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Affirm Stock Soars Afterhours On Solid Q3 Results

Affirm Holdings Inc AFRM reported third-quarter revenue growth of 53.8% year-over-year to $354.8 million, beating the consensus of $344.03 million.

GMV was $3.9 billion, an increase of 73% Y/Y. Active merchants increased from 12,000 to 207,000, driven primarily by the adoption of Shop Pay Installments by merchants on Shopify’s platform.

Active consumers grew 137% Y/Y to 12.7 million. Total transactions grew to 10.5 million (+162% Y/Y). Transactions per active consumer increased 19% Y/Y to 2.7 as of March 31, 2022, and 81% Y/Y of total transactions were from repeat Affirm consumers.

The operating loss expanded to $(226.6) million for Q3, compared to $209.3 million a year ago. The adjusted operating margin was 1.1% versus 2.1 in 3Q21.

EPS was $(0.19) down from $(1.23) in 3Q21, beating the consensus of $(0.54). Affirm’s cash used in operating activities year-to-date totaled $(103.08) million, compared to $173.22 million a year ago.

Affirm announced a multi-year extension of its partnership in the U.S. with Shopify. The expanded agreement cements Affirm as the exclusive pay-over-time provider for Shop Pay Installments in the U.S.

“As we advance our strategy to drive growth, maintain attractive unit economics, and deploy superior risk management, we plan to achieve a sustained profitability run rate on an adjusted operating income basis by July 1, 2023,” commented Max Levchin, Founder and CEO.

4Q22 Outlook: Affirm expects GMV of $3.95 billion to $4.05 billion, Revenue of $345 million to $355 million vs. a consensus of 352 million, and an Adjusted Operating Margin of (15)% to (11)%.

FY22 Outlook: Affirm expects GMV of $ $15.04 billion to $15.14 billion, Revenue of $1.33 billion to $1.34 billion vs. a consensus of $.133 billion, and an Adjusted Operating Margin of (7.6)% to (6.6)%.

Price Action: AFRM shares are trading higher by 16.10% at $20.94 during the post-market session on Thursday.

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