Affirm Stock Rallies As Earnings, Revenue Top Expectations

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Analyst Team
Updated: 13 May 2022

Key points:

Shares of buy now, pay later company Affirm Holdings (NASDAQ: AFRM) have rallied in premarket action Friday after the company reported fiscal third-quarter earnings that topped analyst expectations.

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Affirm announced a loss per share of 19 cents before the bell on Thursday, with revenue coming in at $354.8 million.

The numbers reported were against an anticipated loss per share of 49 cents and revenue of $344.03 million.

Also Read: The Top Earnings Reports to Look Out For in the Coming Quarter

The company said its 54% increase in revenue was driven by continued gross merchandise volume and merchant network revenue growth, higher interest income, greater gains on sales of loans due to higher loan sale volume, and higher servicing income as the loan portfolio held by third-parties scaled.

“The number of active merchants on our platform grew from 12,000 to 207,000 year over year, and active consumers increased 137% to 12.7 million people,” said Max Levchin, Founder and CEO of Affirm.

“The secular trend toward adopting honest financial products and our ability to drive strong demand among merchants resulted in GMV growing by 73% year over year. We are especially proud of the re-engagement we are driving with consumers as 81% of our transactions were from repeat Affirm users. This represents our highest repeat transaction rate we have ever reported,” he added.

The company sees fiscal 2022 revenue coming in between $1.33 billion and $1.34 billion.

Affirm shares have rallied 36% premarket, trading around the $24.54 mark, adding to Thursday's 23% gain.

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