Affirm Holdings Inc - Class A
Q4 2024 Earnings
Market Reaction
S&P 500 over the same 30 days: +1.84%.
Did AFRM Beat Earnings? Q4 2024 Results
Affirm delivered a standout fourth fiscal quarter, posting a loss of $0.14 per share against a consensus estimate of negative $0.51, a beat of 72.55%, while revenue of $659.18 million topped the $603.66 million estimate by 9.20% and climbed 47.9% year over year. The primary engine behind the results was a dramatic improvement in operating leverage, with adjusted operating income scaling to $150 million in the quarter and $381 million for the full fiscal year, as adjusted operating margin swung from negative 5% in FY'23 to 16% in FY'24. Revenue less transaction costs grew 70% to $309 million, reaching 4.3% of GMV and exceeding the company's long-term target range. GMV expanded 31% to $7.2 billion, with the Affirm Card alone generating $507 million. Looking ahead, Affirm guided Q1 FY'25 revenue of $640 million to $670 million and full-year GMV above $33.5 billion, and CEO Max Levchin set a public target of achieving GAAP operating profitability by Q4 FY'25 and sustaining it thereafter.
- GMV grew 31% YoY to $7.2 billion, outpacing overall e-commerce growth
- Revenue as a % of GMV improved to 9.1% from 8.1% driven by pricing initiatives
- RLTC grew 70% YoY to $309 million, reaching 4.3% of GMV
- Interest income grew 57% YoY driven by pricing initiatives and growth in loans held for investment
- Gain on sales of loans grew 116% YoY as more loans were sold with favorable market conditions
- Technology and data analytics expenses declined $28 million YoY as infrastructure costs were reduced
- Transactions per active consumer increased to 4.9 from 3.9 YoY
- Total transactions grew 42% YoY to 24.7 million
- Adjusted operating margin expanded to 22.7% from 3.3% in FQ4'23
- General merchandise category grew 45% YoY and was the largest category
“We delivered excellent results in both the fourth fiscal quarter as well as full 2024 fiscal year.”
Affirm CEO, on the earnings call
Forward Guidance & Outlook
For FQ1'25, Affirm expects GMV of $7.1 to $7.4 billion, revenue of $640 to $670 million, transaction costs of $375 to $390 million, RLTC of $265 to $280 million, and adjusted operating margin of 14 to 16 percent with 319 million weighted average shares outstanding. For full FY'25, GMV is expected to exceed $33.5 billion, revenue as a % of GMV at least 10 basis points higher than FY'24, transaction costs similar to FY'24 as a % of GMV, RLTC as a % of GMV at least 10 basis points higher than FY'24, and adjusted operating margin of more than 18.4% with 323 million weighted average shares outstanding. The company expects to achieve GAAP operating income profitability in FQ4'25 and maintain it thereafter. Enterprise warrant expenses related to A-C tranches are expected to decline to $5 million per quarter in FQ3'25 and FQ4'25. A recently announced wallet partnership is not expected to contribute materially in FY'25. UK expansion and B2B product are not expected to be material growth contributors in FY'25. Benchmark interest rate declines embedded in the forward curve are expected to be a tailwind to RLTC as a % of GMV.
AFRM YoY Financials
AFRM Revenue by Segment
Figures from SEC filings and company reports. Not investment advice.