Exceeds Fourth Quarter Financial Outlook
Accelerates Q4 Gross Merchandise Volume Growth
to 106% and Total Revenue Growth to 71% Year Over Year
Expands Network by Nearly Doubling Active
Consumers and Growing Active Merchants by Over 400% Year Over
Year
Expects Fiscal Year 2022 GMV Growth of At Least
50%, or 70% Excluding Peloton, Prior to Any Benefit from the
Recently Announced Amazon Partnership
Affirm Holdings, Inc. (NASDAQ:AFRM) (“Affirm” or the "Company”),
the payment network that empowers consumers and helps merchants
drive growth, today reported financial results for its fourth
quarter and fiscal year ended June 30, 2021.
“Affirm’s strong results this quarter and fiscal year
demonstrate the progress we are making in rapidly expanding our
network,” said Max Levchin, Founder and Chief Executive Officer of
Affirm. “More consumers and merchants are continuing to choose
Affirm because of our ability to offer a variety of ways to pay,
thanks to our unrivaled technology. During the fourth quarter, we
increased the number of merchants on our platform by more than
fivefold, more than doubled gross merchandise volume and grew
active consumers by 97% year over year.”
Levchin continued, “The secular shift toward flexible and
transparent financial products continues to accelerate. With our
superior technology, Affirm is strongly positioned to build a more
valuable two-sided network for consumers and merchants. We remain
focused on extending our leadership position with our core
products, while capitalizing on our vast opportunities to empower
more people with the new ones we continue to launch.”
Fourth Quarter and Fiscal Year 2021 Operating Highlights:
All comparisons are made versus the same period in fiscal year 2020
unless otherwise stated.
- Gross merchandise volume ("GMV") for the fourth quarter of
fiscal 2021 was $2.5 billion, an increase of 106%, or 178%
excluding Peloton; GMV for fiscal year 2021 was $8.3 billion, an
increase of 79%, or 91% excluding Peloton
- Active merchants grew by 412% to nearly 29,000 for the fourth
quarter of fiscal 2021, including several thousand newly integrated
Shopify merchants
- Active consumers grew 97% to 7.1 million
- Transactions per active consumer increased 8% to approximately
2.3 as of June 30, 2021
Fourth Quarter of Fiscal Year 2021 Financial Highlights:1
All comparisons are made versus the same period in fiscal year 2020
unless otherwise stated.
- Total revenue was $261.8 million, a 71% increase, driven by
increases in network revenue and interest income, related to growth
in GMV and loans held for investment, respectively, as well as
gains on loan sales
- Total revenue less transaction costs was $147.7 million,
compared to $107.6 million in the fourth quarter of fiscal 2020,
owing to the strong revenue growth; the prior year included a $32.2
million gain in provision for credit losses due to stronger than
expected repayments and reduced stress multiples from the initial
stress levels at the onset of the COVID-19 pandemic
- Operating loss was $124.7 million compared to operating income
of $39.3 million in the fourth quarter of fiscal 2020, and includes
a $105.2 million increase in stock-based compensation following the
Company's January 2021 initial public offering ("IPO")
- Adjusted operating income for the fourth quarter of fiscal 2021
was $14.2 million, compared to adjusted operating income of $46.7
million reported in the fourth quarter of fiscal 2020
- Net loss for the fourth quarter of fiscal 2021 was $128.2
million compared to net income of $34.8 million in the fourth
quarter of fiscal 2020, and includes the above-mentioned increase
in stock-based compensation following the IPO
Fiscal Year 2021 Financial Highlights:1 All comparisons
are made versus fiscal year 2020 unless otherwise stated.
