In its pursuit of profitability, buy now, pay later provider Sezzle has shuttered operations in some markets.
The Minneapolis-based company, which reported fourth-quarter earnings Tuesday, took a number of actions last year to shave costs as it sought to rebound from a full-year net loss of $75.2 million in 2021.
For the fourth-quarter though, Sezzle reported net income of $600,000, compared to a net loss of $25.9 million in the same quarter in 2021.
Sezzle has wound down payment operations in India and it’s in the process of doing so in Europe and Brazil, the company said Tuesday. The company mainly operates in the U.S. and has a presence in Canada, according to its most recent quarterly filing from November.
It’s also cut loose or renegotiated pricing with unprofitable merchants, implemented convenience fees in the U.S. and “reduced, renegotiated and eliminated” third-party technology and marketing spending, the company said in its earnings release.
The company, led by CEO Charlie Youakim, also noted employee cuts last year. Last March, Sezzle said it was cutting 20% of its North American staff. A Sezzle spokesperson didn’t immediately respond to a request for comment on the current headcount.
Even with those cost-cutting actions, the company reported a $38.1 million net loss for 2022.
Additionally, as inflation has affected consumer spending, Sezzle’s fourth-quarter underlying merchant sales fell 19.4%, to $452.3 million. The company attributed that drop to the merchant adjustments it made, tightened underwriting and the competitive BNPL landscape. Sezzle currently has about 47,000 merchants in its network, according to its website.
After a period of rapid expansion, BNPL companies in recent months have begun to prize profitability over growth, largely due to a push from their investors who are worried about the gloomy global economic outlook.
Others BNPL providers, including Stockholm-based Klarna, Sydney-based Zip and San Francisco-based Affirm have cut workers, tightened underwriting standards or considered merchant fee increases.
To fuel growth, the company said it’s focusing on its premium offering which now has about 132,000 subscribers and its “pay anywhere” card, according to the release. Sezzle also introduced a pay in full option last year, and plans to pursue partnerships and monetization opportunities within its app.
Last year, Sezzle received $11 million from BNPL peer Zip. That company had planned to acquire Sezzle before scrapping the purchase last July.
