Core Viewpoint - Affirm's shares declined following a weak revenue forecast, raising concerns about CEO Max Levchin's strategy to expand through 0% loans [1][2]. Revenue Forecast - Affirm projected revenue for the current quarter to be between $815 million and $845 million, with the midpoint falling short of the $841 million average analyst estimate [2]. Business Strategy - CEO Max Levchin is focusing on 0% loans to attract consumers and foster long-term customer loyalty, even at the cost of current profit margins [2]. - The strategy aims to educate consumers on the benefits of avoiding excessive revolving interest, positioning Affirm as a competitor to credit cards [3]. Market Position - Currently, 0% loans account for 13% of Affirm's total Gross Merchandise Volume (GMV), with 80% of these loans being issued to prime and super-prime customers [3]. - Affirm's primary business involves providing point-of-sale installment loans for consumer purchases in categories such as apparel, electronics, and sporting goods [3].

Core Viewpoint - Affirm Holdings, Inc. reported a fiscal third-quarter 2025 earnings of $0.01 per share, surpassing the Zacks Consensus Estimate of a loss of $0.09 per share and significantly improving from a loss of $0.43 per share in the prior-year quarter [1] Financial Performance - Total revenues increased by 36% year over year to $783.1 million, slightly missing the consensus mark by 0.1% but within management's expectations of $755-$785 million [1] - Gross Merchandise Value (GMV) reached $8.6 billion, climbing 36% year over year, exceeding both management's expectations of $8-$8.3 billion and the Zacks Consensus Estimate of $8.1 billion [3] - Total transactions surged by 45.6% year over year to 31.3 million, driven by a significant increase in repeat customer transactions [4] - Servicing income rose by 27% year over year to $32.1 million, beating the consensus mark of $31.3 million [4] - Interest income increased by 28% year over year to $402.7 million, although it fell short of the Zacks Consensus Estimate of $414.4 million [4] Revenue Breakdown - Merchant network revenues improved by 34.3% year over year to $214 million, surpassing the consensus mark of $199.5 million [5] - Card network revenues surged by 64.2% year over year to $58.6 million, attributed to higher usage of Affirm Card and virtual cards, exceeding the consensus estimate of $46.4 million [5] Expense and Losses - Total operating expenses rose by 7.4% year over year to $791.5 million, driven by increased costs in various areas including loan purchase commitments and technology expenses [6] - Provision for credit losses escalated by 20.3% year over year to $147.3 million [6] - Sales and marketing expenses decreased by 44.3% year over year [6] Profitability Metrics - Adjusted operating income totaled $173.7 million, more than doubling year over year, with an adjusted operating margin improving by 860 basis points to 22.2%, surpassing management's estimated range of 20-22% [7] - Affirm's net income was $2.8 million, a significant recovery from a net loss of $133.9 million in the prior-year quarter [7] Financial Position - As of March 31, 2025, Affirm had cash and cash equivalents of $1.4 billion, a 33.4% increase from the fiscal 2024-end figure [8] - Total assets rose by 9.6% year over year to $10.4 billion [8] - Funding debt amounted to $1.9 billion, up 3.9% from June 30, 2024 [8] - Total stockholders' equity increased by 5.2% to $2.9 billion [8] Cash Flow - Affirm generated $210.4 million of net cash from operations during the March quarter, reflecting a 1.1% year-over-year increase [9] Future Guidance - For the fourth quarter of fiscal 2025, Affirm forecasts GMV in the range of $9.4-$9.7 billion, up from the previous estimate of $9-$9.3 billion [10] - Revenues are anticipated to be between $815-$845 million, higher than the earlier guidance of $810-$840 million [10] - For fiscal 2025, management anticipates GMV to be in the range of $35.7-$36 billion, an increase from the earlier guidance of $34.74-$35.34 billion [12] - Revenues for fiscal 2025 are expected to be in the range of $3.163-$3.193 billion, up from the prior outlook of $3.13-$3.19 billion [12]