- Total revenue was $870.5 million, a 71% increase, driven
primarily by growth in network revenue and interest income related
to growth in GMV and loans held for investment, respectively
- Total revenue less transaction costs was $431.4 million,
compared to $160.9 million in fiscal year 2020, driven by strong
revenue growth, and offset by a $90.4 million increase in
transaction costs
- Operating loss was $379.2 million compared to $107.8 million in
fiscal year 2020. Fiscal year 2021 operating loss included a $257.9
million year-to-year increase in stock-based compensation following
the company's IPO, as well as $64.8 million in amortization expense
for stock warrants related to the Company's commercial agreement
with Shopify, offset by a $39.2 million decrease in provision for
credit losses year on year
- Adjusted operating income was $14.3 million, compared to an
adjusted operating loss of $68.3 million
- Net loss was $430.9 million compared to $112.6 million in
fiscal year 2020, and includes a $257.9 million increase in
stock-based compensation following the IPO and the above-mentioned
Shopify warrant expense
Recent Business Highlights
- In June 2021, the Company advanced its exclusive partnership
with Shopify by making Shop Pay Installments, exclusively powered
by Affirm, available to all eligible Shopify merchants in the
United States
- In August 2021, the Company completed a $500 million
securitization of its point-of-sale installment loans, which
represented the Company’s most successful and efficient issuance to
date with attractive terms
- In August 2021, the Company announced a non-exclusive
partnership with Amazon to offer Affirm's flexible payment
solutions to consumers who shop on Amazon.com in the U.S., allowing
them to split the total cost of purchases of $50 or more into
simple monthly payments, without late or hidden fees. Amazon and
Affirm are testing with select customers now, and in the coming
months, Amazon plans to make Affirm more broadly available to its
customers
“We delivered another set of excellent results to close out our
fiscal year with GMV and revenue growth continuing to accelerate,”
said Michael Linford, CFO of Affirm. “During the fourth quarter, we
delivered strong unit economics while driving even greater capital
efficiency. The strategic progress we achieved in fiscal year 2021
sets us up for long-term growth. We have never been more confident
and excited in Affirm's future.”
Financial Outlook
The following table summarizes Affirm's financial outlook for
the first quarter and fiscal year 2022 periods.
Fiscal Q1 2022
Fiscal Year 2022
GMV
$2.42 to $2.52 billion
$12.45 to $12.75 billion
Revenue
$240 to $250 million
$1,160 to $1,190 million
Transaction Costs
$145 to $150 million
$605 to $620 million
Revenue Less Transaction Costs
$95 to $100 million
$555 to $570 million
Adjusted Operating Loss2
$(68) to $(63) million
$(145) to $(135) million
Weighted Average Shares Outstanding
275 million
290 million
Affirm's financial outlook assumes the following for GMV and
revenue:
- The Company has not included estimates of potential
contributions to GMV or revenue from the recently announced
partnership with Amazon, which is currently being tested with
select customers. The Company plans to provide additional detail on
the financial impact of the partnership in subsequent quarters
- The Company has also not included any potential GMV or Revenue
contributions from its forthcoming rollout of Affirm Debit+ and
plans to update its outlook as the offering is more widely
available
- The Company expects a moderation in GMV and revenue from
Peloton in fiscal year 2022
In fiscal year 2022, Affirm expects GMV to grow faster than
revenue as the Company's GMV mix shifts toward shorter duration
Split Pay volume, and the volume coming from longer-duration
Peloton financing de-concentrates.
Affirm's fiscal year 2022 financial outlook also reflects its
strategy to drive growth in its network through continued
investment in product as well as merchant and consumer acquisition
and retention efforts. The Company is intentionally prioritizing
increased investments in both its product and engineering teams,
while also increasing its brand and direct response marketing
efforts. These investments are expected to benefit the Company's
product innovation capabilities and brand awareness in support of
its long-term growth objectives.
Conference Call
Affirm will host a conference call and webcast to discuss fourth
quarter fiscal year 2021 financial results on Thursday, September
9, 2021, at 5:00 pm ET. Hosting the call will be Max Levchin,
Founder and Chief Executive Officer, and Michael Linford, Chief
Financial Officer. The conference call will be webcast live from
the Company's investor relations website at
https://investors.affirm.com/. A replay will be available on the
investor relations website following the call.
Investor Forum
Affirm will also hold a virtual event after the close of market
on September 28, 2021 to provide an update on its strategic,
financial and product initiatives. The event will feature keynote
presentations by Max Levchin, Founder and Chief Executive Officer,
and Michael Linford, Chief Financial Officer, and Q&A sessions
with Mr. Levchin, Mr. Linford and additional members of its
executive leadership team. The event will be webcast from Affirm’s
investor relations website at https://investors.affirm.com/ and a
replay will be available following the event.
