Abigail Rudder

Abigail Rudder, on for Rayna Kumar from Oppenheimer, asked about the outlook for hardware revenue in fiscal 2026 after persistent headwinds and inquired about the impact on guidance. She also asked to distinguish between declines from delayed sales versus cloud migrations.

Answer

CFO & Treasurer Mimi Carsley explained that while hardware revenue is not expected to rebound massively, it will be less of a material headwind in fiscal 2026 due to the lower base from fiscal 2025. She noted the decline is primarily structural, driven by the ongoing migration of clients from on-premise to the private cloud, as very few new clients choose on-premise solutions.

Abigail Rudder from Oppenheimer & Co. Inc. asked about Sezzle's potential response to deteriorating consumer credit quality, changes in the competitive pricing landscape, and the current status and timeline of the lawsuit with Shopify.

Answer

Executive Chairman & CEO Charlie Youakim stated that Sezzle can adjust consumer credit limits immediately if risk signals emerge, a key advantage over credit cards. He noted no significant changes in pricing from competitors. Regarding the Shopify lawsuit, he reported no new updates and suggested the legal process could take upwards of three to five years.

Abigail Rudder from Oppenheimer & Co. Inc. asked for additional details on the Tinman AI software business opportunity and its expected performance through the cycle. She also inquired about the drivers behind the strong growth in the home equity business.

Answer

Founder & CEO Vishal Garg positioned the software business as a high-margin opportunity to replace legacy systems, noting a strong pipeline that includes a top-10 mortgage company. Regarding home equity's 166% YoY volume growth, Garg credited Better's ability to make the process cheaper and faster via a marketplace model, increasing approval rates. CFO Kevin Ryan added that high consumer acceptance is driven by home appreciation and high mortgage rates.