Sezzle Looks to Drive Revenue After ‘Watershed’ 2022

Sezzle is looking to drive revenues after ending a challenging 2022 on a high note.

The buy now, pay later (BNPL) provider released quarterly earnings figures Tuesday (Feb. 28) that show the company’s income jumping 16.2% to a record $38.3 million.

And as it heads into 2023, Sezzle says it has identified other revenue sources that can bring it an additional $10 million.

“Fiscal year 2022 will go down as a watershed moment for Sezzle,” CEO Charlie Youakim said. “We went from a company that reported a net loss of $75.2 million in fiscal year 2021 to exiting 2022 with net income in the fourth quarter.”

Youakim described the path the company took to reach this point in an interview with PYMNTS’ Karen Webster earlier this month.

He said Sezzle found itself “challenged unit economics-wise as a company” at the end of 2021, which meant that some arrangements with large merchant customers had to be repriced, a difficult process in which some of those deals did not survive.

Sezzle also had to trim unprofitable cohorts from its portfolio, something that took months to implement.

The company also began incentivizing customers to use automated clearing house (ACH) bank transfers for payments instead of cards, an easy move compared to other tough choices that had to be made, Youakim told Webster.

“We had to do a layoff,” he said. “I’m not proud of that. It’s the only time I’ve ever done it in my career, and I don’t ever want to do it again.”

Sezzle also disbanded its international businesses as they were some of its most unprofitable on a unit economics basis.

According to the company’s earnings report, 2022 saw Sezzle end its payments operation in India, and wind down businesses in Brazil and Europe.

The company has also been building up its Premium offering. It had 122,000 active subscribers in December, and has now topped 132,000, according to the earnings report.

Over the next 12 to 18 months, Sezzle says it will embark on initiatives that will bring in new revenue. The company said these involve partnerships, product innovation — for example, a “pay anywhere” card — and feature monetization, such as “affiliate payment models and pay-per-click placement” in the Sezzle app.

Sezzle’s earnings follow a spate of recent reports from companies that suggest BNPL volumes are growing, as PYMNTS reported recently.