Gladiator 5 – Sezzle v Dave Inc.

I’m having trouble deciding which share I’m more excited about: Sezzle or Dave Inc. I do know that I am excited about both. They appear to be in the early stages of a massive rise. Both featured in my Top Ten, now my Fabulous Fourteen.

I hadn’t expected it, but this focus on a group of shares in especially exciting companies is becoming a central part of the Quentinvest strategy. I expect the number of shares in the list to grow slowly over time. It depends on how many super exciting shares I find. Departures from the list will be significant events. Ideally, there won’t be any.

I have been thinking about Charlie Munger’s comments about being prepared to hold shares for a century. Worked for him, I suppose, because he lived for over 100 years. I have noted before, in agreement with him, that patience is arguably the chief characteristic of a successful investor.

It is a virtue that I lack to the nth degree. If I had it, I would be unimaginably rich. It may be a little late to acquire it, as my 80th birthday is fast approaching.

The Munger approach can be summed up in a simple rule. When you buy a share, you buy on the understanding that you will never sell. I have considered this in the past, but never remotely been able to stick to it.

It also concentrates the mind when you buy, like getting married versus a one-night stand. Both are wonderful in their different ways, but marriage should be more rewarding.

I read a David Gemmell book once where the hero said he had never had sex with any woman unless he was paying. He was talking to a beauty who promptly asked for a coin and told him he could now do what he wanted to do. I have sometimes thought that hero was on to something. It is not sex without love, but certainly sex without strings, which may be the most romantic kind.

Whatever the merits of one-night stands, that should not be our approach to investing.

The chart of Dave Inc. shows one of the greatest resurrections since Our Beloved Saviour.

A market value above $4bn in early 2022 fell to $50m and has since rebounded to $3.4bn. These guys are nothing if not battle-hardened.

Sezzle and Dave have much in common. They are disruptors in a financial sector which is both massive and ripe for disruption.

I have just listened to an hour-long interview with Dave CEO, Jason Wilks, which took place in April 2025. He is impressive and has massive plans to grow the business (a) by getting more customers and (b) by offering to meet more of the credit needs of those customers. He expects Dave to be massively bigger in a few years.

It tells you something about America that Dave’s target market is the 50% of Americans earning less than $100,000 a year who are considered too small to interest the bigger banks with their high cost structure and their need to charge high fees.

He also notes that as a digital, AI-intensive operation, Dave is highly scalable, able to grow sales faster than costs, so becoming not only bigger but more profitable over time Dave’s loans are very short-term, literally a matter of days between paychecks, so he is accumulating a massive amount of data about his customer base, which feeds into lower bad debts, already very low and a more efficient operation.

Last, but not least, the product is so attractive and so competitive with regular banks that new customers come in by word of mouth and marketing spend is low.

When the company floated, like many digital businesses, the target was to maximise growth, and this proved almost disastrous in a financial climate that became much more hostile in 2022. The company had to pivot from growth at all costs to profits at all costs. Now that profits have been achieved and are growing rapidly as the company scales, the emphasis can switch back towards growth.

It is a terrific story, JW looks like a terrific CEO, and the opportunity looks massive. The shares have come a long way since the 2023 lows, but could still be early days in a period of supercharged growth that could run for years, even decades.

Sezzle is every bit as exciting as Dave Inc..

Take this from the Q1 2025 results.

 It’s an exciting time for the payments industry and especially buy now pay later as our sector continues to grow and gain market share.

Even as we’re gaining on other payment methods, we still represent less than 10% of the payments market. We believe that our sector will continue to gain share as we gain share within it.

We also believe that it is a great time to be in the buy now pay later space as there is a heightened level of uncertainty in the economy. Consumer sentiment is dropping and many consumers seek out flexibility in their finances in uncertain times.

BNPL provides that wanted flexibility and allows payments to be matched to budgets. We have said this before, but we will say it again now, BNPL is aligned with responsible repayment. Consumers must be current with us or they aren’t allowed to continue to use us as a payment method. BNPL is very different from a revolving line of credit on a credit card where large overdue balances can be punted into the next cycle, accumulating large fees and high APRs, leading to a cycle of never-ending debt. We love that we’re on the right side of responsible payments.

