Affirm major earnings expectations, but stocks fall

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Affirm Holdings Inc. beat revenue expectations for its latest quarter and issued an optimistic forecast, but shares fell in after-hours trading Thursday. The company, which allows people to divide purchases into installments, generated a tax net loss in the second quarter of $ 31.6 million, or 45 cents per share, compared to $ 31 million, or 92 cents per share, in the quarter of the previous year. Analysts surveyed by FactSet were modeling 81 cents a share in GAAP earnings.

Affirm AFRM, + 2.76% revenue increased to $ 204.0 million from $ 130 million, while analysts had been projecting $ 189.4 million. Affirm’s gross merchandise volume increased to $ 2.1 billion from $ 1.3 billion, above the FactSet consensus, which called for $ 1.7 billion. Despite the heartbeat relative to the FactSet consensus, stocks fell more than 8% in after-hours trading. Barclays analyst Ramsey El-Assal wrote that the stock movement after the report could reflect a quieter outperformance in the company’s traders’ revenue line, comprised of the fees companies pay Affirm when people use their payment options, as well as potentially higher expectations. from the purchase side. Additionally, Affirm shares are up more than 180% since their January initial public offering price, compared to a gain of approximately 7% for the Nasdaq COMP Composite Index, + 0.38% during that period, which El -Assal said it could also help explain the stock liquidation after the results. Chief Executive Officer Max Levchin told MarketWatch that the company saw increased revenue diversification among its business partners in the last quarter. While Peloton Interactive Inc. PTON, + 0.99% represented 30% of revenues in the September quarter, it was responsible for 24% in the December period. This indicated to Levchin that the company is “growing our non-Peloton user base faster, while also happily growing with Peloton,” as Affirm increased volume within its existing merchant base and added new partners. . Affirm had 4.5mn active clients in the quarter, compared to 3.6mn in the June quarter. The company revealed that in calendar 2020, approximately two-thirds of purchases came from regular Affirm users. Affirm increased its active customer base by 52% and its merchant base by 90% over the previous year. The report was Affirm’s first since it was released a month ago. The company forecast tax revenue for the third quarter of $ 185 million to $ 195 million, while analysts were projecting $ 189 million. Affirm expects a gross merchandise volume of $ 1.80 billion to $ 1.85 billion, above the FactSet consensus, which called for $ 1.75 billion. For the full fiscal year, Affirm requested $ 760 million to $ 780 million in revenue and $ 7.25 billion to $ 7.35 billion in GMV. Analysts expected $ 747 million and $ 6,790 million in GMV.