Sezzle Inc.SEZL
Sezzle Inc. Stock Compensation Disclosure
Equity Based Compensation
We issue incentive and non-qualified stock options, restricted stock units, restricted stock awards, and unrestricted stock to employees and non-employees. With the exception of unrestricted stock, equity based compensation issuances include service based vesting requirements, generally covering four years. We utilize the Black-Scholes valuation model to determine the fair market value of stock option issuances, and the closing price of our stock on the grant date to determine the fair market value of restricted stock issuances.
Equity based compensation expense, including vesting of restricted stock units, totaled $6.5 million and $5.2 million for the years ended December 31, 2025 and 2024, respectively. Equity based compensation expense is recorded within personnel on the consolidated statements of operations and comprehensive income.
2016 Employee Stock Option Plan
We adopted the 2016 Employee Stock Option Plan on January 16, 2016. The number of awards authorized for issuance under the plan was 1.6 million. We had an immaterial amount of options issued and outstanding under the plan as of December 31, 2025. We had 0.3 million options issued and outstanding under the plan as of December 31, 2024. We had no restricted stock awards issued and outstanding as of December 31, 2025 and 2024. During the years ended December 31, 2025 and 2024, 0.3 million and 0.1 million options were exercised into shares of common stock, respectively.
2019 Equity Incentive Plan
We adopted the 2019 Equity Incentive Plan on June 25, 2019. The number of awards authorized for issuance under the plan was 4.1 million. We had 0.4 million and 0.7 million options issued and outstanding as of December 31, 2025 and 2024, respectively. We had no restricted stock units issued and outstanding as of December 31, 2025 and 2024. During both the years ended December 31, 2025 and 2024, 0.4 million options were exercised into shares of common stock.
2021 Equity Incentive Plan
We adopted the 2021 Equity Incentive Plan on June 15, 2021. The number of awards authorized for issuance under the plan as of December 31, 2025 was 7.7 million. As of both December 31, 2025 and 2024, we had 0.1 million options issued and outstanding. We had 1.1 million and 1.9 million restricted stock units issued and outstanding as of December 31, 2025 and 2024, respectively. During both the years ended December 31, 2025 and 2024, an immaterial amount of options were exercised into shares of common stock.
The following tables summarize the options issued, exercised, canceled, outstanding, and exercisable under our equity based compensation plans as of December 31, 2025 and 2024:
For the year ended December 31, 2025 | ||||||||||||||
(in thousands, except per share amounts) | Number of Options* | Weighted Average Exercise Price* | Intrinsic Value | Weighted Average Remaining Life | ||||||||||
| Outstanding, beginning of year | 1,094 | $ | 10.43 | $ | 35,743 | 5.07 | ||||||||
| Granted | — | — | — | — | ||||||||||
| Exercised | (650) | 6.01 | 49,814 | — | ||||||||||
| Canceled | (5) | 39.52 | — | — | ||||||||||
| Outstanding, end of year | 439 | 16.42 | 20,672 | 4.76 | ||||||||||
| Exercisable, end of year | 396 | 17.04 | 18,382 | 4.38 | ||||||||||
| Expected to vest, end of year | 43 | $ | 10.80 | $ | 2,290 | 8.15 | ||||||||
For the year ended December 31, 2024 | ||||||||||||||
(in thousands, except per share amounts) | Number of Options* | Weighted Average Exercise Price* | Intrinsic Value | Weighted Average Remaining Life | ||||||||||
| Outstanding, beginning of year | 1,522 | $ | 10.34 | $ | 1,147 | 5.85 | ||||||||
| Granted | 72 | 11.38 | — | — | ||||||||||
| Exercised | (453) | 8.98 | 8,845 | — | ||||||||||
| Canceled | (47) | 22.82 | — | — | ||||||||||
| Outstanding, end of year | 1,094 | 10.43 | 35,743 | 5.07 | ||||||||||
| Exercisable, end of year | 1,017 | 10.25 | 33,425 | 4.78 | ||||||||||
| Expected to vest, end of year | 77 | $ | 12.84 | $ | 2,318 | 8.91 | ||||||||
*Effective March 28, 2025, we performed a 6-for-1 stock split of the Company’s common stock, effected through a stock dividend. Share and per share amounts have been retroactively adjusted.
The following table represents the assumptions used for estimating the fair values of stock options granted to our employees, contractors, and non-employees under the Black-Scholes valuation model. The risk-free interest rate is based on the U.S. Treasury yield curve in effect on the grant date:
| 2024 | |||||
| Risk-free interest rate | 4.37% | ||||
| Expected volatility | 140.69% | ||||
| Expected life (in years) | 6.00 | ||||
| Weighted average estimated fair value of options granted | $ | 10.53 | |||
Restricted stock award and restricted stock unit transactions during the years ended December 31, 2025 and 2024 are summarized as follows:
For the year ended December 31, 2025 | For the year ended December 31, 2024 | ||||||||||||||||
(in thousands, except per share amounts) | Number of Shares* | Weighted Average Grant Date Fair Value* | Number of Shares* | Weighted Average Grant Date Fair Value* | |||||||||||||
| Unvested shares, beginning of year | 1,893 | $ | 7.87 | 2,140 | $ | 3.55 | |||||||||||
| Granted | 160 | 45.01 | 808 | 11.99 | |||||||||||||
| Vested | (777) | 8.06 | (860) | 5.49 | |||||||||||||
| Forfeited or surrendered | (150) | 8.43 | (195) | 5.70 | |||||||||||||
| Unvested shares, end of year | 1,126 | $ | 12.96 | 1,893 | $ | 7.87 | |||||||||||
*Effective March 28, 2025, we performed a 6-for-1 stock split of the Company’s common stock, effected through a stock dividend. Share and per share amounts have been retroactively adjusted.
During the year ended December 31, 2025, employees and non-employees received restricted stock units totaling 0.2 million. Vesting of restricted stock units totaled 0.8 million. The shares underlying the restricted stock units granted in 2025 were assigned a weighted average fair value of $45.01 per share, for a total value of $7.2 million. The restricted stock issuances are scheduled to vest over four years.
During the year ended December 31, 2024, employees and non-employees received restricted stock units totaling 0.8 million. Vesting of restricted stock units totaled 0.8 million. The shares underlying the restricted stock units granted in 2024 were assigned a weighted average fair value of $11.99 per share, for a total value of $9.7 million. The restricted stock issuances are scheduled to vest over a range of to four years.
As of December 31, 2025, the total compensation cost related to non-vested awards not yet recognized is $12.1 million and is expected to be recognized over the weighted average remaining recognition period of approximately 2.6 years. As of December 31, 2024, the total compensation cost related to non-vested awards not yet recognized is $11.7 million and is expected to be recognized over the weighted average remaining recognition period of approximately 2.8 years.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Feb 29, 2024 | |
| 2022 | Feb 28, 2023 | |
| 2021 | Mar 30, 2022 | |
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.