📈 Company Growth and Financials
Quarterly Financial Performance
| Quarter | Revenue ($M) | Net Profit ($M) | EBITDA ($M) |
|---|---|---|---|
| Q4 FY22 | 364 | -186 | -85 |
| Q1 FY23 | 361 | -251 | -97 |
| Q2 FY23 | 400 | -315 | -103 |
| Q3 FY23 | 381 | -205 | -89 |
| Q4 FY23 | 446 | -206 | -78 |
| Q1 FY24 | 497 | -169 | -60 |
| Q2 FY24 | 866 | 80.4 | 150 |
Key Financial Insights
✅ YoY Revenue Growth: From $446M in Q4 FY23 to $866M in Q2 FY24, nearly doubling in a year! ✅ EBITDA Trend: EBITDA turned positive in Q2 FY24, showing improved operational efficiency. ✅ Net Profit: Affirm posted a net profit of $80.4M in Q2 FY24, marking a significant turnaround.
Key Takeaway: Strong revenue growth 📈, profitability achieved 💸, and improving financial health signal a promising outlook.
🗂 Order Book and Business Expansion
📚 Business Model: Affirm operates on a BNPL (Buy Now, Pay Later) and merchant partnership model, with Gross Merchandise Volume (GMV) as a key growth indicator.
🚀 Recent Expansions:
- New Sectors: Expanded into travel, hospitality, and healthcare financing.
- Global Growth: Strengthened operations in Canada and deepened U.S. partnerships.
- Big Partnerships: Collaborations with Amazon, Shopify, Walmart, and Target.
✅ Scalability: Strong tech infrastructure supports rapid merchant onboarding and credit innovation.
Key Takeaway: Affirm’s diversified expansion and robust tech infrastructure indicate strong growth potential. 🛠️
📊 Future Projections
📈 Revenue Forecast: Analysts expect Affirm’s revenue to reach $2.6B in FY25, up from $2.2B in FY24.
💰 Earnings Per Share (EPS) Outlook: EPS is expected to remain negative in the near term but improve toward breakeven by 2026.
👥 Strategic Developments:
- Affirm Card rollout driving customer engagement.
- AI-based credit risk models optimizing approvals.
- Strengthened alliances with major e-commerce platforms.
Key Takeaway: Affirm’s revenue visibility and tech-driven credit models make it a strong long-term growth play. 🌟
💳 Debt and Financial Health
💵 Debt-to-Equity Ratio: Moderately high but managed through asset-backed securitization.
💪 Cash Flow Trends: Operating cash flow is improving as default rates stabilize.
🛡️ Debt Strategy: Focused on structured repayments with no near-term high-impact liabilities.
Key Takeaway: Debt is under control 🔒, and increasing cash flow supports a sustainable financial structure.
🌍 Market Size and Opportunities
🌍 Total Addressable Market (TAM):
- Global consumer credit market: ~$10T.
- U.S. BNPL Market: ~$300B targeted by Affirm.
🌟 Sector Growth: BNPL is expected to grow at a CAGR of 25-30% globally.
⚠️ Risks: Rising interest rates, regulatory oversight, and competition from Apple Pay Later and Klarna.
Key Takeaway: Large market opportunities 🚀, but regulatory and competitive risks must be monitored.
⚖️ Regulatory & Market Influences
📜 Regulatory Scrutiny: Facing moderate oversight under the Consumer Financial Protection Bureau (CFPB).
📊 Market Sentiment:
- Recent fintech sell-offs created volatility.
- Institutional confidence is rising, with increasing institutional holdings.
Key Takeaway: Minor regulatory hurdles, but Affirm retains strong market credibility. ⚖️
📊 Technical Analysis (Monthly Chart View)
| Level | Price Range ($) |
| 📈 Resistance | $55 – $60 |
| 📉 Support | $40 – $45 |
📈 Current Trend: Uptrend forming with higher lows. 📊 Short-Term Forecast: Potential breakout above $55. 💪 Long-Term Forecast: $75+ possible with sustained profitability.
Key Takeaway: Strong technical momentum 📈 supports a bullish breakout scenario.
📊 Valuation & Investment Outlook
📉 Valuation Status: In a re-rating phase with improving fundamentals.
📈 Investment Outlook: High-growth fintech play with strong risk-reward potential.
💪 Ideal Investment Strategy: Growth investors can accumulate on dips.
Key Takeaway: Affirm presents a compelling long-term opportunity for fintech investors. 📊💪
❓FAQs
1️⃣ Is Affirm Holdings profitable in 2024–25?
✅ Yes, Affirm posted a net profit of $80.4M in Q2 FY24, marking its first profitable quarter.
2️⃣ What are the main revenue sources for Affirm?
💸 Merchant fees, interest income, loan securitization, and Affirm Card usage.
3️⃣ How is Affirm different from Klarna, Apple Pay Later & Afterpay?
⚙️ Offers longer plans, no hidden fees, AI-based underwriting, and deeper e-commerce integration.
4️⃣ Is Affirm a good long-term investment?
📈 Yes, due to strong revenue growth, large market potential, and improving financials.
5️⃣ What are the risks in investing in AFRM stock?
⚠️ Interest rates, regulatory actions, credit defaults, and rising competition.
6️⃣ When will Affirm become consistently profitable?
📊 Expected by FY26, based on current growth and improving margins.
7️⃣ How does Affirm manage credit risk?
🧠 Through AI-based risk models, conservative underwriting, and securitization.
8️⃣ What is Affirm’s total addressable market (TAM)?
🌍 ~$10T global credit market and ~$300B BNPL market in the U.S.
9️⃣ Is AFRM stock undervalued or overvalued now?
🔄 Fairly valued in growth terms; attractive on dips for long-term investors.
🔟 What are Affirm’s future growth drivers?
🚀 Affirm Card, AI credit models, new sectors, and global expansion.
