NEW YORK, August 7, 2026, 12:12 p.m. EDT — U.S. trading begins.
- Sezzle shares were down 34.2% at $117.50 in late-morning dealings.
- Revenue exceeded FactSet projections by 10.8%, while adjusted EPS was 9.7% above estimates.
- The yearly outlook suggests revenue will increase by 30.8% in the second half, compared to 40.1% growth achieved in the first half.
Sezzle Inc. NASDAQ:SEZL shares dropped sharply on Friday despite reporting a strong quarter, as the outlook for the second half disappointed investors. The stock started at $131.09 and reached a low of $116.20. The decline appears related to adjusted expectations, not the company’s recent results.
The contrast is sharp. Revenue and adjusted profit both beat expectations by roughly 10%. However, Sezzle only lifted its full-year adjusted EPS outlook by 2.9%, increasing it to $5.25 from $5.10. The revenue growth forecast was set at 35%, at the upper end of its earlier range.
The quarter recorded solid performance in terms of volume, engagement and profit.
| Q2 metric | Reported | Comparison |
|---|---|---|
| Revenue | $149.7 million | 10.8% over FactSet; increased 51.7% YoY |
| Adjusted diluted EPS | $1.13 | 9.7% over FactSet; rose 61.4% YoY |
| Gross merchandise volume | $1.3 billion | Rose 37.9% YoY |
| Net income | $40.8 million | Increased 47.7% YoY |
| Active subscribers | 854,000 | Risen 76.4% YoY |
FactSet’s projections stood at $135.1 million in revenue and $1.03 for adjusted EPS. Beat percentages are determined using disclosed results.
Sezzle’s yearly revenue outlook offers investors the strongest indication yet. Using a 35% increase on 2025 revenue projects this year’s figure at approximately $607.9 million. After accounting for first-half actual earnings, nearly $322.7 million would need to be achieved during the second half.
That represents second-half growth of 30.8%, compared with 40.1% in the first half. These are inferred figures rather than official company guidance. KBW analyst Ryan Tomasello noted investors were looking for “more meaningful flow-through of the growth momentum in the second half.” CFO Lee Brading stated the fundamental calculation indicates about 30% growth. Investing.com
| Period | 2025 revenue | 2026 actual or implied | YoY growth |
|---|---|---|---|
| First half | $203.6 million | $285.2 million actual | 40.1% |
| Second half | $246.7 million | $322.7 million implied estimate | 30.8% |
| Full year | $450.3 million | $607.9 million implied estimate | 35.0% |
Second-half and full-year 2026 numbers are derived from Sezzle’s approximate 35% growth aim. These are not independent forecasts issued by the company.
Demand signals are strong. Purchase frequency climbed to 7.2 transactions, up from 6.1 in the previous year. Revenue generated per monetized user increased by 16.2%. Repeat usage accounted for 97.2% of all orders.
To drive growth, acquisition costs increased significantly. Marketing spending climbed to $19.4 million from $8.8 million. Sezzle gained 140,000 net subscribers in the quarter. CEO Charlie Youakim said management was “hitting the gas in the car just to see how the car reacted.” He anticipates reduced spending in the third quarter, provided other conditions hold steady. Contentful
Increased spending left headline margins unaffected but heightened the focus on cohort payback and credit performance.
| Operating measure | Q2 2026 | Q2 2025 | Change |
|---|---|---|---|
| Revenue/Gross Merchandise Value | 11.7% | 10.6% | up 1.1 percentage points |
| Transaction costs/GMV | 4.3% | 4.1% | up 0.2 points |
| Net transaction margin | 63.5% | 61.1% | up 2.4 points |
| Non-transaction costs/Revenue | 29.0% | 28.1% | up 0.9 points |
| Adjusted EBITDA margin | 38.8% | 38.9% | down 0.1 points |
| Marketing costs | $19.4 million | $8.8 million | up 121.1% |
Net transaction margin refers to revenue after subtracting transaction-related expenses, expressed as a percentage of revenue.
The drop on Friday reduced Sezzle’s projected earnings multiple by nearly 12 turns. The stock closed at $178.53 on Thursday, representing roughly 34 times the updated $5.25 EPS forecast. With the price at $117.50, the multiple decreases to about 22.4 times.
Broker opinions were mixed. B. Riley and Needham increased their price targets, but KBW lowered its target significantly. According to Google Finance, there are three Buy recommendations, four Hold ratings, and zero Sell calls, with an average price target of $168.
| Brokerage | Analyst | Recommendation | Target | August 7 action |
|---|---|---|---|---|
| B. Riley Securities | Hal Goetsch | Buy | $196 | Up from $141 |
| Needham | Kyle Peterson | Buy | $172 | Increased from $166 |
| Northland Securities | Michael Grondahl | Buy | $170 | No change |
| KBW | Ryan Tomasello | Hold | $155 | Lowered from $190 |
| TD Cowen | Hoang Nguyen | Hold | $165 | No change |
| Oppenheimer | Rayna Kumar | Hold | — | No change |
Key fintech peers showed minimal changes. Affirm Holdings Inc. NASDAQ:AFRM remained unchanged, Block Inc. NYSE:XYZ dipped 0.1%, while PayPal Holdings Inc. NASDAQ:PYPL declined by 1.0%. This divergence points to Sezzle’s drop being driven by company-specific factors.
| Company | Late-morning price | Friday change |
|---|---|---|
| Sezzle | $117.50 | down 34.2% |
| Affirm | $76.58 | unchanged |
| Block | $78.91 | off 0.1% |
| PayPal | $59.17 | down 1.0% |
Prices observed as of approximately 11:57 a.m. EDT.
SezzleCash began operations in June, with Sezzle Send set to roll out in August. Company executives plan to be present at Needham’s fintech event on August 13. Investors are monitoring if reduced marketing impacts subscriber growth.
Risks: Sezzle anticipates credit-loss provisions will rise to between 2.5% and 3.0% of GMV, with elevated loss rates among new users. BNPL industry faces ongoing regulatory uncertainties, and if performance of recent user cohorts falls short, marketing payback periods may extend.
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