Looking at our first quarter results, we continue to defy those who say we can’t compete with larger better capitalized competitors. We are doing more than just competing. We are thriving and winning. It turns out that innovation and efficient operations can still produce great returns.

Charlie Youakim, CEO, Sezzle, Q1 2025, 19 May 2025

The company is looking after shareholders.

During the quarter, we announced a $50 million share repurchase program, which went into effect after quarter-end. We also completed a six-for-one stock split to make our shares more appealing and accessible for investors, with the mindset that this will help increase liquidity in our stock. We believe both decisions are smart capital markets moves.

Charlie Youakim, CEO, Sezzle, Q1 2025, 19 May 2025

Sezzle has been burned in the flames. Maybe it should be called ‘Sizzle’.

Prospects look good.

We are excited to announce that we’re raising 2025 guidance across the board increasing top line revenue growth from 20% to 30% to 60% to 65% and earnings per share from $2.21 to $3.25. I know that’s a significant adjustment especially when you see many companies out there pulling back on guidance completely.

So, let me walk you through why we’re confident about the adjusted outlook. It’s important to start by calling out the tailwinds leading to our $36 million net income quarter.

First, demand remained strong in the first quarter which is usually one of our softer quarters. Second credit performance surpassed our expectations with the provision for credit losses as a percentage of GMV coming in well below our stated expectations.

Last the interplay between our subscription and on-demand products has exceeded our expectations. We expected to see a balance between the cannibalization of subscription and adoption of our on-demand product yet our subscribers are holding up and even using the product more frequently and non-subscribers continue to engage with our on-demand product. We expect this positive trend to continue providing a strong tailwind for 60% plus top line growth.

Karen Hartje, CFO, Sezzle, Q1 2025, 19 May 2025

The more I study Sezzle, the more I realise how much I have to learn about this business and its amazing CEO, Charlie Youakim. This guy just won’t be beat. Time and again, when you think he is out for the count, he comes storming back with a reinvention of his business.

I wasn’t sure about Sezzle at first because they are a late entry to a competitive market, BNPL (Buy Now Pay Later). But I am beginning to realise that he is the guy to beat. As recently as October 2023, the shares fell to $1.18, but even then, Youakim and team had dreamed up the innovation that was to be a get-out-of-jail card.

I am trying to explain developments I have not yet fully understood, but I will be returning to the subject of Sezzle in future alerts.

BNPL companies provide free credit to borrowers who buy and repay in three instalments. Profits are generated from merchant payments, and this space can be highly competitive. In June 2022, Sezzle launched its first subscription product, Sezzle Premium, followed in June 2023 by Sezzle Anywhere in 2024.

Building on the success of the Sezzle subscription product, Sezzle saw strong demand for a flexible, non-subscription way to Pay in 4 anywhere*. The Sezzle On-Demand product meets this need by allowing users to generate a single-use virtual card for a set amount, enabling them to split payments without being limited to partnered merchants. Issued by WebBank, Sezzle On-Demand is already meeting the needs of shoppers who value the simplicity and convenience of the On-Demand way to pay.

This product offers higher conversion rates — both for first-time orders and for shoppers upgrading to a subscription — demonstrating its impact on driving engagement. Unlike a subscription, Sezzle On-Demand has no recurring fees; consumers simply pay a one-time service fee at checkout. By setting their spending amount upfront, shoppers can stay in control of their budget while enjoying the flexibility of Buy Now, Pay Later across any retailer that accepts Visa.

Sezzle news

This pace of innovation seems set to continue.

What’s New in Sezzle’s Product Marketplace?

Smarter shopping with AI-powered, personalized recommendations tailored to your interests. Instant price drop alerts to ensure you never miss a deal. Curated collections featuring trending products, making discovery effortless.

Behind the scenes, AI-driven technology is transforming the shopping experience. Sezzle’s system automatically categorizes products, refines search results, and curates relevant collections, ensuring users quickly find what they’re hunting for. With intelligent personalization, Sezzle’s Product Marketplace delivers smarter, more intuitive recommendations, making it easier than ever to shop with confidence and convenience.

Sezzle news

Share Recommendations

Dave Inc. DAVE

Sezzle. SEZL

Which of these two stocks do I prefer? No idea; they both look amazing.