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confirm Shares of the buy now pay later loan provider rose 16% in after-hours trading on Wednesday after the company reported better-than-expected financial conditions. Fourth quarter results.
Here’s how the company performed, compared to LSE analysts’ consensus estimates.
- Loss per share: Adjusted 14 cents, expected 51 cents
- income: $659 million vs. $604 million expected
Affirm reported gross merchandise volume (GMV) of $7.2 billion, a 31% increase from the same period last year. GMV is a key industry metric that helps measure the total value of a transaction within a reporting window.
Revenue increased 48% year over year, and Affirm’s net loss narrowed to $45.1 million from $206 million in the same period last year. The company’s number of active merchants exceeded 300,000, and its active consumers grew 19% to 18.6 million.
Affirm CEO Max Levchin said in a report to shareholders that the company has set a new goal to achieve operating profitability on a GAAP basis by the fourth quarter of fiscal 2025.
Affirm expects revenue in the current quarter to be between $640 million and $670 million. Analysts polled by London Stock Exchange Group (LSEG) expected revenue of $625 million.
Affirm shares were down 36% for the year as of Wednesday’s close, but have been trending higher recently, rising 12% in August. Federal Reserve Chairman Jerome Powell said on Friday that a rate cut could come as soon as September.
Bank of America analysts said in a note last month that the rate cut would benefit Affirm’s financing costs and loan sales gains. The company raised the annual interest rate cap on its merchant loans to 36% from the previous 30%, which analysts said “should remain a driver of yield and GMV growth.”
Analysts said that confirmation and apple plus other partnerships Amazon and Shopping Also helping. June, Affirm and Adple announced plans US Apple Pay users on iPhone and iPad can apply for a loan directly through Affirm.
Affirm is also planning to launch in the UK by the end of this year.
Gina Sanchez, chief market strategist at Lido Advisors, told CNBC’s “The Exchange” on Wednesday that slowing consumer growth could make it difficult for the company to meet its profit targets.
“In a consumer-down environment, this is a buy now, pay later company,” Sanchez said. “You have to be prepared for what could be a pretty slow period in the first half of 2025 until the rate cuts really start to take effect because that’s It’s the reality of participating in a consumer game that requires consumption.”
watch: Affirm the CEO’s views on consumer behavior
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