What happened
Shares of the popular buy now, pay later company Affirm (AFRM -0.45%) had dropped roughly 23% just before the market closed today after the company released its latest batch of earnings results on Twitter sooner than expected.
So what
Since the early drop, Affirm has released the full earnings results for the second fiscal quarter of 2022 on its investor relations website. For the three months ending on Dec. 31, Affirm reported a loss of nearly $160 million, or a loss of $0.55 earnings per share (EPS). Total revenue came in at $361 million for the quarter. Analysts had only been projecting an EPS loss of $0.34. However, revenue in the quarter did beat estimates handily.
Affirm also provided its outlook for the rest of the year, projecting that the company would generate revenue of about $1.3 billion in fiscal 2022. Affirm expects to generate an adjusted operating loss as a percentage of revenue between 12% and 14%.
Image source: Getty Images.
"Affirm's strong growth accelerated this quarter, reflecting the key advantages of our superior technology, and commitment to putting people first," Affirm's Founder and CEO Max Levchin said in a statement.
Levchin added: "We more than doubled gross merchandise volume year over year. Over the last 12 months, we have added nearly seven million active consumers to our network, while enabling 168,000 merchant partners to better serve their customers."
Now what
In the current earnings season, the market has been pretty hostile toward tech and growth companies that don't beat estimates or provide solid guidance for the year ahead. Affirm said in its release today that it was raising its outlook for fiscal 2022, and the revenue guidance of $1.3 billion for the year appears to be slightly ahead of what analysts have been projecting for revenue in 2022.
So perhaps investors are reacting harshly to the huge miss on EPS, but I would really need to look deeper into the report to further diagnose the situation from here.
