Thank you. Good afternoon, everyone, and welcome to Sezzle's Third Quarter Earnings Call. I'm Charlie Youakim, CEO and Executive Chairman of Sezzle. I'm joined today by our Chief Financial Officer, Karen Hartje; and our Head of Corporate Development and Investor Relations, Lee Brading. In conjunction with this call, we filed our earnings announcement with the SEC and posted it along with our earnings presentation on our investor website at sezzle.com. To retrieve the documents, please go to the Investor Relations section of our website. Please be advised of the cautionary note and forward-looking statements and reconciliation of GAAP to non-GAAP measures included in the presentation, which also covers our statements on today's call. If you're a long-term investor of Sezzle, you're already well aware of how good this team is at navigating and adapting our business model and our product solutions. I continue to be impressed by our team and our ability to adjust and adapt. We're always looking for ways to create win-wins with our stakeholders and also balance profitability, growth, and customer satisfaction. 2025 has been more of the same on that front. We've been testing our launches of on-demand and our shopping solutions and making incremental improvements and adjustments along the way, with a strong weighting towards making our customers' lives better while also continuing to grow with strong profitability metrics. We still believe that BNPL is in its early days and that we are likely to have years upon years of industry growth ahead of us. And we also believe that we're bringing to market a product that is fundamentally a better and more user-friendly credit product than a credit card. Our company and our BNPL industry in general are 100% aligned with responsible repayment of short duration loans that lean into the concept of budgeting versus outspending your income, like a credit card product can tend to do. Our company and our products are winning, and our industry is winning, too. If you take a look at Slide 3, you'll understand a bit of the excitement. We just posted revenue growth of 67% year-on-year in Q3. Our net income margin for the quarter was over 22%. Our return on equity for the last 12 months exceeded 100%, and our consumer metric measured by MODS rose almost 50% year-on-year. Further, we are raising our EPS and EBITDA guidance for 2025 and have received awards from some of the most respected media outlets, Time, U.S. News, Newsweek, and CNBC. What's our secret sauce? I believe it's our constant drive. We are never satisfied and are always pushing forward. Do we have a chip on our shoulder? Yes, maybe a little bit. Slide 4 provides some insight into our restless energy. The consumer is always wanting more, and we aim to fulfill their needs. We have launched several features in our app, most recently the Earn tab, which allows consumers to earn Sezzle spend. Consumers can find and activate offers for things like gas, groceries, and dining. We have a variety of ways for them to engage and win such as Sezzle Arcade and our educational tool, MoneyIQ. Last quarter, our Earn tab had over 13 million visits, and we just launched it at the end of Q2. I'm crazy proud of our team and how they continue to find new and innovative ways to provide value to the consumer. We continue to evaluate and push forward on additional products. Many of these are being run in parallel, and you've heard me discuss them before. Launch dates are still TBD, but they are all being worked on at various degrees. In June, we brought back one of our former heads of technology, Killian Bracky, to centralize our AI efforts. It's exciting to see the progress they are making across Sezzle. We called out a couple of example projects that the team is working on, a support chatbot and an AI shopping assistant. Both are great examples of how we're able to pull AI into our Sezzle ecosystem. The chatbot is already making a difference for our customer support team, saving them a significant amount of time, enabling our team to become more efficient. Let me take a step back and tell you a bit about our approach to AI. We aren't looking for ways to use AI to cut our team. Why would we? We have incredible growth, and cutting people is not something we need to do other than for performance. We view AI as a tool to enhance our team's productivity, allowing us to further leverage our infrastructure and scale the company faster with more efficient product launches and expansions. So in the case of customer service, it's likely that we'll scale incredibly well here over the next couple of years as the AI tooling continues to evolve and expand its ability to serve end customers. But the way we operate, you'll likely see that the support team size doesn't grow and may even shrink over the next few years as our efficiency with technology replaces the need to backfill members of the team. Our existing members will take on more complex cases and help train the AI systems in place to do more and more. Our marketing efforts are focused on the consumer with the primary goal of acquiring new users but also reducing churn. The combination of new feature launches and our marketing efforts is reflected in our strong engagement metrics. On Slide 5, you can see the step-up in our quarterly marketing and advertising spend. While we love all consumers that use Sezzle, the ones with the greatest lifetime values are those that engage Sezzle as either an on-demand user or as a subscriber. As most of you are aware, we created the definition of Monthly On-demand & Subscribers, also called MODS, in the fourth quarter of 2024 when we launched Sezzle On-Demand. We anticipated