Core Insights - Affirm Holdings, Inc. (AFRM) has expanded its payment options to include in-store purchases via Apple Pay, enhancing flexibility and choice for users in the US [1][9] - The integration allows users to set up Affirm in the Apple Wallet app and split purchases into biweekly or monthly installments [2][4] Company Developments - Users can initiate Affirm's payment method by double-clicking the side button on their iPhone, selecting Affirm, and completing a quick eligibility check [3] - Affirm offers installment payments with rates starting as low as 0% APR, with no late fees or hidden charges [4] - The adoption of Affirm's payment solutions has led to a 47.2% year-over-year increase in transaction count in fiscal 2025 [5][9] Competitive Landscape - Key competitors in the buy now pay later (BNPL) space include PayPal Holdings, Inc. (PYPL) and Visa Inc. (V), both of which have a strong market presence [6][7] - PayPal processed 6.2 billion transactions in Q2 2025, with net revenues rising 5% year-over-year to $8.3 billion [6] - Visa's processed transactions increased by 10% year-over-year in Q3 2025, with total revenues advancing 14% year-over-year [7] Financial Performance - Affirm's shares have surged 103.3% over the past year, outperforming the industry's growth of 40.3% [8] - The Zacks Consensus Estimate for Affirm's fiscal 2026 earnings indicates a 473.3% improvement from the previous year, with revenues expected to grow by 23.4% year-over-year [11] - Affirm currently trades at a forward price-to-sales ratio of 6.99, above the industry average of 5.82 [10]

LexinFintech Holdings Ltd. (NASDAQ:LX) is among the best stocks with the highest upside potential. According to the recent disclosure with the Securities and Exchange Commission, Nomura Holdings Inc. has increased its position in LexinFintech Holdings Ltd. (NASDAQ:LX) by a whopping 437.7% during the first quarter. Following the addition of 414,749 shares, the firm now owns 509,512 shares of the company’s stock, valued at $5,141,000. With the rise in BNPL services, the outlook looks overwhelmingly positive ...

I focus on producing objective, data-driven research, mostly about small- to mid-cap companies, as these tend to be overlooked by many investors. From time to time, though, I also look at large-cap names, just to give a fuller sense of the broader equity markets.Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in ...

I focus on producing objective, data-driven research, mostly about small- to mid-cap companies, as these tend to be overlooked by many investors. From time to time, though, I also look at large-cap names, just to give a fuller sense of the broader equity markets.Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in ...

Core Insights - American Express Company (AXP) is adapting to the Buy Now Pay Later (BNPL) trend by integrating it into its existing card services rather than resisting it [1][4] - The company's 'Plan It' feature allows cardholders to split purchases of $100 or more into manageable monthly payments, enhancing the cardholder experience with rewards and benefits [2][8] - American Express is collaborating with various companies to strengthen its presence in the digital shopping landscape, showcasing that traditional financial institutions can innovate and grow within the BNPL space [3][4] Financial Performance - American Express achieved a 98% spend retention rate, with network volume increasing by 7% year over year in Q2 2025, indicating strong customer loyalty and growth [4][8] - The forward price-to-earnings ratio for American Express is 18.4X, which is lower than the industry average of 20.6, suggesting a potentially attractive valuation [10] - The Zacks Consensus Estimate for American Express' 2025 earnings is projected at $15.26 per share, reflecting a 14.3% increase from the previous year [11] Competitive Landscape - Competitors in the BNPL space include PayPal Holdings, which reported a 6% year-over-year growth in total payment volume and a 2% increase in active accounts to 438 million in Q2 2025 [5] - Affirm Holdings is focusing on higher-ticket purchases and reported a 23% year-over-year increase in active consumers, along with a 36% growth in gross merchandise volume in Q3 2025 [6]

