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AFRM Nasdaq· Affirm Holdings Inc.
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AFRM Nasdaq· Affirm Holdings Inc.
Earnings report Q4 2023

AFRM Sees Significant Revenue Growth Across Multiple Segments

Segments of Revenue

AFRM's revenue for the latest quarter was $591.11 million, a 48% increase from the previous year's $399.56 million. This revenue was generated from several sources. Merchant network revenue was $188.36 million, up from $134.02 million. Card network revenue stood at $39.27 million, a rise from $29.12 million. Interest income was the largest contributor at $288.35 million, a significant increase from $155.32 million. Gain on sales of loans was $52.70 million, a decrease from $59.61 million. Lastly, servicing income was $22.44 million, slightly up from $21.49 million.

Strengths

The firm's strength lies in its diversified revenue streams, with significant growth in merchant network revenue, card network revenue, and interest income. The company's revenue model, which includes earning a fee from merchants when a sale is converted and a transaction is facilitated, has proven effective.

Challenges

Despite the impressive revenue growth, AFRM reported an operating loss of $172.15 million and a net loss of $166.90 million. The company also saw a decrease in gain on sales of loans, which could indicate challenges in this area.

Noteworthy

The company's Pay-in-4 and Core loans offerings are noteworthy, as they provide short-term payment plans with four biweekly 0% APR installments, indicating a unique approach to lending.

Summary

AFRM's latest quarter saw substantial revenue growth across multiple segments, with interest income being the largest contributor. Despite this, the company reported an operating loss and a net loss, indicating that costs are outpacing revenue. The decrease in gain on sales of loans is a potential area of concern. However, the company's unique lending offerings could provide opportunities for future growth.

Source documents

Form 10-Q  filed on Feb 08, 2024
13 pages scanned

Reference data

Company financials Q4 revenue 591M
Analyst estimates Q4 EPS missed by -11.55%
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