Sezzle Growth Engine: Can Subscriber Momentum Keep Accelerating?

Sezzle Inc. SEZL entered 2026 with stronger customer engagement and a clear shift toward higher-value subscribers. In the first quarter of 2026, active subscribers rose 48.4% year over year to 714,000, while the combined total of monthly on-demand users and subscribers reached 887,000, up 34.8%. Management believes this focus supports better retention and lifetime value.

The subscriber push is also changing how often customers use Sezzle. In the first quarter, average quarterly purchase frequency climbed to a record 7.1 times from 6.1 a year earlier. Active consumers increased 13.6% to 3.1 million, while transactions jumped 35.8% to 9.9 million. Repeat usage reached 97% of total orders.

These gains helped lift Gross Merchandise Volume (GMV) by 37.3% to $1.1 billion, nearly matching the holiday-driven fourth quarter. In the first quarter, revenues rose 29.2% to $135.5 million, representing 12.2% of GMV.

Marketing remains central to the subscriber growth strategy. First-quarter spending rose to $11.2 million from $5.3 million a year earlier, yet Sezzle reported a payback period of less than six months. The Earn tab logged 4.8 million visits since its launch in June 2025, and users showed a 55% higher Buy Now Pay Later (BNPL) conversion rate within 30 days after their first Earn tab activity.

The next test is whether Sezzle can turn stronger engagement into lasting customer value. Pay-in-5 is showing encouraging early demand, while the mobile plan, virtual card in Canada and enhanced long-term lending add more reasons to stay active. Sezzle is also developing deposit accounts and card products, with management expecting much of its current product roadmap to be completed and scaled by the end of 2027.

How Are Affirm & Klarna Growing Their Users?

Affirm AFRM is showing subscriber-style growth similar to Sezzle, helped by a wider merchant reach and frequent use of its payment products. Its expanding consumer base suggests BNPL demand remains healthy across major platforms. In the quarter ended March 2026, AFRM reported 26.8 million active consumers, up 22% year over year.

Klarna Group plc KLAR is also adding users, as it broadens beyond checkout into banking, cards and longer-term financing. Its scale is much larger than Sezzle’s, but the growth pattern reflects the same push toward deeper consumer relationships. In the first quarter of 2026, KLAR reached 119 million active consumers, rising 21% year over year.

SEZL’s Price Performance, Valuation & Estimates

Shares of Sezzle have outperformed in the past three months compared with the broader industry and the S&P 500 Index.

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From a valuation standpoint, Sezzle’s shares have a Value Score of D. In terms of forward 12-month P/E, SEZL stock is trading at 30.01X, which is at a premium to the Zacks Financial Transaction Services Market industry’s 17.27X.

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Sizzle’s estimate revisions reflect a positive trend. The Zacks Consensus Estimate for full-year 2026 EPS has been revised upward to $5.10 in the past month. The consensus estimate for the metric indicates a year-over-year increase of 42.06%.

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Sezzle currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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