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Affirm Reports Strong Q2 Results, Shares Surge
Max Levchin, co-founder of PayPal and CEO of the financial technology firm Affirm, made an appearance at the annual Allen & Company Sun Valley Conference, coinciding with significant news for his company.
On Friday, Affirm’s stock soared by 16% following the announcement of its fiscal second-quarter results, which exceeded Wall Street’s expectations. The buy now, pay later (BNPL) service experienced a noteworthy surge during the busy holiday shopping season, leading to an unexpected profit.
The company’s earnings reported were 23 cents per share, a stark contrast to the anticipated loss of 15 cents per share predicted by analysts surveyed by LSEG. Furthermore, Affirm’s revenue for the quarter reached $866 million, reflecting a robust 47% increase compared to the same period last year. Analysts had estimated revenues would be approximately $807 million.
Affirm’s Chief Financial Officer, Rob O’Hare, remarked on the performance, stating, “We outperformed on adjusted operating income, which is our bottom-line profitability metric that we guide to,” highlighting the company’s strong operational health.
Additionally, Affirm reported a gross merchandise volume (GMV) of $10.1 billion, surpassing the consensus estimate of $9.64 billion. This marked a significant milestone for the firm, as it was the first time GMV has exceeded the $10 billion mark, representing a 35% year-over-year growth.
In its shareholder letter, Affirm credited much of this growth to its strengthened performance in general merchandise and consumer electronics during the holiday shopping rush, pinpointing where demand surged significantly.
Looking ahead, Affirm remains committed to achieving Generally Accepted Accounting Principles (GAAP) profitability by the end of its fiscal fourth quarter. For the ongoing period, the company projects revenues between $755 million and $785 million, indicating a cautious yet optimistic outlook for future performance.
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