Sezzle Inc. · NASDAQ:SEZL
Sezzle — Investor Presentation (August 2024)
53 slides from Sezzle's investor presentation, Aug 13, 2024
Slide 1: The Responsible Way to Pay – Investor Presentation August 2024
@sezzle The Responsible Way to Pay Investor Presentation August 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
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 S% Forbes "RGek. DDFs) Money FORTUNE BuySideis: Worth CNBC IPO on Australian Attained Termination of Delisted from ASX Securities Exchange (ASX) B Corp Certification Planned Merger with Zip Co. (Listed on Nasdaq Aug 2023) (Announced Feb 2022) 2 2 @2-@-2-@ Sezzle Launc
Slide 6: 2Q24 Snapshot
2Q24 Snapshot 60.2% ~~ ~, 462,000 Total Revenue Growth ® ®@ Active Subscribers? (2Q24 YoY) one la Ju 30, 2024) eee $40.0 million eee, FY24 Adjusted Net Income Guidance $29.7 million $13.1 million Net Income @ Adjusted Net income! @ (2024) $ 6 75 (2024) FY24 Adjusted Net Income per Diluted Share 53.1
Slide 7: Certified
Certified 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 cultur
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 the $20.0M of stock repurchase plans, delivered success of FY22 and FY23 Initiatives $13.1M in Adjusted Net Income! and ROE of 74.3% in 2Q24,
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 POS Financing Wallet Payment 1 Products 78 4% pence BNPL & POS » mers $207.3B 2%
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 35% - 40% Sezzle FY24 Guidance 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 th
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 76% of Sezzle Consumers are ages between 18 — 46 (Gen Z & Millennial) oy! 40% of BNPL users would leave carts without BNPL offered at
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 eee Ee = aa» Virtual Card Sezzle Inc. | Investor Presentation | 16
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 esezzle Example: $100 Purchase 50% 50% 25% | 25% | 25% 25% Monthly With APR? $100 $50 $50 $25 $25 $25 $25 $8.33 Time
Slide 18: 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 ) Files Sezzle Up consumer purchase activities to all major credit bureaus in the U.S. Start Your Journey to Bett
Slide 19: Providing an Elevated Experience
Providing an Elevated Experience Premium 462,000 Active Subscribers! & Across Premium & Anywhere ANYWHERE PR © Payin d anywhere Vea is accepted app dels & ciscounts “extra free reschedule per order © Priority customer support UM oe ees NPs’ 74 (6 Pts QoQ #) 57 (7 Pis QoQ 4) © $10 in monthly Sezsie S
Slide 20: Fostering Financial Responsibility Through Gamification
Fostering Financial Responsibility Through Gamification Payment Streaks payments, unlock perks, and embark on a journey towards financial wellness Ascend through loyalty tiers for consistent & timely payments Benefits! include entries in monthly giveaways, bonuses, and failed payment fee forgiveness
Slide 21: 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
Slide 22: Expanding Our Merchant Ecosystem
Expanding Our Merchant Ecosystem Initial Business Model Launched in 2Q22 Launched in 2Q23 e e e > Direct & , A < Premium Anywhere Virtual Card Integration (Anywhere VISA is accepted) Economics for Sezzle: Economics for Sezzle: Economics for Sezzle: * Merchant discount rate (MDR) + Affiliate & Gift C
Slide 23: Innovation Expands Reach and Lifetime Value
Innovation Expands Reach and Lifetime Value > Premium & Anywhere Subscription (2022 a 2023) Premium: Access to 350+ Premium Merchants & Gift Card platform partners Anywhere: Provides consumers the ability to shop anywhere Visa is accepted Bank Sponsorship Immediate Benefits Launch of On-Demand Produ
Slide 24: Growing Our Brand Presence
Growing Our Brand Presence GET FINANCIALLY FIT WIT yA ES Minnesota Timberwolves Social Media Engagement Campaigns Official Jersey Sponsor
Slide 25: Growing Profitably Through Strong Execution
Growing Profitably Through Strong Execution
Slide 26: 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 27: Initiatives Drive Profitability
Initiatives Drive Profitability Initiatives Exceeding Expectations FY24 Initiatives In the Works ~ $7. n New Product Launches 2023 Net Income Payment Streaks (completed), Product Marketplace (testing), and Initiatives Net Impact ank-enabled Products d a of the ($38.1) Million Profitability Initiativ
Slide 28: 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 29: Annual Snapshot
Annual Snapshot Total Revenue Net Income (Loss) Adjusted Net Income (Loss)! Adjusted Net Income (Loss)! Per Diluted Share Total Revenue Less Transaction Related Costs? as a % of Total Revenue Non-Transaction Related OpEx® as a % of Total Revenue 2022 Actual $125.6M ($38.1M) ($41.5M) ($7.63) 37.5% 75
Slide 30: 2Q24 Snapshot
2Q24 Snapshot 2Q23 2Q24 YoY Change Total Revenue $34.9M $56.0M 60.2% t Net Income $1.1M $29.7M 2,505.9% ff Adjusted Net Income (Loss)! ($0.2M) $13.1M 6,952.5% F A mae ($0.03) $2.17 6,523.4% ff TauiReeleeTamecenteied | 55.7% | onan | soem tt Hon Teaggartn He eted se 54.2% 32.9% -21.3Pts ¥ Sezzle Ine.
Slide 31: 2Q24 YoY Engagement Metrics
2Q24 YoY Engagement Metrics Active Subscribers? (Premium & Anywhere) 2Q24 +294k Repeat Usage As A % Of Total Orders (Cumulative) +82 Bps 42000 200 TT osx 2005 (NNN 2.000 YoY || 202; TT o<7 | YoY 2am | 14000 2022 (ET oa. Active’ Consumers Quarterly Purchase Frequency (Average) 10, 202s (TT 252.000 0.
