Total Revenue

9 Months Ended

Sep. 30, 2025

Revenue from Contract with Customer [Abstract]

Total revenue was $116.8 million and $70.0 million for the three months ended September 30, 2025 and 2024, respectively, and $320.4 million and $172.9 million for the nine months ended September 30, 2025 and 2024, respectively. Total revenue in the fourth quarter has historically been strongest for us, in line with consumer spending habits during the holiday shopping season. Our total revenue is classified into three categories: transaction income, subscription revenue, and income from other sources.

Transaction Income

Transaction income is comprised of all income earned from merchants, consumers, and other third parties that relate to processing orders and payments on the Sezzle Platform. This primarily includes merchant processing fees, partner income, and consumer fees.

We earn income from fees paid by merchants in exchange for our payment processing services. These merchant processing fees are applied to the underlying sales of consumers passing through our platform and are predominantly based on a percentage of the GMV plus a fixed fee per transaction. For orders that result in a financing receivable, merchant processing fees are recognized over the duration of the loan using the effective interest method. For orders that do not result in a financing receivable, merchant processing fees are recognized at the time the sale is completed. We also earn income from partners on consumer transactions. This income includes interchange fees earned through our virtual card solution and promotional incentives with third parties. Virtual card interchange income related to loans we originate is recognized over the loan’s duration using the effective interest method. Virtual card interchange income related to loans we purchase is recognized at the time the sale is completed and not deferred over the life of the loan. Promotional incentives are recognized in the period we fulfill our contractual obligations with third-party platforms for directing traffic or volume to specific merchants or brands. Merchant and partner income totaled $26.0 million and $21.9 million for the three months ended September 30, 2025 and 2024, respectively, and $73.3 million and $59.9 million for the nine months ended September 30, 2025 and 2024, respectively.

Transaction income also includes income from consumer fees that are related to processing orders and payments. Such fees are assessed when consumers make a scheduled payment using a card, when a payment method fails when attempting to make an installment payment, or when consumers are assessed a fee for using Sezzle On-Demand. These fees are recognized at the time the fee is assessed to the extent the fee is reasonably collectible and totaled $33.5 million and $14.5 million for the three months ended September 30, 2025 and 2024, respectively, and $96.0 million and $32.1 million for the nine months ended September 30, 2025 and 2024, respectively.

Subscription Revenue

We offer our consumers the ability to subscribe to two paid services: Sezzle Premium and Sezzle Anywhere. Sezzle Premium allows consumers to shop at select large, non-integrated premium merchants, along with other benefits, for a recurring fee. Sezzle Anywhere allows consumers to use their Sezzle Virtual Card at any merchant online or in-store, subject to certain merchant, product, goods, and service restrictions, for a recurring fee. Subscription fees are recognized straight-line over the subscription period.

Income from Other Sources

Income from other sources includes all other incomes earned from merchants, consumers, and other third parties not included in transaction income or subscription revenue. This includes late payment fees, gateway fees, and marketing revenue earned from affiliates. Late payment fees are assessed to consumers who fail to make a timely principal payment. Late payment fees are recognized at the time the fee is charged to the consumer to the extent the fee is reasonably collectible. Late payment fees totaled $21.0 million and $6.8 million for the three months ended September 30, 2025 and 2024, respectively, and $53.4 million and $13.5 million for the nine months ended September 30, 2025 and 2024, respectively.

Disaggregation of Total Revenue

Our total revenue by category and Accounting Standards Codification (“ASC”) recognition criteria for the three and nine months ended September 30, 2025 and 2024 was as follows:


	For the three months ended September 30,
	2025						2024
(in thousands)	Topic 310		Topic 606		Total		Topic 310		Topic 606		Total
Transaction income	$	34,299	$	25,244	$	59,543	$	26,951	$	9,446	$	36,397
Subscription revenue	—		24,340		24,340		—		22,857		22,857
Income from other sources	25,016		7,897		32,913		7,452		3,252		10,704
Total revenue	$	59,315	$	57,481	$	116,796	$	34,403	$	35,555	$	69,958


	For the nine months ended September 30,
	2025						2024
(in thousands)	Topic 310		Topic 606		Total		Topic 310		Topic 606		Total
Transaction income	$	92,488	$	76,817	$	169,305	$	66,678	$	25,418	$	92,096
Subscription revenue	—		70,345		70,345		—		57,377		57,377
Income from other sources	61,433		19,327		80,760		15,237		8,195		23,432
Total revenue	$	153,921	$	166,489	$	320,410	$	81,915	$	90,990	$	172,905

Transaction income that falls under the scope of ASC Topic 310, Receivables, relates to transactions that result in a financing receivable being recognized. Such income is initially recorded as a reduction to notes receivable, net, within the consolidated balance sheets. The income is then recognized over the average duration of the note using the effective interest rate method. Transaction income to be recognized over the duration of existing notes receivable outstanding was $2.3 million and $3.8 million as of September 30, 2025 and December 31, 2024, respectively.

Transaction income that falls under the scope of ASC Topic 606, Revenue from Contracts with Customers, relates to transactions that do not result in a note receivable being recognized. Such revenue comprises a single performance obligation which is satisfied at the time the transaction occurs, at which point we recognize revenue.

Subscription revenue entirely falls under the scope of ASC Topic 606. Such revenue comprises a single performance obligation which is satisfied evenly over the underlying subscription period. Revenue is recognized ratably over the duration of the performance obligation. All performance obligations are fully satisfied within one year or less of receiving payment. Payment received for performance obligations not yet satisfied are recorded as deferred revenue on the consolidated balance sheets until such performance obligations are satisfied. Subscription revenue to be recognized over the remaining duration of outstanding performance obligations was $4.6 million and $4.2 million as of September 30, 2025 and December 31, 2024, respectively. Total revenue for the nine months ended September 30, 2025 includes $4.1 million of revenue that was included in deferred revenue as of December 31, 2024. Total revenue for the nine months ended September 30, 2024 includes $2.6 million of revenue that was included in deferred revenue as of December 31, 2023.

Income from other sources that falls under the scope of ASC Topic 310 primarily relates to late payment fees. Such fees are recognized at the time the fee is charged to the consumer to the extent they are reasonably collectible. Income from other sources that fall under the scope of ASC 606 comprises a single performance obligation which is satisfied immediately and not deferred.