According to the company’s executives on Tuesday’s (Aug. 13) second-quarter 2024 earnings call, the world’s largest home improvement retailer will need to continue to win over a greater share of this valuable B2B segment, because regulator customers are continuing to spend less on home improvement projects, pressured by higher interest rates and concerns that the economy is getting worse.

“During the quarter, higher interest rates and greater macro-economic uncertainty pressured consumer demand more broadly, resulting in weaker spend across home improvement projects. However, the team continued to navigate this unique environment while executing at a high level. I would like to thank our associates for their hard work and dedication to serving our customers and communities,” said Ted Decker, chair, president and CEO.

“The underlying long-term fundamentals supporting home improvement demand are strong,” Decker added.

Still, the retailer expects demand to remain tight, as evidenced by the lowered guidance it issued for the rest of the fiscal year. Home Depot said Tuesday that it expects sales at stores open at least a year to fall between 3% and 4% this year compared to last year, down from its earlier estimate that sales would fall around 1%.

Home Depot’s challenges are emblematic of a broader trend affecting the retail sector, particularly those dependent on discretionary consumer spending, where high interest rates have not only slowed down home improvement projects but have also led to a recalibration of expectations within the industry.

Read more: Home Depot Teams With Instacart to Bolster eCommerce Offerings

Targeting Pros With Value-Added Services

Per its financials, Home Depot plans to open approximately 12 new stores over the course of the year, and reported sales of $43.2 billion for the second quarter of fiscal 2024, an increase of 0.6% YoY. Total sales include $1.3 billion from its recent acquisition of SRS Distribution Inc. (SRS), which represents approximately six weeks of sales in the quarter.

As reported by PYMNTS, Home Depot spent $18.2 billion to buy SRS earlier this year, which operates as a distributor for roofing firms and construction projects. The company has 760 locations, thousands of trucks on the road and, as its own site has noted, has closed more than 100 acquisitions of roofing and building suppliers, which bolster’s Home Depot’s fulfillment operations.

SRS helps contractors access rebates and promotions through its RoofHub account, which in turn submits purchase data. SRS also enables contractors to open lines of credit and cash on delivery applications.

Read more: Home Depot Expands Pro Market Footprint With $18 Billion SRS Deal

The larger professional shoppers that Home Depot is targeting with the SRS acquisition make up a crucial way for the retailer to boost sales, and the company has continually stressed its efforts to build a pro ecosystem that includes things like credit and financing products, digital capabilities, field support and rentals.

Home Depot’s CFO Richard McPhail told investors on Tuesday’s call that spending for products linked to big projects, particularly those that may require debt financing, remained strained.

“Categories like kitchen, bath, lighting, flooring — all these categories that are components of larger projects have seen the greatest degree of softness,” McPhail said.

PYMNTS Intelligence, in collaboration with Ingo Money, noted that 73% of contractors were forced to pay out of pocket for materials last year due to late payments from clients, up from the 66% of firms who had done the same in 2022. More than half of the subcontractors surveyed said that they’d had to use credit cards to bridge cash flow gaps.

Home Depot noted that for the most recent quarter, its sales leveraging digital platforms increased by 4%.

The February/March PYMNTS Intelligence report, “New Reality Check: The Paycheck-to-Paycheck Report: Why One-Third of High Earners Live Paycheck to Paycheck,” which drew from a census-balanced survey of more than 4,200 U.S. consumers, found that 60% of shoppers have cut down on nonessential purchasing due to retail product price increases. Plus, half have turned to cheaper merchants, and 45% of low-income consumers have shifted to purchasing lower-quality products, as have 41% of middle-income and 28% of high-income shoppers.

The post Home Depot Looks for B2B Buffer Against Softening Consumer Spend appeared first on PYMNTS.com.

Among the solutions businesses are adopting is the company’s proprietary unified commerce platform “that’s purpose-built to collect, store, lend and send money, combining elegant payments and banking functionality to monetize the commerce networks we serve,” Tom Priore, chairman and CEO of Priority Technology Holdings, said Thursday (Aug. 8) during the company’s quarterly earnings call.

