Affirm’s recent quarterly report arrived with some fantastic surprises.
Affirm Holdings (AFRM 32.58%) stock is skyrocketing in Thursday’s trading. The buy now, pay later specialist’s share price was up 33.9% as of 11 a.m. ET, according to data from S&P Global Market Intelligence.
After the market closed yesterday, Affirm published results for the fourth quarter of its last fiscal year (which ended June 30). The company delivered sales and earnings for fiscal Q4 that beat Wall Street’s targets, and the company paired the impressive results with guidance that crushed the market’s expectations.
Affirm crushed Wall Street’s earnings target in fiscal Q4
Affirm recorded a loss of $0.14 per share on revenue of $659.18 million. Meanwhile, the average analyst estimate had called for a per-share loss of $0.44 on revenue of $653.8 million. Revenue was up 47.9% year over year in the period, and the company’s loss came in far lower than Wall Street had been anticipating.
Affirm’s buy now, pay later platform continued to post strong momentum in Q4. Gross merchandise volume (GMV) rose 31% to hit $7.2 billion, and the total number of transactions on the company’s network increased 42% to hit 24.7 million. The average number of transactions per active customer increased to 4.9 in the quarter — up from 4.6 in fiscal Q3.
Guidance crushes expectations
For the first quarter of its current fiscal year, Affirm is guiding for GMV to come in between $7.1 billion and $7.4 billion. Management expects sales for the period to come in between $640 million and $670 million, far ahead of the average analyst estimate’s call for sales of $625 million. The company also said it expected its adjusted operating income margin to be between 14% and 16% in the quarter. It looks like margins should improve as the year progresses.
For the full year, Affirm is guiding for an adjusted operating margin of 18.4% — and it expects to shift into profitability in fiscal Q4. The company also guided for annual GMV of more than $33.5 billion, topping Wall Street’s expectations. Even better, the company said that revenue as a percentage of GMV will be at least 10 basis points higher than in the last fiscal year. With the company guiding for a roughly 26% annual increase for GMV and indicating that take rates will improve slightly, revenue growth should come in above that level based on management’s targets.
Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