Core Insights - Affirm Holdings Inc experienced a significant decline in share price despite reporting fiscal third-quarter results that were broadly in line with expectations [1] - The company's gross merchandise value (GMV) reached $8.6 billion, representing a 36.5% increase, surpassing the consensus estimate of $8.2 billion [2] - Revenue for the quarter was reported at $783.1 million, up 35.9%, aligning with consensus expectations [3] Financial Performance - Affirm raised its fiscal fourth-quarter GMV outlook from a range of $9 billion to $9.3 billion to a new range of $9.4 billion to $9.7 billion, indicating strong execution and growth [4] - The revenue outlook for the fourth quarter was also increased from $810 million to $840 million to a new range of $815 million to $845 million [4] - Despite positive revenue and GMV growth, there were weaker-than-expected results in interest income and gain on sale revenue [3] Market Reaction - Following the earnings report, Affirm's shares fell by 13.71%, trading at $46.82 [4] - Analyst Kyle Peterson maintained a Hold rating on the stock, citing a lack of positive catalysts in the near term due to rising recessionary fears [4]

Core Insights - The article highlights five cloud computing-centric stocks that are expected to deliver strong returns in the short term, emphasizing their earnings and revenue growth potential for 2025 [3][4]. Group 1: Cloud Computing Overview - Cloud computing provides on-demand access to computing resources over the Internet, transitioning from traditional on-premises infrastructure to cloud-based solutions [1]. - Organizations can access shared resources from cloud service providers, which reduces operating costs and enhances productivity and scalability [2]. Group 2: Stock Picks and Performance - The selected stocks include Five9 Inc. (FIVN), Affirm Holdings Inc. (AFRM), Microsoft Corp. (MSFT), Juniper Networks Inc. (JNPR), and Tyler Technologies Inc. (TYL), all showing strong earnings growth potential [3][4]. - Each stock has received positive earnings estimate revisions in the last 60 days and carries a Zacks Rank of 1 (Strong Buy) or 2 (Buy) [4]. Group 3: Company-Specific Insights Five9 Inc. (FIVN) - Five9 provides intelligent cloud software for contact centers, offering a virtual platform for customer service and sales functions [8]. - The company is experiencing growth due to the adoption of AI tools, with an expected revenue growth rate of 9.6% and earnings growth of 10.9% for the current year [11][10]. Affirm Holdings Inc. (AFRM) - Affirm has diversified revenue streams and expects revenues between $3.13 billion and $3.19 billion in fiscal 2025, driven by partnerships and expanding into new markets [12][13]. - The expected revenue growth rate is 37.1%, with earnings growth projected at 96.4% for the current year [14]. Microsoft Corp. (MSFT) - Microsoft reported strong fiscal Q3 2025 results, driven by AI business growth and Azure cloud infrastructure [15][16]. - The expected revenue growth rate is 13.7%, with earnings growth of 12.7% for the current year [17]. Juniper Networks Inc. (JNPR) - Juniper Networks reported strong Q1 2025 results, benefiting from demand for AI-driven enterprise solutions and data center virtualization [18][19]. - The expected revenue growth rate is 7.3%, with earnings growth of 21.5% for the current year [20]. Tyler Technologies Inc. (TYL) - Tyler Technologies is capitalizing on the public sector's shift to cloud-based systems and the hybrid working trend, with an expected revenue growth rate of 8.9% and earnings growth of 15.6% for the current year [21][22].

