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Dec 31, 2024
Affirm Q2 2025 Earnings Report
Key Takeaways
Affirm reported strong financial performance for FQ2'25, surpassing expectations across all key metrics. The company achieved $866 million in revenue (up 47% YoY), $80.4 million in net income, and nearly break-even operating income. Gross Merchandise Volume (GMV) grew 35% to $10.1 billion, driven by increased merchant adoption and 0% APR offers. Adjusted Operating Income reached $237.8 million with a 27.4% margin. Affirm also expanded into new markets, including the UK, and strengthened partnerships in travel, healthcare, and electronics.
Affirm
Affirm
Affirm Revenue by Segment
Revenue by Segment
Merchant Network Revenue
CapyFin.comCard Network Revenue
CapyFin.comInterest Income Revenue
CapyFin.comLoan Sales Gain Revenue
CapyFin.comServicing Income Revenue
CapyFin.com Forward Guidance
Affirm expects continued GMV growth, targeting $8.00-$8.30 billion in FQ3'25 and $9.00-$9.30 billion in FQ4'25. Revenue is forecasted between $755-$785 million in FQ3 and $810-$840 million in FQ4. The company aims to achieve GAAP operating profitability by FQ4'25, with adjusted operating margins projected at 20-25%.
Positive Outlook
- Affirm expects GMV growth to remain strong, reaching $35B for FY25.
- Revenue is projected to surpass $3.1 billion in FY25, up from $2.6 billion in FY24.
- Adjusted operating margins are expected to improve further, reaching 23-25% in Q4 FY25.
- The company has expanded funding capacity to $22.6 billion, ensuring liquidity for future growth.
- Expansion in the UK and new merchant partnerships are expected to drive further adoption.
Challenges Ahead
- Operating income remains slightly negative, though breakeven is expected in FQ4'25.
- Higher transaction costs, particularly related to funding costs and credit losses, could impact profitability.
- Competition in the BNPL space remains intense, with rivals also expanding market share.
- Macroeconomic conditions, including potential interest rate changes, could impact loan economics.
- Delinquencies have slightly increased YoY due to expanded credit offerings.
Revenue & Expenses
Visualization of income flow from segment revenue to net income