Investment Q&A

In the recent quarter, EPS of -43c beat estimates of -46c. Revenue of $576M was 4% better than expected.  Affirm appears well positioned to achieve 4Q guidance of about 40% gross profit expansion (33.5% revenue growth), ahead of consensus, given momentum in e-commerce partnerships, particularly with Shopify and Amazon.com. Asset quality trends have remained steady, though management highlighted potential seasonal weakness in the summer. The company's 3Q performance reflects on its efforts to manage costs and achieve adjusted operating-margin guidance of more than 15-17% in fiscal 2024 (vs. 11% previously and consensus' 10.7%). Sales and marketing and technology/analytics spending was about 23% and 22% of net revenue, while general and administrative expenses were 22%. Credit performance held up and Affirm's balance sheet appears robust, with $15.6 billion in funding capacity as of March 31.The stock of course is very bouncy and it is highly sensitive to rates and the economy, but the actual quarter and outlook were decent.