Guidance rises again as subscriber growth accelerates and margins hold

The key surprise is another guidance increase, not just a strong quarter. Sezzle lifted FY2026 revenue-growth guidance to 35%, the top of its previous 30%–35% range, while raising adjusted net income to $185 million from $180 million and adjusted EPS to $5.25 from $5.10 (Updated FY2026 Guidance). That is a roughly 3% increase to profit and per-share expectations and signals that management sees enough momentum to absorb heavier investment and still deliver more earnings than previously assumed.

Growth is broad and increasingly subscription-led. GMV rose 37.9%, but active subscribers jumped 76.4% to 854,000, while purchase frequency increased to 7.2x from 6.1x (Business Highlights). That mix matters because it suggests the quarter was driven by deeper engagement and recurring subscription adoption, not merely higher transaction volume.

The company is spending aggressively without giving up profitability. Marketing more than doubled to $19.4 million from $8.8 million, pushing non-transaction operating expenses up 56.4% and to 29.0% of revenue from 28.1% (Non-Transaction Related Operating Expenses). Even so, adjusted net income margin improved to 26.2% from 25.1%, while adjusted EBITDA margin was essentially stable at 38.8% (Financial Highlights). The tradeoff is higher spending now for subscriber growth, but the filing shows that investment has so far translated into faster growth rather than margin deterioration.

Credit performance is a watch point, but not a clear negative in this filing. Transaction-related costs rose 42.2%, and transaction-related costs as a share of GMV edged up to 4.3% from 4.1%, with the provision for credit losses at 2.4% of GMV (Transaction Related Costs). Management says this remains within the expected seasonal buildup toward its 2.5%–3.0% full-year target range. That is reassuring relative to the company's own framework, although the modest deterioration means the guidance raise depends partly on credit losses remaining controlled as the receivables book expands.

The net read is clearly better than the standing expectation. The quarter delivered strong operating growth, rising subscriber momentum, stable adjusted EBITDA margins, and a third upward revision to 2026 profit guidance (Financial Highlights; Updated FY2026 Guidance). The new products and cheaper $300 million funding facility add longer-term growth and financing capacity, but their eventual contribution is still early and not yet quantified (Business Highlights; Funding Facility discussion). With no separate published quarterly consensus provided here, the strongest defensible comparison is versus Sezzle's prior guidance—and on that basis, the filing is a significant positive.