These stocks like affirm, sofi and paysafe have never been tested in a recession. Turning to the financials. So whatever you could share there would be helpful. Got it. These forward-looking statements speak only as of today, and the company does not assume any obligation or intend to update them, except as required by law. And this year, were really going to invest in just making this the very best product for the end consumer in every imaginable way. Look, our guide is our guide. So if you can figure a transaction that has no interest at all, its pretty great. So probably the most important thing to know about Amazon is that its still very, very early relative to the potential of the just the sheer scale they have and the many different ways for us to work together. Affirm Holdings, Inc. (AFRM) Earnings Report | Seeking Alpha As you will hear in a second, we're still adding significant features to Debit+, and its at-scale contribution to our top and bottom lines is difficult to forecast. We have once again posted a very healthy set of numbers, beating our own financial targets. But our guide is the guide and yet we take it very seriously, and I dont think weve missed one yet. And we manage credit and look at credit metrics. I think what you saw, though, in the quarter was all of our tools to manage that on full display. To read the full story on Seeking Alpha, click here. The company's fiscal second-quarter earnings were released on As such, our outlook for fiscal year 2023 does not include any material GMV or revenue impact from this product. I have no business relationship with any company whose stock is mentioned in this article. It also assumes that the current macroeconomic conditions do not fundamentally change for the better, with early signs of consumer stress persisting through the fiscal year. Shares rose to $97 on their first day of trading, and actually hit a high of $146 per share in February. Under his leadership, we are investing in the United Kingdom market this fiscal year and plan to continue from there. With that, well open it up for questions. Affirm Holdings (AFRM) stock forecast for If you have an ad-blocker enabled you may be blocked from proceeding. I think the forward flow market also remains very attractive with a robust pipeline of forward flow buyers who are interested in partnering with us. I seek undervalued, unappreciated value stock ideas and share them first with DIY members. Have a tip? I mean, as we talked about, the delinquencies are up a little bit. But it will be a way to give consumers one more reason to choose Affirm when they have all the choices. Revenue estimates have seen 8 upward revisions and 0 downward. So one anecdote that I was going to share is theres a really interesting -- as much as Michael just pointed out, growing a straight line from DQ 30 into the ultimate charge-off is a bad idea, in my opinion, because theres a lot of opportunities to cure, theres a lot of tools we have. And then if I can get one more follow-up. The transactions per active consumer are at a healthy 2.7x per week, and the online/offline usage breakdown is split nearly evenly. But the current state of partnership is nothing but excellence. Affirm's shares saw great momentum, almost incredible momentum, as the huge moves left me to conclude to be very cautious, not seeing a compelling reason to buy shares after that run. So maybe a little bit of a brief description of how the allowance and provisioning works mechanically. Accordingly, we expect adjusted operating loss as a percentage of revenue of 6.5% to 4.5% for the full year. That seasonal pattern should begin to abate and go down. The first, I guess you kind of signaled that you saw some deterioration. Your line is now live. Thanks. Thanks, operator. Seeking Alpha Davidson. Or is it more something that you were seeing in this particular quarter? We have, obviously, Debit+ is something that I am personally very passionate about. It ended the quarter with $1.55 billion. Affirm Stock Tumbles As 2022 Guidance Disappoints As Total net revenue grew 39% to $364.1 million, above our outlook of $345 million to $355 million and grew 49%, excluding Peloton. The reality is we dissolved the stress and we began to have to react to it. Report here. And it is the case that were outperforming our own expectations. Excluding provision expense, transaction costs grew 21% compared to revenue growth of 39%. This comes even as top-line growth And we have about $200 million out of $4.3 billion of forward flow capacity thats even up for renewal in the entire fiscal year. The main reason why the situation, by definition, has become more compelling is that the share price has essentially been cut in half, to $66 at the moment of writing. Hosting today's call are Max Levchin, Affirm's Founder and Chief Executive Officer; and Michael Linford, Affirm's Chief Financial Officer. So short answer is no, we are seeing if anything increase demand on the consumer side, which is exactly as we expected it primarily because inflation takes away spending capacity and you borrow to increase it. And we continue to feel very good about being able to do that into the future. Our next question is coming from Andrew Jeffrey from Truist Securities. According to Seeking Alpha Quant, analysts are expecting Bank of America to report $25.17 billion in revenue and $0.85 in EPS in its Approximately 70% of this capacity came from existing and new warehouse and forward flow agreements, including a new $0.5 billion multi-year forward flow commitment. Thank you. Or whats kind of the right range for us to think about where those should be at? Yes. The company has multiple products ahead: The skeptical investor will question the product's uniqueness. Please. -For Q2, the estimated earnings decline for the S&P 500 is -6.5%. I am not receiving compensation for it (other than from Seeking Alpha). Fortunately, Affirm's general merchandise volume grew nearly five-fold. Affirm