“Our customers and current market conditions reinforce our belief that systems facilitating payments and banking solutions to distribute funds in multiparty environments will be critical as businesses put greater demands on software and payment solutions providers to accelerate cash flow and optimize working capital,” Priore said.

Priority Technology Holdings’ ecosystem of financial solutions includes point-of-sale (POS) and acquiring solutions that accelerate the user’s cash flow; a banking-as-a-service (BaaS) offering that streamlines financial operations and provides full transparency to surplus cash; and payables and financing solutions that enable users to automate reconciliation work, optimize working capital and earn cash back, according to a presentation released Thursday in conjunction with the earnings call.

The company also offers its Accelerated Commerce Engine, an application programming interface (API) suite for acquiring, banking and payables solutions that can be integrated into users’ enterprise systems, per the presentation.

During the second quarter, demand for this product lineup drove records results for Priority Technology Holdings, including year-over-year revenue growth of 20.6%, according to a Thursday earnings release.

The company also had over $1 billion in deposits, 1 million total accounts and about $125 billion in last-12-months (LTM) total volume, per the presentation.

“Everything we did over the past several years, from accelerating our investment in our unified commerce payments and banking infrastructure, to our focus on building countercyclical business lines, to our acquisition of Plastiq a year ago, was done with the intention and purpose to provide our customers with an elegantly delivered experience combining acquiring, payables and banking solutions on a single platform,” Priore said during the call.

“Our financial and operating results demonstrate that we’ve continued to execute with exceptional consistency and a forward-looking vision that resonates with the constituents we serve,” Priore added. “Our tech-enabled service platform is delivering on the promise of a financial tool set that can accelerate cash flow and optimize working capital for our partners.”

The post Priority: Challenging Economic Conditions Bolster Demand for Software, Payment Solutions appeared first on PYMNTS.com.

On Thursday (Aug. 8), the company posted its latest earnings results that showed  total revenues were down 0.9% to $4.7 million. Drilling down into the data, software-as-a-service (SaaS) revenue declined 0.8% and totaled $4.6 million. Net loss improved to $127,000, where it had been $853,000 a year ago.

Investors sent the shares down 13% in after-hours trading.

Customers in the key retail segment, management noted on the conference call with analysts, are pulling back on spending, particularly on their cards, which is having an impact on transaction volumes and by extension, ID verification, on a “per scan” basis.  During the call, management noted that retail bankruptcies and store closings among some of its clients led to 16% volume declines in the quarter, where that decline had been 10% in the first quarter. Within retail, there’s been a bit of bifurcation, with volume gains seen in sporting goods and electronics, but with other retail categories losing ground.

But as Bryan Lewis, CEO, said on the call, identity fraud “is not going away” and breaches have been growing by leaps and bounds, with tens of billions of dollars in losses. In a recent interview with Karen Webster, Lewis said that the proverbial raw material to steal an identity is startlingly cheap, he said — for $30 to $40, enterprising criminals and even crime rings can buy names, addresses, Social Security numbers and emails. Challenge questions and answers have been hacked, too, so knowledge-based security protocols are not as robust as they once were.

Moving Beyond Retail

And as he and CFO Jeff Ishmael noted on the call, the company continues to make inroads in verticals beyond retail. One in particular was the pact, announced this week, wherein Intellicheck is partnering with Doma Title Insurance to offer Doma’s independent title agents and approved attorneys a tool to detect seller impersonation amid a nationwide surge in real estate scams and impersonation fraud. As detailed in the release announcing the partnership, fraudsters leverage the property owner’s Social Security and driver’s license numbers in the transaction.

“In many cases, fraudsters use email and text messages to communicate with the title agent, allowing them to mask their true identities and commit crime from a remote location,” the companies said this week.

Management noted on the call that the company’s new business lines have seen an 11% average price increase per transaction compared to its older business lines, including retail.

“Diversification is an important strategy,” Lewis said, “and it is working.”

