Wong Yuen

Wong Yuen asked about the differences in Sezzle's marketing approach for subscription products now compared to before the launch of on-demand, and whether the company expects to return to previous levels of net subscription adds. He also inquired about recent pricing actions on new subscribers and any changes in approval rates or underwriting this quarter.

Answer

Executive Chairman and CEO Charlie Youakim declined to provide specific guidance on quarterly subscription net adds. He confirmed that pricing on both subscription products was increased by $1-2 per month, primarily as an inflationary adjustment since their launch three years prior. Mr. Youakim explained that the current marketing strategy directly funnels consumers towards subscription offers at the point of sale or within the app, rather than initially presenting an on-demand option. While this approach may result in a slightly lower conversion rate, it is deemed a better decision from a lifetime value perspective. Regarding underwriting, Mr. Youakim stated that new models were launched this quarter with the goal of maintaining similar approval rates while reducing the provision for credit losses (PLR) for new customers.

Wong Yuen asked about the distinctions in Sezzle's marketing approach for subscription products now compared to before the introduction of on-demand, specifically whether the company anticipates returning to previous net add levels for subscriptions. He also inquired about recent pricing adjustments for new subscribers and their potential as a top-line lever, as well as any changes in underwriting or approval rates during the current quarter.

Answer

Charlie Youakim, Executive Chairman and CEO, refrained from providing specific guidance on quarterly subscription net additions. He clarified that recent pricing increases on subscription products were modest ($1-2 per month) and primarily served as an inflationary adjustment. The core difference in marketing now involves directly funneling consumers towards subscription options at the point of sale or within the app, rather than initially offering on-demand. While this might result in a slightly lower conversion rate compared to on-demand, it is considered a superior decision from a lifetime value perspective. Charlie also confirmed that approval rates remain consistent with past levels, with new underwriting models designed to maintain approval rates while reducing PLR for new customers.