A buy-now-pay-later company that grew revenue 66%, expanded margins to 45%, and is now launching a mobile phone service via AT&T is not the same business it was two years ago.
We’ll help you decide whether the $170 million adjusted net income guidance for 2026, the 918K subscribers, and the 51% jump in app sessions make Sezzle worth adding to your portfolio at current levels.
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Sezzle Beat Its Own Guidance on Revenue, Margins, Net Income, and Tax Rate
Sezzle Inc. (NASDAQ: SEZL) reported FY2025 revenue of $450.3 million, up 66.1% year over year. That beat its own guidance of 60-65% growth.
Adjusted net income came in at $128.4 million against guidance of $120 million.
Adjusted EBITDA hit $187.7 million, above the $175-180 million guidance range. Even the tax rate came in under guidance at 23% versus the expected 25%.
This was a clean beat across every metric the company told you to expect.
Q4 showed 32.2% revenue growth, and GAAP net income for the full year was $133.1 million. This is a company that was losing money in 2022 and is now generating over $130 million in annual profit.
FY2025 revenue $450.3M, up 66.1%: Beat the 60-65% guidance range.
GAAP net income of $133.1M for the full year: From losses in 2022 to $133M in 2025.
For 2026, Sezzle guided 25-30% revenue growth and adjusted net income of $170 million, which translates to adjusted EPS of $4.70 – a 31% increase over 2025.
That guidance does not include any contribution from Sezzle Mobile or other new products still in development. The upside case is that these new products add on top of an already-above-consensus baseline.
Action: Buy SEZL now. The $170M adjusted net income guide excludes Sezzle Mobile entirely, so any traction there is unpriced upside. Exit if Q1 revenue growth misses 20%.
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The AT&T Mobile Partnership Is a Strategic Bet on Daily User Engagement
Sezzle is launching a mobile phone service through a partnership with AT&T, operating under the Sezzle Mobile brand.
The CEO described it as a way to save consumers money on their $141 average monthly cellular bill while giving Sezzle more frequent daily touchpoints with its user base.
A fintech whose customers check the app once a month to make a payment is fundamentally less sticky than one they interact with daily for their phone service.
The strategic logic is retention and acquisition. A Sezzle Mobile customer has a much higher switching cost than a pure payment user.
The mobile service also reaches people who have never tried buy-now-pay-later. The 2026 guidance excludes Sezzle Mobile entirely, leaving the market with no way to price any traction it gets.
Sezzle Mobile via AT&T, expected to launch imminently: Confirmed on the Q4 earnings call.
Mobile creates daily touchpoints vs monthly payment interactions: Retention and acquisition play combined.
A receipt scanning and rewards feature hit adoption rates higher than any prior Sezzle launch in testing. Deposit accounts, a debit card, and an AI shopping assistant are also in development on top of the mobile launch.
Action: On the Q1 call, if management reports any Sezzle Mobile subscriber metrics, add 10% immediately. Mobile is excluded from guidance entirely, so any traction is pure earnings upside.
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Subscriber Growth and App Engagement Are the Leading Indicators to Watch
Sezzle ended 2025 with 918,000 monthly on-demand and subscriber users, up 30% year over year. App sessions surged 51% by December.
These are the metrics that tell you whether the platform strategy is working before revenue and earnings show it.
More sessions per user means more purchasing activity, more engagement with Sezzle’s shopping features, and higher lifetime value per subscriber.
Subscribers pay monthly fees regardless of transaction volume.
That recurring base reduces earnings cyclicality and gives Sezzle a more predictable profile than a pure transaction-fee model. At 918K subscribers growing 30%, that base is now material.
918K monthly on-demand and subscribers, up 30% year over year: The subscriber base is accelerating.
App sessions up 51% by December 2025: Users are engaging more frequently and more deeply.
MoneyIQ surpassing one million lessons in its first year tells you users are engaging with Sezzle as a financial platform, not just a checkout tool.
Deeper engagement supports premium pricing and reduces churn.
Action: If subscribers cross 1.1 million by Q2 2026, add 15% to your position. That is a 20% sequential jump from Q4 and tells you the mobile and feature launches are converting.
Sezzle Joined the S&P SmallCap 600 and Authorized a $100M Buyback
Sezzle was added to the S&P SmallCap 600 Index in December 2025. Index inclusion is not just a headline.
It forces passive funds to buy the stock mechanically, increases trading liquidity, and raises the stock’s institutional visibility to a wider set of fund managers who screen by index membership.
