Sezzle第二季收入增51.7%至1.497億美元 淨收入4076萬美元

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q

(Mark One)
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2026

OR
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to 
Commission file number 001-41781

SEZZLE INC.
(Exact name of registrant as specified in its charter)

Delaware81-0971660
(State or other jurisdiction of
incorporation or organization)(I.R.S. Employer
Identification No.)

700 Nicollet Mall, Suite 640, Minneapolis, Minnesota
55402
(Address of principal executive offices)(Zip Code)

Registrant’s telephone number, including area code: +1 651 240 6001

Not Applicable
(Former address)

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:

Title of Each ClassTrading Symbol(s)Name of Each Exchange on Which Registered
Common Stock, par value $0.00001 per shareSEZLThe Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the 
past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T
(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company (as defined in Rule 12b-2 of the Exchange Act).

Large accelerated filer ☒
Accelerated filer ☐
Non-accelerated filer ☐

Smaller reporting company ☐
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. The total shares of common stock, par value $0.00001 per share, outstanding at August 4, 2026 were 33,675,014.

Table of Contents

SEZZLE INC.

TABLE OF CONTENTS

PART I
FINANCIAL INFORMATION

Item 1
Financial Statements (unaudited)

Consolidated Balance Sheets
4

Consolidated Statements of Operations and Comprehensive Income
5

Consolidated Statements of Stockholders’ Equity
6

Consolidated Statements of Cash Flows
8

Notes to the Consolidated Financial Statements
9

Item 2
Management’s Discussion and Analysis of Financial Condition and Results of Operations 
19

Item 3
Quantitative and Qualitative Disclosures About Market Risk 
31

Item 4
Controls and Procedures
32

PART II
OTHER INFORMATION

Item 1
Legal Proceedings
33

Item 1A
Risk Factors
33

Item 2
Unregistered Sales of Equity Securities and Use of Proceeds 
33

Item 3
Defaults Upon Senior Securities
34

Item 4
Mine Safety Disclosures
34

Item 5
Other Information
34

Item 6
Exhibits
34

Signature
35

2

Table of Contents

FORWARD-LOOKING STATEMENTS

The information in this Quarterly Report on Form 10-Q and the documents incorporated by reference herein (“Form 10-Q”) includes “forward-looking statements” under Section 27A of the Securities Act of 1933, as amended, (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements, other than statements of historical fact, regarding our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management included in this Form 10-Q are forward-looking statements. When used in this Form 10-Q, the words “could,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project,” and similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements described under the heading “Risk Factors” included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Form 10-K”) and in other filings we make with the Securities and Exchange Commission. These forward-looking statements are based on our current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events. There is a risk that such predictions, estimates, projections, and other forward-looking statements will not be achieved. Nevertheless, and despite the fact that management’s expectations and estimates are based on assumptions management believes to be reasonable and data management believes to be reliable, our actual results, performance, or achievements are subject to future risks and uncertainties, any of which could materially affect our actual performance. Risks and uncertainties that could affect such performance include, but are not limited to:
 
•impact of the “buy-now, pay-later” (“BNPL”) industry becoming subject to increased regulatory scrutiny;
•impact of operating in a highly competitive industry;
•impact of macro-economic conditions on consumer spending and consumer credit;
•our ability to maintain our relationship with our existing merchant base, increase our merchant network and Gross Merchandise Volume (“GMV”);
•our ability to retain and increase our consumer base and GMV;
•our ability to retain and increase our subscriber base and subscription revenue;
•our ability to effectively manage growth, sustain our growth rate and maintain our market share;
•our ability to maintain adequate access to capital in order to meet the capital requirements of our business;
•the loans facilitated through the Sezzle Platform involve a high degree of financial risk;
•our reliance on our originating bank partner to originate a substantial majority of the loans facilitated by the Sezzle Platform;
•our reliance on third-party data to assess creditworthiness of consumers;
•impact of exposure to consumer bad debts and insolvency of merchants;
•our ability to comply with the applicable requirements of Visa and other payment processors;
•impact of the integration, support and prominent presentation of our platform by our merchants;
•impact of any data security breaches, cyberattacks, employee or other internal misconduct, malware, phishing or ransomware, physical security breaches, natural disasters, or similar disruptions;
•impact of key vendors or merchants failing to comply with legal or regulatory requirements or to provide various services that are important to our operations;
•impact of exchange rate fluctuations in the international markets in which we operate;
•our ability to protect our intellectual property rights and third party allegations of the misappropriation of intellectual property rights;
•our ability to retain our existing workforce and recruit additional staff;
•impact of the costs of complying with various laws and regulations applicable to the BNPL industry in the United States and Canada; 
•our ability to comply with applicable state lending licenses and other state lending laws and regulations; 
•the impact of litigation, regulatory investigations and actions, and compliance issues on our business; and
•our ability to achieve our public benefit purpose as a Delaware public benefit corporation.
 
