Affirm(US:AFRM)2025-02-06 22:04Financial Performance - Total revenue for the three months ended December 31, 2024, was $866.4 million, a 47% increase from $591.1 million in the same period of 2023[221]. - Operating loss decreased to $4.3 million for the three months ended December 31, 2024, compared to a loss of $172.2 million in the same period of 2023, representing a 97% improvement[221]. - Net income for the three months ended December 31, 2024, was $80.4 million, a significant turnaround from a net loss of $166.9 million in the same period of 2023[221]. - Merchant network revenue for the three months ended December 31, 2024, was $244.9 million, a 30% increase from $188.4 million in the same period of 2023[253]. - Interest income for the three months ended December 31, 2024, was $409.4 million, a 42% increase from $288.3 million in the same period of 2023[253]. - The company reported a net income of $80.4 million for the three months ended December 31, 2024, compared to a net loss of $166.9 million in the same period of 2023[253]. - Merchant network revenue increased by $56.5 million, or 30%, and $94.9 million, or 28%, for the three and six months ended December 31, 2024, respectively, compared to the same periods in 2023[256]. - GMV increased by $2.7 billion, or 35%, and $4.6 billion, or 35%, for the three and six months ended December 31, 2024, respectively, compared to the same periods in 2023[256]. Consumer Metrics - As of December 31, 2024, the company had approximately 21.0 million active consumers, a 19% increase from approximately 17.6 million active consumers as of December 31, 2023[249]. - The average number of transactions per active consumer increased by 22% to approximately 5.3 transactions as of December 31, 2024, compared to 4.4 transactions as of December 31, 2023[251]. - Active merchant base grew to approximately 337 thousand and active consumers reached 21.0 million as of December 31, 2024, up from approximately 279 thousand and 17.6 million, respectively, as of December 31, 2023[256]. Loan and Credit Metrics - For the three months ended December 31, 2024, interest-bearing loans represented 72% of total GMV facilitated through the platform, compared to 73% in the same period of 2023[223]. - The company directly originated approximately $1.7 billion in loans for the three months ended December 31, 2024, maintaining a consistent 17% of total loans originated compared to the same period in 2023[227]. - The volume of loan modifications during the fiscal quarter ended December 31, 2024, represented 0.15% of the outstanding principal balance of loans held on the balance sheet[239]. - Credit risk exposure related to loans held on the balance sheet was $6.8 billion as of December 31, 2024, compared to $5.7 billion as of June 30, 2024[324]. - The company sold $6.8 billion of unpaid principal balance of loans subject to risk sharing arrangements as of December 31, 2024, with a maximum exposure to losses of $85.1 million[324]. Economic and Market Conditions - The macroeconomic environment, including inflation and interest rate changes, continues to impact consumer spending and business operations[236]. - Seasonal fluctuations in GMV are expected, with the strongest performance typically during the fiscal second quarter due to holiday retail commerce[235]. - Continued volatility in interest rates may adversely impact consumer spending levels and willingness to pay outstanding amounts owed[319]. Technology and Competitive Advantage - The company’s proprietary technology platform and data analytics are key competitive advantages, enhancing risk pricing and consumer value[219]. - The company’s innovative approach and focus on technology position it to define the future of commerce and payments[218]. Financial Position and Cash Flow - As of December 31, 2024, the company had $1.9 billion in cash and cash equivalents and available for sale securities, $3.6 billion in available funding debt capacity, and $330.0 million in borrowing capacity under the revolving credit facility[286]. - Net cash provided by operating activities was $508.9 million for the six months ended December 31, 2024, compared to $173.2 million for the same period in 2023[300][304]. - Net cash used in investing activities was $664.1 million for the six months ended December 31, 2024, with outflows related to $15.1 billion of purchases and origination of loans held for investment[305]. - Net cash provided by financing activities was $609.7 million for the six months ended December 31, 2024, primarily from net cash inflows of $750.0 million from new issuance and repayment of notes[307]. Risk Management and Internal Controls - The company maintains an interest rate risk management program to mitigate potential volatility of earnings from changes in interest rates[321]. - The company utilizes proprietary underwriting models to manage credit risk associated with consumer loans[322]. - The company intends to continue monitoring and upgrading internal controls as necessary, acknowledging inherent limitations in their effectiveness[329]. - There were no changes in internal control over financial reporting that materially affected the company during the quarter ended December 31, 2024[328]. - The company’s management evaluated the effectiveness of disclosure controls and concluded they were effective as of the end of the reporting period[327].