Key Operating Metrics, Non-GAAP Financial Measures and
Supplemental Performance Indicators
Three Months Ended June
30,
Year Ended June 30,
2021
2020
2021
2020
(in millions, except GMV and
percent data) (unaudited)
GMV (in billions)
$
2.5
$
1.2
$
8.3
$
4.6
Total Revenue, net
$
261.8
$
153.3
$
870.5
$
509.5
Total Revenue as a % of GMV
10.5
%
12.7
%
10.5
%
11.0
%
Transaction Costs (Non-GAAP)
$
114.0
$
45.8
$
439.0
$
348.7
Transaction Costs as a % of GMV
4.6
%
3.8
%
5.3
%
7.5
%
Revenue Less Transaction Costs
(Non-GAAP)
$
147.7
$
107.6
$
431.4
$
160.9
Revenue Less Transaction Costs as a % of
GMV (Non-GAAP)
5.9
%
8.9
%
5.2
%
3.5
%
Operating (Loss) Income
$
(124.7
)
$
39.3
$
(379.2
)
$
(107.8
)
Operating Margin
(47.6
)%
25.6
%
(43.6
)%
(21.2
)%
Adjusted Operating Income (Loss)
(Non-GAAP)
$
14.2
$
46.7
$
14.3
$
(68.3
)
Adjusted Operating Margin (Non-GAAP)
5.4
%
30.5
%
1.6
%
(13.4
)%
Net (Loss) Income
$
(128.2
)
$
34.8
$
(430.9
)
$
(112.6
)
June 30, 2021
June 30, 2020
June 30, 2019
(unaudited)
Active Consumers (in millions)
7.1
3.6
2.0
Transactions per Active Consumer
2.3
2.1
2.0
Active Merchants (in thousands)
29.0
5.7
3.1
Total Platform Portfolio (Non-GAAP) (in
billions)
$
4.7
$
2.5
$
1.4
Equity Capital Required (Non-GAAP) (in
millions)
$
178.1
$
220.8
$
169.6
Equity Capital Required as a % of Total
Platform Portfolio (Non-GAAP)
3.8
%
8.9
%
12.0
%
Allowance for Credit Losses as a % of
Loans Held for Investment
5.8
%
9.2
%
9.0
%
Key Operating Metrics
- Gross Merchandise Volume ("GMV") - The Company defines GMV as
the total dollar amount of all transactions on the Affirm platform
during the applicable period, net of refunds. GMV does not
represent revenue earned by the Company. However, the Company
believes that GMV is a useful operating metric to both the Company
and investors in assessing the volume of transactions that take
place on the Company's platform, which is an indicator of the
success of the Company's merchants and the strength of that
platform.
- Active Consumers - The Company defines an active consumer as a
consumer who engages in at least one transaction on its platform
during the 12 months prior to the measurement date. The Company
believes that active consumers is a useful operating metric to both
the Company and investors in assessing consumer adoption and
engagement and measuring the size of the Company's network.
- Transactions per Active Consumer - Transactions per active
consumer is defined as the average number of transactions that an
active consumer has conducted on its platform during the 12 months
prior to the measurement date. The Company believes that
transactions per active consumer is a useful operating metric to
both the Company and investors in assessing consumer engagement and
repeat usage, which is an indicator of the value of the Company's
network.
Non-GAAP Financial Measures
- Transaction Costs - The Company defines transaction costs as
the sum of loss on loan purchase commitment, provision for credit
losses, funding costs, and processing and servicing expense. The
Company believes that transaction costs is a useful financial
measure to both the Company and investors of those costs, which
vary with the volume of transactions processed on the Company's
platform.
- Transaction Costs as a Percentage of GMV - The Company defines
transaction costs as a percentage of GMV as transaction costs, as
defined above, as a percentage of GMV, as defined above. The
Company believes that transaction costs as a percentage of GMV is a
useful financial measure to both the Company and investors as it
approximates the variable cost efficiency of transactions processed
on the Company's platform.
- Revenue Less Transaction Costs - The Company defines revenue
less transaction costs as GAAP total revenue less transaction
costs, as defined above. The Company believes that revenue less
transaction costs is a useful financial measure to both the Company
and investors of the economic value generated by transactions
processed on the Company's platform.
- Revenue Less Transaction Costs as a Percentage of GMV - The
Company defines revenue less transaction costs as a percentage of
GMV as revenue less transaction costs, as defined above, as a
percentage of GMV, as defined above. The Company believes that
revenue less transaction costs as a percentage of GMV is a useful
financial measure to both the Company and investors of the unit
economics of transactions processed on the Company's platform.
- Adjusted Operating (Loss) Income - The Company defines adjusted
operating (loss) income as its GAAP operating loss, excluding: (a)
depreciation and amortization; (b) stock-based compensation
included in GAAP operating loss; (c) the amortization of its
commercial agreement asset; and (d) certain other costs as set
forth in the reconciliation of adjusted operating (loss) income to
GAAP operating loss included in the tables at the end of this press
release. Adjusted operating (loss) income is presented because the
Company believes that it is a useful financial measure to both the
Company and investors for evaluating its operating performance and
that it facilitates period to period comparisons of the Company's
results of operations as the items excluded generally are not a
function of the Company's operating performance.
