Investment Q&A

EPS of -(54c) beat estimates of -(55c). Revenue of $591M was 8% ahead of estimates.  Affirm's 2024 guidance implies a gross-merchandise value slowdown in 2H, though that could be conservative, considering momentum in e-commerce partnerships, particularly with SHOP and AMZN. Management clarified that full-year guidance of $25.25 billion is a floor of what they expect to achieve. The company's 2Q performance reflects on its efforts to manage costs and achieve adjusted operating-margin guidance of more than 11% in fiscal 2024 (vs. consensus' 7%), limiting total cost growth to single digits. Sales and marketing and technology/analytics spending was about 27% and 20% of net revenue, while general and administrative expenses were 22%. Credit performance held up and Affirm's balance sheet appears robust, with $15.5 billion in funding capacity as of Dec. 31. We would consider results/guidance decent, but the stock is up 270% in a year and will likely see some profit taking.