Affirm's Apple Pay Tie-Up Boosts Shares, No Big 2025 Impact

Key Takeaway

• Affirm's payment products will be available to Apple Pay users in the U.S. later this year, enhancing payment flexibility.
• Affirm's shares surged 11.6% to $33.98 following the announcement, though they remain down 36% year-to-date.
• Despite the partnership with Apple, Affirm does not expect a material impact on revenue or gross merchandise volume for fiscal year 2025.

Affirm and Apple Partnership

Affirm Holdings, Inc., a prominent player in the buy now, pay later (BNPL) market, announced that its payment products will be available to Apple Pay users in the U.S. later this year. This partnership will enable users checking out online or in-app with Apple Pay on iPhone and iPad to apply to pay over time with Affirm. The company disclosed this development in a filing with the U.S. Securities and Exchange Commission on Tuesday. Despite the potential benefits, Affirm does not expect this partnership to have a material impact on revenue or gross merchandise volume in fiscal year 2025.

Affirm, founded by Max Levchin, a co-founder of PayPal Holdings Inc., is one of the leading BNPL providers, alongside Klarna Bank AB and Block Inc.’s Afterpay. An Affirm spokesperson highlighted the advantages of this partnership, stating, “This provides users with additional payment choices, and offers the ease, convenience and security of Apple Pay alongside the features users love in Affirm – flexibility, transparency and no late or hidden fees.” The spokesperson also mentioned that more details would be shared at a later time.

Market Reaction

Following the announcement, Affirm's shares surged as much as 11.6% to $33.98 on Tuesday. Despite this uptick, the company’s shares are still down about 36% year-to-date. Analysts at Mizuho Securities, who have a “buy” rating on the shares, commented on the positive market reaction. “The news is a big positive for AFRM, especially since the stock traded down several times in the past when Apple announced its entry into BNPL,” they wrote. They further noted, “Affirm’s strong brand and sophisticated underwriting technology have a moat that Apple likely could not replicate on its own.”

Affirm's stock has gained over 76% in the past year, according to Benzinga Pro. Investors looking to gain exposure to the stock can do so via the JPMorgan BetaBuilders U.S. Small Cap Equity ETF (BBSC).

Financial Outlook

Affirm recently introduced new payment options, Pay in 2 and Pay in 30, to enhance flexibility for its users. While these options are currently available only through Affirm’s app, the company plans to test and roll them out more broadly to its integrated merchant partners in the coming months. Last month, during its fiscal third-quarter results, Affirm reported that it had crossed one million active Affirm card consumers, with a gross merchandise volume of about $374 million.

For the fiscal fourth quarter, Affirm expects revenue between $585 million and $605 million, compared to estimates of $602.68 million. The company also anticipates a gross merchandise volume of $6.75 billion to $6.95 billion. Despite the new partnership with Apple, Affirm reiterated that it does not expect this collaboration to have a material impact on its revenue or gross merchandise volume in fiscal year 2025.

Street Views

• Mizuho Securities (Bullish on Affirm Holdings):

  "The news is a big positive for AFRM, especially since the stock traded down several times in the past when Apple announced its entry into BNPL. Affirm’s strong brand and sophisticated underwriting technology have a moat that Apple likely could not replicate on its own."

Management Quotes

• Affirm Spokesperson:

  "This provides users with additional payment choices, and offers the ease, convenience and security of Apple Pay alongside the features users love in Affirm – flexibility, transparency and no late or hidden fees."