Highlights;
- Affirm’s stock surged 10% after the company reported strong fiscal Q4 results, with earnings of $0.20 per share (nearly double expectations) and revenue of $876 million, up 33% year-over-year.
- CEO Max Levchin expressed optimism, stating the company is “firing on all pistons,” with consumer and merchant growth driving increased usage, and net income of $69.2 million compared to a prior-year loss.
- Affirm’s key volume metric jumped 44%, supported by partnerships with Shopify and Amazon, despite losing Walmart to rival Klarna, and its Affirm Card saw significant growth with $1.2 billion in GMV.
- The company highlighted AI-driven advancements, with its AdaptAI system boosting merchant volume by 5%, and expressed confidence in its 0% APR loans and responsible lending practices.
Affirm’s Stock Surges as Strong Earnings and Consumer Spending Fuel BNPL Growth
Affirm Holdings saw its stock rise by 10% on Friday after the buy now, pay later (BNPL) company exceeded Wall Street expectations in its fiscal fourth-quarter earnings report. CEO Max Levchin expressed confidence in the company’s performance, stating that Affirm is “firing on all pistons” during an appearance on CNBC’s “Money Movers.”
Earnings Highlights:
- Earnings per share (EPS) of 20 cents, nearly doubling analyst expectations.
- Revenue reached $876 million, a 33% increase year-over-year, surpassing estimates.
- Net income was $69.2 million, a significant turnaround from the $45.1 million loss reported in the same period last year.
Levchin highlighted the strong consumer engagement and merchant growth driving increased usage. “Consumers are transacting more frequently,” he noted, attributing the growth to compounding factors such as consumer and merchant expansion. The company also provided optimistic guidance for fiscal 2026 and the current quarter, with Levchin emphasizing confidence in timely repayments.
Strategic Partnerships and Growth:
Affirm’s success was partly fueled by partnerships with major retailers like Shopify and Amazon, despite losing Walmart to rival Klarna. The company’s key volume metric surged by 44% year-over-year, exceeding expectations by nearly a billion dollars. Additionally, Affirm has deepened ties with Apple through a recent deal.
The BNPL leader faces increasing competition as Klarna prepares for an IPO, but Affirm remains focused on its strategic initiatives, particularly the Affirm Card, which has seen significant adoption. The card’s gross merchandise volume (GMV) grew by 132% to $1.2 billion, with active cardholders nearly doubling to 2.3 million and in-store spending up 187%. Zero-interest APR loans now account for 14% of card volume, attracting 50% of new users.
Levchin reassured investors about the sustainability of 0% APR loans, emphasizing rigorous underwriting practices. “If we believe someone cannot afford to borrow, we compassionately inform them it’s not suitable,” he stated.
Innovation and Technology:
Artificial intelligence is a key growth driver for Affirm, with its new AdaptAI system already boosting merchant volume by an average of 5%. This underscores the company’s long-standing use of AI in credit scoring and checkout optimization.
Economic Context:
Affirm’s performance aligns with positive economic indicators, as the U.S. economy expanded by 3.3% in the second quarter, beating initial estimates. This growth, despite tariff uncertainties, reflects resilient consumer and business activity.
As Affirm continues to navigate the competitive BNPL landscape, its strategic focus on partnerships, product innovation, and AI-driven solutions positions it as a leader in the evolving fintech sector.
Source: https://www.cnbc.com/2025/08/29/affirm-stock-earnings.html
