Affirm Stock Soars On Revenue Beat, Broader AFRM Stock Alliance With Amazon

Consumer financing firm Affirm Holdings (AFRM) reported September-quarter revenue that topped Wall Street estimates amid a wider loss. AFRM stock jumped on Thursday as the company also announced a broader e-commerce partnership with Amazon.com (AMZN).

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San Francisco-based Affirm reported fiscal first quarter earnings late Wednesday. Affirm stock jumped 25.6% to near 167.70 before the market open on the stock market today. In Wednesday’s regular session, Affirm stock tumbled 15.4% amid a broad market sell-off.

For the quarter ending Sept. 30, Affirm reported an adjusted operating loss of $45.1 million vs. a $7.9 million loss a year earlier. Affirm said revenue climbed 55% to $269.4 million vs. estimates of $248.7 million.

The company said gross merchandise volume jumped 84% to $2.7 billion. Analysts estimated gross merchandise volume at $2.5 billion. Active consumer users of the company’s “buy now, pay later” plans totaled 8.7 million, up 124% from a year earlier, Affirm said.

For its fiscal second quarter, Affirm projected revenue of $325 million at the midpoint of its guidance. Analysts had estimated revenue of $296 million.

Big Provider Of ‘Buy Now, Pay Later’

AFRM stock ranks No. 6 in the IBD 50 roster of growth stocks. Affirm stock is one of the biggest providers of buy now, pay later installment payment services.

Under an expanded deal, Affirm will be the only provider of BNPL services to Amazon until January 2023. In addition, Affirm will also be integrated into Amazon Pay’s digital wallet in the U.S.

Peloton Interactive (PTON) has been a large customer. But Affirm has also forged partnerships with e-commerce firms Shopify (SHOP), Amazon and Walmart (WMT).

Affirm’s merchant base reached 102,000 as of Sept. 30, up from 6,500 a year earlier.

Affirm Stock: Some Consumer Loans Involve Interest Fees

The initial public offering for AFRM stock in January raised $1.2 billion. Affirm gets most of its revenue from transaction fees paid by online retailers.

Buy now, pay later — or BNPL — services generally split interest-free payments into three or four equal installments over two months or less. However, Affirm stretches out some BNPL plans to as long as 60 months. In addition, Affirm gets more than one-third of its revenue from interest income paid by consumers.

Heading into earnings, Affirm stock had a Relative Strength Rating of 98 out of a best-possible 99, according to IBD Stock Checkup. But AFRM stock is extended from an IPO base of 138.08.

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Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.

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