Fintech Affirm Releases Financial Results Earlier than Expected, Shares Fall Over 20%

Fintech Affirm‘s (NASDAQ:AFRM) stock had fallen over 20% to a $58.68 share price on Thursday (February 10, 2022) following the firm’s disclosure of its Q2 results (which came ahead of schedule). Affirm closed the week at $46.55 after starting the year at over $95 so Affirm has experienced a 50%+ haircut in just a few weeks.

Here’s how Affirm did compared to the Refinitiv consensus expectations for the quarter ending in December 2021:

  • Total loss per share: $0.57
  • Revenue: $361 million compared to $328.8 million forecasted
  • Affirm noted that it estimates anywhere between $1.29 billion and $1.31 billion in revenue for the financial year, which is ahead of the $1.27 billion forecasted by industry analysts.

As first reported by CNBC, the early release came following a (now deleted) tweet that had been sent out from the Fintech company’s official Twitter account at about 1:30 PM ET on February 10. The tweet had confirmed the details of the firm’s financial performance, which noted that its sales surged 77%.

Affirm’s guidance has been disappointing, according to D.A. Davidson’s Chris Brendler.

The tweet indicated that Affirm might exceed revenue expectations. Analysts surveyed  by Refinitiv had forecasted a 61% increase. The stock had gone as high as 10% on that update (but only short-term).

Affirm later tweeted that its inadvertent disclosure of financial results was attributed to human error.

Affirm is notably one of many Buy Now, Pay Later firms, which provide short-term and low-interest loans to consumers when they purchase consumer products via online platforms.

For instance, clients purchasing a $1,450 product may pay it off over a 39-month period with payments starting at $45 via Affirm. In 2021, Affirm entered a partnership with Amazon to be the only non-credit-card provider for financing for products the retailer markets in the US.

Affirm had gone public in January of last year, and its share price has dropped around 65% from its high this past November. It was established Max Levchin, who is notably one of the PayPal founders.

Affirm recently announced new options for customers to access its buy now, pay later (BNPL) services. According to a release, Affirm has launched a new “super app” as well as a browser extension.

Affirm said the new app bundles both its payments and savings features, along with its virtual card plus “exclusive” retail offers.

Max Levchin, founder and Chief Executive Officer of Affirm, said:

“We know that consumers want a one-stop shop to manage their finances. Affirm saw this firsthand when we added Savings to our app, which has since attracted more than $300 million in total deposits while driving meaningful engagement. By evolving the Affirm app into a super app, we have launched the ultimate destination for consumers to shop their favorite brands and smartly manage their finances, while also delivering a seamless, rewarding, and increasingly personalized experience.”

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