The post Intellicheck: Retail May Be Pressured, but Identity Fraud ‘Isn’t Going Away’ appeared first on PYMNTS.com.

“Brand Expedia has been a great highlight for us,” Gorin told analysts and investors during the company’s second-quarter earnings call on Thursday (Aug. 8). “It gives me confidence because it was the least disrupted of all of our brands. We’ve built up the brand value there. The value prop on Brand Expedia is really strong for travelers. We feel good about it. We’d like to see more growth with it internationally.”

While the company’s second-quarter metrics were generally positive, Gorin noted a recent softness in demand.

“In July, we have seen a more challenging macro environment and a softening in travel demand,” she said. “We are therefore adjusting our expectations for the rest of the year.”

Gross bookings for Expedia Group increased 6%, to $28.8 billion, during the second quarter. Lodging and hotel bookings rose 8% to $20.7 billion. Revenue grew 6% to $3.6 billion (including a 22% rise in B2B revenue). Room night growth increased 10%.

Expedia continues to enhance its consumer brands, including Expedia, Hotels.com and Vrbo, through its loyalty program, One Key, which is available in the U.S. and is set to launch in the U.K.

“Our second-quarter results came in at the high end of our expectations, with gross bookings and revenue growing 6%,” Gorin said. “We’re pleased with our momentum and the sequential improvement in our consumer brands.”

That softness in travel demand is expected to continue in the third quarter, Gorin noted.

“We’re focused on executing what’s in our control,” she said, “and that is the traffic growth of our three brands. And our loyalty members worldwide continue to benefit from our improved member discounts we launched last summer. We’re encouraged by our second-quarter results.”

Recent replatforming efforts involved in the recovery of the B2C segment, particularly Vrbo, revealed key insights for company officials.

“It’s unlocked a lot of capabilities for us,” Gorin said. “We have a new testing platform, and our testing velocity has really gone up, and our view of the customer is across all of our brands. What we’re digging into is where are there configurations or brand specific features we need to build on top.”

Gorin said she looks forward to enhancing the company’s advertising efforts for Expedia, Hotels.com and Vrbo, its three flagship consumer brands.

“We’re excited about our opportunities to grow advertising,” she said. “Shopping and booking moments during the booking process is where our advertising happens most. The opportunity is there to expand with partners who use our advertising tools. We’re also about to introduce some video into our ads. There’s a lot of opportunity there.”

Consumers have many options for making travel arrangements, whether that involves personal or business trips, or the use of loyalty points, Gorin noted.

“We see the opportunity to power the technology and inventory in any of those areas,” she said. “It forces our own B2C brands to be more competitive and up our game. We know the environment is becoming more volatile, but there is a lot of opportunity ahead.”

The post Expedia Focuses on Loyalty Programs as It Expects Soft Travel Demand in Q3 appeared first on PYMNTS.com.

That was then. But two decades later, and Yelp is still contributing to, if not necessarily as strongly defining, the digital category it helped spearhead. After all, convenience and real-time insights are far from going out of style in today’s commerce landscape.

Just look at the Thursday (Aug. 8) results from Yelp’s second quarter 2024 earnings report — which show that the company’s net revenue increased by 6% year over year, to $357 million. Net income for the quarter increased by 158% year over year to $38 million, reflecting an 11% margin.

“Yelp delivered strong profitability and record net revenue in the second quarter,” said Jeremy Stoppelman, Yelp’s co-founder and chief executive officer.

“The execution of our product-led strategy continued to drive results, particularly in home services, which grew approximately 15% year over year in the second quarter, as well as in our self-serve channel, which saw revenue increase about 20% year over year to a record level.

“Looking ahead, we plan to build upon our strong momentum in services as we remain focused on executing against our robust product roadmap to deliver the best experience for consumers and service pros.”

Still, Yelp ultimately lowered its full year 2024 guidance for the rest of the fiscal season down to $1.410 billion to $1.425 billion of net revenue.

