Document Analysis NLP IA
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Summary (IA Generated)
Affirm, a consumer finance business founded by PayPal mafia member Max Levchin, filed to go public this afternoon.
Affirm recorded impressive historical revenue growth.
In its 2019 fiscal year, Affirm booked revenues of $264.
Fast forward one year and Affirm managed top line of $509.
5 million in fiscal 2020, up 93% from the year-ago period.
Affirm’s fiscal year starts on July 1, a pattern that allows the consumer finance company to fully capture the U.
In its 2019 fiscal year, Affirm lost $120.
More recently, in its first quarter ending September 30, 2020, Affirm kept up its pattern of rising revenues and falling losses.
In that three-month period, Affirm’s revenue totaled $174.
0 million, up 98% compared to the year-ago quarter.
That pace of expansion is faster than the company managed in its most recent full fiscal year.
Accelerating revenue growth with slimming losses is investor catnip; Affirm has likely enjoyed a healthy tailwind in 2020 thanks to the COVID-19 pandemic boosting ecommerce, and thus gave the unicorn more purchase in the realm of consumer spend.
Again, comparing the company’s most recent quarter to its year-ago analog, Affirm’s net losses dipped to just $15.
Affirm’s financials on a quarterly basis — located on page 107 of its S-1 if you want to follow along — give us a more granular understanding of how the fintech company performed amidst the global pandemic.
After an enormous fourth quarter in calendar year 2019, growing its revenues to $130.
9 million in the previous quarter, Affirm managed to keep growing in the first, second, and third calendar quarters of 2020.
In those periods, the consumer fintech unicorn recorded a top line of $138.
That one-time profit, along with its slim losses in its most recent period make Affirm appear to be a company that won’t hurt for future net income, provided that it can keep growing as efficiently as it has recently.
The pandemic has had more impact on Affirm than its raw revenue figures can detail.
Affirm said that it saw an increase in revenue from merchants focused on home-fitness equipment, office products, and home furnishings during the pandemic.
For example, its top merchant partner, Peloton, represented approximately 28% of its total revenue for the 2020 fiscal year, and 30% of its total revenue for the three months ending September 30, 2020.
Investors, while likely content to cheer Affirm’s rapid growth, may cast a gimlet eye at the company’s dependence for such a large percentage of its revenue from a single customer; especially one that is enjoying its own pandemic-boost.
GMV at the startup has grown considerably year-over-year, as you likely expected given its rapid revenue growth.
Akin to the company’s revenue growth, its GMV did not grow by quite 100% on a year-over-year basis.
88 million “active customers,” which the company defines as a “consumer who engages in at least one transaction on our platform during the 12 months prior to the measurement date.
38 million in the September 30, 2019 quarter.
The growth is nice by itself, but Affirm customers are also becoming more active over time, which provides a modest compounding effect.