Holdings (NASDAQ: AFRM) has been roundly rejected by the stock market lately. And then I mean, you sound decidedly more conservative and may be concerned about the macro and the consumer on this call relative to maybe previous calls, rightfully so. And thats just not the case for other lenders out there right now. Your line is now live. Theres 10 different ways of calling it, but this idea that its too confusing to borrow money, and yet credit is really important, is it, you know is a simple idea, but it seems that its time has finally come. But how do we think about how big maybe that cohort is when youre talking about lower credit quality, seeing signs of stress? This is really the year of the consumer. But before that, thats actually a reflection of consumer sentiment about their potential for job loss, which is a second-order metric but we care a lot of those. The risk associated with these transactions is new to us. I hope the transactions per active customer also ticked up pretty meaningfully sequentially as well. However, with respect to forward flow, that capital is very committed. Its not going back down. Seeking Alpha Were not going to compromise any other metric that we care a lot about. It is the most common theoretical objection to BNPL versus credit cards. Hey, thanks, guys. We have both the underwriting technology and the control systems to deliver on this goal. Great. While the uncertain macro picture over the next 10 months to 11 months as well as us lapping some staggering year-over-year comps are leading us to be prudent in the short-term, we remain very bullish about our opportunities. When we say we have the ability to manage credit outcomes, this is exactly what we mean. full year of 2023. Affirm scores a D+ in that category. One of the preference drivers is how rewarding are these transactions. We grew GMV 77% and 89%, excluding Peloton. Got it. In the language of the 1990s Internet, we're widening the top of our funnel while keeping a watchful eye on its bottom. So we have been keeping our eyes very, very open and have been optimizing credit and credit performance all throughout the calendar year. Your rate will be 036% APR based on credit, and is subject to an With our team's solid execution, we exceeded all of our guidance for fiscal 2022 despite increasingly volatile market conditions in the second half of the fiscal year. Your next question is coming from Jason Kupferberg from Bank of America. I think the if you look at the North American footprint, I would argue weve established our dominance over the last fiscal year, quite decisively. Thank you. My take for months has been fintech is just consumer finance by another name. And we significantly broadened our relationship with Stripe, unlocking streamlined distribution to more merchants and more consumers. I'll stop here, but there are numerous other initiatives we're plowing away on while keeping credit performance top of mind. For example, he said the company would focus on scaling its network. Unless stated otherwise, all comparisons refer to our fourth quarter of fiscal 2022 versus Q4 of fiscal 2021. Thanks. And I think thats a factor thats probably very difficult for you to read through. Other concerns were that 30% of revenue was tied to Peloton (PTON), on top of the potential credit losses and a competitive field. Despite this, we delivered 4.4% RLTC as a percentage of GMV for the second half of fiscal 2022, well above our implied 3.9% in our outlook at the time. 'Burdened By The Facts' Stock Market (And Sentiment And as we do everything here, its a slow start, very careful optimization. I am not receiving compensation for it (other than from Seeking Alpha). Thank you for taking the questions guys. Affirm Markets will adjust for the weaker revenue outlook. The goal is, first and foremost, is to compel consumers to transact with Affirm more. Our current expectations are that its something on the order of 4 points of GMV growth and 7 to 8 points of revenue growth that we are not getting this year or at least that we expect all come to drag against. Please disable your ad-blocker and refresh. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Loss on loan purchase commitments declined 21%, primarily driven by the mix shift I just mentioned. As shown in the bar chart below, Amazon is Affirm's most important integrated partner. Read our thorough review of Seeking Alpha before you spend. At that level, this would reflect marginally less ABS execution proportionately this year. Affirm Q2 2022 Earnings Preview | Seeking Alpha These measures should be considered as a supplement to and not a substitute for GAAP financial measures. But does it matter when you pay for a leader? And so Im just trying to get a sense of how much services you guys might be trying to bake in just as youve had multiple times, theres a lot of uncertainty out there. Looking for more investing ideas like this one? Were very were able to be very surgical. Affirm wants to win customer trust. As we shared in our May earnings call, we expect to achieve a sustained profitability run rate on an adjusted operating income basis by the end of this fiscal year. What you saw in the back half of fiscal 2022 was a huge shock in rates. While we will be prudent with expenses to be reflective of the current environment, we will continue to invest in engineering and product talent to support the robust product road map that has been and will continue to be a key differentiator for Affirm. However, the inherent advantages of our underwriting every application at the transaction level and the high turnover nature of our book provides natural agility. Too much competition. This should result in addressable market share growth. Affirm Q4 2022 Earnings Results. Claim to fame are algos that are supposed to make better (read not only lend faster but hold back sooner) lending decisions in real time versus "old fashioned" banks. So we have lots of really, really exciting