Affirm's Stock Soars 15% After Earnings Crush Estimates and Ceo Sees Path to Profitability

Affirm Holdings Inc.'s stock soared more than 15% in after-hours trading Wednesday, after the buy-now-pay-later company blew past estimates for its fiscal fourth quarter and said it expects to generate an operating profit by the fourth quarter of fiscal 2025.

San Francisco-based Affirm $(AFRM)$ posted a net loss of $45.1 million, or 14 cents a share, in the quarter ending June 30 - narrower than the loss of $206 million, or 69 cents a share, posted in the year-earlier period.

Revenue climbed to $659.2 million from $445.8 million a year ago.

The FactSet analyst consensus was for a loss of 48 cents a share and revenue of $604 million.

Founder and Chief Executive Max Levchin said the company now expects to be operating-income profitable on a GAAP basis in the fourth quarter of fiscal 2025. GAAP, or generally accepted accounting principles, are the standard that U.S. companies must use.

In fiscal 2024, adjusted operating income came to $381 million, with $150 million of that total generated in the fourth quarter.

"It is therefore only appropriate that we set another public goal today: We intend and expect to be profitable on a GAAP basis in our fourth fiscal quarter, and plan to operate the business while maintaining GAAP profitability thereafter," Levchin said in prepared remarks.

Gross merchandise volume rose 21% to $7.2 billion in the quarter, marking the fifth consecutive quarter of growth for that metric.

Affirm ended the year with more than 300,00 active merchants and about 50 million U.S. customers.

Credit quality remained in line with its expectations, according to the company.

"We are also pleased to report that the U.S. consumer continues to shop and to buy, and is more open-minded than ever to the idea of honest financial products that put them in control of their financial destiny," Levchin said.

Affirm expects revenue to range from $640 million to $670 million in its current first quarter and to be at least 10 basis points higher than fiscal 2024 as a percentage of gross merchandise volume. The FactSet consensus is for revenue of $625 million.

The stock is down 36% in the year to date, while the S&P 500 SPX has gained 18%.