The restaurant industry is particularly susceptible to recession fears, which have been mounting, as PYMNTS reported Monday (Aug. 5), and Yelp executives cited the operating and macro environment to investors on Thursday’s call when sharing their quarterly results.

Read more: 3 Big Ideas From PYMNTS Intelligence’s Restaurants’ Digital Transformation Report

Finding Certainty

“Yelp delivered a solid second quarter with net revenue increasing by 6% year over year to a record $357 million even as challenges persisted in the operating environment for restaurants, retail and other businesses,” said David Schwarzbach, Yelp’s chief financial officer.

“Net income margin increased six percentage points and adjusted EBITDA margin increased one percentage point from the previous year, reflecting our disciplined approach. We’re particularly focused on the opportunity ahead in services to deliver shareholder value over the long term.”

Shifts in consumer behavior and advancements in technology are transforming the restaurant industry, and Yelp executives stressed to investors that their company is leaning into those changes.

As PYMNTS reported, Yelp at the start of the year (Jan. 30) added more artificial intelligence (AI)-powered search tools, including AI business summaries that quickly bring potential visitors up to speed on what a particular business is best known for based on first-hand reviews from users, “such as the atmosphere, service, amenities, value, or a popular dish.”

“While challenges in the operating environment for Restaurants, Retail & Other (“RR&O”) businesses persisted, our Services categories maintained their momentum, with double-digit revenue growth for the 13th consecutive quarter. At the same time, our product and engineering teams continued to innovate, introducing more than 20 new features and updates in the quarter,” executives told investors in the company’s shareholder letter.

And Yelp’s materials noted that while overall paying advertising locations decreased by 6% year over year to 531,000, ad clicks themselves increased by 9% year over year, “driven by improvements to advertising technology as well as our efforts to acquire Services projects through paid search, which drove more leads to service pros compared to the prior-year period.”

Read more: How Technology With a Side of Service Is Shaping Restaurant Loyalty 

PYMNTS Intelligence’s new study, “Why More Restaurants Need to Bite Into Digital Transformation,” delves into consumers embracing technologies like digital wallets, mobile apps and QR codes because they not only meet the preferences of tech-savvy diners, but also enhance operational efficiency and empower staff to elevate the overall dining experience.

More contemporary channels, such as social media platforms like TikTok, have also become crucial for restaurants looking to engage with a younger, more digital-savvy audience, Steve Fusco, president and head of all distribution for Rewards Network, told PYMNTS. He mentioned that successful restaurants often employ dedicated staff to produce engaging content, such as videos showcasing unique dishes or special events. This content can go viral, boosting a restaurant’s visibility and customer traffic.

Yelp’s own AI goals come on the heels of the news that Yum Brands is aiming to be a “leading global digital restaurant company,” by tapping its tech acquisitions to create a unified eCommerce ecosystem on which to layer AI to drive sales and productivity.

The post Yelp Gets Revenue Lift From AI, Ad Sales in Challenging Environment  appeared first on PYMNTS.com.

In reporting its second-quarter results Thursday (Aug. 8), GoodRx said monthly active users (MACs) rose 8%, contributing to a 7% rise in prescription transactions revenue, which totaled $146.7 million.

While overall second-quarter revenue rose 6%, to $200.6 million, subscription revenue sank 8%, to $22 million, driven by a decrease in the number of subscription plans due to last month’s sunsetting of the company’s partnership subscription program, Kroger Savings Club.

Meanwhile, GoodRx will incur an estimated $5 million loss due to Rite Aid’s store closures. Total Rite Aid store closures have exceeded 650 since the company filed for Chapter 11 bankruptcy 10 months ago.

Chief Financial Officer Karsten Voermann addressed the impact of Rite Aid’s store closures, noting that while the immediate effects on revenue and prescription volume are significant, they are expected to stabilize over time. “The closures are specific to certain store types and geographies, which makes this situation distinct from other potential impacts,” Voermann said. “We believe the Rite Aid impact on prescriptions and revenue will be temporary over the next quarter or two.”