Financial Data and Key Metrics Changes - Total processing volume (TPV) reached $91 billion in Q2 2025, a 29% increase compared to Q2 2024 [5][19] - Net revenue for Q2 was $150 million, growing 20% year over year [6][22] - Gross profit was $104 million, reflecting a 31% increase year over year, resulting in a gross margin of 69% [6][23] - Adjusted EBITDA was $29 million, achieving a margin of 19%, marking an all-time high for the company [7][27] - GAAP net loss was $600,000, including $8 million of interest income [28] Business Line Data and Key Metrics Changes - Non-block TPV grew nearly three times faster than block TPV, driven by diverse use cases [19][20] - Lending, including buy now pay later (BNPL), saw significant acceleration in growth compared to Q1, with all top 10 customers experiencing growth [21][29] - Value-added services gross profit more than doubled year over year, indicating strong traction [11] Market Data and Key Metrics Changes - European TPV continues to grow over 100% year over year, driven by various use cases including neo banking and expense management [13][18] - The acquisition of TransactPay is expected to enhance program management capabilities in Europe, further driving growth [15][16] Company Strategy and Development Direction - The company is focused on expanding customer relationships and innovating in lending and BNPL solutions [8][17] - Plans to launch new capabilities that allow consumers to receive multiple BNPL options at purchase are underway, with a broader launch expected in 2026 [10][97] - The acquisition of TransactPay aims to standardize offerings across geographies and enhance customer engagement [16][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business trajectory despite some macroeconomic uncertainties [38][39] - Full-year 2025 revenue growth expectations have been raised, with anticipated growth in gross profit and adjusted EBITDA margins [29][34] - The revised accounting policy for network incentives will shift from a tailwind in Q2 to a headwind in Q3 and Q4 [31][33] Other Important Information - The company repurchased 35.2 million shares at an average price of $4.62 in Q2, reducing outstanding shares by over 12% [28] - Adjusted operating expenses were $76 million, shrinking 7% year over year, driven by better execution and investment timing delays [26][27] Q&A Session Summary Question: Visibility on sales cycles and trends in TPV - Management feels good about visibility, noting strong performance in lending and BNPL, with growth accelerating unexpectedly [37][38] Question: Growth factor of value-added services - Value-added services are a high priority and are expected to become a larger growth driver as the business matures [39][42] Question: Drivers of increased adjusted EBITDA margin guidance - Strong gross profit growth driven by TPV and favorable mix, combined with lower expenses, are core sources of upside [46][48] Question: Regulatory environment impact - The regulatory environment is more business as usual, with some improvements in communication and coordination with bank partners [54][55] Question: International success and investment needs - The European market is growing over 100%, and the acquisition of TransactPay will enhance program management capabilities [71][75] Question: Crypto market performance and traditional bank engagement - The crypto use case has been volatile but is performing better, while engagement with traditional banks is ongoing but still several years away from broader support [83][87]

Financial Data and Key Metrics Changes - Total Processing Volume (TPV) reached $91 billion in Q2 2025, a 29% increase compared to Q2 2024 [5][18] - Net revenue for Q2 was $150 million, growing 20% year over year, driven by diverse use cases [6][20] - Gross profit was $104 million, a 31% increase year over year, resulting in a gross margin of 69% [6][22] - Adjusted EBITDA was $29 million, translating into a 19% margin, marking an all-time high for the company [6][26] - The company reported a GAAP net loss of $600,000 for the quarter [26] Business Line Data and Key Metrics Changes - Non-block TPV grew nearly three times faster than block TPV, with financial services, lending (including BNPL), and expense management driving the majority of TPV growth [19] - Lending, including BNPL, saw significant acceleration in growth compared to Q1, with all top 10 customers experiencing growth [20] - Value-added services gross profit more than doubled year over year, indicating strong traction [11] Market Data and Key Metrics Changes - European TPV continues to grow over 100% year over year, driven by diverse use cases [13][17] - The acquisition of TransactPay is expected to enhance program management services and support larger customers in Europe [15][17] Company Strategy and Development Direction - The company is focused on expanding customer relationships and enabling growth through innovative programs and geographic expansions [7][16] - The strategy includes enhancing value-added services and leveraging partnerships to deliver comprehensive solutions [10][41] - The acquisition of TransactPay is aimed at standardizing offerings across geographies and enhancing customer engagement [15][17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business trajectory despite some macroeconomic uncertainties [35][36] - The company raised expectations for Q3, Q4, and full-year 2025 revenue growth, gross profit growth, and adjusted EBITDA margin [28][32] - Management noted that the revised accounting policy for network incentives will shift from a tailwind in Q2 to a headwind in Q3 and Q4 [29][30] Other Important Information - The company repurchased 35.2 million shares at an average price of $4.62 in Q2, reducing outstanding shares by over 12% [27] - The company ended the quarter with over $820 million in cash and short-term investments [27] Q&A Session Summary Question: Visibility on sales cycles and trends - Management feels good about visibility, noting strong performance in TPV growth and positive customer conversations [35][36] Question: Growth of value-added services - Value-added services are a high priority and are expected to become a larger growth driver as the business matures [37][41] Question: Drivers of adjusted EBITDA margin guidance increase - Strong gross profit growth driven by TPV and favorable mix, along with lower expenses, are key drivers of the adjusted EBITDA margin increase [45][46] Question: Regulatory environment impact - The regulatory environment is more business as usual, with some improvements in communication and coordination with bank partners [53][55] Question: International success and investment needs - The company sees significant growth potential in Europe, particularly with the capabilities gained from the TransactPay acquisition [70][73] Question: Crypto market performance - The crypto use case has been volatile but is performing better, with a focus on stablecoins and partnerships [82][84] Question: Traditional banks engagement - Conversations with traditional banks are ongoing, but broader support is still several years away [86][88] Question: TPV breakdown and spending patterns - No noticeable shifts in TPV breakdown, with strong performance across various use cases [92][94] Question: New BNPL capabilities - The company is developing a product that allows consumers to choose from multiple BNPL providers at the point of sale, enhancing value for issuing partners [95][96]