We caution you that these forward-looking statements are subject to numerous risks and uncertainties, most of which are difficult to predict and many of which are beyond our control. These risks include, but are not limited to, the risks described under “Risk Factors” in our 2025 Form 10-K. Should one or more of the risks or uncertainties described in the 2025 Form 10-K occur, or should underlying assumptions prove incorrect, our actual results and plans could differ materially from those expressed in any forward-looking statements.
 
All forward-looking statements, expressed or implied, included in this Form 10-Q are expressly qualified in their entirety by these cautionary statements. These cautionary statements should also be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue. Except as otherwise required by applicable law, we disclaim any intention or obligation to update any forward-looking statements to reflect events or circumstances occurring after the date of this Form 10-Q.
3

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Consolidated Balance Sheets (unaudited)

As of
(in thousands, except per share amounts)June 30, 2026December 31, 2025

Assets
Current Assets
Cash and cash equivalents, including amounts held by variable interest entity (“VIE”) of $17,694 and $25,921, respectively 
$79,757 $64,054 
Restricted cash, current, including amounts held by VIE of $4,506 and $8,245, respectively
4,549 8,413 
Notes receivable321,160 283,400 
Allowance for credit losses(32,001)(28,505)
Notes receivable, net, including amounts held by VIE of $260,621 and $237,062, respectively
289,159 254,895 
Other current assets, net34,899 24,502 
Total current assets408,364 351,864 
Non-Current Assets
Restricted cash, non-current27,743 30,134 
Deferred tax asset14,670 13,615 
Other assets5,694 4,616 
Total Assets$456,471 $400,229 

Liabilities and Stockholders' Equity
Current Liabilities
Merchant accounts payable$57,905 $56,374 
Other payables, including amounts held by VIE of $172 and $1,476, respectively
6,471 6,908 
Deferred revenue6,821 5,431 
Other current liabilities, including amounts held by VIE of $869 and $0, respectively
30,467 21,053 
Total current liabilities101,664 89,766 
Non-Current Liabilities

Operating lease liabilities312 661 
Line of credit, net of unamortized debt issuance costs of $1,978 and $1,268, respectively, held by VIE
121,522 139,991 

Total Liabilities223,498 230,418 

Commitments and Contingencies (see Note 8)

Stockholders' Equity
Common stock and additional paid-in capital, $0.00001 par value; 750,000 shares authorized; 35,065 and 35,130 shares issued, respectively; 33,665 and 33,798 shares outstanding, respectively
196,535 194,890 

Treasury stock, at cost: 1,400 and 1,332 shares, respectively
(28,923)(24,072)
Accumulated other comprehensive loss(836)(683)
Accumulated earnings (deficit)66,197 (324)
Total Stockholders' Equity232,973 169,811 
Total Liabilities and Stockholders' Equity$456,471 $400,229 

See the accompanying Notes to the Consolidated Financial Statements.
4

Table of Contents

Consolidated Statements of Operations and Comprehensive Income (unaudited)

For the three months ended June 30, For the six months ended June 30, 
(in thousands, except per share amounts)2026202520262025
Total revenue$149,683 $98,702 $285,222 $203,614 

