Affirm
- Affirm soared as much as 22% on Friday after the company posted strong revenue growth for its fiscal fourth quarter.
- Affirm also raised its 2022 revenue guidance to as high as $1.19 billion, ahead of analyst expectations.
- The buy now, pay later firm is extending its positive momentum from last month's Amazon partnership.
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Shares of Affirm soared as much as 22% on Friday after the buy now, pay later firm reported strong fourth-quarter revenue growth and raised its 2022 guidance ahead of analyst expectations.
Affirm's business continues to grow fast as the alternative lending space has seen a surge in adoption over the past few months, accelerated by Square's $29 billion acquisition of Afterpay and Paypal's $2.7 billion buyout of Paidly.
In the fintech company's fiscal fourth quarter earnings results, active consumers nearly doubled while active merchants grew nearly 400% year-over-year.
Here were the key numbers:
Revenue: $261.8 million, versus estimates of $224.4 million
Earnings per share: -$0.48, versus estimates of -$0.33
2022 revenue guidance: $1.16 billion – $1.19 billion, versus estimates of $1.16 billion
"During the fourth quarter, we delivered strong unit economics while driving even greater capital efficiency. The strategic progress we achieved in fiscal year 2021 sets us up for long-term growth," Affirm CFO Michael Linford said.
Despite the strong revenue growth, Affirm still does not expect to be profitable next year. The company forecasts adjusted operating losses of up to $145 million in its fiscal year of 2022.
Jefferies expects the losses at Affirm to continue for a while longer, according to a Friday note.
"We note that while we expect robust top-line growth to persist, we believe this could come with margin pressures given competition and macroeconomic normalization. And looking at AFRM's recent levels of merchant discount rates, Gain on Sale margins, credit losses, and cost of funds, we do not see a likely means for many of these key drivers to improve," Jefferies said.
The move higher in Affirm's extends gains from late last month, when the stock soared more than 20% after announcing a partnership with Amazon. Shares of Affirm are up 130% from its $49 IPO price, but are down 23% from its record high of about $147.