Affirm shares surge on huge earnings beat

Affirm shares surge on huge earnings beat

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Investors in Affirm Holdings Inc. had a good day today after the payments company reported fiscal third-quarter earnings that smashed estimates, sending its share price surging after the bell.

For the quarter ended March 31, Affirm reported a net loss of $54.7 million, or 19 cents per share, vastly reducing its loss of $287 million, or $1.23 a share, in the same quarter of last year. Revenue jumped 54% from a year ago, to $354.8 million. Analysts had expected a loss of 49 cents per share on revenue of $344 million.

The figures were positive across the board. Affirm reported $3.9 billion in gross merchandise value, up 74% year-over-year, and active merchants jumped from 12,000 this time last year to 207,000. The increase was driven by the adoption of Shop Pay installments by merchants on Shopify Inc.’s platform.

Active consumers rose 137% year-over-year, to 12.7 million, which was also up 13% from the previous quarter. At least this quarter, Affirm didn’t accidentally tweet its earnings before their official release.

Highlights in the quarter included Affirm signing a multiyear extension of its partnership in the U.S. with Shopify. The extended deal includes all eligible U.S. merchants gaining access to Affirm’s Adaptive Checkout, which offers biweekly and monthly payment options side-by-side in a single integrated checkout. Consumers will be able to use Affirm’s Shop Pay for transactions between $50 and $17,500.

Affirm also entered into a strategic partnership with Stripe Inc. that will see Affirm’s Adaptive Checkout available to all Stripe users in the U.S., adding possibly millions of merchants and customers in the coming months.

Looking forward, Affirm is estimating gross merchandise value of $3.95 billion to $4.05 billion and revenue of $345 million to $355 million. Analysts were expecting GMV of $3.97 billion and revenue of $352 million.

“Our strong performance demonstrates our ability to drive growth with attractive unit economics, despite volatile market conditions,” Michael Linford, chief financial officer of Affirm, said in a statement. “We outperformed our outlook, especially on revenue less transaction costs, as we rapidly scale our network while driving operating leverage and greater capital efficiencies.”

Investors really liked the figures. On a day the Nasdaq barely moved, Affirm’s share price jumped more than 23% in regular trading ahead of the earnings release. After its earnings release at 4 p.m., Affirm’s share price rose nearly 34% more.

Image: Affirm

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