Affirm’s Stock Rises As the BNPL Giant Reports Improved Results

Affirm Inc.’s shares soared early Thursday as the buy now, pay later platform reported revenue and profit results late Wednesday that topped analyst expectations and may indicate the online and point-of-sale lending trend, which emerged with force during the pandemic, retains plenty of momentum.

The positive results also followed Affirm’s recent announcements of new deals with Hotels.com , Newegg Commerce Inc., and Apple Inc.’s Apple Pay payments wallet. And in early June, the company expanded its menu of payment options for its users by adding Pay-in-2 and Pay-in-30 choices.

Following management’s review late Wednesday afternoon of the company’s June-quarter performance, Affirm’s shares shot up in after-hours trading. By mid-morning Thursday, the share price was flirting with $41.50, up by more than 30% from the previous day’s close.

For its fiscal fourth quarter ended June 30, San Francisco-based Affirm reported a per-share loss of 14 cents per share, significantly better than the consensus expectation of 51 cents. Meanwhile, revenue came in at $659 million, up a robust 48% from the June quarter last year and beating the consensus estimate of $604 million.

Partly on the basis of these results, the 12-year-old company’s chief executive on Wednesday set an ambitious goal for the coming year. “[W]e 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,” said Max Levchin in the company’s shareholder letter, released late Wednesday. “[W]e see no shortage of demand for the honest financial products Affirm builds and the transactions these products enable,” he said in the letter. Levchin, who founded Affirm, was also a co-founder of PayPal.

Transaction count, on which Levchin placed considerable importance for the company’s improved results, came to 24.7 million for the quarter, up 42%, resulting in 4.9 transactions per active consumer. The merchant count came to 303,000, a 19% increase.

Operating income was a negative $73 million, a $170 million improvement from the same period last year. Net income improved by $161 million, to finish the quarter at a negative $45 million.

Active consumers using Affirm reached 18.6 million, up 19% versus the same quarter last year. “The sheer scale of our consumer base–we’ve underwritten about 50 million Americans–has become a significant reason for merchants to add Affirm to their checkout pages,” Levchin said in the letter. “This drives more consumers to sign up (or repeat!) with Affirm, which, in turn, motivates more merchants to join us.”