Gucci's "see now, buy now" approach for the first collection from new designer Demna, harnessing a buzz around the brand to draw shoppers back to its stores after years of lackluster sales, is showing... ...

Key Takeaways Affirm partners with Ace Hardware to bring flexible BNPL payment options to in-store shoppers.Customers can split purchases of $50 or more via QR code checkout with clear terms and no hidden fees.AFRM's total transactions surged 51.8% year over year in Q4 FY25, highlighting strong growth.Affirm Holdings, Inc. (AFRM) has teamed up with Ace Hardware, making it easier for customers to enjoy more flexible payment options at checkout with convenient buy now, pay later (BNPL) solutions in stores. Th ...

Core Insights - Klarna has shown significant revenue growth with a CAGR of almost 14% over the past three years, reporting revenues of $2.8 billion in 2024, up from $1.9 billion in 2022 and $2.3 billion in 2023, while turning losses into profits with an EPS of $0.01 in 2024 from a loss of $3.09 per share in 2022 [1][2] Company Overview - Founded in 2005 and rebranded in 2010, Klarna is a Swedish fintech company specializing in "buy now, pay later" (BNPL) services and digital financial tools, offering flexible installment payment options for both online and in-store shoppers [3] - Klarna has ambitions to challenge traditional banks, with CEO Sebastian Siemiatkowski criticizing banks for their long-standing profits under misguided regulations [2] Financial Metrics - Klarna's Gross Merchandise Volume reached $105.01 billion, reflecting a year-over-year growth of 14%, with active customer count increasing to 93 million in 2024 from 79 million in 2022, and average revenue per active customer rising to $30 from $24 in 2022 [5] - The company reported operating cash flow of $587 million in 2024, an increase from $336 million in 2022, although lower than $808 million in 2023, with a cash and equivalents balance of $3.2 billion against short-term debt of $1.21 billion [6] Market Position and Strategy - Klarna holds a dominant 71.9% website share in the global BNPL market, with operations in over 26 countries and a partner network of nearly 675,000 global merchants, positioning itself as a formidable player in the growing BNPL space projected to reach $911.8 billion by 2030 [8] - The company has established itself as a default checkout option for many online retailers, enhancing customer acquisition for merchants with minimal setup costs [9][10] Banking Ambitions - Klarna has expanded into retail banking in select markets, offering interest-bearing savings accounts and fixed-term deposit products, supported by a Swedish banking license obtained in 2017 [11][12] - Interest income climbed 17% in 2023 and a further 33% in 2024 to reach $675 million, benefiting from rising interest rates and low-cost deposit funding [12] Challenges and Regulatory Environment - Klarna's valuation has significantly declined from a peak of $45.6 billion in 2022 to a target of approximately $14 billion for its upcoming IPO, facing regulatory headwinds as authorities tighten oversight of BNPL operators [13] - The company has faced regulatory scrutiny in various markets, including a SEK 500 million fine in Sweden for compliance shortcomings [13] Conclusion - Klarna is a significant player in the BNPL market with strong growth metrics, but it faces challenges related to sustainable profitability, valuation decline, and regulatory risks, suggesting a need to focus on consistent profitable growth before further banking ventures [14]

Industry Trend - The industry discusses the comparison between using credit cards and "buy now, pay later" services [1]

Consumer Finance & Credit Risk - Banks are wary of consumers overusing "buy now, pay later" plans [1] - Overuse of "buy now, pay later" plans may negatively impact approval chances for mortgages or credit cards [1]

Industry Trend - FICO is incorporating buy now, pay later (BNPL) activity into its credit scores [1]

Core Insights - Affirm's revenue forecast for the current quarter is below analysts' estimates, leading to a 10% drop in stock price during extended trading [1] - The company reported a gross merchandise volume (GMV) of $8.6 billion, exceeding the average estimate of $8.2 billion, with a year-over-year increase of 36% [1] - Revenue for the quarter rose 36% to $783 million compared to $576 million a year ago, with net income of $2.8 million, a significant improvement from a loss of $133.9 million a year earlier [2][5] Financial Performance - The revenue less transaction costs (RLTC) margin was reported at 4.1%, slightly above the long-term target range of 3% to 4% [2] - Adjusted operating margin was 22%, surpassing the estimate of 21.6% [2] - Earnings per share were reported at 1 cent, compared to an expected loss of 3 cents [5] Future Guidance - For the current quarter, Affirm is guiding for revenue between $815 million and $845 million, with a midpoint of $830 million, which is below the average estimate of $841 million [3] Market Context - Affirm's business is closely linked to consumer spending, particularly in sectors like electronics, apparel, and travel [4] - The U.S. economy experienced contraction in early 2025, influenced by an import surge as companies and consumers anticipated tariffs [4]