- Adjusted Operating Margin - The Company defines adjusted
operating margin as its adjusted operating (loss) income, as
defined above, as a percentage of its GAAP total revenue. Similar
to adjusted operating (loss) income, the Company believes that
adjusted operating margin is a useful financial measure to both the
Company and investors for evaluating its operating performance and
that it facilitates period to period comparisons of the Company's
results of operations as the items excluded generally are not a
function of the Company's operating performance.
- Total Platform Portfolio - The Company defines total platform
portfolio as the unpaid principal balance outstanding of all loans
facilitated through its platform as of the balance sheet date,
including loans held for investment, loans held for sale, and loans
owned by third-parties. The Company believes that total platform
portfolio is a useful financial measure to both the Company and
investors in assessing the scale of funding requirements for the
Company's network.
- Equity Capital Required - The Company defines equity capital
required as the sum of the balance of loans held for investment and
loans held for sale, less the balance of funding debt and notes
issued by securitization trusts as of the balance sheet date. The
Company believes that equity capital required is a useful financial
measure to both the Company and investors in assessing the amount
of the Company's total platform portfolio that the Company funds
with its own equity capital.
- Equity Capital Required as a Percentage of Total Platform
Portfolio - The Company defines equity capital required as a
percentage of total platform portfolio as equity capital required,
as defined above, as a percentage of total platform portfolio, as
defined above. The Company believes that equity capital required as
a percentage of total platform portfolio is a useful financial
measure to both the Company and investors in assessing the
proportion of outstanding loans on the Company's platform that are
funded by the Company's own equity capital.
Supplemental Performance Indicators
- Active Merchants - The Company defines an active merchant as a
merchant which engages in at least one transaction on its platform
during the 12 months prior to the measurement date. The Company
believes that active merchants is a useful performance indicator to
both the Company and investors because it measures the reach of the
Company's network.
- Total Revenue as a Percentage of GMV - The Company defines
total revenue as a percentage of GMV as GAAP total revenue as a
percentage of GMV, as defined above. The Company believes that
total revenue as a percentage of GMV is a useful performance
indicator to both the Company and investors of the revenue
generated on a transaction processed on the Company's
platform.
- Allowance for Credit Losses as a Percentage of Loans Held for
Investment - The Company defines allowance for credit losses as a
percentage of loans held for investment as GAAP allowance for
credit losses as a percentage of GAAP loans held for investment.
The Company believes that allowance for credit losses as a
percentage of loans held for investment is a useful performance
indicator to both the Company and investors of the future estimated
credit losses on the Company's outstanding loans held for
investment.
Use of Non-GAAP Financial Measures
To supplement the Company's condensed consolidated financial
statements, which are prepared and presented in accordance with
generally accepted accounting principles in the United States
("GAAP"), the Company presents the following non-GAAP financial
measures: transaction costs, transaction costs as a percentage of
GMV, revenue less transaction costs, revenue less transaction costs
as a percentage of GMV, adjusted operating (loss) income, adjusted
operating margin, total platform portfolio, equity capital
required, and equity capital required as a percentage of total
platform portfolio. Definitions of these non-GAAP financial
measures are included under "Key Operating Metrics, Non-GAAP
Financial Measures and Supplemental Performance Indicators" above,
and reconciliations of these non-GAAP financial measures with the
most directly comparable GAAP financial measures are included in
the tables below.
Summaries of the reasons why the Company believes that the
presentation of each of these non-GAAP financial measures provides
useful information to the Company and investors are included under
"Key Operating Metrics, Non-GAAP Financial Measures and
Supplemental Performance Indicators" above. In addition, the
Company uses these non-GAAP financial measures in conjunction with
financial measures prepared in accordance with GAAP for planning
purposes, including the preparation of its annual operating budget,
and for evaluating the effectiveness of its business strategy.
However, these non-GAAP financial measures are presented for
supplemental informational purposes only, and these non-GAAP
financial measures have limitations as analytical tools. Some of
these limitations are as follows:
- Revenue less transaction costs and revenue less transaction
costs as a percentage of GMV are not intended to be measures of
operating profit or loss as they exclude key operating expenses
such as technology and data analytics, sales and marketing, and
general and administrative expenses;
- Adjusted operating (loss) income and adjusted operating margin
exclude certain recurring, non-cash charges such as depreciation
and amortization, although the assets being depreciated and
amortized may need to be replaced in the future, and share-based
compensation expense, which has been, and will continue to be for
the foreseeable future, a significant recurring expense and an
important part of the Company's compensation strategy; and
- Other companies, including companies in the same industry, may
calculate these non-GAAP financial measures differently from how
the Company calculates them or not at all, which reduces its
usefulness as a comparative measure.
