Core Insights - Affirm Holdings, Inc. (AFRM) is focused on reinventing payments through a diverse merchant network, which has grown to approximately 358,000 active merchants as of March 31, 2025, up from around 292,000 the previous year [1][10] Merchant Network and Partnerships - The merchant partners of Affirm span various industries, including fashion, electronics, travel, and home and lifestyle, utilizing Affirm's buy now, pay later (BNPL) solutions to enhance average order values and customer conversion rates [2] - Recent partnerships include collaborations with Shopmonkey and Xsolla, extending payment solutions to auto repairs and game developers, while partnerships with Williams-Sonoma and KAYAK facilitated entry into the Canadian market [3] Financial Performance - In the first nine months of fiscal 2025, Affirm's gross merchandise volume (GMV) reached $26.3 billion, reflecting a 36% year-over-year increase, with expectations for fiscal 2025 GMV to be between $35.7 billion and $36 billion, indicating a 34.8% rise at the midpoint [5][10] - Merchant network revenues improved by 30% year-over-year during the same period [10] Competitive Landscape - Key competitors in the BNPL space include PayPal Holdings, Inc. (PYPL) and Sezzle Inc. (SEZL), with PayPal reporting over 36 million merchants globally and a 1% year-over-year revenue increase to $7.8 billion [6][7] - Sezzle's merchant base exceeds 40,000 businesses, with total revenues more than doubling year-over-year to $104.9 million, supported by a 64.1% rise in GMV [8] Stock Performance and Valuation - Affirm's stock has surged 132.1% over the past year, outperforming the industry growth of 41.2% [9] - The company trades at a forward price-to-sales ratio of 5.61, which is below the industry average of 5.88 [12] Earnings Estimates - The Zacks Consensus Estimate for Affirm's fiscal 2025 earnings suggests a 101.8% improvement from the previous year, with revenue growth projected at 37% year-over-year [14]

Core Viewpoint - Affirm Holdings, Inc. is expected to report its third-quarter fiscal 2025 results on May 8, 2025, with a projected loss of 8 cents per share on revenues of $783.1 million, indicating significant year-over-year improvements in both earnings and revenues [1][2]. Financial Performance - The fiscal third-quarter earnings estimate has improved by 2 cents over the past month, reflecting an 81.4% year-over-year improvement [1]. - The Zacks Consensus Estimate for quarterly revenues suggests a year-over-year growth of 35.9% [1]. - For the current fiscal year, the revenue estimate is pegged at $3.2 billion, implying a rise of 37.1% year over year, while the EPS consensus is a loss of 6 cents, indicating a 96.4% improvement year over year [2]. Earnings Expectations - Affirm is predicted to beat earnings estimates due to a positive Earnings ESP of +63.27% and a Zacks Rank of 1 (Strong Buy) [3]. - The company has consistently beaten consensus estimates for earnings in the last four quarters, with an average surprise of 84.1% [2]. Revenue Drivers - Merchant network revenues are expected to reach $199.5 million, indicating a 25.2% rise from the prior-year quarter [5]. - The Gross Merchandise Volume (GMV) is anticipated to grow by 29.2% year-over-year, with management estimating it to be in the range of $8-$8.3 billion [6]. - Active consumers are projected to grow by 17.4% year-over-year, and transactions per active consumer are expected to rise by 16.5% [7]. Card Network and Interest Income - Card network revenues are expected to improve by 30% year-over-year, while interest income is pegged at $414.4 million, indicating a 31.3% year-over-year rise [8]. - Servicing income is estimated to reach nearly $31.3 million, reflecting a 23.6% increase from the year-ago quarter [9]. Transaction Costs - The company anticipates higher transaction costs in the range of $415-$430 million for the quarter [9]. Stock Performance - Affirm's stock has increased by 38.6% over the past month, outperforming the industry growth of 19.4% and significantly surpassing the S&P 500's increase of 12.3% [10]. Valuation - Despite the recent stock price appreciation, Affirm's valuation remains relatively cheap at 4.34X forward 12-month sales, below the industry average of 5.12X [13]. Competitive Landscape - The delay of Klarna's IPO has reduced competitive pressure in the BNPL space, benefiting Affirm as one of the few publicly traded players [18]. - Concerns regarding Walmart's relationship with Affirm are considered overblown, as Walmart contributed only 5% to Affirm's GMV [18]. Long-term Outlook - Affirm is expanding internationally and diversifying its offerings, which positions it to compete with major players like Visa and PayPal [19]. - The company is focusing on profitability by tightening underwriting standards and improving margins, which is expected to bolster investor confidence [19].