Affirm Shares Surge Post-Earnings as Strong Growth Fuels Investor Optimism
2min read Shares of Affirm have been on an impressive run, with momentum surging further following its first-quarter fiscal 2025 earnings report. The buy-now-pay-later (BNPL) leader initially faced a profit-taking dip on Friday morning after its report, but by the end of the day, its strong financial performance and outlook helped reverse most of those losses. Now trading at its highest level since February 2022, Affirm is catching the market’s attention as a standout growth story in the fintech sector.
Affirm’s first-quarter results highlighted several key strengths, with Gross Merchandise Volume (GMV) growth taking center stage. GMV increased by an impressive 35 percent year-over-year, a noticeable acceleration from the 31 percent growth posted in the prior quarter. The company attributed this performance to robust contributions from its top five merchants and platform partners, which experienced a 41 percent year-over-year increase in GMV. Importantly, this growth was broad-based, with every product category achieving double-digit expansion, except for sporting goods and outdoor equipment.
Another highlight from the report was the rapid adoption and expansion of the Affirm Card, which is increasingly becoming a cornerstone of the company’s strategy. The number of Affirm Card users climbed to 1.4 million in the first quarter, up from 1.2 million in the fourth quarter of fiscal 2024. Usage metrics also painted a positive picture. The annualized GMV per Affirm Card user grew from $2,500 to over $3,000, reflecting increased engagement and spending. Additionally, in-store usage of the Affirm Card jumped from 25 percent in early fiscal 2024 to 45 percent in the latest quarter, signaling greater consumer adoption beyond online transactions.
This strong performance is helping to alleviate initial market concerns over the company’s lofty valuation after its recent rally. Affirm’s share price had climbed approximately 75 percent since early August, raising the potential for a sell-the-news reaction ahead of its earnings release. While the stock experienced a sharp drop in early trading on Friday, the market quickly recalibrated as the full scope of Affirm’s growth story became apparent.
The company’s ability to post significant growth across multiple metrics, despite ongoing economic uncertainty, has reassured investors about its long-term potential. Affirm’s success in diversifying its GMV across categories and products indicates resilience in its business model, while the continued expansion of the Affirm Card suggests untapped opportunities for growth in both e-commerce and brick-and-mortar retail.
Looking ahead, Affirm’s focus on deepening relationships with merchants and improving user engagement with its products positions the company well for sustained growth. The accelerating GMV growth and increased adoption of its Affirm Card highlight a winning formula that could drive the company’s performance further, even as competition in the BNPL space intensifies.
In conclusion, Affirm’s latest earnings report underscores its strong operational execution and growth prospects. With shares continuing to climb, the market’s confidence in the company’s ability to navigate challenges and capitalize on opportunities remains strong. Affirm has firmly positioned itself as a leader in the evolving fintech landscape, and its ongoing success will be closely watched by both investors and competitors alike.