Affirm Holdings Inc. (NASDAQ:AFRM) experienced a significant surge in its stock value after announcing a notable rise in transactions facilitated through its buy now, pay later platforms. This surge was propelled by the company’s successful collaborations with fresh merchants, effectively countering challenges posed by escalating interest rates.
In a statement released late on Thursday, the firm disclosed that it achieved $5.5 billion in gross merchandise volume for the quarter ending June 30. This metric, which represents the cumulative dollar value of all transactions conducted on its platform, marked a 25% increase compared to the same period last year. The reported figure exceeded the predictions put forth by analysts. Notably, Affirm’s Affirm Card also made impressive headway during this period.
The company’s shares experienced a remarkable upswing of up to 32% in New York on Friday. This was the most substantial intraday increase since May 2022, with shares trading at around $18 by 1:05 p.m.
Max Levchin, the Chief Executive Officer, commented in a Bloomberg TV interview on Friday, “As much as I’m enjoying the stock market reaction, we’re very focused on the long-term. We are definitely energized by the growth and in particular the growth of the card product. It’s finally showing real signs of stickiness and we’re very excited about that.”
With the easing of pandemic-related restrictions, there has been a resurgence in consumer demand for experiences such as travel and ticketed events. Affirm adeptly capitalized on this renewed demand, forging new partnerships with companies like Cathay Pacific and Booking.com. Simultaneously, the company expanded its existing collaborations with Royal Caribbean Group and Priceline.
Michael Linford, the Chief Financial Officer, stated during an earnings call, “We saw the consumer out participating in the economy in those sort of event-driven, experiential-driven spending patterns. And because of our breadth of distribution there, we were real beneficiaries of that this quarter.”
Affirm also revealed a 22% increase in revenue, reaching $446 million in comparison to the same period the previous year. The count of affiliated merchants grew by 8% to 254,000, while the consumer base expanded by 18%.
However, the year was not without its challenges. The buy now, pay later sector experienced setbacks as the initial online shopping boom of the pandemic waned. Affirm also grappled with market volatility resulting from higher interest rates, necessitating adjustments to align with evolving consumer preferences.
Linford acknowledged, “We definitely should acknowledge that 2023 was a challenging year for us.” Despite enduring months of volatility that impacted short-term performance, the company concluded the year on a robust note.
Founded in San Francisco, Affirm was established by Max Levchin, one of the co-founders of PayPal Holdings Inc. and a former colleague of Elon Musk. Levchin remarked during the earnings call, “We have been more productive than perhaps ever in our history over the last six months or so… Certainly, in the last three, we’ve really just built a lot of great stuff, and we have no intention of slowing down.”
Levchin also announced that the company would host an investor forum on November 14 in New York, where it would provide updates on its commercial and product initiatives.
In June, Affirm (NASDAQ:AFRM) and Amazon.com Inc. (NASDAQ:AMZN) unveiled a partnership that allows U.S. retailers using Amazon Pay to offer pay-over-time options for purchases exceeding $50. The collaboration aimed to boost sales and foster customer loyalty, as affirmed by Affirm at the time.
Featured Image: Megapixl
Author Faith Yakubu 
