Tuesday , October 4, 2022

Affirm Posts a Big Quarter as It Reaps a User Payoff From Its Shopify And Amazon Deals

Corporations aren’t in business to please Wall Street, but for publicly held companies investor expectations are hard to ignore. Affirm Inc. early Friday is seeing its share price climb steadily after exceeding analysts’ consensus expectations for payment volume and revenue for its fiscal third quarter, ended March 31. The good news comes after the buy now, pay later giant suffered a beating when its prior quarterly report fell short of Wall Street’s expectations, despite strong operating results.

San Francisco-based Affirm reported sizable gains late Thursday afternoon in dollar volume, users, and revenue, much of it driven by recent BNPL agreements with the online giants Amazon.com Inc. and Shopify Inc. Volume climbed 73% year-over-year to $3.92 billion, while revenue shot up 55%, to $354 million. Both numbers were ahead of Wall Street’s consensus expectations, the latter by more than $10 million. 

So far, investors are rewarding the company, which went public only in January last year. Affirm’s shares were trading at just over $22 at mid-morning, up 23% at that point on the day.

The company’s performance included gains in its base of active consumers, which shot up 137%, to 12.7 million. The active-merchant count reached 207,000 for the quarter, up from 11,500 a year ago and 168,000 in the prior quarter. 

The Amazon and Shopify platforms both serve millions of small online sellers globally. The impact of these two deals has been dramatic. Affirm’s active-merchant count nearly tripled, to 29,000, when “general availability” of Affirm on the Shopify platform went live in the spring last year, according to data Affirm released Thursday. When the Amazon connection became available in the Christmas quarter, that count again rose dramatically, up 65% to 168,000 by year’s end.

Consumers are coming back to Affirm after trying it the first time, the company reported. Some 81% of Affirm’s transactions in the quarter came from repeat users, the “highest repeat transaction rate we have ever reported,” said Affirm chief executive Max Levchin, in a statement accompanying Affirm’s earnings release.

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