Affirm Holdings FY2024 Revenue $2.32B Up 46%, Net Loss $517.8M

Executive Summary

Affirm Holdings, Inc. reported its fiscal year 2024 financial results, demonstrating a significant year-over-year increase in revenue, which grew by approximately 46% from $1.59 billion to $2.32 billion. However, net loss widened from $985.3 million to $517.8 million, reflecting ongoing investments and operational expansion. The company’s revenue growth underscores robust market demand and successful platform scaling, while the increased net loss highlights continued strategic investments in technology, marketing, and expansion initiatives.

Management Discussion and Analysis

During FY2024, Affirm continued to capitalize on its innovative buy now, pay later platform, expanding its merchant network and consumer base. Revenue was primarily driven by interest income, which increased by 75% from $685.2 million to $1.20 billion, and gains on sales of loans, which grew marginally by 5% from $188.3 million to $197.2 million. Operating expenses surged by approximately 5.5%, primarily attributable to increased marketing, technology development, and customer acquisition costs. Despite revenue growth, operating loss expanded from $1.20 billion to $615.8 million, indicating intensified investments in market share and product development.

Income Statement Analysis

Revenue

Total revenue for FY2024 rose to $2.32 billion, a 46% increase from $1.59 billion in FY2023, driven mainly by interest income and loan sale gains. Interest income alone doubled, reflecting higher average loan balances and improved yield management. Revenue from loan sales modestly increased, indicating sustained demand for securitized assets.

Gross Profit & Operating Income

Gross profit figures are not explicitly stated; however, the revenue growth coupled with high operating expenses resulted in an operating loss of $615.8 million, compared to $1.20 billion in FY2023. Margin compression underscores ongoing strategic investments rather than immediate profitability.

Net Income / Loss

Net loss for FY2024 was $517.8 million, more than halving the prior year’s loss of $985.3 million. The loss per share was approximately $1.67 for both basic and diluted calculations, based on an average outstanding share count of approximately 310 million shares.

Balance Sheet Analysis

As of June 30, 2024, total assets increased by 17% to roughly $9.52 billion from $8.16 billion, driven by higher loan and securities balances. Cash and cash equivalents stood at $1.02 billion, with total loans held for investment at $5.67 billion, showing a substantial growth aligned with revenue expansion. Total liabilities increased by 21% to $6.79 billion, largely due to securitization and funding debt, which now account for the majority of liabilities. Stockholders’ equity rose modestly to $2.73 billion, reflecting retained earnings deficits offset by capital raises and accumulated capital contributions.

Cash Flow Analysis

Operating cash flow was positive at approximately $450 million, primarily from collections and loan sale proceeds, indicating effective working capital management. Investing activities showed a net outflow of about $1.33 billion, mainly due to loan originations exceeding portfolio repayments. Financing activities generated approximately $913 million, mainly from debt issuance and securitization financing, with additional cash used for debt repurchases and interest payments. Capital expenditures and software development costs totaled around $126.5 million, supporting platform enhancements and operational infrastructure.

Ratios & DuPont Analysis

Given the net loss, profitability ratios such as net margin are negative. Return on assets (ROA) and return on equity (ROE) are also negative, reflecting the company’s ongoing growth phase. Asset turnover remains high, indicating efficient utilization of assets to generate revenue, while the equity multiplier suggests increased leverage, consistent with expanded funding and securitization activities. These metrics underline a strategic focus on growth and market capture over immediate profitability.

Risk Factors

Affirm faces regulatory risks due to evolving financial services regulations and potential compliance costs. Market risks include interest rate fluctuations impacting funding costs and borrower credit performance. Competitive pressures from traditional financial institutions and fintech rivals pose ongoing threats. Operational risks involve platform security, technology disruptions, and credit risk management. Macroeconomic factors such as inflation, economic slowdown, and consumer spending trends could adversely affect loan performance and revenue streams.

Notes & Additional Commentary

Unusual items include a significant increase in operating expenses and net losses due to strategic investments in technology and growth initiatives. The company executed debt buybacks totaling approximately $120 million post-year-end, reducing outstanding convertible notes and strengthening liquidity. No material impairment charges or asset write-downs were recognized in FY2024, indicating stable asset valuations despite market volatility.

Investment Implications

Affirm’s strong revenue growth and expanding loan portfolio present attractive short-term opportunities for investors seeking exposure to innovative fintech and consumer finance. However, persistent net losses and high operating expenses highlight long-term risk factors, requiring careful assessment of profitability pathways. The company’s leverage and reliance on securitization markets suggest sensitivity to interest rate environments and regulatory changes, necessitating ongoing monitoring of macroeconomic trends and capital market conditions. A balanced outlook recognizes both growth potential and operational risks, with strategic focus on achieving sustainable profitability in future periods.