Operating Expenses
Personnel14,725 11,681 29,392 26,729 
Transaction expense20,738 14,243 39,258 29,560 
Third-party technology and data4,907 3,428 9,322 6,802 
Marketing, advertising, and tradeshows19,396 8,772 30,642 14,118 
General and administrative4,348 3,846 8,328 6,977 
Provision for credit losses30,608 20,646 44,283 33,447 
Total operating expenses94,722 62,616 161,225 117,633 

Operating Income54,961 36,086 123,997 85,981 

Other Income (Expense)
Net interest expense(3,250)(3,501)(6,265)(6,415)
Other income (expense), net1 87 (31)112 

Income before taxes51,712 32,672 117,701 79,678 

Income tax expense10,947 5,068 25,633 15,910 

Net Income40,765 27,604 92,068 63,768 

Other Comprehensive (Loss) Income
Foreign currency translation adjustment(75)729 (153)822 

Total Comprehensive Income$40,690 $28,333 $91,915 $64,590 

Net income per share*:
Basic$1.21 $0.82 $2.73 $1.89 
Diluted$1.17 $0.78 $2.64 $1.80 

Weighted-average shares outstanding*:
Basic33,633 33,733 33,698 33,792 
Diluted34,724 35,507 34,828 35,510 

*Effective March 28, 2025, we performed a 6-for-1 stock split of the Company’s common stock, effected through a stock dividend. Share and per share amounts have been retroactively adjusted.

See the accompanying Notes to the Consolidated Financial Statements.
5

Table of Contents

Consolidated Statements of Stockholders’ Equity (unaudited)

Common Stock and Additional Paid-in CapitalStock SubscriptionsTreasury Stock, At CostAccumulated Other Comprehensive LossAccumulated Deficit
(in thousands)SharesAmountTotal
Balance at April 1, 202533,965 $192,703 $— $(11,835)$(1,495)$(53,611)$125,762 
Equity based compensation— 393 — — — — 393 
Stock option exercises522 3,024 — — — — 3,024 
Restricted stock issuances and vesting of awards315 1,105 — — — — 1,105 
Stock subscriptions receivable related to stock option exercises7 44 (44)— — — — 
Repurchase and retirement of common stock(679)(3,728)— — — (19,819)(23,547)
Repurchase of common stock(115)— — (4,672)— — (4,672)
Foreign currency translation adjustment— — — — 729 — 729 
Net income— — — — — 27,604 27,604 
Balance at June 30, 202534,015 193,541 (44)(16,507)(766)(45,826)130,398 

Common Stock and Additional Paid-in CapitalStock SubscriptionsTreasury Stock, At CostAccumulated Other Comprehensive LossAccumulated EarningsTotal
(in thousands)SharesAmount
Balance at April 1, 202633,594 $194,210 $— $(25,000)$(761)$28,273 $196,722 
Equity based compensation— 1,009 — — — — 1,009 
Stock option exercises26 507 — — — — 507 

Restricted stock issuances and vesting of awards152 1,104 — — — — 1,104 

Repurchase and retirement of common stock(53)(295)— — — (2,841)(3,136)
Repurchase of common stock(54)— — (3,923)— — (3,923)
Foreign currency translation adjustment— — — — (75)— (75)
Net income— — — — — 40,765 40,765 
Balance at June 30, 202633,665 196,535 — (28,923)(836)66,197 $232,973 

See the accompanying Notes to the Consolidated Financial Statements.
6

Table of Contents

Consolidated Statements of Stockholders’ Equity (unaudited)

Common Stock and Additional Paid-in CapitalStock SubscriptionsTreasury Stock, At CostAccumulated Other Comprehensive LossAccumulated Deficit
(in thousands)Shares*AmountTotal
Balance at January 1, 202533,735 $188,589 $— $(9,391)$(1,588)$(89,775)$87,835 
Equity based compensation— 1,533 — — — — 1,533 
Stock option exercises623 3,564 — — — — 3,564 
Restricted stock issuances and vesting of awards500 3,539 — — — — 3,539 
Stock subscriptions receivable related to stock option exercises7 44 (44)— — — — 

