positiveBuy Now Provider, pays later loans and makes revenue forecasts for the current quarter, even if the previous quarter’s profits were better than expected. Shares fell 8% in extension trading on Thursday.
Compared to the analyst consensus estimates from LSEG, the company’s method is as follows:
Earnings per share: 1 cent vs 3 cent loss expected Revenue: 783 million vs 783 million expectation
According to StreetAccount, AFFIRM reports a total product volume (GMV) of $8.6 billion. GMV is an important metric that helps to evaluate the total value of transactions, up 36% from the previous year.
Quarterly revenues rose 36% from $576 million the previous year. The company’s key margin metric – revenue reduction transaction costs, or RLTC, slightly exceeds the long-term target range of 3% to 4%, reaching 4.1%.
The adjusted operating margin was 22% compared to the estimated StreetAccount 21.6%. Affirm reported net profit of $2.8 million, or penny per share, compared to a loss of $133.9 million, or a loss of 43 cents per share.
According to LSEG, it is $833 million below $830 million, leading to revenues of $815 million to $845 million from current quarterly revenue.
Affirm’s business is closely tied to consumer spending as online loans are becoming more popular with electronics, apparel and travel sellers. The US economy signed a surge in imports at the start of President Donald Trump’s second term in the first three months of 2025 as businesses and consumers tried to preempt Trump’s tariffs implemented in early April.
CNBC reported later last month, quoting first quarter results from credit card lenders, low-income people are curbing their transactions to focus on essentials, while wealthy people continue to spend money on expensive meals and luxury trips.
“We are now seeing credit results that are very much in line with expectations,” Chief Financial Officer Rob O’Hare said in an interview. “We don’t see any signs of stress on the consumer side.”
AFFIRM forecasts GMV for the fourth quarter between $9.4 billion and $9.7 billion with a midpoint of $9.55 billion, with StreetAccount estimates above $9.2 billion. Compared to the 23.8% StreetAccount estimate, the adjusted operating margin is expected between 23% and 25%.
Affirm has repeatedly made its commitment to achieving profitability on a GAAP basis by the end of the fourth quarter of 2025.
As the AFFIRM cards are the company’s big bet to promote overall use, GMV has increased by 115% from the previous year, with the number of active cardholders more than doubled.
Company Partnership apple, Amazon and Shopify Continue to promote momentum. In June, AFFIRM and Apple announced plans for Apple Pay users on their iPhones and iPads so that they can apply for loans directly through assertions.
Earlier this week, the Consumer Financial Protection Agency said it would halt implementation of Biden-era regulations that would strengthen complex compliance for BNPL providers.
The quarter saw a noticeable rise in interest loans of 0%. This is a strategy that subsidizes borrowing costs to drive sales by merchants, sometimes manufacturers. This marked a 44% increase from a year ago.
O’Hare said that for merchants, a 0% loan serves as an alternative to traditional discounts.
“It could be an expensive net discount rate, but it’s better than a 10% off,” he said.
Affirm CEO Max Levchin said a 0% loan will help build a pipeline of high-value customers.
“Every time you sign a new person through a 0% promotion, every few months or quarter from now, it’s a major candidate for the assertion card and it’s a lifetime value booster,” Levutin said in his revenue call.
Meanwhile, the quality of credit was stable, with losses of less than 1% of the company’s core products allowing users to repay the loan in four installments.
AFFIRM shares fell 11% per year, excluding movements outside of business hours, while NASDAQ fell 7%.
Watch: Affirms CEOs on consumer behavior
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