Affirm Holdings Inc. jumped after reporting an increase in transactions on the buy now, pay later firm’s platforms as deals with new merchants helped offset challenges from rising interest rates.
(Bloomberg) — Affirm Holdings Inc. jumped after reporting an increase in transactions on the buy now, pay later firm’s platforms as deals with new merchants helped offset challenges from rising interest rates.
The company reported $5.5 billion of gross merchandise volume — or the total dollar amount of all transactions on its platform — in the quarter ending June 30, it said in a statement. The figure was 25% higher than the same period last year and beat analyst estimates.
Affirm boosted its focus on consumers’ experiential purchases through new deals with companies including Cathay Pacific and Booking.com and expanded projects with Royal Caribbean Group and Priceline. Buy now, pay later companies benefited when the pandemic drove consumers to shop online but have felt the pain as the virus receded and consumer spending habits changed. Affirm has also had to confront higher interest rates and keep pace with subsequent shifts in consumer demand.
“We definitely should acknowledge that 2023 was a challenging year for us,” Chief Financial Officer Michael Linford said in an interview. But after the company weathered months of volatility that impacted its short-term performance, it ended “strong,” he said.
Shares in the company rose 6.13% in late New York trading.
Affirm, headquartered in San Francisco, was started by Chief Executive Officer Max Levchin, one of the co-founders of PayPal Holdings Inc. and a former colleague of Elon Musk.
The company also said revenue increased 22% to $446 million compared to the same period a year earlier, which also beat analyst estimates.
Affirm and Amazon.com Inc. announced in June that US retailers using the Amazon Pay service can now offer pay-over-time options for purchases of more than $50. The partnership was rolled out to increase sales and customer loyalty, Affirm said at the time.
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