on-demand would allow us to reach more consumers that might be averse to joining a monthly subscription product. However, we also expected it to cannibalize our subscription product. We just didn't know to what extent. Initially, we put most of our marketing dollars towards on-demand because there's less friction to join relative to subscription. And you can see from the results that we quickly grew that product to 264,000 monthly users at the end of the second quarter. However, you can also see that our subscriber count shrank from 529,000 users at the end of the third quarter of 2024 to 484,000 users at the end of the second quarter of 2025. By the end of the second quarter, we had enough information to evaluate the effectiveness of on-demand. The engagement on the front end was good, but the follow-through on conversion was not as good as we would like. What do I mean by follow-through on conversion? When we launched on-demand, there were three key tenets: number one, drive enterprise opportunities; number two, increase conversion activity at the point of sale; and number three, convert a customer over to subscription eventually. On-demand has clearly positioned us to be more aggressive with enterprise merchants, and I'm happy to note a few wins on Slide 5 as a result. However, it didn't deliver like we hoped on conversions at the point of sale or over to subscription. Further, the profit profile for on-demand is less than our premium and anywhere subscription products. We still believe on-demand is a great tool, and it's a great tool to have in our tool belt, but we have adjusted how we go to market with it. We're going to continue to lean into it for winning over merchants. But on the consumer side, we're going to lean back into subscription with on-demand only being used as an alternative tool when its parent subscription can't do the job or meeting some resistance with an individual consumer. As you can see from the results, we pivoted our marketing and advertising spend towards subscription products in Q3 with subscribers rising to 568,000 at the end of the third quarter. We remain disciplined in our costs with a payback on marketing for consumer acquisition at 6 months or less. Across the board, our engagement metrics on Slide 6 reflect the strong momentum we have in our business. Terrific year-on-year and quarter-on-quarter performance. My two favorite metrics on this slide are MODS and purchase frequency. MODS is a good indicator of consumer activity within Sezzle over the last 30 days, and seeing such strong growth in our highest LTV products is fantastic. While the rise in purchase frequency suggests we are moving to the top of the consumers' wallets. You can see the same sequential dynamics on Slide 7. Before turning the call over to Karen, I would like to give more details on our corporate strategic project costs that were called out in our earnings release and later in the presentation. During the quarter, these items added up to about $1.3 million in costs. While these costs are relatively minor, they potentially have some pretty big outcomes. We decided to break these out because they aren't part of our core activities. While they aren't material, we wanted to make investors aware of them. First, our antitrust suit. For obvious reasons, we can't discuss the case. But if you'd like to learn more, you can go to our investor site where we have posted the suit there. We will find out in December if the case will continue forward as the defendant has petitioned the court to dismiss the case. Second is our capital markets exploration. We have talked in the past about our desire to refinance the credit facility given the size of only $150 million and price of SOFR plus 675 bps. We have decided to exercise the $75 million accordion with our current lenders as we head into the holidays, and this will give us more time to evaluate our options. You will see in our 10-Q that will be filed tomorrow morning the amendment to our current facility, which increases the size of the facility from $150 million to $225 million. Lastly, our banking charter discovery process. We have hired consultants and attorneys to assist us. Yes, we have an ILC bank partner in WebBank, and they are fantastic. We believe that holding an ILC, which is an acronym for industrial loan company, is the right long-term path for us as it doesn't subject us to becoming a bank holding company, which has all sorts of implications about capital, and capital allocations, etc. We believe it will be accretive and add greater efficiency to our business. This is a long process and not a guarantee process. If we apply, we anticipate submitting an application in the first half of 2026. If we don't get it, it doesn't change what we're doing, and it would not affect the outlook we have. With that, I'd like to turn the call over to Karen to review in further detail our Q3 results. But before I turn it over to Karen, I wanted to let investors know that Karen is retiring and that we're going to miss her dearly. Karen and Amin Sabzivand, our Chief Operating Officer, both joined the company on the same day, and I always say that day was one of the best days Sezzle has ever had. We're going to miss her infectious positivity and her total perfection in completing every task given to her and her team. But I also wanted to tell her how much I've appreciated her support and help along the way. We're definitely going to miss you, Karen. The plan is for Karen to stick around with us for the next 12 months as we transition. And we really feel great about that plan, and I'm also really happy Karen gets to step away in such a great way. Karen, take it away.

