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Affirm's Q3 Earnings Beat Estimates on Solid GMV Growth
AFRMAffirm(AFRM) ZACKS·2025-05-09 18:10

Core Viewpoint - Affirm Holdings, Inc. reported a fiscal third-quarter 2025 earnings of 0.01pershare,surpassingtheZacksConsensusEstimateofalossof0.01 per share, surpassing the Zacks Consensus Estimate of a loss of 0.09 per share and significantly improving from a loss of 0.43pershareintheprior−yearquarter[1]FinancialPerformance−Totalrevenuesincreasedby360.43 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 755−755-785 million [1] - Gross Merchandise Value (GMV) reached 8.6billion,climbing368.6 billion, climbing 36% year over year, exceeding both management's expectations of 8-8.3billionandtheZacksConsensusEstimateof8.3 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 32.1million,beatingtheconsensusmarkof32.1 million, beating the consensus mark of 31.3 million [4] - Interest income increased by 28% year over year to 402.7million,althoughitfellshortoftheZacksConsensusEstimateof402.7 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 214million,surpassingtheconsensusmarkof214 million, surpassing the consensus mark of 199.5 million [5] - Card network revenues surged by 64.2% year over year to 58.6million,attributedtohigherusageofAffirmCardandvirtualcards,exceedingtheconsensusestimateof58.6 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 791.5million,drivenbyincreasedcostsinvariousareasincludingloanpurchasecommitmentsandtechnologyexpenses[6]−Provisionforcreditlossesescalatedby20.3791.5 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 173.7million,morethandoublingyearoveryear,withanadjustedoperatingmarginimprovingby860basispointsto22.2173.7 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 133.9millionintheprior−yearquarter[7]FinancialPosition−AsofMarch31,2025,Affirmhadcashandcashequivalentsof133.9 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 10.4billion[8]−Fundingdebtamountedto10.4 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 2.9billion[8]CashFlow−Affirmgenerated2.9 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 9.4−9.4-9.7 billion, up from the previous estimate of 9−9-9.3 billion [10] - Revenues are anticipated to be between 815−815-845 million, higher than the earlier guidance of 810−810-840 million [10] - For fiscal 2025, management anticipates GMV to be in the range of 35.7−35.7-36 billion, an increase from the earlier guidance of 34.74−34.74-35.34 billion [12] - Revenues for fiscal 2025 are expected to be in the range of 3.163−3.163-3.193 billion, up from the prior outlook of 3.13−3.13-3.19 billion [12]