For a company that was a small-cap fintech with limited institutional following, this is a step change in how the stock gets discovered and held.
The board also authorized a new $100 million buyback, the second in under a year. The company repurchased $150 million in stock in 2025.
At $170 million adjusted net income guided for 2026, that pace is sustainable and directly accretive to EPS.
Added to S&P SmallCap 600 in December 2025: Passive fund buying and institutional visibility increase.
Adjusted EPS of $4.70 guided for 2026: Up 31% year over year.
The average analyst price target is $92.60 against a current price of $56 to $62. Index inclusion brings passive buyers, and the earnings trajectory supports a higher multiple.
Action: Any pullback to $50 to $55 is a buyback-supported add. The company is repurchasing aggressively at these levels. Buy the dip, do not read it as a warning.
How Sezzle’s Margins Compare Against BNPL and Fintech Peers
Adjusted EBITDA margins of 44.9% in Q4 2025 are unusually high for a BNPL company. The category broadly operates on thin spreads because credit losses, funding costs, and merchant acquisition costs compress margins.
Sezzle has been systematically cutting these costs through better credit underwriting, partner economics optimization, and the shift toward subscription revenue that carries higher margins than transaction fees.
Credit losses came in at approximately 2% of GMV in Q4. These improvements reflect two years of deliberate credit underwriting and cost restructuring, not a single good quarter.
44.9% adjusted EBITDA margin in Q4: Among the highest in the BNPL category.
Credit losses at approximately 2% of GMV: Improving underwriting is driving the credit performance.
At $60 and $4.70 adjusted EPS guidance, SEZL trades at approximately 13x forward earnings. For 25-30% revenue growth with 45% margins and a mobile expansion underway, that multiple is low.
Action: Size your position knowing 13x is the floor if guidance lands and 18x to 20x is where high-growth fintech typically trades.
A rerating to 18x takes the stock to $85. The $92.60 analyst target assumes that rerating happens.
Trivia: What did Warren Buffett pay per share when he first started buying Berkshire Hathaway in 1962?
The Risks Are Real, and China Is Not One of Them
Sezzle’s risks are specific to its model. The company is a consumer lender, and its credit performance is directly tied to the health of its customer base.
If unemployment rises or consumer spending weakens materially, credit losses move above the current 2% of GMV rate, and margins compress quickly.
The 2025 credit performance was strong, but it was also supported by a relatively stable consumer environment.
The second risk is the execution of new products. Sezzle Mobile, agentic commerce, deposit accounts, and a secured credit card are all being launched simultaneously.
Managing multiple new product rollouts at once adds operational complexity and dilutes management focus.
The company has a track record of successful product launches, including the receipt scanning feature that hit adoption records in testing, but the scale of the 2026 product roadmap is larger than anything it has attempted before.
Credit losses at 2% of GMV now, higher in a downturn: The primary risk to margin expansion.
Analyst target of $92.60 vs stock at $56 to $62: Wide gap reflects uncertainty, not just upside.
Neither risk breaks the thesis at current growth rates. Monitor credit loss trends every quarter.
Action: Hard stop if Q1 credit loss rate rises above 3% of GMV. That is the one number that breaks the margin expansion story. Everything else in the thesis holds as long as credit stays near 2%.
Final Word: 66% Revenue Growth and a Platform That Keeps Expanding
Sezzle is not the BNPL business people dismissed three years ago.
It is a profitable platform with 45% EBITDA margins, $133 million in GAAP net income, and a 2026 roadmap that includes mobile, AI shopping, and banking.
Buy at current levels with a hard stop tied to credit losses. Analyst consensus at $92.60 is achievable if the guide lands.
Setup Scorecard
Entry Window: Current levels around $56 to $62. Any pullback toward $50 to $55 is a buyback-supported add.
Catalyst Watch: Q1 2026 earnings print, Sezzle Mobile launch subscriber numbers, Q1 credit loss rate vs 2% benchmark.
Upside Setup: 2026 guide beats at $170M adjusted net income, mobile traction adds upside, stock rerates from 13x to 18x forward adjusted EPS. That puts the stock at $85 to $94.
Downside Cushion: $100M active buyback, S&P SmallCap 600 passive buying, $133M GAAP net income base.
What Moves It Next: Q1 revenue vs 25-30% guidance range, Sezzle Mobile launch metrics, and credit loss rate trend.
That's our coverage for today; thanks for reading! Reply to this email with feedback or any value names you want me to check out.
Best Regards,
—Noah Zelvis
Undervalued Edge