Thank you, Charlie, and good evening to all those joining us. The enhancement of our product experience and deeper consumer engagement drove remarkable results for the quarter, as seen on Slide 8. Total revenue continues to grow at an exceptional pace, increasing 67% year-over-year to $116.8 million. Our profitability followed a similar growth trend with GAAP net income and adjusted net income growing over 50% to $26.7 million and $25.4 million, respectively. Our margins held steady year-over-year with an adjusted EBITDA margin of 33.9% and total revenue less transaction-related costs of 54.2%. Most importantly, alongside our growth is our ability to scale efficiently, evidenced by our non-transaction-related operating expenses decreasing 2.9 percentage points year-over-year to 27.1%. Now turning to Slide 9, which highlights our top line growth. GMV increased 58.7% year-over-year, making our first $1 billion quarter. As Charlie discussed earlier on Slides 6 and 7, growth in active consumers and higher transaction frequency drove this milestone. Our take rate, defined as total revenue as a percentage of GMV, rose 60 basis points both sequentially and year-over-year to 11.2%. The focus on high LTV products that Charlie outlined on Slide 5 is a key driver of take rate strength, and we believe that focus positions us well to sustain this rate going forward. On Slide 10, we note our transaction-related costs with detailed components outlined on Slide 11. Overall, transaction-related costs as a percentage of total revenue and GMV increased year-over-year due to our strategic decision to expand our underwriting aperture and drive top line growth. Specifically, third quarter provision for credit losses as a percentage of GMV increased 70 basis points year-over-year to 3.1% and is trending toward the lower half of our stated 2025 provision target likely between 2.5% and 2.75%. Despite the slightly higher transaction-related costs, total revenue less transaction-related costs, as seen on Slide 12, continues to grow robustly, increasing 64.5% year-over-year to $63.3 million and representing 54.2% of total revenue. I know we touched on this during our prior two earnings calls of 2025, but we think it's important to continue emphasizing that the expansion of our underwriting isn't without carefully balancing the profitability of the growth we're experiencing. Recent headlines on a few lending companies have also called into question the sustainability of certain sectors of the consumer credit market, but we haven't seen any deterioration as consumer activity continues to perform in line with our expectations. But that is not the nature of our product or our business model, as we outlined on Slide 13. Not only do our strong gross margins provide us with great flexibility and room to maneuver, but the short duration of our lending product allows us to pivot quickly and adjust our strategy upon seeing any early sign of deterioration in our portfolio performance. On Slide 14, you'll see that despite the incremental costs we've incurred in long-term corporate strategic projects that Charlie previously covered, we continue to maintain cost discipline and leverage our fixed cost structure. Non-transaction-related costs increased 50.9% year-over-year to $31.6 million but decreased 290 basis points as a percentage of total revenue. In the third quarter, we incurred $1.3 million in costs related to these projects, with the largest being the exploration of potential financing avenues, an effort that will continue in a more streamlined manner in the fourth quarter. The remaining expenses that make up the core of this bucket, personnel, third-party technology, marketing, and G&A increased sequentially, largely driven by the timing of equity and incentive compensation and our personnel costs. Bringing the full picture together on Slides 15 and 16, GAAP net income grew 72.7% year-over-year to $26.7 million, and adjusted net income increased 52.6% year-over-year to $25.4 million. GAAP profit margin expanded 70 basis points year-over-year to 22.8%, while our adjusted profit margin decreased 2 percentage points to 21.8%. Despite this decrease, our margin still remains above our internal goal of operating the business to an adjusted profit margin of at least 20%. Lastly, adjusted EBITDA grew nearly 74.6% year-over-year to $39.6 million, representing a 33.9% adjusted EBITDA margin. Turning to our balance sheet on Slide 17. Total cash grew by $14.7 million in the quarter to $134.7 million, even with paying down our line of credit by $13.3 million. Cash flow from operations for the quarter was $33.1 million, bringing year-to-date cash flow from operations to $55.6 million. These results demonstrate the strength of our balance sheet and our ability to self-fund growth while maintaining flexibility in our capital structure. Finally, turning to our outlook on Slide 18. We're reaffirming our guidance for top-line growth and adjusted net income with modest adjustments to our GAAP net income to reflect the impact of our year-to-date discrete tax benefit to our EPS to reflect adjustments related to our estimated diluted share count and to adjusted EBITDA. The discrete tax benefit raises our GAAP net income guidance to $125 million, while the updated diluted share count increases our GAAP EPS to $3.52 and adjusted EPS to $3.38. As for our adjusted EBITDA, we're raising our range from $170 million to $175 million to $175 million to $180 million. Lastly, we are also providing adjusted EPS guidance for 2026 of $4.35, reflecting 29% growth over our 2025 adjusted EPS. While this guidance does not reflect any of the future potential products outlined at the beginning of our presentation, we wanted to give investors a view into the strong fundamentals of our business and our confidence in sustained growth moving forward. Thank you. I will now turn it over to the operator for Q&A.