things planned for the consumer for this year. That is to say, 95% of our capacity is mostly locked into the entirety of fiscal 2023 on the forward flow side. WebQ1 Affirm Holdings, Inc. - First Quarter 2023 Earnings Conference Call Affirm Q1 2023 Earnings Supplement 1.7 MB Affirm Q1 2023 Shareholder Letter 2.5 MB Affirm Our team's outperformance this year means we are ahead of where we expected to be in terms of market share. Revenue rose 92% to $510 million in 2020, with growth to a minor extent inflated because of a $32 million gain on the sale of loans. Is this happening to you frequently? Our allowance that we have on the balance sheet, which determines the provision and the income statement is that for the third quarter declined. Affirm The former means our credit posture will remain conservative until we have a clearer view of the real economy. Affirm has two technological waves it will depend on to grow. The most creditworthy are paying with credit cards and getting rewards so that leave Affirm and BNPL with higher risk users. At this time all lines have been placed on mute to prevent any background noise. Its about everything that theyre buying and you saw that last quarter. Thanks for the question, and Ill start and Michael can help quantify it. Folks that are buying something that is pretty short term or sorry, pretty low AOV tend to select short term because those transactions we can generally speaking do on no interest at all. Operating losses narrowed modestly to $120 million, although relative losses came down quite a bit. Entering text into the input field will update the search result below. For historical non-GAAP financial measures, reconciliations to the most directly comparable GAAP measures can be found in today's earnings press release, which is available on our Investor Relations website. One follow-up for me. And Im not prepared to declare it to be ready to be given to everyone. On Slide 9 of the supplement, you can see just how diversified our network is across industries. And the second part of that question. And those are the numbers that we feel really, really strong about. As we roll the program out, Affirm consumers will begin to earn points on eligible point-of-sale, Affirm Anywhere and Debit+ transactions, with redemptions in the Affirm app. We expect transaction costs of $865 million to $915 million, reflecting a modest year-over-year reduction in transaction costs as a percentage of GMV. With that context in mind, for our fiscal year ending June 30, 2023, we expect gross merchandise volume to increase between 32% and 42% from fiscal year 2022 to between $20.5 billion to $22 billion. While homewares and fashion experienced something of a retreat to more normal levels of growth, we were able to help our long-time partners and online travel agencies have a banner quarter, posting triple-digit year-on-year growth in some cases. Its also not a function of any shift away from or falling out of favor of the category. Please. This disappointed investors. Web4 Summary Have you heard of Seeking Alpha? The leverage then that we have at our disposal or everything from actually just increasing the credit bar to lower approval rates because you have less of the capacity to approve to changing the term lengths, if you change from a 24 months to 18 months, your risk posture changes or requiring more down payments. Our mission and our business model compel us to keep our consumers' long-term financial interest in mind alongside our partners and our own. Before we begin, I would like to remind everyone listening that today's call may contain forward-looking statements. If you have an ad-blocker enabled you may be blocked from proceeding. Affirm shares soar after company announces expanded deal Given inflationary pressures, we began to see the signs of stress during the quarter within certain low credit segment consumers. Last year, we hosted an event where we discussed our product road map in detail and plan to do 1 again late this year. And then on funding capacity, I appreciate the update there. It will maintain "attractive unit economics.". And a decade of operating gives you a lot of really interesting use cases that you just wouldnt have seen if youre small. It was the only category that declined last quarter. I know Michael want to quantify for us. Affirm debit+ has 0% APR installment loans. And if you think about $1 of low-teens MDR, high -- long-term 0% being swapped in for $1 of 4% to 5% Split Pay-type MDRs, youre giving up a lot on a GMV basis in terms of total revenue. Theres a small company in Mountain View, thats figured out how to make money on capture consumer demand from search. Being able to request a transaction-specific down payment or additional income information and offer risk appropriate term selection are just some of the powerful tools we have built over the years. JackF. Ennis: Acquisitions Facilitate Strong First Quarter Results We closed fiscal 2022 well ahead of our plan at nearly $15.5 billion in GMV, representing 87% growth in GMV and 114%, excluding Peloton. Earnings for the year Banks have a similar offering to Affirm's SuperApp. GAAP total operating expenses, excluding transaction costs, grew by 76% to $461.6 million, driven by year-over-year growth in enterprise warrant and share-based expense of $102.7 million. Our Q4 earnings supplement is also posted on our IR website. Even if you hate em, if youre scared at least get in the market, use trailing stops, walk away. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. We constantly monitor the credit performance of our portfolio as well as the broader environment. And thats obviously a natural drag on probably less transaction cost, if you start to think of it that way. It needs more customers buying more products and generating more transactions. And as a follow-up, at the beginning of the call, Max had mentioned the rewards program. Is that a function of the holiday and mix? Every one of these transactions is two sided. WebSAN FRANCISCO--(BUSINESS WIRE)--Feb. 10, 2022-- Affirm Holdings, Inc.