UPDATED 20:08 EST / NOVEMBER 10 2021

APPS

Affirm shares bounce on new Amazon deal and strong guidance

Shares in Affirm Holdings Inc. bounced in after-hours trading today after the payments company announced an expanded deal with Amazon.com Inc. and predicted stronger-than-expected December quarter revenue guidance.

For the quarter ended Sept. 30, Affirm reported revenue rose 55% from the previous quarter. Adjusted operating loss came in at $45.1 million or 40 cents per share, compared with an operating loss of $7.9 million in the same quarter of last year. Analysts had been predicting revenue of $249.36 million and an adjusted loss of 28 cents per share.

Usage figures were up across the board. Gross merchandise value for the quarter jumped 84%, to $2.7 billion. The number of active merchants increased from 6,500 to 102,000 over the same period. The latter was primarily driven by the adoption of Affirm’s Shop Pay Installments by merchants on Shopify Inc.

Active consumers grew 124% year-over-year, to 8.7 million, up 22% from the previous quarter. Transactions per active consumer also rose 8%, to 2.3.

The big news was the expanded relationship with Amazon. Under the deal, Affirm will now be generally available to support all eligible purchases of $50 or more on Amazon.com and the Amazon shopping app in the U.S. As part of the new deal, Affirm will serve as Amazon’s only third-party, non-credit card, buy now, pay later option in the U.S.

Although the deal is not entirely exclusive, Amazon will be subject to certain restrictions on providing other installment products in the U.S. through January 2023. Affirm will also be integrated into Amazon Pay’s digital wallet in the U.S.

As part of the agreement, Amazon will also receive tranches of warrants to purchase Affirm’s Class A shares, subject to certain performance obligations and vesting conditions.

Looking forward, Affirm predicted revenue of $320 million to $330 million in its fiscal 2022 second quarter. Analysts had been forecasting revenue of $296 million in the December quarter. For the full fiscal year 2022, the company predicts revenue of $1.125 billion to $1.25 billion.

Affirm’s shares, which had fallen more than 15% in regular trading on a day tech stocks had dropped across the board, bounced strongly after the bell. Shares in Affirm rose more than 27% after-hours.

Image: Affirm

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