Affirm Lifts Revenue Outlook, Extends Shopify Deal

Reuters2022-05-13

Affirm Holdings Inc raised its annual revenue forecast and said it has extended a multi-year partnership with Shopify in the United States, sending shares of the buy now, pay later (BNPL) firm up 34% aftermarket on Thursday.

San Francisco-based Affirm's third-quarter revenue surged 54%, surpassing the company's estimates, as it benefited from higher interest income and loan sale volumes as well as a surge in users.

"Our strong performance demonstrates our ability to drive growth with attractive unit economics, despite volatile market conditions," Chief Financial Officer Michael Linford said in a statement.

The company's results are in sharp contrast to fintech firm Upstart Holdings, which lowered its annual revenue outlook on Tuesday in a sign of declining loan demand as interest rates rise amid decades-high inflation.

Affirm said active merchants on its platform grew to 207,000 from 12,000 last year, while active consumers increased 137% to 12.7 million.

BNPL firms like Affirm earn from charging merchants a fee to offer their customers small, point-of-sale loans which are paid back in interest-free installments over a period of time, bypassing credit checks.

"Affirm is well-positioned for continued growth and long-term value creation ... We plan to achieve a sustained profitability run rate on an adjusted operating income basis by July 1, 2023," Chief Executive Officer Max Levchin said.

Affirm raised its full-year revenue forecast to between $1.33 billion and $1.34 billion, up from $1.29 billion to $1.31 billion earlier.

The company also narrowed its loss to $54.7 million, or 19 cents a share, from $287 million, or $1.23 a share, a year ago, as it recognized a $136.2 million gain in the third quarter.

Analysts had expected a loss of 51 cents a share, according to data from Refinitiv.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

Leave a comment
31