Affirm Holdings Inc. said it’s growing far faster than the e-commerce market in general, but Wall Street has found reasons to nitpick the company’s latest results, with shares down 2.5% in the extended session.
The latest quarterly numbers included gross merchandise volume of $7.6 billion, up 35% from a year earlier and above the FactSet consensus view of $7.3 billion. The metric measures the dollar value of transactions made through Affirm’s platform.
Transactions per active consumer rose 25% from a year before to 5.1 on a trailing-12-month basis.
Affirm booked 41% revenue growth for the fiscal first quarter, with that top-line total coming in at $698 million versus the $664 million consensus view. Revenue as a portion of GMV came out to 9.2%, versus 8.8% for the equivalent quarter a year before.
The buy-now-pay-later company said in its shareholder letter that it’s seeing “a mix shift toward interest-bearing products and away from 0% APR products.”
Revenue less transaction costs was 3.8%, which is the same as what Affirm posted in the year-prior quarter. Affirm has said that this metric captures the economic value of the transactions it processes.
In discussing the trend, Affirm noted that “higher revenue was offset by higher provision and, to a lesser extent, an increase in funding costs.”
“The majority of the increase in provision expense was due to an increase in loans originated and retained on balance sheet during the quarter, which also contributed to…year-over-year growth in interest income,” the company said in the shareholder letter.
Affirm logged a fiscal first-quarter net loss of $100 million, or 31 cents a share, compared with a loss of $172 million, or 57 cents a share, in the year-earlier period. Analysts tracked by FactSet were modeling a 32-cent per-share loss.
For the ongoing quarter, Affirm models $770 million to $810 million of revenue. Analysts were looking for $785 million.
“As we prepare for what promises to be a great holiday season, credit remains job #1,” the company said in the shareholder letter. “Delinquencies rose seasonally in FQ1 and also as a result of expanded approvals with the APR range expansion compared to last year. We expect delinquencies to decline as we exit the holiday season, as normal.”
