Affirm Holdings, Inc. has recently released its 10-K report, providing an in-depth look into the company's financial performance and operations. Affirm operates a payment network in the United States, Canada, and internationally, offering point-of-sale payment solutions for consumers, merchant commerce solutions, and a consumer-focused app. The company's platform allows consumers to pay for purchases over time, without deferred interest, late fees, or penalties. Affirm's active merchants cover a wide range of industries, including sporting goods, home and lifestyle, travel, electronics, fashion, and more.
In the 10-K report, Affirm's financial performance for the fiscal year ended June 30, 2024, compared to the fiscal year ended June 30, 2023, is highlighted. The total revenue for the year ended June 30, 2024, was $2,322,999, marking a 46% increase from the previous year. However, the company reported an operating loss of $(615,847), which represents a 49% improvement compared to the previous year. The net loss for the year ended June 30, 2024, was $(517,757), reflecting a 47% decrease from the previous year.
Affirm's revenue model is based on three main loan product offerings: Pay-in-4, 0% APR monthly installment loans, and interest-bearing monthly installment loans. Pay-in-4 represented 15% of total GMV facilitated through the platform for the year ended June 30, 2024. Interest-bearing loans represented 74% of total GMV facilitated through the platform during the same period. The company also earns a portion of the interchange fee when consumers use virtual cards issued through its app.
The report also delves into Affirm's loan origination and servicing model. The company underwrites loans using its proprietary risk model and partners with originating bank partners to fund and issue loans. Affirm directly originated approximately $4.5 billion, or 17% of loans for the year ended June 30, 2024. The company acts as the servicer on all loans it originates directly or purchases from its originating bank partners, earning a servicing fee on loans sold to its funding sources.
Factors affecting Affirm's performance include expanding its network, diversity, and mix of funding relationships, seasonal fluctuations in consumer spending patterns, and the macroeconomic environment. The company has also been monitoring the impacts of the current macroeconomic conditions, including shifts in consumer demand, increased borrowing costs, and volatile capital markets.
The market has reacted to these announcements by moving the company's shares -2.9% to a price of $31.58. For the full picture, make sure to review Affirm's 10-K report.
