Since unveiling a buy-now, pay-later agreement with Amazon.com Inc., Affirm Holdings Inc. has gained traction, and it appears to be maintaining that momentum following its recent earnings release.
Affirm Holdings Inc. Stock
Shares of Affirm AFRM, a company that allows customers to split purchases into installments, were up more than 20% in after-hours trading Thursday after the company easily surpassed revenue and volume expectations for the most recent quarter and gave an upbeat volume forecast for the full year—even before accounting for potential contributions from the Amazon arrangement.
The firm recorded a net loss of $128.2 million, or 48 cents per share, in the fiscal fourth quarter, compared to a net profit of $35.4 million, or 17 cents per share, in the year-ago period. Following the company’s first public offering in January, Affirm’s loss includes a $105.2 million increase in stock-based compensation.
Revenue increased to $261.8 million from $153.3 million the year before, compared to $224.4 million expected by FactSet analysts. Affirm’s gross merchandise sales (GMV) grew to $2.5 billion from $1.2 billion, compared to $2.2 billion expected by analysts.
In a statement, CEO Max Levchin stated, “The secular movement toward flexible and transparent financial solutions continues to accelerate.”
Next Quarter and annual expectations
Affirm forecasts revenue of $240 million to $250 million and GMV of $2.42 billion to $2.52 billion in the current quarter. Analysts predicted sales of $232.6 million and GMV of $2.2 billion.
Affirm expects revenue of $1.16 million to $1.19 million and GMV of $12.45 billion to $12.75 billion for the entire fiscal year, versus $1.16 million and $12.0 billion, respectively, according to FactSet. In its press statement, Affirm stated that it had not factored in its newly announced Amazon AMZN, -1.17 percent relationship into its revenue or GMV estimates.
Affirm asks to be cautious
According to Affirm, the Amazon agreement isn’t exclusive, and it’s presently being tested with a small group of consumers. In the “coming months,” the firms intend to expand availability.
In a letter to clients, Mizuho analyst Dan Dolev said, “While management stated that the AMZN collaboration was non-exclusive, this is unlikely to hinder the considerable growth opportunities ahead, especially given that FY22 estimate does not include any AMZN contribution.” The company’s prognosis, he said, is “extremely cautious.”
Affirm forecasts Peloton Interactive Inc. PTON, +9.83 percent to moderate its GMV and revenue growth this fiscal year, with GMV growth outpacing revenue growth as the company’s mix swings toward shorter-duration volume and less concentration from longer-duration Peloton financing.