenses
SEZZLE INC 4Q22 Presentation | 16 NON-TRANSACTION RELATED OPERATING EXPENSES COMMENTARY 1 Non-Transaction Related Operating Expenses is a non-GAAP financial measure equal to Total Operating Expenses less Reimbursement of Merger-Related Costs, Transaction Expense and Provision for Uncollectible Accou
Slide 17: Closed the Gap
SEZZLE INC 4Q22 Presentation | 17 CLOSED THE GAP COMMENTARY 1 Adjusted EBTDA and Adjusted EBITDA are non-GAAP financial measures. For a reconciliation of GAAP Net Income (Loss), Adjusted EBITDA, and Adjusted EBTDA see Appendix II for reconciliation. 2 Adjusted Operating Expenses and Other Income and
Slide 18: Capitalization
SEZZLE INC 4Q22 Presentation | 18 CAPITALIZATION COMMENTARY Select Balance Sheet Data Unaudited Unaudited US$000's 30-Sep-2022 31-Dec-2022 Cash and cash equivalents $57,875 $68,280 Restricted cash $890 $1,243 Total cash $58,765 $69,523 Drawn on line of credit $54,008 $65,000 Availability on line of
Slide 19: January '23 Update
JANUARY ’23 UPDATE
Slide 20: Key Statistics for January
SEZZLE INC 4Q22 Presentation | 20 KEY STATISTICS FOR JANUARY COMMENTARY • Total Income for January rose 18.3% YoY to US$11.7 million as FY22 initiatives continue to push revenue higher YoY. Total Income as a percent of UMS reached 10.0%. • Average Daily UMS is up 8.0% through 25 February 2023 compar
Slide 21: Appendices
APPENDICES
Slide 22: Appendix I: Reconciliation of GAAP to Non-GAAP Measures
SEZZLE INC 4Q22 Presentation | 22 APPENDIX I : RECONCILIATION OF GAAP TO NON-GAAP MEASURES ADJUSTED OPERATING EXPENSES AND OTHER INCOME AND EXPENSES TOTAL INCOME LESS TRANSACTION RELATED COSTS For the three months ended December 31, 2022 September 30, 2022 June 30, 2022 March 31, 2022 December 31, 2
Slide 23: Appendix II: Reconciliation of GAAP to Non-GAAP Measures
SEZZLE INC 4Q22 Presentation | 23 APPENDIX I I : RECONCILIATION OF GAAP TO NON-GAAP MEASURES ADJUSTED EBTDA AND ADJUSTED EBITDA NON-TRANSACTION RELATED OPERATING EXPENSES For the three months ended (in $US thousands) December 31, 2022 September 30, 2022 June 30, 2022 March 31, 2022 December 31, 2021
Slide 24: Appendix III: Consolidated Balance Sheets
SEZZLE INC 4Q22 Presentation | 24 APPENDIX I I I : CONSOLIDATED BALANCE SHEETS As of December 31, 2022 December 31, 2021 Assets Current Assets Cash and cash equivalents $ 68,279,539 $ 76,983,728 Restricted cash, current 1,223,119 1,886,440 Notes receivable, net 93,358,404 133,986,583 Other receivabl
Slide 25: Appendix III: Consolidated Statements of Operations and Comprehensive Loss
SEZZLE INC 4Q22 Presentation | 25 APPENDIX I I I : CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS For the years ended December 31, 2022 December 31, 2021 Total income $ 125,570,441 $ 114,816,635 Operating Expenses Personnel 51,217,083 56,831,368 Transaction expense 40,776,825 43,476,14
Slide 26: Appendix III: Consolidated Statements of Cash Flows
SEZZLE INC 4Q22 Presentation | 26 APPENDIX I I I : CONSOLIDATED STATEMENTS OF CASH FLOWS For the years ended December 31, 2022 December 31, 2021 Operating Activities: Net loss $ (38,093,756) $ (75,168,363) Adjustments to reconcile net loss to net cash provided from (used for) operating activities: D
Slide 27: Appendix III: Consolidated Statements of Cash Flows (cont.)
SEZZLE INC 4Q22 Presentation | 27 APPENDIX I I I : CONSOLIDATED STATEMENTS OF CASH FLOWS (CONT. ) For the years ended December 31, 2022 December 31, 2021 Financing Activities: Payments on long term debt — (1,220,332) Proceeds from line of credit 71,155,556 174,666,667 Payments to line of credit (84,
Slide 28: Non-GAAP Financial Measures
SEZZLE INC 4Q22 Presentation | 28 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; adj
Slide 29: Sezzle: The way forward
*®sezzle The way forward. \