Operational efficiency and platform scale allowed the company to more than double adjusted EBITDA dollars while trending toward sustainable GAAP profitability.Value-added services doubled in gross profit contribution year-over-year, now utilized by 18 of the top 20 customers to enhance fraud mitigation and user engagement.European operations demonstrated significant momentum, with TPV growing twice as fast as the overall company and 2025 volume reaching eight times the 2022 levels.Strategic pivot toward ent ...

Core Insights - The latest inflation data indicates a continued easing of price pressures, particularly in essential categories, providing consumers with some relief [1][2] - The Consumer Price Index (CPI) rose 2.4% year over year in January, with a monthly increase of 0.2% on a seasonally adjusted basis, suggesting a pattern of restrained inflation [2] - Essential costs, including housing, food, and bills, have historically consumed a significant portion of household income, particularly for consumers earning less than $50,000 annually [3] Inflation Trends - January's CPI report shows signs of stabilization in critical areas, with energy prices declining 1.5% for the month and 0.3% over the past year, which can positively impact household budgets [4] - Food prices increased modestly, with food and beverages rising 0.2% in January and 2.8% year over year, indicating a normalization after previous volatility [5] - Shelter costs remain elevated but show slower growth, with shelter prices rising 3% over the past year and 0.2% in January, suggesting easing housing-related pressures [9] Service Sector Inflation - Inflation in service-oriented categories remains elevated, with food away from home increasing 4% year over year and medical care services rising 3.9%, indicating persistent cost pressures in labor-intensive sectors [10][11] - Goods-related inflation has shown clearer deceleration, while services inflation continues to exert pressure, highlighting a nuanced inflation narrative [11] Consumer Financial Behavior - Consumers are increasingly utilizing flexible payment mechanisms to manage cash flow, with 31% using credit card installment plans and 14% using buy now, pay later (BNPL) products [12][13] - The adoption rates of installment structures are notably higher among millennials, with 42% of bridge millennials utilizing these mechanisms [13] - The use of installment plans is viewed as a budgeting tool rather than a sign of financial stress, allowing consumers to align payments with income cycles [14] Overall Outlook - January's inflation data and consumer finance trends suggest a gradual recalibration rather than acute disruption, with inflation persisting in shelter and services but moderating in essential categories [15] - Consumers are adapting their financial behaviors through spending prioritization and credit utilization, indicating a demand for flexibility and predictability in a still-elevated price environment [16]

Core Insights - Berkshire Hathaway's portfolio includes high-quality companies, but investments are not guaranteed to succeed due to competitive risks [1] - American Express is experiencing significant revenue growth despite potential threats from innovations like BNPL and stablecoins [4] Group 1: Industry Developments - The payments industry has seen the rise of fintech services such as buy now, pay later (BNPL) and stablecoins, appealing to younger consumers and merchants [2] - Major payment processing companies like PayPal, Fiserv, and Stripe are adopting stablecoins, supported by favorable legislation from the Genius Act in 2025 [3] Group 2: American Express Performance - American Express generated $9.9 billion in revenue from merchants and $2.6 billion from card membership fees in Q4 2025, with double-digit growth in revenue and earnings per share reported last year [4] - The brand loyalty among high-income consumers allows American Express to charge higher processing fees to merchants [5] - American Express is successfully attracting younger customers, with millennials and Gen Z now making up the largest share of U.S. consumer spending [6]

Group 1 - Affirm Holdings, Inc. (NASDAQ:AFRM) is recognized as one of the top 10 financial stocks for long-term investment, particularly following a partnership with Intuit to integrate buy now, pay later (BNPL) options into QuickBooks [1] - The partnership aims to enhance small businesses' payment solutions, potentially increasing conversions and improving cash flows [1] - Kyle Peterson of Needham upgraded Affirm from Hold to Buy, setting a price target of $100, indicating a potential upside of 69.5% from current levels, which is higher than the median Wall Street estimate of 55.38% [2] Group 2 - Affirm operates a payment network across Canada, the United States, and internationally, offering a consumer-focused app and point-of-sale payment solutions [3] - The company was incorporated in 2012 and is headquartered in San Francisco, California [3] - The potential acquisition of a limited bank charter could significantly impact Affirm by providing access to deposit funding for loans and reducing third-party risks [2]

Company Leadership Changes - PayPal announced that Enrique Lores, the current CEO of HP, will succeed Alex Chriss as its next president and CEO, effective March 1, 2024 [3][5] - Alex Chriss was ousted after approximately 17 months in the role due to missed earnings and slow growth in branded checkout, as indicated by the company's fourth-quarter results [4][5] - Jamie Miller will serve as interim CEO until Lores takes over, while David Dorman will assume the role of independent chair immediately [5] Industry Appointments - Kristen Sosa has been appointed as division president of brand portfolio for consumer-driven footwear brands at Caleres, overseeing brands such as Stuart Weitzman and Allen Edmonds [8] - Sosa brings 30 years of experience to her new role, having previously served as CEO of Zadig & Voltaire in North America [8] Educational Initiatives - Central Saint Martins has appointed professor Kate Goldsworthy as director of the Future Denim Lab, a collaborative initiative aimed at reimagining denim for a circular economy [9]

Core Insights - PayPal Holdings Inc. has experienced a 20% decline in stock price and the removal of CEO Alex Chriss, prompting former president David Marcus to critique the company's shift towards a culture of "financial optimization" [1][2]. Company Culture and Leadership - David Marcus attributes PayPal's struggles to a transition from product-led innovation to a financially-driven leadership style, which he believes has diminished the company's competitive edge [2]. - Marcus expressed that the leadership's focus on predictability over innovation has led to a loss of the company's original "mojo" [3]. Product Strategy and Market Position - Marcus criticized PayPal's approach to the Buy Now, Pay Later (BNPL) service, stating that while competitors like Klarna and Affirm built strong consumer brands, PayPal treated BNPL merely as a feature rather than a core offering [4]. - This lack of strategic aggression in the BNPL space contributed to a slowdown in PayPal's core branded checkout growth, which fell to just 1%, described by management as a significant "execution shortfall" [4].

