Affirm’s Q4 Earnings Beat Expectations

Affirm’s stock soared by 16% in after-hours trading following the release of its impressive fourth-quarter financial results. The company reported earnings of 14 cents per share, surpassing analysts’ expectations of 51 cents. Additionally, Affirm’s revenue of $659 million exceeded the projected $604 million.

The company experienced a 31% increase in gross merchandise volume (GMV) to $7.2 billion, a key industry metric indicating transaction value. Revenue also climbed by 48% year-over-year, with a net loss of $45.1 million, significantly lower than the previous year’s $206 million loss. Affirm now boasts over 300,000 active merchants and 18.6 million active consumers.

CEO Max Levchin announced a new goal of achieving operating profitability on a GAAP basis by the fourth quarter of 2025. The company anticipates revenue between $640 million and $670 million for the current quarter, surpassing analysts’ estimates of $625 million.

Affirm’s recent partnerships with Apple, Amazon, and Shopify have contributed to its growth. The company’s collaboration with Apple allows U.S. Apple Pay users to apply for loans directly through Affirm. Additionally, Affirm plans to expand into the UK by the end of the year.

However, some experts express concerns about Affirm’s profitability goals amidst a potential consumer slowdown. Gina Sanchez, chief market strategist at Lido Advisors, warns of challenges in achieving profitability, especially in a declining consumption environment. She emphasizes the need to prepare for a potentially slow period until rate cuts take effect.

Overall, Affirm’s positive financial performance and strategic partnerships position the company for continued growth and expansion into new markets. As the buy now, pay later industry evolves, Affirm remains a key player with promising prospects for the future.