Affirm stock up 30%: ‘higher rates have not been a real impact on cost’

By: Wajeeh Khan
Wajeeh Khan
Wajeeh is an active follower of world affairs, technology, an avid reader, and loves to play table tennis in… read more.
on May 13, 2022
  • Affirm reports strong Q3 results and lifts revenue guidance for the full year.
  • CEO discussed the earnings report with Jim Cramer on CNBC's Mad Money.
  • Affirm stock opened roughly 30% up this morning on the quarterly report.

Affirm Holdings Inc (NASDAQ: AFRM) stock opened 30% up on Friday after the BNPL company reported strong results for its fiscal Q3 and raised guidance for the full financial year.

Key takeaways from Affirm Q3 earnings report

  • Lost 19 cents per share in the third quarter versus the year-ago figure of $1.23.
  • Revenue popped up 54% on a year-over-year basis to $354.8 million.
  • Gross merchandise volume in fiscal Q3 shot up 73% to $3.90 billion.
  • FactSet consensus was for 46 cents of per-share loss on $344.3 million in revenue.
  • Announced multi-year extension of its partnership with Shopify in the U.S.
  • Active merchants increased from 12K to 207K and active consumers were up 137%.

Affirm is committed to hitting sustained adjusted operating income profitability on a run rate basis by the end of fiscal 2023, as per the earnings press release. The stock is now down roughly 75% for the year.

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Future outlook and CEO’s remarks on CNBC’s Mad Money

For fiscal 2022, Affirm now forecasts its revenue to fall between $1.33 billion and $1.34 billion. The bottom end of this range matches experts’ forecast. The fintech expects up to $15.14 billion in GMV this year – well ahead of the FactSet consensus.

Affirms’ Q4 outlook for revenue was also roughly in line with analysts’ estimates. On CNBC’s Mad Money with Jim Cramer, CEO Max Levchin said:

Our cost of capital is still lower than 2019. So, the higher rates have not been a real impact on cost. Our delinquencies are also basically around the 2019 level. So, we feel great. We’ve added a billion dollar of new capacity in the last fiscal year.

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