Despite the short-term impact on the company due to Rite Aid store closures, Interim CEO Scott Wagner highlighted GoodRx’s ongoing commitment to enhancing its value proposition across the pharmacy ecosystem.

“While the retail pharmacy landscape is experiencing turbulence, our focus remains on delivering affordable medication access and enriching our value for both healthcare partners and consumers,” Wagner said.

GoodRx continues to strengthen its relationships with retail and pharmacy benefit manager partners, Wagner added, and “expand its offerings around brand medications, and engage deeply with its patient base.”

The number of subscribers fell 8%, from 778,000 in the first quarter, to 696,000 in the second quarter.

Despite the drop in subscription revenue and Rite Aid store closures, Wagner is optimistic due to GoodRx’s business model

“Right now we’re all seeing the tectonic place of healthcare continue to shift between PBMs and plans and brand manufacturers and retailers,” Wagner said. “The good news for GoodRx is that we provide value to practically every part of the pharmacy ecosystem with the consumer, or patient, right at the start. Consumers use GoodRx to save money on their prescriptions.”

Healthcare professionals use GoodRx to get patients on the medications they need and save precious time, Wagner said, adding, “pharma manufacturers work with GoodRx to make their brand medications available to more consumers. Pharmacies work with GoodRx to acquire new consumers, reduce friction at the counter, and keep people from walking away from the nearly 900 million 30-day scrips that go unfilled every year.”

And finally, Wagner said, “pharmacy benefit managers work with us to gain incremental volume. We believe the best proof point for GoodRx’s value lies in scale. In 2023, consumers visited the GoodRx site and app about 350 million times and viewed our drug price pages almost 140 million times.”

Wagner noted that 88% of GoodRx users have commercially funded Medicare and use GoodRx as a complement to their funded benefits. He also pointed out independent pharmacies haven’t comprised much of the company platform but hinted that could change.

“Historically, we haven’t worked with a lot of independent pharmacies, but we should look at it,” he said. “To date, independent pharmacies haven’t been a big part of the GoodRx platform, but there’s no reason they shouldn’t be.”

The post GoodRX Subscription Revenue Down 8% but Active User Numbers Are Up appeared first on PYMNTS.com.

The provider of metal payment cards, security and authentication solutions added several new programs involving its metal cards during the second quarter, CompoSecure President and CEO Jon Wilk said Wednesday during the company’s second-quarter 2024 earnings call.

“Card issuers maintained steady purchase volumes and drove strong customer acquisitions in the second quarter,” Wilk said. “This continues the trends we have seen throughout the year and has reaffirmed our belief in a strong and growing market for premium and metal payment cards.”

The latest metal card programs announced by CompoSecure customers include American Express White Gold, Wells Fargo-Expedia One Key+, Turkish Airlines Premier and Atlas, according to an earnings presentation released Wednesday.

“We continue to support our customers’ ability to offer highly attractive premium card programs,” Wilk said during the call.

He added later that these four card programs are just a select set of examples of some new programs.

“There are a good number more than that in any given quarter,” Wilk said.

Premium cards are a status symbol, tied to high credit lines and high-level rewards programs, and the move to contactless impacted the metal card sector in positive ways, Wilk told PYMNTS in an interview posted in April 2021.

CompoSecure said at the time that metal cards are a competitive differentiator for 58% of consumers, that roughly half of consumers said they would leave their bank for another if offered a metal payment card, and that getting metal cards into the hands of younger users may lead to long-lived relationships.

Wilk said in the interview that while metal cards started by targeting the affluent, high net worth space, they have since been embraced by the “mass affluent space.”

During the second quarter, CompoSecure also expanded its partnership with Fiserv to include the marketing and reselling of Arculus Authenticate, CompoSecure’s hardware-bound passkey authenticator, according to the presentation released Wednesday.

Wilk said during the call that the expanded partnership “enhances our ability to bring FIDO2 secure authentication to Fiserv’s extensive customer base of financial institutions and FinTechs” and “solidifies our joint commitment to add functionality to payment cards that improves the customer experience.”