Repurchase and retirement of common stock(679)(3,728)— — — (19,819)(23,547)
Repurchase of common stock(171)— — (7,116)— — (7,116)
Foreign currency translation adjustment— — — — 822 — 822 
Net income— — — — — 63,768 63,768 
Balance at June 30, 202534,015 193,541 (44)(16,507)(766)(45,826)130,398 

Common Stock and Additional Paid-in CapitalStock SubscriptionsTreasury Stock, At CostAccumulated Other Comprehensive LossAccumulated (Deficit) EarningsTotal
(in thousands)SharesAmount
Balance at January 1, 202633,798 $194,890 $— $(24,072)$(683)$(324)$169,811 
Equity based compensation— 2,007 — — — — 2,007 
Stock option exercises35 618 — — — — 618 
Restricted stock issuances and vesting of awards333 1,427 — — — — 1,427 

Repurchase and retirement of common stock(433)(2,407)— — — (25,547)(27,954)
Repurchase of common stock(68)— — (4,851)— — (4,851)
Foreign currency translation adjustment— — — — (153)— (153)
Net income— — — — — 92,068 92,068 
Balance at June 30, 202633,665 196,535 — (28,923)(836)66,197 $232,973 

*    Effective March 28, 2025, we performed a 6-for-1 stock split of the Company’s common stock, effected through a stock dividend. Share and per share amounts have been retroactively adjusted.

See the accompanying Notes to the Consolidated Financial Statements.
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Consolidated Statements of Cash Flows (unaudited)

For the six months ended June 30, 
(As restated)
(in thousands)20262025
Operating Activities:
Net income$92,068 $63,768 
Adjustments to reconcile net income to net cash provided from operating activities:
Depreciation and amortization938 598 
Provision for credit losses44,283 33,447 
Provision for other credit losses20,703 8,523 
Discount on notes receivable(658)(782)
Equity based compensation and restricted stock vested3,434 2,771 
Deferred income taxes(1,055)2,485 
Other, net452 269 
Changes in operating assets and liabilities:
Other assets(31,076)(20,523)
Merchant accounts payable1,845 (8,931)
Other payables(423)(4,645)
Other liabilities9,310 (1,496)
Deferred revenue1,394 22 
Operating leases11 30 
Net Cash Provided from Operating Activities141,226 75,536 

Investing Activities:
Purchases and originations of notes receivable, net of proceeds from repayments(77,931)(53,014)
Purchase of property and equipment(765)(431)
Internally developed intangible asset additions(1,564)(897)
Net Cash Used for Investing Activities(80,260)(54,342)

Financing Activities:
Proceeds from line of credit108,000 95,000 
Payments to line of credit(125,760)(68,700)
Payments of debt issuance costs(1,143)(10)

Proceeds from stock option exercises618 3,564 

Repurchase of common stock(32,805)(30,663)
Net Cash Used for Financing Activities(51,090)(809)

Effect of exchange rate changes on cash(428)1,274 
Net increase in cash, cash equivalents, and restricted cash9,876 20,385 
Cash, cash equivalents, and restricted cash, beginning of period102,601 98,310 
Cash, cash equivalents, and restricted cash, end of period$112,049 $119,969 

Noncash investing and financing activities:
Conversion of accrued profit-sharing incentive plan liabilities to stockholders' equity$— $2,301 

Supplementary disclosures:
Interest paid$7,748 $7,036 
Income taxes paid35,929 25,169 

See the accompanying Notes to the Consolidated Financial Statements.
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Notes to Consolidated Financial Statements (unaudited)

Note 1. Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

These unaudited consolidated financial statements are prepared and presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”) applicable to interim financial statements. While these consolidated financial statements and the accompanying notes thereof reflect all normal recurring adjustments that are, in the opinion of management, necessary for fair presentation of the results of the interim period, they do not include all of the information and footnotes required by U.S. GAAP for complete consolidated financial statements. These consolidated financial statements and their accompanying notes should be read in conjunction with the consolidated financial statement disclosures in our 2025 annual consolidated financial statements.

Operating results reported for the three and six months ended June 30, 2026 might not be indicative of the results for any subsequent period or the entire year ending December 31, 2026.

