Affirm soars as strong holiday shopping powers BNPL lender’s surprise profit

More consumers used its BNPL services to take advantage of heavy discounts by retailers on everything from apparel to electronics to lure budget-conscious shoppers during the holiday season.

“With inflation and interest rates still elevated, consumers are prioritizing flexibility in how they pay. BNPL solutions like Affirm are meeting that demand, offering a way for people to manage expenses without relying on traditional credit,” said Michael Hershfield, CEO and founder of fintech firm Accrue.

Gross merchandise volume (GMV) – the total dollar amount of all transactions on the Affirm platform – jumped 35% to $10.1 billion in the second quarter ended December 31, exceeding analysts’ estimates of $9.57 billion, according to data compiled by LSEG.

San Francisco, California-based Affirm was on track to add more than $4 billion to its market capitalization if the gains hold.

In a letter to shareholders late on Thursday, Affirm said the merchandise and consumer electronics categories contributed significantly to growth. GMV growth from Affirm’s top five merchants and platform partners collectively jumped 40%, partly due to increasing demand from consumers for zero-percent financing. Affirm reported net income of $80.4 million, or 23 cents per share, compared with analysts’ expectations of a loss of 15 cents per share.

The company posted profit on a reported basis for the first time as a public company.

“Affirm’s ability to expand its retail partnerships – particularly in high-demand categories – has driven strong transaction volume and profitability. Meanwhile, larger fintech players like PayPal are grappling with rising operating costs,” Hershfield added.

The company’s total revenue soared 47% to $866 million, beating estimates of $807.2 million.

It also forecast fiscal 2025 revenue between $3.13 billion and $3.19 billion, compared with Street expectations of $3.09 billion.