Affirm Holdings Inc. upped its outlook on Monday as the company, which trades now and pays later, said it posted better-than-expected results in the March quarter.
The company now expects fiscal third quarter revenue of at least $335 million, up from its previous forecast of $325 million to $335 million released on Feb. 10 in Affirm AFRM’s report of -15.04%. $148 million, while the previous forecast was between $138 million and $143 million.
Confirm forecasts of gross sales volume (GMV) for the quarter of at least $3.71 billion, while his previous forecast was between $3.61 billion and $3.71 billion. The company also expects its adjusted operating loss as a percentage of revenue to be 15% or higher. Previously, the company focused on 19-21%.
Meanwhile, Affirm shares fell nearly 11% in midday trading on Monday, putting them on track to close at a record low. Shares have lost 74% in the past three months as the S&P 500 SPX is down about 9%.
Bloomberg News reported late Friday that Affirm suspended a proposed sale of asset-backed securities as a major investor pulled out “due to general market volatility, which could result in higher risk premiums than the company wanted.” The report cites several unnamed sources.
“While we were pleased with the interest we received to refinance the deal and the backing of our program by the investor community, in light of elevated credit spreads and interest rate volatility, and in line with our disciplined approach to navigating the volatility. , we have made the decision to temporarily delay the release of this particular transaction at this time,” an Affirm spokesperson told MarketWatch.
While Barclays analyst Ramsey El-Assal said that Affirm’s “modest” increase in outlook indicated that its “business is on track,” he also wrote that “the company’s decision not to settle for less favorable prices on its ABS securitizations is fueling bearish narratives.” around cyclical risk.”
Affirm noted in its Monday release that its GMV growth “remained strong, in part thanks to partnerships with enterprises.” The company’s higher earnings net of transaction costs guidance reflects “excellent performance in both network revenue and transaction costs, including provisions for credit losses,” the company continued.
In the latest issue, Affirm also spoke about its “diversified funding strategy.” “For example, in the current volatile market environment for pricing ABS issues, the company’s diversified funding strategy allows it to maintain discipline by tapping into other sources of liquidity with attractive economies,” Affirm said in a statement.
The fintech company also raised its forecast for the entire fiscal year. Affirm now expects $1.31 billion in revenue, up from $1.29 billion to $1.31 billion previously. Affirm also forecasts revenue net of transaction costs of $600 million, up from its previous estimate of $585 million to $595 million.
Affirm expects its adjusted operating loss as a percentage of revenue to be between 11 and 13 percent for the entire fiscal year. His earlier forecast was 12 to 14 percent. Affirm models GMV at a minimum of $14.78 billion, while its previous forecast was between $14.58 billion and $14.78 billion.