Sezzle Inc. (the “Company”, “Sezzle”, “we”, “us”, or “our”) uses the same accounting policies in preparing quarterly and annual consolidated financial statements. We consolidate the accounts of subsidiaries for which we have a controlling financial interest. The accompanying consolidated financial statements include all the accounts and activity of Sezzle Inc. and its wholly-owned subsidiaries. All intercompany balances and transactions are eliminated in consolidation.

Fair Value

Fair values are based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e. an exit price). The accounting guidance includes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The three levels of the fair value hierarchy are as follows:

•Level 1 — Unadjusted quoted prices for identical assets or liabilities in active markets;
•Level 2 — Inputs other than quoted prices in active markets for identical assets and liabilities that are observable either directly or indirectly for substantially the full term of the asset or liability; and
•Level 3 — Unobservable inputs for the asset or liability, which include management’s own assumption about the assumptions market participants would use in pricing the asset or liability, including assumptions about risk.

As of June 30, 2026 and December 31, 2025, our assets and liabilities measured at fair value were not material. We hold certain financial assets and liabilities that are not measured at fair value on the consolidated balance sheets. Such financial assets and liabilities are comprised of cash and cash equivalents; restricted cash; notes receivable, net; and line of credit, net. Cash and cash equivalents, and restricted cash are classified within Level 1 of fair value hierarchy. Carrying amount approximates fair value because these balances are held on demand. Line of credit, net, is classified within Level 2 of the fair value hierarchy. The line of credit’s carrying value approximates its fair value because the contractual interest rate follows current market rates, and there have been no material change in our credit profile since the line of credit was amended. Notes receivable, net, is classified within Level 3 of the fair value hierarchy. Given the short-term nature of the underlying loans and the recognition of an allowance for credit losses against the notes receivable balance, the carrying amount approximates fair value.

Segments

Segments are components of a company that have discrete financial information available and are regularly evaluated by a chief operating decision maker (“CODM”) to assess performance and decide how resources are allocated. Our Chief Executive Officer is considered to be the CODM, and our operations comprise one reportable segment, primarily deriving revenue from our payment processing platform in North America. Our CODM manages business activities on a consolidated basis and uses consolidated net income, as reported on the consolidated statements of operations and comprehensive income, to evaluate financial performance, allocate resources, and monitor budget versus actuals. The measure of segment assets is reported on the consolidated balance sheets as total assets. Significant expenses reviewed by the CODM are the expense line items presented in the consolidated statements of operations and comprehensive income. There are no significant concentrations by state or geographical location.

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Variable Interest Entity

Our primary source of funding consumer receivables is through a secured line of credit. We transfer a portion of our notes receivable to a wholly owned, bankruptcy-remote special purpose entity (the “SPE”), which then pledges such receivables as collateral for our line of credit. We continue to service all receivables sold and pledged to the SPE. The amount we can borrow under our line of credit is dependent on the amount of eligible, pledged notes receivable we have sold to the SPE. While we serve as a limited guarantor for the SPE and are subject to certain financial covenants, our line of credit provider does not have full recourse against our general credit and may absorb losses in the event of default if the cash receipts related to our pledged notes receivable are not sufficient to repay the outstanding line of credit balance. Refer to Note 7. Line of Credit for more information about our line of credit and the relationship between our line of credit and our notes receivable.

We are required to evaluate the SPE for consolidation, which we have concluded is a VIE. We have the ability to direct the activities that most significantly impact the economic performance of our wholly owned SPE. We also have the obligation to absorb losses and the right to proceeds related to the pledged notes receivable in the SPE, exposing us to losses and returns that could potentially be significant. As such, we have determined that we are the primary beneficiary of the SPE and are required to consolidate the entity as a VIE.

Stock Split

Our Board of Directors approved a stock split of our issued shares of common stock at a ratio of 6-for-1, effected through a stock dividend (the “Stock Split”). The Stock Split became effective March 28, 2025. All share and per share amounts for all periods presented in these consolidated financial statements and their accompanying notes have been adjusted, on a retrospective basis, to reflect the Stock Split, unless otherwise stated. The number of authorized shares and the par value of the shares remained unaffected.

