Buy Now, Pay Later Firms’ Earnings Are In. Now They’re Looking for Holiday Growth | Global News Avenue

Buy Now, Pay Later (BNPL) ProviderThe company’s shares on Friday reversed months of gains and slid toward the end of the year, which is seen as crucial to expanding the business.

Affirm Holdings stock price (AFRM) and Afterpay parent company Block (square number), shares fell on Thursday after two fintech companies reported earnings that largely met or exceeded expectations. The stocks of both companies, specifically Affirm, It has generally risen since August.

Affirm reported revenue of $698 million in the first quarter of its fiscal year, a year-on-year increase of 41%, and a loss of $100 million. wall street expected The company had revenue of $663.9 million and a net loss of $107.5 million, according to analyst data polled by Visible Alpha.

Block reported revenue of $5.98 billion, below the consensus estimate of $6.18 billion provided by Visible Alpha. But Block beat Visible Alpha’s $240 million net profit forecast, reporting $283.7 million in net profit on $2.25 billion in profits from Afterpay; Cash App, a provider of consumer financial services; and Square, a merchant point-of-sale service.

Affirm shares recently fell about 11%, roughly in line with year-to-date losses. Block is down about 4% today and will fall 7% in 2024.

BNPL users typically use short-term loans to divide purchases into fixed quotas. The fintech companies behind these services make money by charging merchants fees to facilitate these loans and may charge interest and fees to delinquent borrowers.

Both companies are eyeing expansion during this busy holiday season for consumers and merchants. Affirm and AfterPay reported their highest quarterly revenue numbers in the final quarter of 2023, according to Visible Alpha.

Affirm is optimistic about attracting more users during the holidays with interest-free options, executives said. Merchants looking to increase sales may offer transaction subsidies to shoppers who would otherwise qualify for interest-bearing loans.

“We’re seeing a lot of excitement from merchants as we approach the holidays,” CEO Max Levchin told analysts, according to a transcript provided by AlphaSense.

Block also hopes to enhance the use of Afterpay. Block CEO Jack Dorsey said during an earnings call that Afterpay will be available to the 24 million people who have a Cash App-affiliated debit card “in the short term.”