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Affirm's stock pops after earnings bring narrowing loss, big revenue beat

By Emily Bary

'We are prepared to grow our business at pace while managing credit in the higher-for-longer interest rate environment,' company says

Affirm Holdings Inc. logged a big revenue beat for its latest quarter, and shares of the buy-now-pay-later operator were moving higher in the extended session after Wednesday's report.

The company posted a fiscal first-quarter net loss of $171.8 million, or 57 cents a share, compared with a loss of $251.3 million, or 86 cents a share, in the year-prior quarter. The FactSet consensus was for a 70-cent per-share loss.

Affirm's (AFRM) revenue rose to $497 million from $362 million, while the FactSet consensus was for $444 million. Excluding transaction costs, revenue was $212 million, or 3.8% of gross merchandise volume.

"We believe the important takeaway from this quarter is that having done the hard work of adapting to interest-rate changes over the course of last year, we are prepared to grow our business at pace while managing credit in the higher-for-longer interest-rate environment," the company said in its investor letter.

The company noted "a modest seasonal increase in delinquencies (which began to normalize on schedule as the summer wrapped up)," and its "loss allowance increased accordingly."

Shares of Affirm were up more than 7% in after-hours trading.

Affirm's gross merchandise volume clocked in at $5.6 billion, above the $5.4 billion that analysts were modeling.

"We observed particularly strong demand at two of our enterprise platform partners," the company said in a release, while Affirm also saw accelerating volume growth from its debit card and one-time virtual cards.

For the December quarter, Affirm anticipates $495 million to $520 million in revenue. Analysts were modeling $504 million.

-Emily Bary

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11-08-23 1623ET

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