Eh, What's Up With Affirm? Stock Drops Despite Toon-tastic Earnings!

A Hare Raising Start!

What's up doc? Yours truly Bugs Bunny reporting live from the financial burrow! Seems like Affirm that 'buy now pay later' fella had a quarter that was shall we say a bit of a rollercoaster ride. They made a penny per share when everyone thought they'd be losing three! Revenue matched expectations at $783 million. Not bad eh? 'Of course you realize this means war!' (Just kidding... mostly.)

Gross Merchandise Volume? Sounds Yummy!

Now they're braggin' about their 'Gross Merchandise Volume' – or GMV which sounds like somethin' I'd find in Yosemite Sam's stew. Turns out it's the total value of transactions and it clocked in at $8.6 billion. That's a lot of carrots! Up 36% from last year which is not too shabby. Margin metric also came in at 4.1% slightly above its long term target range of 3% to 4%. Adjusted operating margin was 22% compared to StreetAccount's estimate of 21.6%. Net income? $2.8 million. 'Ain't I a stinker'?

Forecast Follies!

But here's where things get a bit... 'despicable.' For the current quarter Affirm is predictin' revenue between $815 million and $845 million. That midpoint $830 million is lower than the $841 million the experts were expectin'. 'Sufferin' succotash!' The stock market didn't like that one bit and the stock tumbled 8% after hours. Talk about a plot twist!

Trump Tariffs and Tight Wallets Oh My!

Apparently this is all tied to consumer spending. See folks are buyin' less because of 'Trump tariffs' and all that jazz. The lower income earners are stickin' to the bare necessities. CFO Rob O'Hare said they haven't seen any signs of stress on the consumer side. 'Ehhh I knew I shoulda taken that left turn at Albuquerque!' But they are forecasting fourth quarter GMV between $9.4 billion and $9.7 billion with a midpoint of $9.55 billion above StreetAccount's estimate of $9.2 billion. Adjusted operating margin is expected between 23% and 25% compared to the 23.8% StreetAccount estimate.

Card Sharks and Apple Pay

The Affirm Card which is their big bet for drivin' greater usage overall saw GMV rise 115% from a year earlier and the number of active cardholders more than doubled. Their partnerships with Apple Amazon and Shopify are still goin' strong. And get this – Apple Pay users on iPhones and iPads can now apply for loans directly through Affirm. 'Hooray for Hollywood!'"

Zero Percent Shenanigans!

They're also pushin' those '0% interest loans.' Turns out merchants are payin' the borrowing costs to boost sales. CEO Max Levchin thinks these 0% loans help build a pipeline of higher value customers. Meanwhile credit quality is steady with losses below 1% in the company's core offering that allows users to repay loans in four installments. 'That's all folks!' or is it? Tune in next time to see what happens with Affirm!