Core Insights - PayPal Holdings Inc. has experienced a 20% drop in stock price and the removal of CEO Alex Chriss, prompting former president David Marcus to critique the company's shift towards financial optimization over product-led innovation [1][2] Legacy of Optimization - David Marcus attributes PayPal's struggles to a long-term shift from product-led innovation to a focus on financial optimization, stating that the company's leadership style has changed since his departure [2] - He expressed concern that the company's "mojo" has evaporated, indicating a loss of product conviction during his absence [2] BNPL 'Feature' Fail - Marcus criticized PayPal's approach to Buy Now, Pay Later (BNPL), stating that while competitors built platforms, PayPal merely added a feature, failing to establish a core consumer relationship [3] - This lack of strategic aggression allowed competitors to gain market share, contributing to a slowdown in PayPal's core branded checkout growth to just 1%, which management described as a significant "execution shortfall" [3] Leadership at the Crossroads - The board has indicated a need for "greater discipline" and "faster execution," but Marcus remains skeptical about the current leadership's ability to revitalize the company [4] - He questioned the suitability of the newly appointed leader, suggesting that a hardware executive may not be the right fit for a payments company [4] Stock Performance - PayPal's stock has declined by 28.57% in 2026, with a 37.86% drop over the last six months and a 53.41% decrease over the past year [4]

Core Insights - PayPal announced a CEO change, appointing Enrique Lores as the new president and CEO effective March 1, replacing Alex Chriss to accelerate execution in a competitive payments market [2][5] - The board appointed David W. Dorman as the independent board chair, indicating a need for improved pace of change and execution within the company [3] Leadership Transition - Enrique Lores has been on PayPal's board for nearly five years and previously served as president and CEO of HP, where he focused on diversifying services and enhancing operational efficiency [2][4] - Jamie Miller, the Chief Financial and Operating Officer, will act as interim CEO until Lores takes over [2] Strategic Initiatives - PayPal is focusing on new growth engines, including the launch of a Transaction Graph Insights & Measurement program to help brands measure campaign effectiveness using verified purchase data [5] - The company plans to acquire Cymbio to enhance agentic commerce tools, making merchant catalogs more discoverable on AI platforms [6] - PayPal expanded its partnership with Deutsche Bank to improve merchant settlement and related services across regions [6] - In September, PayPal sold approximately $7 billion in buy now, pay later loans to Blue Owl Capital to maintain a light balance sheet [6]

Core Viewpoint - The rise of populism is influencing financial policies, favoring fintech companies that aim to improve affordability and efficiency in the financial system [2][3]. Financial Sector Outlook - The financial sector is viewed positively, with expectations of consumer resilience and stable credit conditions [3]. - Policy shifts away from deregulation are expected to benefit disruptors and innovative companies in the fintech space [3]. Fintech Opportunities - Companies targeting small and medium-sized businesses or retail are likely to experience significant tailwinds [6]. - Key fintech subsectors identified include Buy Now Pay Later (BNPL) services and digital assets, with companies like Affirm, Circle, and Coinbase highlighted as potential winners [7][8]. Regulatory Environment - Increased regulation in digital assets may affirm the legitimacy of these businesses, transitioning from an enforcement-focused environment to a regulatory one [12]. - The market may have overreacted to negative news regarding credit card rate caps, as fintech companies can adapt their pricing structures more easily [11]. Investment Strategy - The fintech basket is characterized as high beta compared to traditional equities, suggesting it should be a satellite position within a diversified portfolio [13]. - Investors may achieve similar exposure to traditional financials with a smaller investment in fintech, given its higher volatility [15]. Corporate Response to Political Climate - Companies are already responding to the political discourse around affordability, even without concrete policy changes [16][17]. - The ongoing populist narrative may drive corporate actions that benefit fintech companies, increasing liquidity in the system [18].

Core Insights - Affirm has become the exclusive provider of buy now, pay later (BNPL) payment options for Expedia Group brands in the U.S. [1] - The partnership will soon extend to Canadian travelers, enhancing payment flexibility for customers [2][3] Partnership Details - The collaboration between Affirm and Expedia Group is part of a multi-year expansion [2] - Affirm is now among nearly 420,000 merchants globally that offer flexible payment options [4] Customer Experience - Affirm's BNPL offerings are designed to provide clarity and confidence in payment selection for customers [3] - The partnership aims to enhance the travel planning experience by integrating payment considerations with travel choices [5] Recent Developments - Affirm reported record volumes and profitable growth in Q1 of fiscal 2026, supported by demand for transparent credit options [5] - Recent partnerships include collaborations with Bolt, Esusu, and Gr4vy to expand BNPL services and flexible payment options [6] Technology and Innovation - Expedia Group is leveraging AI, automation, and partner connectivity to meet growing travel demand [7] - The company's technology systems are designed to create a connected experience for travelers and supply partners [7]