Affirm stock slides even after double-beat on Q1 results, guidance boost

Affirm Holdings (NASDAQ:AFRM) shares gapped down 5.2% in Thursday after-hours trading despite turning in a double-beat on fiscal Q1 results and raising its guidance for the next fiscal year.

The buy now, pay lender platform still expects to achieve operating income profitability in Q4 2025. It now expects gross merchandise volume for the fiscal year to be more than $34B, compared with the $34.1B Visible Alpha estimate and the prior view of more than $33.5B. Revenue is seen at least 20 basis points higher than FY24 as a percentage of GMV, up from 10 bps in the previous target. Adjusted operating margin is expected to be at least 20%, vs. more than 18.4% in the prior guidance.

For fiscal Q2, the company expects GMV to reach $9.35B-$9.75B, vs. $9.55B Visible Alpha estimate; Q2 revenue of $770M-$810M, vs. $784.5M consensus; and adjusted operating margin of 21%-23%.

Fiscal Q1 GAAP EPS of -$0.31, better than the -$0.34 expected, compared with -$0.14 in the prior quarter and -$0.57 in the year-earlier quarter.

Total net revenue of $698.5M, vs. $664.0M consensus, advanced from $659.2M in the earlier three-month period and $496.6M in last year’s Q1.

GMV was $7.6B, exceeding the $7.3B Visible Alpha estimate and up from $7.2B in Q4.

Affirm’s (NASDAQ:AFRM) number of active consumers, excluding the discontinued Returnly business, climbed 21% from a year ago to 19.5% at Sept. 30, 2024.

Operating expenses rose to $831.1M from $732.6M in Q4 and $706.0M a year ago.

Adjusted operating margin of 18.6% vs. 22.7% in the prior three-month period and 12.1% a year before.

Funding capacity increased to $16.8B at the end of Q1, up from $16.1B at the end of Q4, marking the seventh straight quarter in which funding capacity rose.

Conference call at 5:00 p.m. ET.