Max Levchin, co-founder of PayPal and CEO of financial technology company Affirm, arrives at Sun Valley Resort for the annual Allen & Company Sun Valley Conference in Sun Valley, Idaho.
Drew Angerer | Getty Images
confirm The company’s shares soared 34% on Thursday, on track for their best day in nearly three years, after the company’s buy-now-pay-later loan business beat revenue and profit estimates. earnings report.
If the rally continues, it would be the stock’s third-biggest gain since its January 2021 IPO.
After the close on Wednesday, Affirm said, fiscal fourth quarter It increased 48% year-on-year to US$659 million, and net loss narrowed to US$45.1 million from US$206 million in the same period last year. The company’s revenue exceeded expectations and its losses were smaller than expected.
Affirm expects revenue in the current quarter to be between $640 million and $670 million. Analysts polled by London Stock Exchange Group (LSEG) expected revenue of $625 million.
Affirm CEO Max Levchin said in a report to shareholders that the company has set a new goal to achieve operating profitability on a GAAP basis by the fourth quarter of fiscal 2025.
Analysts at Mizuho Bank called this a “killer quarter” for Affirm in a note Thursday and said “the prospect of positive GAAP operating income” would be “a significant milestone.”
Even after Thursday’s gains, Affirm shares are still down about 14% this year, while the Nasdaq is up 18%. But the stock has trended higher recently, rising 50% in August. Federal Reserve Chairman Jerome Powell said on Friday that a rate cut could come as soon as September.
Bank of America analysts said in a note last month that the rate cut would benefit Affirm’s financing costs and loan sales gains. The company raised the annual interest rate cap on its merchant loans to 36% from the previous 30%, which analysts said “should remain a driver of yield and GMV growth.”
Mizuho plans to launch new apple The Pay partnership could add $12 billion to Affirm’s total addressable market once it goes live later this year.
