To The Moon

$Affirm Holdings, Inc.(AFRM)$ stock rose by nearly 10% in after-hours trading on Thursday as the company unveiled its latest financial report for the fourth quarter of FY2023.

The company's total GMV amounted to $5.5 billion, surpassing the $4.4 billion from the same period last year and the $4.6 billion from the previous quarter.

Since the end of May, the Affirm Card, a debit card product, has added approximately 75,000 active cardholders per month, reaching a total of 300,000 active cardholders by mid-August.

Revenue climbed to $445.8 million, exceeding market expectations of $406.1 million, marking a 23% year-on-year increase.

Operating expenses totaled $689.7 million, lower than the previous quarter's $691 million but higher than the $641.4 million from the previous year.

The company achieved a turnaround from loss to profit, with adjusted operating income improving from -$6.4 million in Q3 to $14.7 million in Q4. The adjusted operating margin for Q4 improved from -1.7% in Q3 and -8.0% in Q4 2022 to +3.3%.

Basic and diluted earnings per share were -$0.69, surpassing the market's expected -$0.83.

Furthermore, this "buy now, pay later" financing provider reiterated its guidance for achieving full-year adjusted operating profit in FY2024.

The projected total merchandise volume for the year is expected to exceed $2.4 billion, slightly below the market consensus of $2.47 billion. The Take Rate, the proportion of revenue to GMV, is anticipated to be similar to FY2023 at 7.9%. Projected revenue for FY2024 is at least $1.9 billion, while the Wall Street consensus stands at $1.92 billion.

The expected adjusted operating margin is set to exceed 2%.

For the next quarter (FY24Q1), the company forecasts revenue between $430 million and $455 million, surpassing market expectations of $430.3 million. GMV is estimated to range from $5.3 billion to $5.5 billion, higher than the market's $5.3 billion projection.

The projected adjusted operating margin is between 2% and 4%.

However, recently, several retailers including $Target(TGT)$ , $TJX Companies(TJX)$ $Dick's Sporting Goods(DKS)$ , $Foot Locker(FL)$ have reported cases of inventory "disappearing," attributing it to "theft."

Companies like AFRM, which offer "buy now, pay later" financing, often experience delayed cash flow. If there are more instances of "defaults" by customers, these "performances" might ultimately turn into default.