The first question comes from Mike Grondahl with Northland.

Maybe the first one for Charlie. Charlie, can you talk a little bit about when you deemphasized on-demand in Q3? And how you think that's going to affect sort of growth going forward, if at all?

Yes, it was probably right around the middle of the quarter. At that point, we felt like we had enough data based on what we had been seeing on conversion at point of sale and conversion into subscription. And the bridge just wasn't as strong as we were originally envisioning, I guess, is the main point. Conversions, I think, were slightly better into on-demand at point of sale than they are into subscription, but just not enough to make the payout worthwhile. And so when we started to analyze the lifetime values of the customers, the conversion rates, we really started to realize that on-demand is probably just a better tool around the fringes and at least in the direct-to-consumer portion of our business. It's still part of the mix, but it's really the tool that we're going to lean into more on the merchant side to win over more enterprise merchants that are sensitive to margin pressures, et cetera. And then on the consumer side, we really just want to lean back into subscription and maybe use on-demand as a fallback if some consumers are resistant to subscription or whatever it might be. And then in terms of your second part of your question, Mike?

Yes. Just how do you see that maybe affecting growth? And as a follow-up to that, is your customer who maybe was going to pick an on-demand product, can you direct them into subscriptions? How does that work? How will you be successful there?

We choose specifically what to present to each individual consumer. Regarding growth, pursuing the subscription model may result in lower GMV growth initially. However, by focusing on enhancing lifetime values, we expect to see improved revenue and income in the upcoming quarters. The key reason for this decision is that the differences in lifetime value and conversion rates indicate a stronger potential in the subscription model.

Got it. Then maybe just one more. Can you talk a little bit about take rate trends? And then the 3.1% credit losses was maybe a little bit higher by deemphasizing on-demand, will that naturally drop a little bit more?

We aim for a gross margin of around 60%, which informs our planning for the PLR throughout the year. The 3.1% PLR for the third quarter aligns with our expectations. Back in May, we indicated that we anticipated a 2.5% to 3% PLR for the entire year. Since we've already experienced some lower PLRs, we expect that the third and fourth quarters will fall above that range to average out. We have recently updated our guidance, indicating that we are now looking at a range of 2.5% to 2.75% for the year. The 3.1% fits neatly into our expectations. On-demand brings in higher conversions, attracting more new consumers to those products, which generally leads to a higher PLR. Conversely, fewer new consumers usually result in a lower PLR since new consumers typically have higher PLRs. That’s the key point to note.