Reclassifications

Certain prior period amounts have been reclassified to conform with the current period presentation format. These reclassifications had no effect on our total assets, total equity, net income, total comprehensive income, or cash flows.

Restatement of Previously Issued Consolidated Financial Statements

We have restated our consolidated statements of cash flows for the six months ended June 30, 2025. Such restatement was previously reported in our Annual Report on Form 10-K for the year ended December 31, 2025.

Recent Accounting Pronouncements

Recently Issued Accounting Guidance, Not Yet Adopted Within Our Consolidated Financial Statements

StandardDescriptionDate of Planned AdoptionEffect on Consolidated Financial Statements

ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses
This ASU requires, in the notes to the consolidated financial statements, the disaggregation of certain expenses within relevant expense captions in tabular format, incremental qualitative disclosures about expenses, and the disclosure of total selling expenses.Year ended December 31, 2027
As this ASU relates to disclosures only, there will be no impact to our consolidated results of operations and financial condition. We will include the enhanced disclosure requirements in our 2027 annual consolidated financial statements.
ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software
This ASU changes the criteria required to begin capitalizing internal-use software and website development costs, in addition to clarifying which disclosures are required for capitalized internal-use software costs.Year ended December 31, 2028We do not expect the adoption of this ASU to have a material impact on our consolidated financial statements. We expect to elect the prospective transition approach upon adoption.

There are additional new accounting pronouncements issued by the FASB that we have not yet adopted. We do not believe any of these additional accounting pronouncements will have a material impact on the consolidated financial statements or disclosures.
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Note 2. Total Revenue

Total revenue was $149.7 million and $98.7 million for the three months ended June 30, 2026 and 2025, respectively, and $285.2 million and $203.6 million for the six months ended June 30, 2026 and 2025, respectively. Our total revenue is classified into two categories, based on Accounting Standards Codification (“ASC”) recognition criteria: lending-based income and revenue from contracts with customers. Our total revenue by category for the three and six months ended June 30, 2026 and 2025 was as follows:

For the three months ended June 30, For the six months ended June 30, 
(in thousands)2026202520262025
Lending-based income (ASC Topic 310)$64,962 $46,686 $125,531 $94,606 
Revenue from contracts with customers (ASC Topic 606)84,721 52,016 159,691 109,008 
Total revenue$149,683 $98,702 $285,222 $203,614 

Lending-Based Income (ASC Topic 310)

Total revenue within the scope of ASC Topic 310, Receivables, relates to net origination fees on financing receivables we originate, premiums and discounts on financing receivables we purchase, and delinquency fees on financing receivables we hold. This is primarily comprised of merchant processing fees on orders that result in a financing receivable, delinquency fees, and other ancillary consumer fees, such as fees to reschedule installment due dates and nonrefundable fees assessed for using Sezzle On-Demand. Merchant processing fees are based on the Gross Merchandise Volume (“GMV”) passing through our platform and are predominately based on a percentage of the GMV, plus a fixed fee per transaction. Lending-based income derived from merchants and partners totaled $10.9 million and $12.7 million for the three months ended June 30, 2026 and 2025, respectively, and $21.0 million and $26.9 million for the six months ended June 30, 2026 and 2025, respectively. Lending-based income derived from consumers totaled $54.1 million and $34.0 million for the three months ended June 30, 2026 and 2025, respectively, and $104.5 million and $67.7 million for the six months ended June 30, 2026 and 2025, respectively.

Lending-based income, other than delinquency fees, is initially recorded as a reduction to notes receivable, net, within the consolidated balance sheets. Such income is subsequently recognized over the average duration of the related note receivable using the interest method. $2.5 million and $3.1 million of lending-based income was deferred within notes receivable, net, as of June 30, 2026 and December 31, 2025, respectively. Delinquency fees include fees assessed to consumers who fail to make a timely principal payment or their payment method fails when attempting to make an installment payment, and are recognized at the time the fee is charged to the consumer, to the extent they are reasonably collectible.

