The company said it expects third-quarter gross merchandise volume between $1.80 billion and $1.85 billion, lower than the $2.1 billion it reported for the previous three months, sending its shares down 8.6% after the bell.
Affirm was founded in 2012 by PayPal Holdings Inc co-founder Max Levchin to offer small loans to people without credit histories or savings accounts for items ranging from a new mattress to an outfit for a job interview.
So-called buy now, pay later services - offered by providers such as Affirm, Klarna, Afterpay Ltd and PayPal Holding Inc’s “Pay In 4” - have blossomed across retail websites during the pandemic as people have turned more to shopping online.
Affirm’s active customers rose by 52% to 4.5 million in the second quarter ended Dec. 31.
It reported a net loss attributable to common stockholders of $31.6 million, or 45 cents per share, compared with a loss of $44.2 million, or 92 cents per share, a year earlier.
Affirm lets shoppers select its services at checkout, decide a payment schedule ranging from six weeks to four years and then confirm their loan. It shows customers how much a loan will cost in dollar terms and does not charge late fees or compound interest.
For example, a purchase of $500 would eventually cost the shopper $512.82, under a three monthly payments plan based on a 15% annual percentage rate. Reporting by Noor Zainab Hussain in Bengaluru; Editing by Aditya Soni