Affirm shares plunged more than 20% Thursday after the buy-now pay-later company mistakenly posted earnings results early, then faced tough questions about how new partnerships were affecting revenue.
This replaces an earlier report that incorrectly reported how second-quarter revenue compared with analyst expectations. It has been corrected.
The company’s gross revenue as a percentage of its volume declined to about 8% in the December quarter from roughly 10% in the September quarter, noted Mizuho analyst Dan Dolev. “You’ve got a lot of growth in the split-pay offering with really high merchant fees and you have a lot of user growth that comes along with that,” he said.
As it relates to Amazon, Affirm is seeing delayed benefits because it runs interest-bearing offerings with the e-commerce giant, said Mizuho’s Dolev, but the Amazon arrangement might also have a naturally lower take rate. The stock fell another 7.2% in after-hours trading Thursday, as the outlook became a hot topic of conversation on the call. Bank of America analyst Jason Kupferberg highlighted that while Affirm increased its full-year volume outlook by roughly $1.5 billion, it barely changed its outlook for revenue less transaction costs.
“The other obvious impact with respect to the revenue less transaction cost as a percentage of GMV is the mix towards split-pay again, as it does run lower,” he continued.
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