The post CompoSecure: Issuers Adopt Metal Payment Cards to Attract Premium Customers appeared first on PYMNTS.com.

The U.K.-based delivery service on Thursday (Aug. 8) released earnings for the first half of 2024 showing slight upticks in the gross transaction volume (GTV) per order (up 5% in constant currency) and orders themselves (up 2%).

Looking to the second half of the year on a call with analysts, Deliveroo Founder and CEO Will Shu pointed to the promise of the company’s grocery delivery offering.

“We’ve continued to make excellent progress in grocery,” he said, noting that 80% of the company’s grocery orders now come through Deliveroo’s picking app. “We have strong double-digit growth throughout H1. And this growth was broad-based across all markets. We’ve seen grocery reach 14% of group GTV.”

Still, 70% of the company’s customers haven’t tried the grocery delivery service, Shu added, while half of its users have never seen a grocery menu in Deliveroo’s app.

“And when you see that it’s 14% of our business, it’s very clear that this represents a big opportunity,” he said.

In trying to capture a greater share of the grocery delivery market, Deliveroo is joining rivals such as DoorDash and Instacart. As PYMNTS wrote earlier this week, both companies “are finding new ways to insert their technology into consumers’ grocery shopping routines.”

For example, DoorDash last week expanded its partnership with Chase to give customers with Sapphire Reserve DashPass memberships discounts and other benefits, hoping to cement itself as the go-to eGrocery platform for Chase cardholders.

And Instacart, already known for its eGrocery offerings, is aiming to increase its role in consumers’ grocery shopping trips by expanding its presence in physical stores. Earlier this week, the company announced that Aldi South Group is testing its smart shopping cart subsidiary Caper Carts’ technology in Austria.

In addition to its grocery business, Deliveroo’s Shu also discussed the company’s efforts to become a “Plus First” business by 2026, meaning that a majority of orders will come from members of its Deliveroo Plus loyalty program.

While the program lets customers save money on orders, “it’s also great for us,” Shu said.

“Plus customers spend 3x more than non plus customers,” he added. “Their retention is stronger. Plus accounts for 40% of our global order volume.”

The post Deliveroo Sees Promise in Groceries as Orders Climb appeared first on PYMNTS.com.

During the second quarter, the corporate payments company’s international fleet business performed “exceptionally well,” while its North American fleet business “presented a drag on growth,” Corpay CEO Ron Clarke said Wednesday (Aug. 7) during an earnings call.

The international fleet segment saw low double-digit growth in both Australia and the United Kingdom, while Brazil saw “extremely strong” revenue growth of 20%, Corpay Chief Financial Officer Tom Panther said during the call.

Overall, the company’s vehicle payments segment saw 5% revenue growth during the quarter, compared to a year earlier, according to a Wednesday earnings release.

In its North American fleet segment, Corpay has shifted its focus from small accounts to larger ones that are more stable and creditworthy, Clarke said during the call. By doing so, it has reduced bad debt and improved retention and sales growth.

Panther said that Corpay saw a 20% year-over-year decline in bad debt expense, almost all of which was due to the company’s shift to a higher-quality customer portfolio.

Today, 80% of the North American fleet segment’s digital sales are now made up of accounts with five cards or more, meaning they have larger fleets of vehicles.

“The evidence is building that there is demand for our new products and that this larger prospect segment sales can be grown,” Clarke said. “So, that’s happening. On the back of these trends, we’re outlooking North America fleet to grow revenue organically in Q4 and get back in the plus column.”

In the U.K., Corpay has expanded its pay-by-phone parking app, making it a multipoint solution consumer vehicle payments app that now includes the ability to buy insurance and search for fuel stations and electric vehicle (EV) charging stations, Panther said.

The company will extend that app’s capabilities further in the third quarter by adding Corpay’s vehicle maintenance and repair network.

“It’s early days in terms of customers transacting on the app, but we’ve made good progress and we are excited about the opportunity,” Panther said.