(NASDAQ: AFRM) (Affirm or the "Company), the payment network that empowers consumers Please. We've said it before and we'll say it again. Thank you for joining us on this call. Like what kind of data are you guys pulling from? With that, let me turn now to our outlook for fiscal 2023. We have spent significant time fine-tuning Debit+ this quarter, focusing on the usability and profitability of the card. Disclaimer: This article provides opinions and information, but does not contain recommendations or personal investment advice to any specific person for any particular purpose. Affirm Reports Fourth Quarter and Fiscal Year 2022 Results So we have I cant find any other words to describe how comfortable we are with the current state of credit other than we provided for a full expectation of credit losses at the time of origination, and that outlook has been improving for the third consecutive quarter. I call it honest finance because Im an idealist. I wrote this article myself, and it expresses my own opinions. Now some of thats offset by the strong revenue profile of our interest-bearing product, although theres obviously a timing element to that as well. Your line is now live. If we do see signs of significantly more stress or if rates were to increase much more than expected, we expect to utilize the various levers at our disposal to protect our unit economics. And the impact to us was frankly impossible for anybody to see as we crushed our revenue less transaction cost numbers in that period. Affirm (NASDAQ:AFRM) went public early this year, as I reviewed the investment thesis on the name, as I came to conclude that Affirm was only the most recent high-flier in a very hot IPO market. I dont even think of it as a primary factor. And its hard to hire that team and its really hard to scale it and its hard to get it to be functioning. I believe thats for your held portfolio. Yes. Youre right, that the 0% is always an extreme crowd-pleaser when it comes to consumer buying. So this is not a new thing at all. All that went really, really well and our partners have given us high marks on that front. The delinquency data that we show publicly is the portion of the total platform portfolio thats 30 days delinquent or more. Last month featured our very first Prime Day, which was as much a test of our product as it was of our systems and scalability, and we were quite pleased with the results. Any color there would be great on just consumer behavior recently? Before I hand it off to Michael, one more comment on growth. Definitely on my watchlist, but wouldn't be surprised if it pulls back another 20-25% from current levels post-PTON earnings and of course their own earnings. Yes. As you mentioned, the allowance ratio was down again. The net loss increased from $123.4 million last year to $186.4 million. However, we are forecasting the second quarter to be the low point for the year-over-year GMV growth, given the nearly 370% growth in general merchandise GMV that we are comping against. On a non-GAAP basis, sales and marketing expense declined 1% year-over-year. Valuations are poor. For our first quarter ending September 30, 2022, we expect GMV to grow 55% to 62% to $4.2 billion to $4.4 billion. This would imply a 2-year compound annual growth rate of between 57% and 63% versus fiscal 2021. Already mentioned above, it cost Affirm over $100 million in warrants to earn this deal. As its merchant partners grow, it will grow, too. So theres we think lots of opportunity will be very judicious will be extremely good stewards of shareholder capital, not a thing were going to execute imminently. The one thing that I can tell you were quite right about 0% APR transactions are that much more exciting in an inflationary environment because borrowing money is becoming expensive things to the Fed and buying things is more expensive things to inflation. Accordingly, we ever so subtly turned our dials and gave up a couple of points of growth this past quarter through small optimizations, and we still grew GMV by 77%. Seeking Alpha I think the three points of incredible approvals have been added. And then interest-bearing, Ill just note that some of our strongest and most profitable programs are direct-to-consumer interest-bearing products. Among others, these include merchant and consumer pricing, duration shortening, approval rate changes and downpayment rates. And so we expect more of that. What that means though is that weve been optimizing credit very, very actively. Halfway through February, the company reported its second quarter results as growth slowed down quite a bit. Revenue rose just 57% compared to the year before, to $204 million, for a run rate of just over $800 million. Roughly half of our outstanding loan book is expected to pay down within four months or so at about 80% within eight months. Its not about beauty or t-shirts on Shopify. And its showing up in the network effects. BNPL will more than double from 3.8% of e-commerce spending in 2021 to 8.5% by 2025. We often talk about Affirm as a two-sided network of consumers and merchants. For the first quarter, the revenue of $345 million to $365 million is below the consensus of $390.87 million. Recognize that youre almost two months into the quarter. PayBright more than doubled, posting year-over-year GMV growth of 116%. Amidst all of this and still volatile conditions in the technology market, I do not see appeal yet. And thats because approval rate, yes or no, isnt the only lever that we have. I was just wondering if you could provide a little bit more color around the 32% to 42% year-over-year origination volume outlook. Our strong traction across our enterprise partnerships continued throughout the quarter with our three largest partners making up roughly 30% of our total Q4 volume.
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