A Twitter slip-up sent Affirm Holdings Inc.’s AFRM -21.42% shares on a wild ride that ended with the buy-now-pay-later company’s worst one-day drop on record.
Affirm closed down 21% at $58.68, a huge reversal from its performance earlier in the day, after the company accidentally tweeted some key quarterly results early. At one point, shares were up more than 12% at nearly $84.
The company later deleted the tweet, which disclosed a 77% quarterly revenue jump and a big increase in transaction volume. “Another great quarter is in the books,” it said. Affirm said the cause was “human error.”
Investors initially cheered the abbreviated results, which seemed to punctuate Affirm’s breakout year. The company went public in January 2021, its shares nearly doubling in their trading debut. Deals with Shopify Inc. and Amazon.com Inc. quickly established Affirm as the buy-now-pay-later provider of choice for big merchants.
Investors were less impressed after they saw the full report, sending the shares down as much as 33% in afternoon trading. The company reported a wider loss in the latest quarter, and analysts raised concerns about the company’s profit margins and financial guidance.
Still, revenue rose sharply to $361 million in the company’s second quarter from $204 million a year earlier. Analysts polled by FactSet were expecting revenue of $329 million.
Its gross merchandise volume for the quarter was $4.5 billion, up 115% from a year earlier. Meanwhile, active consumers more than doubled to 11.2 million, and the number of active merchants accepting Affirm rose to 168,000, 21 times more than a year earlier.
“We really hit it out of the park by any objective metric,” Chief Executive Max Levchin said in an interview.
Mr. Levchin said he was more focused on how Affirm performs over decades, not how its stock performs over the course of one day.
“I do think we had a pretty amazing quarter,” Mr. Levchin added. “We’ll see what the market will do when they hear the full story after the earnings call.”
Total operating expenses were $557.2 million, compared with $230.8 million a year earlier.
Affirm attributed the higher expenses to an increase in stock-based compensation following its IPO and expenses related to a recent acquisition. Its sales and marketing spending also increased, as did its provision for credit losses.
Net loss for the quarter was $159.7 million, compared with a loss of $26.6 million a year earlier. The loss per share was 57 cents, widening from 38 cents a year earlier. Analysts had expected a loss of 32 cents a share.
For the current quarter, the company projected revenue of $325 million to $335 million. Analysts are expecting revenue of $335 million.
Write to Peter Rudegeair at [email protected] and Robert Barba at [email protected]
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