Our next question comes from Hal Goetsch with B. Riley Securities.

Charlie, great detail. I wanted to ask about your overall strategy and thoughts on Buy Now Pay Later in the United States. PayPal mentioned it significantly on the last call. I was surprised to see how small yet rapidly growing it is among various players in the market. They view it as a major trend replacing credit cards because it's more user-friendly. Could you share how large you think the pure-play BNPL market is currently in the U.S.? How quickly do you believe it's growing, and why do you think it has many years of growth ahead?

Yes, I don't have an exact figure for you, Hal, but I believe the trend will persist for many years. Looking at credit cards, which were introduced in the 1950s, it's clear that trend has lasted a long time. While I won't claim that BNPL will have a 75-year trend, it's evident that numerous consumers prefer using BNPL over credit cards. In some instances, it also affects debit card usage. It doesn’t completely eliminate debit cards, as customers often pay us back using debit, but it can replace full purchases for debit card users as well. Customers are savvy; they consider the total cost of ownership of a product and tend to see BNPL as a safer option for them. Many perceive us as a budgeting tool, akin to a nanny, monitoring their spending to prevent overspending, unlike credit cards that can encourage it. Credit card companies may not openly admit this, but they benefit when someone overspends because it leads to revolving debt. On our end, if customers overspend significantly, we worry they may not catch up and we risk losing them. We're focused on helping customers spend responsibly, which ultimately lowers the cost of ownership for our credit product. This approach also greatly reduces the risk of personal bankruptcy, which is invaluable. Consequently, I think many customers may increasingly choose BNPL over credit cards because they feel safer and more comfortable with our options.

Can I ask a follow-up? In your press release regarding initiatives, you mentioned some products you've developed to enhance shopper engagement, which resulted in a 38% increase in monthly active users year-over-year, a 120% rise in revenue-generating users year-over-year, and a 78% increase in monthly sessions year-over-year. It seems like these are new KPIs. Could you elaborate on this? What have you built that is contributing to the growth figures mentioned in the press release?

We mentioned that enhancing shopping will be a significant focus for us in 2025 and 2026, likely spanning two years to fully implement these shopping features and initiatives. The Earn tab fits into this strategy, even if it's not strictly a shopping feature. Our goal is to create value for our customers, particularly targeting middle America, mid- to low-income groups, younger consumers, and potentially new families. We aim to provide value through couponing, discounts, price comparisons, and opportunities to earn, similar to gig economy earnings. While these opportunities may not lead to large job numbers, they can still make a difference. We're observing increased activity in our apps as a result of these efforts, which we see as a significant positive outcome. We're closely monitoring key performance indicators because our belief is that encouraging customers to repeatedly return to the app will enhance retention and open the door for them to engage with our subscription products. For instance, a customer who may not be interested in early November could have a change of heart later in the month, leading them to sign up for our services. This is all about delivering value, effectively showcasing that value in the app, and encouraging repeat visits from our customers.

The next question comes from Rayna Kumar with Oppenheimer.

It was really helpful to get the preliminary '26 EPS guidance. Could you just talk about some of the underlying drivers of that target, maybe revenue growth, GMV growth, and your expectations for provisioning?

Yes. We don't have the callouts for the underlying numbers on it. But I'll tell you the overall theme is we do believe that we're going to continue to see continued growth in our subscription and our MODS, but probably leaning more towards subscription into 2026. We're going to be cost-conscious as always. And if people have followed us for some time, you know that we really think quite a bit about growing gross margin dollars at a much faster pace than growing our operational expenses. So that's a part of that. The guidance we gave for the entire year 2025, the 2.5% to 3%, we're basically kind of thinking in the same ballpark there. We like that ballpark because of our top line. The top line numbers that were our take rate kind of really sits along the lines of maintaining the PLR kind of thoughts that we've had from 2025. And then if there's any maybe conservatism in there at all, it's just the economy. We're not seeing anything with our consumer, but we're watching it closely. Obviously, we have the government shutdown. I don't think it's going to continue into 2026. But I think if there's a bit of conservatism, it's based on the economy and what might happen.

