Consumer financing firm Affirm Holdings reported a smaller-than-expected loss in the December quarter while revenue and other financial metrics topped Wall Street targets. Company guidance for AFRM stock came in above expectations, but may not have been good enough after a huge run-up.
The San Francisco-based company reported fiscal second-quarter earnings after the market close on Thursday. On the stock market today, AFRM stock was down 1.1% to 48.64 in morning trading.
"We remain encouraged by the company's growth trajectory, share gains, and ability to manage profitable growth in an elevated interest rate environment," said RBC Capital analyst Daniel Perlin in a report.
In the Affirm earnings report, the company reported a 54 cent per share loss for the three months ended Dec. 31. That compared with a $1.10 per-share loss in the year-earlier period. Analysts polled by FactSet had projected a loss of 72 cents per share.
Affirm said revenue climbed 48% to $591 million vs. estimates of $521 million. Revenue minus transaction expenses came in at $242 million, up 68%, vs. estimates of $198.1 million.
The company said gross merchandise volume rose 32% to $7.5 billion vs. estimates at $6.95 billion. The new Affirm Card brought in $400 million in GMV.
Affirm Stock: GMV Guidance Edges By Views
For the current March quarter, Affirm said it expects revenue of $540 million at the midpoint of its outlook vs. estimates of $488 million. It forecast GMV of $5.9 billion, edging by estimates of $5.78 billion.
AFRM stock had gained 270% over the past 52 weeks prior to the release of fiscal Q2 earnings.
Affirm is one of the biggest providers of buy now, pay later installment payment services. With BNPL options, consumers pay off purchases in monthly installments, either with low interest or none at all. Affirm also is expanding into other financial services.
The initial public offering for AFRM stock in January 2021 raised $1.2 billion. Affirm gets most of its revenue from transaction fees paid by online retailers. In addition, Affirm gets about one-third of its revenue from interest income paid by consumers.
Heading into the Affirm earnings report, the stock had a Relative Strength Rating of 99 out of a best-possible 99, according to IBD Stock Checkup.
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