Shares of
The San Francisco-based lender posted $659.2 million in revenue for the quarter ended June 30, an increase of 47.9% year over year, according to the company's shareholder letter. That beat analysts' revenue consensus of $605.4 million for the quarter, according to Capital IQ. Revenue for the full year landed at $2.3 billion, up 46.3% from the prior year and 2.9% over analysts' expectations.
Affirm posted a net loss of $45 million in the quarter, down from a net loss of $206 million in the same prior-year period. Analysts expected a $142.2 million loss. Earnings per share came in at a 14 cent loss, below a consensus estimate of a 44 cent loss.
The fiscal fourth quarter was the "most profitable" quarter on record for the buy now/pay later company, JPMorgan analyst Reginald Smith wrote in a research note.
"Affirm continues to fire on all cylinders, outgrowing e-comm/payment peers and flexing operational leverage," Smith said.
The company expects to post GAAP profitability next year at the end of its fiscal fourth quarter ending June 30, 2025, Founder and CEO Max Levchin said in a letter to shareholders Wednesday.
The outlook was "better than [JPMorgan] feared, which is encouraging as management typically guides conservatively," Smith wrote.
Wedbush Securities didn't expect Affirm to post GAAP profitability until the end of its fiscal 2027, Managing Director David Chiaverini said in a research note to investors.
Shares jumped 31.9%, or $10.08, to $41.66 at market close in New York Thursday, but still trailed 15.2% from the beginning of the year.
Affirm's Levchin said in the shareholder letter that the key to reaching any profitability goal was "simply more transactions … so long as our transactional unit economics stay positive."
Transaction volume on Affirm's platform soared in the quarter, rising 42% year over year and 15% sequentially to 24.7 million, according to the letter.
Monday's market decline has sparked concerns of an economic downturn, calling attention to installment lenders that market to distressed consumers.
Transactions increased as active merchants jumped to 19% year over year to 303,000, and include the three-largest e-commerce marketplaces by market share: Amazon,
Active customers excluding the company's shuttered Returnly business also rose 19% year over year to 18.6 million and marked the third consecutive quarter of year-over-year growth, according to the letter.
The better-than-expected results come on the heels of numerous new initiatives, including "the Affirm Money Account, the B2B product, the Apple Pay wallet partnership, and the UK expansion," Wedbush's Chiaverini wrote, noting that none are expected to be "meaningful contributors in fiscal 2025."
Still, moves made by the buy now/pay later company can't be ignored, said Ben Danner, senior analyst at Javelin Strategy and Research.
"Affirm has been making waves this year with a notable partnership with Apple as it takes over their Pay Later program," Danner said in an email.
"When you are partnering with a
Danner also said that investors are likely receptive to the way the Affirm CEO has responded to the CFPB's
"Although not always in agreement with the way regulatory agencies have treated BNPL, [Levchin has] positioned the company to be ready for the future regulatory environment and I think that's very important," Danner said.
Meanwhile, Affirm also said on a call with investors Wednesday that the company's current Chief Financial Officer Michael Linford will be taking "an expanded" role as chief operating officer in addition to his CFO duties. Robert O'Hare, who currently serves as senior vice president of finance at the company, will be groomed for the chief finance position and is expected to fully take over the role by the end of the company's fiscal year 2025.
