Affirm (NASDAQ: AFRM), a Fintech focused on BNPL services, delivered another set of solid results/earnings in their third fiscal quarter.
Affirm is reporting $6.3 billion in gross merchandise volume (GMV). The Fintech firm is reporting $576 million in revenue, $231 million in revenue less transaction costs, $161 million in operating income, and $79 million in adjusted operating income.
Affirm’s fiscal 3rd quarter earnings on May 8 appeared to be better than expected. Revenue surged by more than 51% annually, and losses per share were trimmed, but the Fintech firm’s stock reversed during intraday trading.
During Wednesday’s trading, Affirm shares dropped by as much as 10% (trading at $31.58 per share). According to analysts, this may have been due to the presence of other industry participants such as Shopify and other factors potentially impacting the operations of BNPL service providers.
Affirm says its mission remains as important to them – and as relevant to their merchant partners and their consumers – as it has been since day zero, and they “feel quite comfortable executing in the current economic and interest rate environment.”
This is the fourth consecutive quarter of “accelerating GMV growth for Affirm.”
As noted in the letter to shareholders, credit performance was stable and yield “outperformed their expectations, which they see as an opportunity to modestly increase risk exposure by offering credit to more consumers, but as always, they remain firmly in control of credit outcomes.”
Affirm further reveals that funding capacity increased slightly quarter over quarter.
Affirm focused on improving their core products this quarter.
Here are a a few highlights:
The company noted:
“Purchasing Power is a popular feature of our app that helps shoppers plan considered purchases with the knowledge of what they can responsibly spend with Affirm at various merchants and on what terms. We created an embeddable version of Purchasing Power for our point-of-sale integrations, and brought it to a group of our enterprise partners this quarter, driving meaningful GMV growth via improved end-to-end checkout conversion. We are excited to bring embedded Purchasing Power to more integrated points of sale.”
The company also shared:
“Affirm-built AI assistant has been in the works for a while, and this quarter we tested it out in our customer support chat. Although consumers can always speak with a human customer service rep, over 60% of customers served by the AI assistant did not require further human assistance: wave of the future, 100% electronic. We are encouraged by these early results, and we do not expect a material increase in expenses as we train this and other AI models.”
In early trading, shares of Affirm have increased slightly following a positive report by JP Morgan.
