Affirm Holdings, Inc. (AFRM) recently released its financial results for the second quarter of the fiscal year 2024. Despite facing increased expenses, the company demonstrated notable growth in several key areas.
Financial Performance Overview
The quarterly results were impacted by elevated levels of expenditure, primarily driven by increased losses on loan commitments, reserves for potential loan losses, financing costs, and processing and servicing expenses.
Key Financial Metrics
- Adjusted earnings per share stood at 4 cents, falling below expectations.
- Net revenue surged by 48% year-over-year to $591.1 million, surpassing estimates for the quarter.
Operational Highlights
The number of active sellers on the Affirm platform grew by 15% compared to the same quarter last year, reaching 279,000. Gross merchandise volume (GMV) increased by 32% year-over-year to $7.5 billion, with total transactions rising by 42%.
Revenue Streams
Service revenue increased by 4% year-over-year to $22.4 million, driven by higher net receipts from servicing fees. Interest income surged by 86% year-over-year to $288.3 million, exceeding forecasts.
Affirm’s Network Revenue
Revenue from the trading network grew by 41% year-over-year to $188.4 million, attributed to a higher GMV. Card network revenue increased by 35% to $39.3 million due to increased utilization of Affirm cards.
Financial Position and Outlook
Affirm ended the quarter with cash and cash equivalents of $1 billion, a 16.2% increase compared to the end of the previous fiscal year. Total assets grew by 11.2% to $9.1 billion. The company’s management anticipates revenue to surpass $25.25 billion in the fiscal year 2024, indicating a growth of over 25% compared to 2023.
Affirm’s performance in Q2 2024 showcases its resilience and growth potential in the market. With a robust financial position and optimistic outlook, Affirm continues to be a key player in the US stocks market.
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