Accordingly, investors should not consider these non-GAAP
financial measures in isolation or as substitutes for analysis of
the Company's financial results as reported under GAAP, and these
non-GAAP measures should be considered along with other operating
and financial performance measures presented in accordance with
GAAP. Investors are encouraged to review the related GAAP financial
measures and the reconciliations of these non-GAAP financial
measures to their most directly comparable GAAP financial measures
and not rely on any single financial measure to evaluate the
business.
Cautionary Note About Forward-Looking Statements
This document contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended
(the “Securities Act”), and Section 21E of the Securities Exchange
Act of 1934, as amended, that involve risks and uncertainties. All
statements other than statements of historical fact are
forward-looking statements, including statements regarding: the
Company's strategy and future operations, including the Company's
partnerships with Amazon and Shopify; the development, innovation,
introduction and performance of the Company's products, including
the Debit+ Card; acquisition and retention of merchants and
consumers; the Company's future growth, investments, network
expansion, product mix, brand awareness, financial position, gross
market value, revenue, transaction costs, operating income,
provision for credit losses, and cash flows; and general economic
trends and trends in the Company's industry and markets. These
forward-looking statements involve known and unknown risks,
uncertainties and other important factors that may cause the
Company's actual results, performance or achievements to be
materially different from any future results, performance or
achievements expressed or implied by the forward-looking
statements.
Risks, uncertainties and assumptions include factors relating
to: the Company's need to attract additional merchants and
consumers and retain and grow its relationships with existing
merchants and consumers; its need to maintain a consistently high
level of consumer satisfaction and trust in its brand; the
concentration of a large percentage of its revenue with a single
merchant partner; its ability to sustain its revenue growth rate or
the growth rate of its related key operating metrics; the highly
competitive nature of its industry; the terms of its agreement with
one of its originating bank partners; its existing funding
arrangements that may not be renewed or replaced or its existing
funding sources that may be unwilling or unable to provide funding
to it on terms acceptable to it, or at all; its ability to
effectively underwrite loans facilitated through its platform and
accurately price credit risk; the performance of loans facilitated
through its platform; changes in market interest rates; its
securitizations, warehouse credit facilities and forward flow
agreements; the impact on its business of general economic
conditions, the financial performance of its merchants, and
fluctuations in the U.S. consumer credit market; its ability to
grow effectively through acquisitions or other strategic
investments or alliances; and other risks that are described in its
Quarterly Report on Form 10-Q for the fiscal quarter ended March
31, 2021 and in its other filings with the U.S. Securities and
Exchange Commission.
These forward-looking statements reflect the Company's views
with respect to future events as of the date hereof and are based
on assumptions and subject to risks and uncertainties. Given these
uncertainties, you should not place undue reliance on these
forward-looking statements. The forward-looking statements are made
as of the date hereof, and the Company assumes no obligation and
does not intend to update these forward-looking statements.
About Affirm
Affirm’s mission is to deliver honest financial products that
improve lives. By building a new kind of payment network — one
based on trust, transparency and putting people first — we empower
millions of consumers to spend and save responsibly, and give
thousands of businesses the tools to fuel growth. Unlike credit
cards and other pay-over-time options, we show consumers exactly
what they will pay up front, never increase that amount, and never
charge any late or hidden fees.
