Affirm Holdings Shares Surge 23% on Q2 Beat, Merchants' Growth

Affirm Holdings, Inc. (NASDAQ: AFRM) shares soared 23% on Friday, February 7, 2025, following the company's announcement of a surprise profit and revenue beat in its fiscal 2025 second quarter. The provider of buy now, pay later (BNPL) loans reported earnings per share (EPS) of $0.23, surpassing analysts' expectations of a per-share loss of $0.10. Revenue also jumped nearly 47% to $866.4 million, outpacing forecasts.

The strong quarterly results can be attributed to several key factors, including a robust holiday shopping season, strategic partnerships with major retailers, and a favorable macroeconomic environment. Consumers embraced installment plans to manage holiday spending, driving demand for Affirm's BNPL services. Additionally, the company's strategic alliances with retail giants like Amazon and Walmart expanded its reach and brand visibility, exposing its offering to a broader audience and driving increased transaction volume.

Affirm's active customer base increased 19% to 21.0 million, more than anticipated, and transactions per active customer were up more than 20% to 5.3. Gross merchandise volume (GMV), also known as gross merchandise value (GMV), grew 35% to $10.1 billion, beating forecasts. The company's operating loss in the period was $4.3 million, down from $172.2 million a year earlier, demonstrating its commitment to improving its financial health.

Founder and CEO Max Levchin wrote to shareholders that Affirm had "another record-setting holiday shopping season as we once again delivered for our merchants, with several standout categories." Levchin added that even though the company is five months away from its target date to have positive operating income, "we are nearly there today—mark it zero."