November 11, 2026 – Paid members grew about twice as fast as transaction volume in the third quarter. Margins widened anyway, which moves the profit debate from lending toward fees.
In Summary
Active subscribers rose 68.1% to about 955,000, double the 34.9% growth in transaction volume.
Subscription revenue jumped 70.0% to $41.3 million and now makes up about a quarter of sales.
Net income rose 79.3% to $47.8 million as credit losses eased to 2.7% of volume.
Marketing spend nearly doubled from a year ago, and net subscriber adds slowed from the second quarter.
Sezzle subscribers reached about 955,000 at the end of September, the company said in a Nov. 9 investor presentation. That is up 68.1% from 568,000 a year earlier. Transaction volume grew more slowly, by 34.9% to $1.40 billion.
The gap matters for the buy now, pay later lender. It suggests growth now comes from fees per user, not just from more spending. Chief executive Charlie Youakim said Sezzle subscribers are “approaching one million.”
Sezzle subscribers outrun volume and users
The spread widens further down the funnel. Active consumers rose only 6.7% to 3.17 million. As a result, subscribers now equal about 30% of active consumers, up from 19% a year ago, by Catenaa’s math.
Those users also shop more often. Average quarterly frequency rose to 7.8 times from 6.5 times. Total transactions climbed 30.1% to 12.4 million. Meanwhile, revenue per monetized user rose 28.1% to $41.
SezzleCash, a cash advance product, adds to the pull. More than 15% of eligible new Anywhere subscribers made their first transaction with it in the quarter.
Fee income takes a bigger share
The quarterly report shows where the money comes from. Subscription revenue jumped 70.0% to $41.3 million, according to the 10-Q. That lifted its share of total revenue to about 24.8%, from 20.8%. On average, each subscriber brought in about $46 of subscription fees in the quarter, by Catenaa’s math.
By contrast, lending-based income rose 24.0% to $73.5 million. That is slower than volume growth. Even so, total revenue rose 42.6% to $166.5 million, beating volume growth by 7.7 points. Merchant and partner fees also grew, to $30.4 million from $20.9 million.
Margins widen as credit costs ease
Profit improved on every key line. Net income rose 79.3% to $47.8 million, the earnings release shows. Operating income grew 80.7% to $64.3 million, a 38.6% margin. Adjusted EBITDA climbed 77.1% to $70.2 million, a 42.1% margin.
Credit costs also helped. The provision for credit losses fell to 2.7% of volume, from 3.1%. Transaction-related costs dropped to 4.2% of volume from 5.2%. Sezzle now targets about 2.5% for the full year.
Notably, the non-GAAP gap is small. Adjusted net income of $47.7 million sits just below GAAP net income. So the profit story does not rest on add-backs this quarter. Return on equity over the past year reached 84.3%.
The cost of buying growth
Still, growth is not free. Marketing spend rose to $15.9 million from $8.8 million a year earlier, an 81% jump by Catenaa’s math. It did ease from $19.4 million in the second quarter.
Net subscriber adds slowed in step. Sezzle added about 101,000 in the third quarter, compared with 140,000 in the second. That pace will show how durable the subscriber engine is. On funding, Sezzle held $107.9 million of cash, including restricted cash. It also had $104 million drawn on its credit line.
What to watch
Sezzle raised its 2026 outlook for the fourth time. It now expects revenue growth of about 42.5%. Adjusted net income should reach $190 million, or $5.45 to $5.50 per share. Management also gave early 2027 guidance of $7.20 in adjusted earnings per share.
Two risks stand out. First, the company filed a national bank charter application in October, and regulators may not approve it. Second, it flags rising regulatory scrutiny of the BNPL sector in its 8-K filing.
For now, the numbers point one way. Sezzle subscribers are driving profit, and volume is the follower.
Editorial note: This article is for information only and is not investment advice. Figures come from the primary sources listed above. Figures marked “by Catenaa’s math” and chart values labelled as Catenaa calculations are derived by Catenaa from those sources and may differ slightly from company figures because of rounding.