LexinFintech Holdings (NASDAQ: LX ) is a leading Chinese fintech company that provides consumer financial services. The company's main platform, "Fenqile," provides consumers with installment-based loans. Much like many of the BNPL players in the US, LexinFintech has benefited from the rise in BNPL Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions ...

Core Insights - Visa Inc. is adapting to changing consumer spending habits by forming partnerships with Buy Now Pay Later (BNPL) companies, positioning itself strategically within the transaction ecosystem rather than viewing BNPL as competition [1][4][11] Group 1: Partnerships and Strategy - Visa is collaborating with BNPL providers like Klarna, Afterpay, and FIS, allowing these companies to utilize Visa's payment infrastructure, which in turn increases transaction volumes for Visa and enhances the credibility of BNPL offerings [2][11] - The introduction of Visa Installments is part of Visa's strategy to offer flexible payment options to issuers and merchants, further solidifying its role in the evolving payments landscape [2][11] Group 2: Financial Performance - In fiscal 2023 and 2024, Visa's payment volume increased by 6.4% and 6.7% respectively, with an 8% year-over-year growth in the second quarter of fiscal 2025 [3][11] - Processed transactions grew by 9% year-over-year in the same quarter, indicating strong operational performance [3][11] Group 3: Competitive Landscape - Competitors in the BNPL space include Mastercard, which has launched Mastercard Installments, and PayPal, which offers Pay in 4 and Pay Monthly options, leveraging their extensive user bases [5][6][7] - Visa's strategic partnerships with BNPL companies are seen as proactive measures to maintain relevance in a market that may shift away from traditional credit cards [4][11] Group 4: Valuation and Earnings Estimates - Visa's shares have increased by 13.5% year-to-date, outperforming the industry growth of 6.3% [8] - The forward price-to-earnings ratio for Visa is 28.88, above the industry average of 23.06, indicating a premium valuation [9] - The Zacks Consensus Estimate for Visa's fiscal 2025 earnings suggests a 12.9% increase from the previous year, with recent upward revisions in earnings estimates [13][14]

Consumer Debt Overview - US household debt reached a record high of $18.2 trillion in Q1 2025 [1] - Consumer debt includes credit cards, auto loans, mortgages, student loans, and buy now pay later plans [1] - High consumer debt can lead to defaults, impacting the entire economy [1] Credit Card Debt - Americans owed over $1.08 trillion on credit cards as of Q1 2025, a 50% increase since 2021 [1] - The typical cardholder with a balance owes over $7,300 [1] - Over 3% of credit card balances were at least 30 days delinquent as of Q1 2025 [1] - Retail credit cards can have interest rates as high as 36% [1] Buy Now Pay Later (BNPL) - BNPL services allow consumers to pay for purchases in installments [2] - BNPL debt pile could reach $700 billion by 2028 [2] - Over 40% of BNPL users have missed at least one payment [2] - Late fees for BNPL can be up to 50% of the payment amount [2] Mortgage Debt - Americans owe $12.8 trillion on 85 million mortgages [2] - The average borrower owes just under $150,000, and the typical home price is around $510,000 [2] - Mortgage rates have climbed to around 7%, the highest in over 20 years [2] - 0.7% of mortgages are seriously delinquent (90+ days past due) [3] Student Loan Debt - Americans owe nearly $1.08 trillion in student loans [3] - The average federal borrower owes more than $38,000 [3] - Over 20% of borrowers are 90 days or more past due [3] - The Biden administration cancelled more than $180 billion in loans for select groups [3] Economic Impact - Americans spend over $560 billion a year on interest payments [3] - Americans collectively work 18 billion hours a year to service interest on debts [4] - Consumer spending makes up nearly 70% of US GDP [4]