Core Insights - Affirm experienced significant growth in its fiscal third quarter, with gross merchandise value (GMV) and revenues both increasing 36% year over year to $8.6 billion and $783 million, respectively, although guidance indicates a slight deceleration in growth rates ahead [1][3][5] Financial Performance - The Affirm Card's GMV surged 115% year over year to $807 million, with 2 million active cardholders, contributing to a total of 21.9 million active consumers, up 23% from a year ago [6][1] - Revenues rose 36% to $783 million, with 0% APR monthly installments growing by 44%, accounting for 13% of the company's GMV [4][5] - Merchant counts increased by 20% to 358,000, while charge-offs are trending toward 3.5% and loss rates for Pay in 4 loans are below 1% [6] Guidance and Future Outlook - Guidance for the current quarter anticipates revenues between $815 million and $845 million, with a midpoint of $830 million, slightly below the Street's consensus of $840 million [7] - The company expects year-on-year growth of 34%, down from the 36% growth seen in the last quarter, with elevated growth rates observed in April [9] Macroeconomic Considerations - Affirm expressed confidence in managing various macroeconomic environments, anticipating increased demand for payment flexibility during stress scenarios [2][9] - The company estimates that in a recession scenario with a ~50% increase in credit stress, a reduction in approvals could cost about 10 percentage points of GMV growth [9] Consumer Behavior and Credit Reporting - Affirm noted healthy repayment rates and a slight uptick in prepayments, indicating positive credit signals [7] - The company highlighted the importance of credit reporting, stating that timely repayments help consumers build their credit history and improve their credit scores [10]

Market Overview - Markets experienced a rise due to optimistic sentiment surrounding trade deals with U.S. partners, particularly following an agreement with the UK that maintained a +10% tariff [1] - The Dow Jones Industrial Average increased by +254 points (+0.62%), while the S&P 500 rose by +0.58%. The Nasdaq and Russell 2000 saw even larger gains of +1.07% and +1.85%, respectively [2] Earnings Reports - Expedia (EXPE) reported Q1 earnings of $0.40 per share, missing the Zacks consensus of $0.42, despite a +90% year-over-year increase. Revenues were $2.99 billion, below the expected $3.03 billion, leading to a -6.7% decline in after-hours trading [3] - Affirm (AFRM) exceeded bottom line expectations with earnings of +$0.01 per share against a forecast of -$0.08. Revenues matched estimates at $783 million, while Gross Merchandise Value (GMV) rose +36% year over year. However, shares fell -8% in late trading [3] - DraftKings (DKNG) reported a bottom line of -$0.07 per share, an improvement from the projected -$0.30. Revenues of $1.41 billion grew +20% year over year but missed the Zacks consensus of $1.42 billion. The company lowered revenue guidance and adjusted EBITDA forecasts, yet shares rose +3% in post-market trading [4]

Core Insights - Affirm Holdings reported revenue of $783.14 million for the quarter ended March 2025, reflecting a year-over-year increase of 35.9% [1] - The company's EPS was $0.01, a significant improvement from -$0.43 in the same quarter last year, resulting in an EPS surprise of +111.11% [1] - The reported revenue was slightly below the Zacks Consensus Estimate of $783.85 million, indicating a surprise of -0.09% [1] Key Financial Metrics - Gross Merchandise Volume (GMV) reached $8,558 billion, exceeding the average estimate of $8,129.51 billion [4] - Transactions per Active Consumer were 6, surpassing the estimated average of 5 [4] - Active Consumers totaled 22, slightly above the average estimate of 21 [4] - Revenue from the Merchant network was $213.97 million, compared to the estimated $199.48 million, marking a year-over-year increase of 34.3% [4] - Revenue from the Card network was $58.57 million, exceeding the estimated $46.40 million, with a year-over-year growth of 64.2% [4] - Revenue from Interest income was $402.70 million, slightly below the estimated $414.44 million, but still reflecting a year-over-year increase of 27.6% [4] - Revenue from Servicing income was $32.05 million, above the estimated $31.25 million, representing a year-over-year change of 26.7% [4] - Revenue from Gain on sales of loans was $75.84 million, below the estimated $81.19 million, but showing a significant year-over-year increase of 88.7% [4] Stock Performance - Affirm Holdings' shares have returned +16.3% over the past month, outperforming the Zacks S&P 500 composite's +11.3% change [3] - The stock currently holds a Zacks Rank 1 (Strong Buy), suggesting potential for outperformance in the near term [3]

