Affirm stocks slips on Q2 results

Affirm Holdings (ARFM) Affirm reported better than expected second quarter revenue of $591 million versus an expected $520.67 million and an adjusted loss per share of $0.54. In a shareholder letter, Affirm Founder and CEO Max Levchin says "This time last year, we reiterated our commitment to building operating leverage without sacrificing credit performance, volume growth, or innovation. The market wasn’t exactly convinced then, but 12 months later, we have done exactly what we said we would."

Yahoo Finance's Julie Hyman and Josh Lipton break down the report.

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Editor's note: This article was written by Stephanie Mikulich.

Video Transcript

[AUDIO LOGO]

JOSH LIPTON: Affirm just now reporting results for its fiscal Q2. Let's get those headlines to you. The stocks kind of bouncing around here, Julie, in the after hours.

But Q2, they report a loss of $0.54. That was better than expected. On the top line, they look like reporting revenue of $591 million that was also better than consensus.

Looking ahead, Q3 revenue, they're calling for between $530 and $550 million. That looks like a beat. Q3 GMV, so Gross Merchandise Volume, they are forecasting $5.826 billion. Street was around $5.9 billion. Again, we'll just have to see how it plays out in the after hours.

Of course, heading into this report, this stock was a monster, right? It pulled back a little year to date, but it was still up around 200% over the last 12 months. So this is going to be interesting.

I mean, basically, behind the bottom and the top, we're looking for GMV growth, Gross Merchandise Volume. Also, it'll be interesting what any kind of color we can get about that new Affirm card, lots of focus on that. Traction, how much of that is going to boost GMV in the quarters ahead.

JULIE HYMAN: Yeah, I'm just trying to scan through quickly. Max Levchin, the founder and CEO's shareholder letter here because it is confusing to me, just glancing at the numbers, why we're seeing the stock have the reaction that it has unless you know what you're referring to the context of the stock having performed so well over the past year. He talks about the fastest year-over-year gross merchandise volume growth rate in over a year.

He emphasizes that the company has increased its funding capacity. He says they've kept what he calls an unblinking eye on credit, that 30 plus day delinquencies were flat quarter over quarter and year over year. So unclear exactly what is going on here.

I mean, something interesting about a firm is that amongst the sort of buy now, pay later companies, it has really at least portrayed itself as quite conservative as keeping adequate reserves, as not being too risky in the lending that it's offering. And again, the numbers on the face of it, look good unless perhaps there were hopes. Even though the consensus forecast was for a loss of $0.54 in the second quarter, it's possible that the whisper number was better than that. And so there's also something of a reaction to that. We're going to keep digging in here and figure out what is going on.