In Brazil, Corpay’s core fleet product is its toll-related solutions, which continue to grow, Panther said. The company also saw a 24% year-over-year increase in fuel transactions, a threefold increase in insurance policies sold, and 40% increases in both Zapay users and revenues.

Zapay offers a digital mobility solution that enables drivers to pay vehicle taxes, registration and tickets.

Panther said the Zapay growth is all organic, “as we are in the early stages of cross-selling the product.”

The post Corpay Reduces Bad Debt Expense 20% by Targeting Larger Fleets appeared first on PYMNTS.com.

“As shoppers want to use us everywhere and as a regular part of their daily lives, it’s both exciting and rewarding to see,” Sezzle CEO Charlie Youakim told the company’s earnings call audience.

“We believe the quarter-over-quarter results reflect the strong momentum that we are seeing in the business, and we are confident that we will continue to grow our active consumer accounts.”

His confidence was well-founded. Youakim attributed the Q2 success to shrewd marketing, new products and financial education. Those elements combined to produce an underlying merchant sales (UMS) increase by 38.9% year over year (YoY) to $532.2 million, surpassing the previous non-holiday quarterly high.

Consumer purchase frequency rose to 4.8 times from 3.3 times in the same period in 2023. The top 10% of consumers transacted 70 times per year on average. Total revenue grew by 60.2% YoY to $56 million, accounting for 10.5% of UMS. Total operating expenses increased by 26% YoY to $39.3 million, though expenses as a percentage of UMS and total revenue decreased. Operating income rose by 343.7% YoY to $16.7 million, with an operating margin increasing from 10.8% to 29.8%. Subscribers grew from 91,000 in Q2 2023 to 462,000 in 2024.

Among the specific initiatives that Youakim pointed to were a new product marketplace and Payment Streaks, a new feature designed to reward consumers for consistent and timely payments. The program enables users to ascend through loyalty tiers by consistently making on-time payments.

The Payment Streaks program empowers Sezzle users by introducing a gamification approach to responsible payment behaviors. Each successful payment made on or before its scheduled due date contributes to the user’s payment streak. As users accumulate streaks of on-time payments within a rolling 90-day window, they qualify for advancement to higher loyalty tiers.

While the Q2 revenue figures were impressive, the most important company to Sezzle’s future has yet to be named. Sezzle is nearing the completion of its implementation with a bank sponsor partner, with the launch anticipated in Q4.

The immediate benefits of that sponsorship are expected to include the launch of unified fees, and a streamlined regulatory approach. Youakim also expects further upside from future potential consumer product launches assisted by the bank sponsorship, including checking accounts, cash advances, and credit building products.

Initially, Youakim said, the bank partnership will allow Sezzle to unify its product construct across the United States versus the state by state approach it currently has. He also expected it to open doors to new merchants, although he wasn’t naming any names during the call.

“As you might imagine, state laws are not consistent from state to state, with restrictions on fees such as late fees varying widely,” he said. “Our current state-by-state setup makes running our business a bit more complicated and also limits our profitability.”

Both Youakim and CFO Karen Hartje hinted strongly at a major marketing campaign in the fourth quarter, aimed at driving new active users. 

“For the remainder of 2024, we do expect to see some pickup in non-transaction related operating costs, but not at the expense of bottom line profitability,” Hartje said.

“We joke internally that it is amazing what making money will allow one to do, such as investing in more brand awareness and customer acquisition. The good thing is that we are finding ourselves in a position where we can make investments in the business that we might not have made in the past, particularly in marketing.”

“We try our best to make sure that consumers don’t overspend, which on the flip side, I think credit cards love only consumers who overspend because they build imbalances and they start to revolve,” Youakim added in answer to an analyst question about Q4.

“We don’t want consumers to overspend in that quarter because if they overspend, what we tend to find is that the higher default leads to [impact] consumers because with our product, when they are in a default situation, they can’t transact with us again.”

The post Subscriptions and Gamification Drive Sezzle Q2 Revenue appeared first on PYMNTS.com.