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Klarna Gives You The CEO’s Ear Amid An Ambitious IPO
Forbes· 2025-09-11 15:40
Company Overview - Klarna, a Swedish fintech firm, is transitioning to a publicly traded company with its shares listed on NYSE under the ticker KLAR, valued at $40 as of September 10, 2025 [1] - The company is currently valued at approximately $15 billion, with its IPO raising around $1.3 billion through the offering of just over 34 million shares [2] Leadership Insights - CEO Sebastian Siemiatkowski expressed that there is a growing demand for alternative banking solutions, as many consumers are dissatisfied with traditional banks and credit card debt [3] - Klarna's Buy Now, Pay Later (BNPL) service allows consumers to split purchases into interest-free installments, addressing the financial strain on wage workers due to rising prices [3][4] Market Context - The IPO market shows strong appetite, as evidenced by recent successful debuts of companies like Figma Inc. and Circle Internet Group Inc., indicating potential for Klarna's stock performance [9] - Klarna's IPO follows the path of Affirm Holdings Inc., which has experienced stock volatility since its public offering but has seen recent momentum due to improved profit profiles and new product offerings [9] Communication Innovations - Klarna has introduced a "CEO AI hotline," allowing users to interact with an AI avatar of the CEO to provide feedback on their experience with the company [5][6] - This initiative aims to enhance communication with customers, moving away from traditional chatbots to a more engaging interaction model [6][10]
AFRM Jumps on Q4 Results Before Klarna Crashes the Party: Buy or Bail?
ZACKS· 2025-09-04 16:46
Core Viewpoint - Affirm Holdings, Inc. has experienced significant stock volatility following its fiscal Q4 2025 results, initially rising 10.6% but later declining 3.6% due to competitive pressures from Klarna's upcoming U.S. IPO [1][2] Group 1: Financial Performance - Affirm reported Q4 fiscal 2025 earnings of $0.20 per share, surpassing the Zacks Consensus Estimate of $0.11 and improving from a loss of $0.14 in the prior year [3] - Revenue increased by 33% year-over-year to $876.4 million, exceeding the consensus estimate by 4.4% [3] - Gross Merchandise Value (GMV) reached $10.4 billion, a 43% increase from the previous year, and also surpassed the Zacks Consensus Estimate of $9.5 billion [4] Group 2: Growth Drivers - Repeat customers accounted for 95% of transactions in Q4, indicating strong brand loyalty and predictable revenue streams [4] - The demand for 0% APR plans surged by 93% year-over-year, representing 14% of GMV, which is a significant growth driver [5] - Affirm is expanding its operations into Western Europe through a partnership with Shopify, starting with France, Germany, and the Netherlands, which is expected to unlock substantial growth potential [6] Group 3: Future Outlook - The company anticipates GMV for fiscal 2026 to exceed $46 billion, up from $36.7 billion in the prior year, with revenues projected to be 8.4% of GMV [7] - Adjusted operating margin is expected to rise to over 26.1% in fiscal 2026, compared to 24.1% in fiscal 2025 [7] - The Zacks Consensus Estimate for fiscal 2026 earnings suggests a 427% year-over-year increase to $0.79 per share, with fiscal 2027 earnings expected to grow nearly 78.7% [9] Group 4: Competitive Landscape - Klarna's entry into the U.S. market and Walmart's switch from Affirm to Klarna highlight the intensifying competition in the BNPL space [18] - Affirm's long-term debt stood at $7.8 billion as of June 30, 2025, with a debt-to-capital ratio of 71.8%, significantly higher than the industry average of 13.7% [17] - Affirm's stock has increased by 40% year-to-date, outperforming major competitors like PayPal and Block, which have seen declines of 18.5% and 10.9%, respectively [11]
Affirm's Repeat Users: A Strong Signal for Sustainable BNPL Growth?
ZACKS· 2025-08-21 19:15
Core Insights - Affirm Holdings, Inc. (AFRM) has established a unique position in the rapidly expanding Buy Now, Pay Later (BNPL) market, emphasizing transparency and catering to both high-ticket and low-ticket purchases while providing convenient financing options [1] Company Performance - In the third quarter of fiscal 2025, total transactions increased by 45.6% year over year to 31.3 million, with a repeat transaction rate of 94%, indicating strong customer trust and loyalty [2][9] - The company reported a 36% year-over-year increase in total revenues, projecting fiscal 2025 revenues to be between $3.163 billion and $3.193 billion [3][9] - Affirm has an active merchant network of nearly 360,000 partners, which enhances its revenue potential by fostering repeat usage among customers [3] Competitive Landscape - Competitors in the BNPL space include PayPal Holdings, Inc. (PYPL) and Sezzle Inc. (SEZL). PayPal's net revenues grew by 5% year over year, with a total payment volume increase of 6% [5] - Sezzle's total revenues surged by 76.4% year over year, with total transactions rising by 62.6% to 8.2 million and a repeat usage rate of 96.4% [6] Valuation and Estimates - Affirm's shares have gained 19.8% year-to-date, outperforming the industry average increase of 17.5% [7] - The forward price-to-sales ratio for AFRM is 5.83, which is above the industry average of 5.55 [10] - The Zacks Consensus Estimate for Affirm's fiscal 2025 earnings suggests a growth of 103% compared to the previous year [11]