Max Levchin, CEO of Affirm, was cofounder
Affirm surged up to 22% Friday, after the company reported strong revenue growth in its fourth quarter.
Affirm also increased its 2022 revenue guidance by as much as $1.19 Billion, which was higher than analyst expectations.
The firm's positive momentum is continuing after last month's Amazon partnership.
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Affirm shares rose as high as 22% Friday after the buy-now, pay later company reported strong fourth quarter revenue growth and increased its 2022 guidance in advance of analyst expectations.
Affirm continues to grow quickly as alternative lending has seen an increase in adoption over recent months. This was accelerated by Square's $29 Billion acquisition of Afterpay and Paypal’s $2.7 Billion buyout of Paidly.
The fourth quarter results of the fintech company's fiscal financials showed that active consumers almost doubled and active merchants nearly 400%, year-over-year.
These are the key numbers
Revenue: $261.8 Million compared to $224.4 Million
Earnings per Share: -$0.48, against estimates of -$0.33
2022 Revenue guidance: $1.16-$1.19 billion, compared to estimates of $1.16 trillion
"We delivered strong unit economics during the fourth quarter while driving greater capital efficiency. "The strategic progress that we made in fiscal year 2021 will set us up for long term growth," Affirm CFO Michael Linford stated.
Affirm does not anticipate being profitable next year despite the high revenue growth. In its fiscal year 2022, Affirm expects to suffer adjusted operating losses up to $145 Million.
According to a Friday note, Jefferies believes that Affirm's losses will continue for some time.
We note that although we expect strong top-line growth to continue, we fear this could be accompanied by margin pressures due to competition and macroeconomic normalization. Jefferies stated that AFRM's current levels of merchant discount, Gain on Sales margins, credit loss, and cost-of-funds do not suggest that many of these key drivers will improve.
Affirm's shares are now higher than they were late last month when the stock surged over 20% following an announcement by Amazon. Affirm shares are up 130% over its $49 IPO price but are down 23% from the record high of $147.
