Affirm shares jumped more than 15% in extended trading on Thursday after the provider of buy now, pay later loans reported better-than-expected fiscal second-quarter results.
Here’s how the company did, compared to analysts’ consensus estimates from LSEG:
- Earnings per share: 23 cents vs. an expected loss of 15 cents
- Revenue: $866 million vs. $807 million expected
Affirm reported gross merchandise volume, or GMV, of $10.1 billion, topping the average estimate of $9.64 billion, according to StreetAccount, and surpassing $10 billion for the first time. GMV, a key metric that helps gauge the total value of transactions, increased 35% from a year earlier.
Revenue in the quarter rose 47% from $591 million a year ago. When revenue grows at a faster rate than GMV, it typically signals strong unit economics.
Revenue less transaction costs, or RLTC, jumped 73% to $419 million. The RLTC margin of 4.1% came in ahead of the long-term range of 3% to 4%.
Chief Financial Officer Rob O’Hare told CNBC that Affirm’s earnings were boosted by a $60 million gain from a deal in December, when the company repurchased some of its convertible debt at a discount. However, he emphasized that business fundamentals were the primary driver.
“We outperformed on adjusted operating income, which is our bottom-line profitability metric that we guide to,” O’Hare said.
For the current quarter, Affirm expects revenue between $755 million and $785 million, or $770 million in the middle of the range, versus the average estimate of $772 million, according to LSEG. The company reiterated its commitment to achieving profitability on a GAAP basis by the end of its fiscal fourth quarter in 2025.
Affirm’s active consumer base grew 23% year over year to 21 million, while its Affirm Card, which is the company’s big bet for driving greater usage overall, now has 1.7 million active users, up more than 136% from the year-ago quarter. Card volume has more than doubled.
Affirm’s partnerships with Apple, Amazon and Shopify continue to drive momentum. In June, Affirm and Apple announced plans for U.S. Apple Pay users on iPhones and iPads to be able to apply for loans directly through Affirm.
The quarter saw a notable rise in 0% interest loans, a strategy in which merchants — and sometimes manufacturers — subsidize borrowing costs to drive sales.
“When our merchants turn toward growth, like they frequently do in calendar fourth quarter, they look for ways to do promotions,” said Max Levchin, Affirm’s founder and CEO, during the earnings call.
Prior to the earnings report, Affirm shares were up 1.4% for the year after rising 24% in 2024.
— CNBC’s Robert Hum contributed to this report.
Correction: A prior version of this story misattributed the quote in the penultimate paragraph.
