NEW YORK - Affirm Holdings (NASDAQ:AFRM) shares rose 4% after the company reported a smaller-than-expected loss for the third quarter and provided revenue guidance for the fourth quarter that surpassed analyst estimates.
The fintech company's Gross Merchandise Volume (GMV) also showed significant growth, indicating continued business momentum.
For the third quarter, Affirm reported an adjusted loss per share of -$0.43, which was $0.26 better than the analyst consensus of -$0.69. Revenue for the quarter was robust at $576.16 million, exceeding the consensus estimate of $549.65 million and showcasing the company's ability to outperform market expectations.
The GMV surged 36% YoY to $6.3 billion, marking the fourth consecutive quarter of acceleration.
The company's top five merchants and platform partners contributed notably to this growth, with GMV from these sources increasing faster than the overall business. The general merchandise category, which grew 49% YoY, was both the largest category and the most substantial contributor to the overall growth rate.
Travel and ticketing also played a significant role, growing 35% YoY. The electronics and home/lifestyle categories, which had previously underperformed, turned into growth contributors during the quarter.
Direct-to-Consumer GMV (D2C GMV) saw a remarkable 49% YoY increase to $1.6 billion. The Affirm Card generated $374 million in GMV, which, while slightly down from the previous quarter's $397 million, aligned with expectations considering the seasonally strong holiday shopping season.
The active consumer count rose 13% YoY to 18.1 million, and excluding the discontinued Returnly business, the growth rate was an even more impressive 18% YoY. Active merchant count climbed 19% YoY to 292,000.
Affirm's CEO, Max Levchin, commented, "Our mission remains as important to us – and as relevant to our merchant partners and our consumers – as it has been since day zero, and we feel quite comfortable executing in the current economic and interest rate environment."
He also highlighted the company's focus on improving core products and the successful testing of an AI assistant in customer support chat.
Looking ahead, Affirm anticipates fourth-quarter revenue to be between $585 million and $605 million, with the midpoint of this range sitting above the analyst consensus of $576.34 million, signaling a positive outlook for the near future.
This guidance, coupled with the third-quarter performance, has contributed to the positive investor sentiment reflected in the stock's 4% increase following the earnings release.
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