AFRM-F
AFFIRM HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited)
(in thousands, except share and
per share amounts)
June 30, 2021
June 30, 2020
Assets
Cash and cash equivalents
$
1,466,558
$
267,059
Restricted cash
226,074
61,069
Loans held for sale
13,030
4,459
Loans held for investment
2,022,320
1,034,312
Allowance for credit losses
(117,760
)
(95,137
)
Loans held for investment, net
1,904,560
939,175
Accounts receivable, net
91,575
59,001
Securitization notes receivable and
residual certificates (at fair value)
16,170
—
Property, equipment and software, net
62,499
48,140
Goodwill
516,515
1,255
Intangible assets
67,930
2,496
Commercial agreement assets
227,377
—
Other assets
274,679
19,597
Total Assets
$
4,866,967
$
1,402,251
Liabilities, Redeemable Convertible
Preferred Stock and Stockholders’ Deficit
Liabilities:
Accounts payable
$
57,758
$
18,361
Payable to third-party loan owners
50,079
24,998
Accrued interest payable
2,751
1,860
Accrued expenses and other liabilities
317,951
27,810
Convertible debt
—
74,222
Notes issued by securitization trusts
1,176,673
—
Funding debt
680,602
817,926
Total liabilities
2,285,814
965,177
Redeemable convertible preferred stock,
$0.00001 par value, 30,000,000 and 124,453,009 shares authorized as
of June 30, 2021 and June 30, 2020, respectively; zero and
122,115,971 shares issued and outstanding as of June 30, 2021 and
June 30, 2020, respectively; liquidation preference of $0 and
$809,032 as of June 30, 2021 and June 30, 2020, respectively
—
804,170
Stockholders’ deficit:
Common stock, $0.00001 par value, no
shares authorized, issued and outstanding at June 30, 2021;
232,000,000 shares authorized, 47,684,427 shares issued and
outstanding as of June 30, 2020
—
—
Class A common stock, par value $0.00001
per share: 3,030,000,000 shares authorized, 181,131,728 shares
issued and outstanding as of June 30, 2021; no shares authorized,
issued and outstanding as of June 30, 2020
2
—
Class B common stock, par value $0.00001
per share: 88,226,376 shares authorized, issued and outstanding as
of June 30, 2021; no shares authorized, no shares issued and
outstanding as of June 30, 2020
1
—
Additional paid in capital
3,462,762
80,373
Accumulated deficit
(888,381
)
(447,167
)
Accumulated other comprehensive gain
(loss)
6,769
(302
)
Total stockholders’ equity (deficit)
2,581,153
(367,096
)
Total Liabilities, Redeemable
Convertible Preferred Stock and Stockholders’ Deficit
$
4,866,967
$
1,402,251
AFFIRM HOLDINGS, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Unaudited)
(in thousands, except share and
per share amounts)
Three Months Ended June
30,
Year Ended June 30,
2021
2020
2021
2020
Revenue
Merchant network revenue
$
88,657
$
85,249
$
379,551
$
256,752
Virtual card network revenue
19,264
2,699
49,851
19,340
Total network revenue
107,921
87,948
429,402
276,092
Interest income
103,793
49,117
326,417
186,730
Gain on sales of loans
42,582
11,578
89,926
31,907
Servicing income
7,484
4,689
24,719
14,799
Total Revenue, net
$
261,780
$
153,332
$
870,464
$
509,528
Operating Expenses(a)
Loss on loan purchase commitment
$
51,010
$
55,311
$
246,700
$
161,452
Provision for credit losses
25,489
(32,171
)
65,878
105,067
Funding costs
15,623
7,817
52,700
32,316
Processing and servicing
21,924
14,806
73,767
49,831
Technology and data analytics
71,233
31,744
256,082
122,378
Sales and marketing
63,544
5,066
184,279
25,044
General and administrative
137,647
31,439
370,251
121,230
Total Operating Expenses
386,470
114,012
1,249,657
617,318
Operating (Loss) Income
$
(124,690
)
$
39,320
$
(379,193
)
$
(107,790
)
Other income (expense), net
(5,985
)
(4,413
)
(54,073
)
(4,432
)
(Loss) Income Before Income
Taxes
$
(130,675
)
$
34,907
$
(433,266
)
$
(112,222
)
Income tax (benefit) expense
(2,448
)
94
(2,343
)
376
Net (Loss) Income
$
(128,227
)
$
34,813
$
(430,923
)
$
(112,598
)
Excess return to preferred stockholders on
repurchase
—
—
—
(13,205
)
Net (Loss) Income Attributable to
Common Stockholders
$
(128,227
)
$
34,813
$
(430,923
)
$
(125,803
)
Other Comprehensive Income
(Loss)
Foreign currency translation
adjustments
$
1,994
$
562
$
7,042
$
(302
)
Unrealized gains on investments
29
—
29
—
Net Other Comprehensive Income
(Loss)
2,023
562
7,071
(302
)
Comprehensive (Loss) Income
$
(126,204
)
$
35,375
$
(423,852
)
$
(112,900
)
Per share data:
Net loss per share attributable to
common stockholders for Common stock, Class A common stock and