Revenue from Contracts with Customers (ASC Topic 606)

Total revenue within the scope of ASC Topic 606, Revenue from Contracts with Customers, primarily relates to subscription revenue, partner revenue, and certain consumer fees. Revenue from contracts with customers derived from merchants and partners totaled $28.6 million and $16.5 million for the three months ended June 30, 2026 and 2025, respectively, and $52.7 million and $30.5 million for the six months ended June 30, 2026 and 2025, respectively. Revenue from contracts with customers derived from consumers totaled $56.2 million and $35.5 million for the three months ended June 30, 2026 and 2025, respectively, and $106.9 million and $78.5 million for the six months ended June 30, 2026 and 2025, respectively.

Partner Revenue

We earn revenue from contracts with customers via partners. This revenue primarily includes interchange fees earned through our virtual card and promotional incentives with third parties. We have an agreement with a card-issuing partner to facilitate the issuance of virtual cards to be used by our consumers at checkout. We earn virtual card interchange fees when a consumer uses a virtual card to complete a purchase. Such interchange fees are established by the applicable payment network, are assessed to the merchant’s acquiring bank, and are remitted to the card-issuing partner that issues our virtual cards, which in turn remits to us the portion of those fees to which we are contractually entitled. Our customer in this arrangement is our card-issuing partner, and our performance obligation is to facilitate and process the underlying card transaction. The performance obligation is satisfied at the point in time the transaction is settled by the payment network, at which time the related revenue is recognized. Virtual card interchange revenue totaled $17.3 million and $10.5 million for the three months ended June 30, 2026 and 2025, respectively, and $32.5 million and $19.3 million for the six months ended June 30, 2026 and 2025, respectively.

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We earn promotional incentives from third-party platforms and brand partners for directing consumer traffic or transaction volume to specified merchants or brands. Revenue is recognized at the point in time the performance obligation is fulfilled, which is when a sale is made or traffic is directed to the merchant or brand. Consideration under these arrangements is generally determined based on the volume of consumer traffic or transaction activity in the period.

Subscription Revenue

We earn revenue from two paid subscription services, Sezzle Premium and Sezzle Anywhere, for a fixed fee paid at the beginning of the subscription period. Sezzle Premium allows consumers to shop at select large, non-integrated premium merchants, along with other benefits. 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. These performance obligations comprise a series of distinct services that are substantially the same; therefore, such revenue is recognized straight-line over the subscription period. Subscription revenue totaled $35.7 million and $22.6 million for the three months ended June 30, 2026 and 2025, respectively, and $68.9 million and $46.0 million for the six months ended June 30, 2026 and 2025, respectively.

All performance obligations related to these subscriptions are fully satisfied within one year of receiving payment. Payment received for performance obligations not yet satisfied are recorded as deferred revenue within the consolidated balance sheets until such performance obligations are satisfied. Subscription revenue to be recognized over the remaining duration of outstanding performance obligations was $6.8 million and $5.3 million as of June 30, 2026 and December 31, 2025, respectively. Total revenue for the six months ended June 30, 2026 includes $5.3 million of revenue that was included in deferred revenue as of December 31, 2025. Total revenue for the six months ended June 30, 2025 includes $4.1 million of revenue that was included in deferred revenue as of December 31, 2024.

Consumer Fees

Revenue from contracts with customers also includes revenue from fees assessed when consumers make a scheduled payment using a card or load funds into their Sezzle Balance. Such consumer fees relate to a single performance obligation to process the related payment, which is satisfied, and the related revenue is recognized, at the point in time the transaction is processed.

Note 3. Notes Receivable and Allowance for Credit Losses

We offer consumer installment payment plans on our platform. Consumers pay a portion of the purchase price at the point-of-sale as a down payment, and then pay off the remaining amount over time through scheduled payments. We purchase certain receivables related to installment payment plans extended to consumers in the United States by an independent chartered financial institution (our “originating partner”) and are responsible for servicing such receivables. All other consumer installment payment plans are originated by us. Our notes receivable represents amounts due from consumers primarily for outstanding principal on installment payment plans made on our platform that we have either originated or purchased from our originating partner. Our notes receivable are generally due no later than 56 days from origination.

