Affirm stock tumbles after disappointing quarterly results
Affirm, the well-known buy now, pay later company is in trouble after it warned about its slowing growth. The stock declined by 21% on Thursday and more than 10% on Friday.
Affirm is a leading BNPL company that allows people to buy products and then pay in installments. In a statement on Thursday, the company said that its revenue grew at a relatively faster rate in the fourth quarter.
The company’s Gross Merchant Value (GMV) rose by 77% as it started offering its service in Amazon, the biggest e-commerce company. Its total transactions rose by 218%.
At the same time, the company said that the number of active merchants in its platform increased to more than 168,000 from just 8,000 a year earlier. Its revenue jumped to more than $361 million while its total network revenue has risen by 39%.
The company expects that its revenue will rise to between $1.29 billion and $1.31 billion while its transaction costs to rise from $705 million and $715 million. In a statement, the company’s CEO said:
“We had said last year that BNPL is an international phenomenon and we intend to bring Affirm’s unique no late fees, no grudges, no regress approach well beyond our home borders. Over the last 12 months, we’ve solidified our industry leadership with PayBright by Affirm in Canada and launched in Australia.”
Other fintech companies struggle
Affirm is not the only fintech company that is struggling. In the past few months, we have seen many companies like PayPal, Wise, and Block publish weak results.
Analysts expect that the situation is happening as more people go back to work. Also, many companies are struggling with the ongoing inflation rate. Data published by the American government showed that inflation jumped to the highest level in 40 years in January.
Affirm shares have crashed by over 68% from their all-time high.