Affirm the inventory is exploding after reporting 71% gross sales progress and a robust forecast

Confirm the Holdings Inc. website home screen on a laptop computer in an arranged photo taken in Little Falls, New Jersey, USA on Wednesday, December 9, 2020.

Gabby Jones | Bloomberg | Getty Images

Affirm reported better-than-expected results for the fourth quarter of the fiscal year after the bell on Thursday, including a solid forecast and sales growth of 71%.

The stock rose more than 20% in expanded trading following the report.

This is how the company did it:

  • Revenue: $ 261.8 million versus an expected $ 225 million, according to a refinitive poll of analysts
  • Loss per share: 48 cents per share, which is inconsistent with estimates

Affirm is a leading player in the burgeoning buy-now-pay-later space that allows people to split their purchases into installments. Affirm was founded in 2013 by PayPal co-founder Max Levchin and made its stock market debut in January. The shares started at $ 90.90 per share after trading at $ 49 apiece.

Affirm issued optimistic forecasts for the current quarter. For the first fiscal quarter of 2022, revenue is expected to be between $ 240 million and $ 250 million, beating analysts’ estimates of $ 233.9 million.

In the fourth quarter, the company had 7.1 million active customers compared to 5.4 million in the previous period.

The blockbuster earnings report comes after Affirm announced last month it was partnering with Amazon to launch the e-commerce giant’s first partnership with an installment payment provider. The partnership enables Amazon customers in the United States to split purchases of $ 50 or more into smaller monthly installments.

When asked how the partnership with Amazon came about, Levchin said on a call with investors that large retailers are seeing the trend to buy now, not just pay for a fad or feature later. “They see us as providers,” said Levchin.

In the earnings report, Affirm said its full-year and first-quarter guidance does not take into account any potential revenue or gross volume contributions from the partnership with Amazon, which is currently being tested with select customers before rolling out more in the coming months, largely.

– CNBC’s Kate Rooney contributed to this report.

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