We classify all of our notes receivable as held for investment, as we have the intent and ability to hold these investments for the foreseeable future or until maturity or payoff. Since our portfolio is comprised of one product segment, point-of-sale unsecured installment loans, we evaluate our notes receivable as a single, homogenous portfolio and make merchant-specific or other adjustments as necessary. Our notes receivable are reported at amortized cost, which includes unpaid principal adjusted for charge-offs and deferred loan fees and costs. The amortized cost basis is adjusted for the allowance for credit losses within notes receivable, net.

As of June 30, 2026 and December 31, 2025, our notes receivable at amortized cost was comprised of the following:

(in thousands)June 30, 2026December 31, 2025
Notes receivable, gross$323,636 $286,459 
Deferred loan fees and costs
(2,476)(3,059)
Notes receivable, amortized cost$321,160 $283,400 

Deferred loan fees and costs are primarily comprised of unrecognized merchant processing fees, which are recognized over the duration of the note with the consumer and are recorded as an offset to total revenue on the consolidated statements of operations and comprehensive income. As of June 30, 2026, our outstanding notes receivable had a weighted average days outstanding of 29 days.

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We closely monitor credit quality for our notes receivable to manage and evaluate our related exposure to credit risk. When assessing the credit quality and risk of our portfolio, we monitor a variety of internal risk indicators and consumer attributes that are shown to be predictive of ability and willingness to repay, and combine these factors to establish an internal, proprietary score as a credit quality indicator (the “Prophet Score”). We evaluate the credit risk of our portfolio by grouping Prophet Scores into three buckets that range from A to C, with receivables having an “A” rating representing the highest credit quality and lowest likelihood of loss. Our risk and fraud team closely monitors the distribution of Prophet Scores for signs of changes in credit risk exposure and portfolio performance. Consumers’ Prophet Scores are updated real-time. The risk and fraud team also evaluates the integrity of the Prophet Score machine learning model at least annually and updates it as necessary.

The amortized cost basis of our notes receivable by Prophet Score and year of origination as of June 30, 2026 and December 31, 2025 was as follows:

June 30, 2026December 31, 2025
Amortized cost basis by year of origination
(in thousands)20262025Total20252024Total
A$125,034 $25 $125,059 $105,974 $4 $105,978 
B117,942 74 118,016 109,843 13 109,856 
C77,572 456 78,028 67,422 71 67,493 
No score57 — 57 73 — 73 
Total amortized cost$320,605 $555 $321,160 $283,312 $88 $283,400 

Our notes receivable are considered past due when the principal has not been received within one calendar day of when they are due in accordance with the agreed upon contractual terms. Any amounts delinquent after 90 days are charged off with an offsetting reversal to the allowance for credit losses through the provision for credit losses on our consolidated statements of operations and comprehensive income. Charged-off principal payments recovered after 90 days are recognized as a reduction to the allowance for credit losses in the period the receivable is recovered. The amortized cost basis of our notes receivable by delinquency status as of June 30, 2026 and December 31, 2025 was as follows:

(in thousands)June 30, 2026December 31, 2025
Current$275,422 $246,720 
1–28 days past due22,766 18,565 
29–56 days past due11,924 8,274 
57–90 days past due11,048 9,841 
Total amortized cost$321,160 $283,400 

We maintain an allowance for credit losses at a level necessary to absorb expected credit losses on notes receivables from consumers. The allowance for credit losses is determined based on our current estimate of expected credit losses over the remaining contractual term and incorporates evaluations of known and inherent risks in our portfolio, historical credit losses, and current economic conditions. In estimating the allowance for credit losses, we utilize a roll rate analysis of delinquent and current notes receivable. A roll rate analysis is a technique used to estimate the likelihood that a loan progresses through various stages of delinquency and eventually charges off. We segment our notes receivable into delinquency statuses and semi-monthly vintages for the purpose of evaluating historical performance and determining the future likelihood of default. We regularly assess t