Class B common stock:
Basic
$
(0.48
)
$
0.73
$
(2.72
)
$
(2.63
)
Diluted
$
(0.48
)
$
0.17
$
(2.88
)
$
(2.63
)
Weighted average common shares
outstanding
Basic
267,282,166
47,552,288
158,367,923
47,856,720
Diluted
267,282,166
199,238,064
159,244,611
47,856,720
(a) Amounts include stock-based
compensation as follows:
Three Months Ended June
30,
Year Ended June 30,
2021
2020
2021
2020
(in thousands)
General and administrative
$
81,771
$
2,496
$
183,055
$
13,682
Technology and data analytics
21,922
1,988
83,390
12,285
Sales and marketing
6,415
868
19,181
4,040
Processing and servicing
473
28
2,407
82
Total stock-based compensation in
operating expenses
$
110,581
$
5,380
$
288,033
$
30,089
AFFIRM HOLDINGS, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Three Months Ended June
30,
Year Ended June 30,
2021
2020
2021
2020
Cash Flows from Operating
Activities
Net (Loss) Income
$
(128,227
)
$
34,813
$
(430,923
)
$
(112,598
)
Adjustments to reconcile net (loss) income
to net cash used in operating activities:
Provision for credit losses
25,489
(32,171
)
65,878
105,067
Amortization of premiums and discounts on
loans, net
(29,666
)
(6,937
)
(90,371
)
(27,605
)
Gain on sales of loans
(42,582
)
(11,578
)
(89,926
)
(31,907
)
Changes in fair value of assets and
liabilities
6,345
3,553
51,655
2,847
Amortization of commercial agreement
assets
19,006
—
69,103
—
Amortization of debt issuance costs
2,741
652
6,416
2,313
Stock-based compensation
110,581
5,036
288,033
29,625
Depreciation and amortization
7,887
2,023
19,979
9,444
Impairment of right of use assets
403
—
11,544
—
Purchases of loans held for sale
(1,000,062
)
(465,533
)
(2,640,734
)
(2,101,483
)
Proceeds from the sale of loans held for
sale
995,281
446,171
2,594,835
2,021,938
Other
(1,893
)
661
5,129
81
Change in operating assets and
liabilities:
Accounts receivable, net
(16,473
)
(15,036
)
(22,934
)
(19,049
)
Other assets
(22,004
)
(4,539
)
(209,139
)
19,936
Accrued interest payable
(1,140
)
(365
)
1,395
428
Accounts payable
28,159
5,950
32,223
7,514
Accrued expenses and other liabilities
16,923
6,814
119,625
13,868
Payable to third-party loan owners
13,556
2,039
25,082
8,279
Net Cash Used in Operating
Activities
(15,676
)
(28,447
)
(193,130
)
(71,302
)
Cash Flows from Investing
Activities
Purchases and originations of loans held
for investment
(1,583,418
)
(797,034
)
(5,897,252
)
(2,830,320
)
Proceeds from the sale of loans held for
investment
475,816
91,730
824,011
303,433
Principal repayments and other loan
servicing activity
1,322,267
686,946
4,324,618
2,294,833
Acquisition, net of cash and restricted
cash acquired
(117,657
)
—
(222,433
)
—
Additions to property, equipment and
software
(7,838
)
(2,315
)
(20,252
)
(21,019
)
Other investing cash inflows
1,116
—
1,453
—
Other investing cash outflows
(10,178
)
—
(32,178
)
—
Net Cash Provided by (Used in)
Investing Activities
80,108
(20,673
)
(1,022,033
)
(253,073
)
Cash Flows from Financing
Activities
Proceeds from funding debt
645,988
604,058
2,942,254
2,132,805
Payment of debt issuance costs
(1,233
)
(6,304
)
(12,499
)
(7,687
)
Principal repayments of funding debt
(727,043
)
(552,995
)
(3,165,103
)
(1,882,155
)
Proceeds from issuance of notes and
residual trust certificates by securitization trusts
(350
)
—
1,395,879
—
Principal repayments of notes issued by
securitization trusts
(65,865
)
—
(210,368
)
—
Proceeds from issuance of convertible
debt, net
—
75,000
—
75,000
Proceeds from issuance of redeemable
convertible preferred stock, net
—
—
434,542
15,481
Repurchases and conversion of redeemable
convertible preferred stock
—
—
(13
)
(22,591
)
Proceeds from initial public offering,
net
(125
)
—
1,305,176
—
Proceeds from exercise of common stock
options and warrants
3,227
958
47,042
2,733
Repurchases of common stock
(14
)
—
(800
)
(18,854
)
Payments of tax withholding for
stock-based compensation
(30,714
)
—
(158,280
)
—
Net Cash Provided by (Used in)
Financing Activities
(176,129
)
120,717
2,577,830
294,732
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
(2,673
)
—
1,837
—
Net Increase (Decrease) in Cash, Cash
Equivalents and Restricted Cash
(114,370
)
71,597
1,364,504
(29,643
)
Cash and cash equivalents and restricted
cash, beginning of period
1,807,002
256,531
328,128
357,771
Cash and Cash Equivalents and
Restricted Cash, end of period
$
1,692,632
$
328,128
$
1,692,632
$
328,128
AFFIRM HOLDINGS, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS, CONT.