Understood. And then just as a follow-up, can you comment on just what you're seeing out there in terms of competition? Are you seeing any changes in pricing or strategy from your competitors?

Not really. I haven't noticed anything major. I think we saw Klarna launch a subscription product as well, but it's like a much higher dollar subscription product. So that was like one of the companies kind of leaning in our direction in terms of product offerings. But other than that, it seems like more of the same.

The next question comes from Hoang Nguyen with TD Cowen.

Maybe a quick one for Charlie. So since you are pivoting back to subscriptions now, maybe can you talk about maybe the difference this time in terms of marketing posture versus, I guess, the last time before you launched on-demand? How is this time different from the last? And I think last time you were tracking net adds on subscription, maybe you made 60,000 to 70,000 a quarter. I mean, should we expect you guys to get back to that level going forward? And maybe in terms of pricing, I noticed that you recently took pricing actions on new subscribers. So I mean, can you talk a little bit about that as a lever in terms of top line going forward?

Yes. I'll probably avoid the guidance on how many adds to subscription quarter-by-quarter, but we did increase pricing on both subscription products just by $1 or $2 per month, really viewed as just an inflationary type increase. If you launch the products three years ago or so, and there's been some inflation in the United States, so that's the main reason for those changes. And then I guess the start of your question, can you repeat it again, just to make sure I got it nailed.

In terms of marketing for the subscription.

In our marketing approach, we aim to provide a clear view of how we promote our product. When we focus on on-demand services, it allows for a smoother initial purchasing experience. For instance, if a customer is checking out at a store like Lowe's or using one of the merchants in our app, we typically don't present the option to sign up for a subscription right away. Instead, we initiate a purchase request, which we refer to internally as a purchase request or TILA, that outlines the on-demand fee. The customer accepts this fee and completes their purchase. The marketing strategy emphasizes guiding customers through a funnel, where once they enter the app, they encounter a purchase request. For many customers seeking to use our product at the point of sale or shop at the various merchants within our app, we are now presenting the option to join our subscription. This shift in strategy is the main distinction in our marketing efforts. While we have seen a slight decline in subscription conversion rates, the overall view from our analysis indicates that directly offering subscriptions to these customers is a more advantageous choice from a lifetime value perspective.

Got it. I didn't see the chart on approval rates in this quarter's presentation. Can you discuss whether there have been any changes in your underwriting this quarter?

No, we have always been launching new models. We did introduce new models this quarter. The aim of these models is to maintain approval rates while reducing PLR. Our goal with the new models is to keep approval rates consistent with what we've shared in the past. However, with the introduction of the new models, we believe we should see lower PLRs for new customers.

This concludes our question-and-answer session. I would like to turn the conference back over to Charlie Youakim for any closing remarks. Please go ahead.

Thank you. And as people know, I like to usually give a Buffett or a Munger quote or story, but I've got one here from Buffett. It starts when he was just 10 years old. He scraped together $114.75, all the money he had, and he bought 3 shares of Citi's Surface preferred at $38 a share. At first, the stock dropped to $27. And like a nervous young investor, he starts sweating. Then it crawls back up to $40, so he sells. He's relieved; he even makes a few bucks. But here's the kicker. A little later, that same stock shoots up past $200. Buffett said, if I just held on, I would have made a lot more money. That, he says, was his first real lesson in patience. Here's another data point from Buffett that also speaks to the power of patience. I think this crazy stat speaks for itself. Over 99% of Buffett's wealth came after his 50th birthday. That's the quiet miracle of compounding. It's not flashy, it's not fast, but it's relentless if you let it do the work. Buffett always says, my life has been a product of compound interest. Also, the stock market is a device for transferring money from the impatient to the patient. So the real trick, start early, stay patient, and let time, not emotion, do the heavy lifting. Because in the end, wealth doesn't come from timing the market; it comes from time in the market. That's the $114 lesson. I'd like to thank everyone for joining the call today and also thank the Sezzle team for continuing to create wins for our consumers and for our investors. Thank you all. Have a good night.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.