Slide 32: 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 462,000 371,000 307,000 a ai i / 3023 4Q23 1924 2024 2,612,000 2,601,000 2,594,000 | al A O23 4Q23 1024 2024 209,000 178.000 173,000 i 7 D 3023 4023 ya
Slide 33: Total Revenue & UMS
Total Revenue & UMS Total Revenue Underlying Merchant Sales (UMS) +38.9% YoY $383.1 $56.0 $48.9 $47.0 a Cl oO im LC 2023 3023 4023 1024 2024 2023 3023 4023, 1024 2024 mms Total Revenue ($ in millions) % of UMS. = UMS (¢ in millions) Sezzle Inc. | Investor Presentation | 33,
Slide 34: Transaction Related Costs
Transaction Related Costs Transaction Expense Net Interest Expense $13.1 $1.8 2023 3023 4023 1024 2024 2023 3Q23 4Q23 1024 2024 mmm Transaction Expense (¢ in millions) % of UMS mmm Net Interest Expense ($ in millions) % of UMS Provision for Credit Losses Transaction Related Costs! $28.1 $10.5 $10.1
Slide 35: Total Revenue Less Transaction Related Costs
Total Revenue Less Transaction Related Costs! As a % of Total Revenue As a % of UMS $32.2 $32.2 2Q23 3Q23 4Q23 1Q24 2Q24 2Q23 3Q23 4Q23 1924 2Q24 f=mmm Total Revenue Less Transaction Related Costs ($ in millions) (mmm Total Revenue Less Transaction Related Costs ($ in millions) % of UMS % of Total R
Slide 36: Non-Transaction Related Operating Expenses
Non-Transaction Related Operating Expenses Total Revenue Less Transaction Relates Costs yy Heo Total: Revenue vs. Non-Transaction Related OpEx' $18.9 $18.9 $17.6 $18.4 2Q23 3Q23 4Q23 1Q24 2Q24 2Q23 3Q23 4Q23 1024 2Q24 f=mmm Non-Transaction Related Operating Expenses ($ in millions) Non-Transaction R
Slide 37: Net Income and Adjusted Net Income (Loss)
Net Income and Adjusted Net Income (Loss)! Net Income Adjustments! Adjusted Net Income (Loss)? Includes $16.8 million discrete income tax benefit from the release of the valuation allowance previously recorded on deferred tax assets $1.4 — 13) GO) 0.4) $8.0 $2.9 $11 $1.3 il || ($16.6) 2Q23 3Q23 4Q23
Slide 38: Net Income and Adjusted EBITDA
Net Income and Adjusted EBITDA! Net Income & Adjusted Net Income (Loss)? Non-GAAP Adjusted EBITDA’ $29.7 $18.4 $13.1 $9.0 $94 $2.9 $2.6 $11 $13 $1.2 on $0.2) en 223 3023 4Q23 1024 2024 2023 3023 4Q23 1024 2024 ® Net Income ($ in millions) ™ Adjusted Net Income (Loss) ($ in millions) f=mm Adjusted EB
Slide 39: 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 40: Equity Capital Management
Equity Capital Management Evaluating Capital Return Options for Shareholders December 22, 2023 June 20, 2024 July 9, 2024 e ) @ > 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 Inc.
Slide 41: Select Balance Sheet Metrics
Select Balance Sheet Metrics Audited Unaudited Unaudited $ in Thousands Dec 31, 2023 Mar 31, 2024 Jun 30, 2024 Key Assets ») Cash and cash equivalents! $67,624 $77,785 $58,026 Restricted cash $3,075 $4,400 $5,966 Total cash $70,699 $82,185 $63,992 Total notes receivables, net $130,633 $103,332 $119,
Slide 42: FY24 Outlook Provided with 2Q24 Earnings
FY24 Outlook Provided with 2Q24 Earnings 2022 Actual 2023 Actual Se corles od euidanes Total Revenue $125.6M $159.4M 35% - 40% Growth $200M; up 25% galore ti 518% son s6.0% 200% Net Income (Loss) ($38.1M) $7.1M $55.0M $30.0M Net Income (Loss) Per Diluted Share ($7.00) $1.25 $9.25 $5.00 Adjusted Net
Slide 43: Our Long-Term Vision
Our Long-Term Vision Launch of le Up in Canada Launch of Sezzle Up in the U.S. 20 lium “ieesseessesess 2020 2021 2022 2023 2024 & Future ' Sezzle Inc. | Investor Presentation | 43
Slide 44: Sezzle Recap
i, + Prudent, simple, and sustainable capital structure . . * Continuous assessment of capital return options for shareholders, Financial 7 P Performance including special dividends, share repurchases, or both Sezzle 1) + Responsible and transparent lending practices Recap Product * Providing financ
Slide 45: Sezzle Leadership
Sezzle Leadership
Slide 46: 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 | 46
Slide 47: Appendices
Appendices Sezzle Ine. | Investor Presentation 147
Slide 48: 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) June 30,2024 March 31,2024 December 31, 2025 September 30,2023 June 30,2025 _ December 31, 2025 December 31, 2022 ‘Operating in
Slide 49: 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) June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023 Operating expenses $ 39,269 $ 33,144 $ 41,234 $ 35,494 $ 31,174 Personnel (12,737) (11,025) (
Slide 50: 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 (in $ thousands: except per share amounts) dune 30, 2024 March 31,2024 December 31,2023 September 30,2023 June 30, 2028 December 31, 2025 December 31, 2022 Net
Slide 51: 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 52: 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 53: 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 | 53