(Unaudited)
(in thousands)
Three Months Ended June
30,
Year Ended June 30,
2021
2020
2021
2020
Supplemental Disclosures of Cash Flow
Information
Cash payments for interest
$
13,115
$
6,013
$
41,690
$
28,085
Cash paid for income taxes
138
—
219
—
Cash paid for operating leases
3,489
—
13,215
—
Supplemental Disclosures of Non-Cash
Investing and Financing Activities
Stock-based compensation included in
capitalized internal-use software
$
4,530
$
572
$
13,999
$
2,921
Additions to property and equipment
included in accrued expenses
6
27
6
27
Issuance of warrants in exchange for
commercial agreement
—
—
270,579
—
Acquisition of commercial agreement
assets
—
—
25,900
—
Conversion of redeemable convertible
preferred stock
—
—
1,327,271
—
Conversion of convertible debt
—
—
88,559
—
Issuance of common stock in connection
with acquisition
214,475
—
331,498
—
Right of use assets obtained in exchange
for operating lease liabilities
—
—
78,421
—
Reconciliation of Non-GAAP Financial
Measures
The following tables present a reconciliation of transaction
costs, revenue less transaction costs, adjusted operating income
(loss), adjusted operating margin, and equity capital required to
their most directly comparable financial measures prepared in
accordance with GAAP for each of the periods indicated.
Three Months Ended June
30,
Year Ended June 30,
2021
2020
2021
2020
(in thousands, except percent
data) (unaudited)
Operating Expenses
Loss on loan purchase commitment
$
51,010
$
55,311
$
246,700
$
161,452
Provision for credit losses
25,489
(32,171
)
65,878
105,067
Funding costs
15,623
7,817
52,700
32,316
Processing and servicing
21,924
14,806
73,767
49,831
Transaction Costs (Non-GAAP)
$
114,046
$
45,763
$
439,045
$
348,666
Technology and data analytics
71,233
31,744
256,082
122,378
Sales and marketing
63,544
5,066
184,279
25,044
General and administrative
137,647
31,439
370,251
121,230
Total Operating Expenses
$
386,470
$
114,012
$
1,249,657
$
617,318
Total Revenue, net
$
261,780
$
153,332
$
870,464
$
509,528
Less: Transaction Costs (Non-GAAP)
(114,046
)
(45,763
)
(439,045
)
(348,666
)
Revenue Less Transaction Costs
(Non-GAAP)
$
147,734
$
107,569
$
431,419
$
160,862
Operating (Loss) Income
$
(124,690
)
$
39,320
$
(379,193
)
$
(107,790
)
Add: Depreciation and amortization
7,887
2,023
19,979
9,444
Add: Stock-based compensation included in
operating expenses
110,581
5,380
288,033
30,089
Add: Amortization of Shopify Inc.
commercial agreement asset
16,853
—
64,820
—
Add: Other costs3
3,582
—
20,697
—
Adjusted Operating Income (Loss)
(Non-GAAP)
$
14,213
$
46,723
$
14,336
$
(68,257
)
Divided by: Total Revenue, net
$
261,780
$
153,332
$
870,464
$
509,528
Adjusted Operating Margin
(Non-GAAP)
5.4
%
30.5
%
1.6
%
(13.4
)%
June 30, 2021
June 30, 2020
June 30, 2019
(in thousands) (unaudited)
Loans held for investment
$
2,022,320
$
1,034,312
$
735,414
Add: Loans held for sale
13,030
4,459
3,420
Less: Funding debt
(680,602
)
(817,926
)
(569,234
)
Less: Notes issued by securitization
trusts
(1,176,673
)
—
—
Equity Capital Required
(Non-GAAP)
$
178,075
$
220,845
$
169,600
_______________ 1 Information about Affirm's use of non-GAAP
financial measures is provided under "Key Operating Metrics,
Non-GAAP Financial Measures and Supplemental Performance
Indicators" and "Use of Non-GAAP Financial Measures" below, and
reconciliation of GAAP results to non-GAAP results are provided in
the tables at the end of this press release. 2 A reconciliation of
adjusted operating loss to the comparable GAAP measure is not
available on a forward-looking basis without unreasonable effort
due to the uncertainty regarding, and the potential variability of,
expenses that may be incurred in the future. 3 Other costs consists
of one-time expenses incurred in the period associated with the
Company's initial public offering, its strategic acquisitions, and
impairment of right of use assets.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210909006033/en/
Investor Relations ir@affirm.com
Media press@affirm.com
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