Core Viewpoint - Affirm Holdings reported quarterly earnings of $0.01 per share, surpassing the Zacks Consensus Estimate of a loss of $0.09 per share, marking an earnings surprise of 111.11% [1] - The company has consistently exceeded consensus EPS estimates over the last four quarters [2] Financial Performance - Affirm Holdings generated revenues of $783.14 million for the quarter ended March 2025, slightly missing the Zacks Consensus Estimate by 0.09%, compared to $576.16 million in the same quarter last year [2] - The company has topped consensus revenue estimates three times in the last four quarters [2] Stock Performance and Outlook - Affirm Holdings shares have declined approximately 15.4% year-to-date, while the S&P 500 has decreased by 4.3% [3] - The company's earnings outlook is crucial for assessing future stock performance, with current consensus EPS estimates at $0.08 for the upcoming quarter and -$0.06 for the current fiscal year [4][7] Industry Context - The Internet - Software industry, to which Affirm Holdings belongs, is currently ranked in the top 37% of over 250 Zacks industries, indicating a favorable environment for stock performance [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked using tools like the Zacks Rank [5][6]

Core Viewpoint - Affirm reported stronger-than-expected earnings for the third quarter of fiscal year 2025, but its revenue forecast for the fourth quarter fell short of analyst expectations, leading to a 10% drop in stock price during after-hours trading [1]. Group 1: Financial Performance - For Q3 FY2025, Affirm's earnings per share were $0.01, exceeding the expected loss of $0.03 per share, with a net profit of $2.8 million compared to a loss of $133.9 million in the same period last year [1]. - Revenue for the quarter was $783 million, matching expectations, and represented a 36% year-over-year increase from $576 million [1]. - The total Gross Merchandise Volume (GMV) reached $8.6 billion, surpassing the market expectation of $8.2 billion, reflecting a 36% year-over-year growth [1]. Group 2: Future Outlook - Affirm's revenue forecast for Q4 is between $815 million and $845 million, with a midpoint of $830 million, which is below the expected $841 million, disappointing investors [1]. - The company anticipates Q4 GMV to be between $9.4 billion and $9.7 billion, with a midpoint of $9.55 billion, exceeding market expectations of $9.2 billion [2]. - Adjusted operating margin is expected to be between 23% and 25%, aligning closely with the market estimate of 23.8% [2]. Group 3: User Growth and Partnerships - The total number of active users has increased to 22 million, with 2 million new users added [2]. - The "Affirm Card" business saw GMV surge by 115% year-over-year, with the number of active card users doubling [2]. - Partnerships with major platforms like Apple, Amazon, and Shopify continue to drive transaction volume growth [2]. Group 4: Regulatory Environment - The Consumer Financial Protection Bureau (CFPB) announced the cessation of a regulation that increased compliance difficulties for BNPL providers, which is viewed as a positive development for Affirm and similar companies [2]. - The volume of 0% interest loans has increased significantly, rising 44% year-over-year, often subsidized by merchants to boost sales [2]. - Affirm's core "4-installment payment" product maintains stable credit quality, with a default rate below 1% [2]. Group 5: Stock Performance - Despite improvements in fundamentals, Affirm's stock has declined by 11% year-to-date, while the Nasdaq index has decreased by approximately 7% during the same period [3].

Affirm is partnering with Costco to offer online shoppers the option to pay over time for transactions.The financial services company announced the collaboration Thursday (May 8) in a shareholder letter. Customers, if approved, will be to able select monthly Affirm payment plans when shopping on Costco’s website.“[We] are proud to announce our online partnership with Costco — a brand and a retailer I have personally admired for a long time because of their unwavering commitment to customer experience and tr ...