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Today, Affirm Holdings (NASDAQ:AFRM), Inc. disclosed a significant business development involving one of its key partners, Walmart (NYSE:WMT) Inc. According to the 8-K filing with the Securities and Exchange Commission, Walmart’s fintech arm, OnePay, has opted to work with Klarna Group plc for installment loan financing services, a move that introduces a direct competitor into the relationship. With a market capitalization of $16 billion, Affirm has shown remarkable revenue growth of 46% over the last twelve months, according to InvestingPro data.
Klarna, a company that provides similar pay-over-time solutions, is set to offer installment financing to Walmart customers later this year. Despite this new partnership, Walmart maintains its existing relationship with Affirm, which currently offers its payment options to Walmart shoppers both through an integrated program and Affirm’s direct-to-consumer products, the Affirm App, and the Affirm Card.
The filing also revealed financial details pertinent to Affirm’s business with Walmart. For the six-month period ending December 31, 2024, transactions made through Affirm’s integrated program with Walmart constituted about 5% of Affirm’s Gross Merchandise Volume and around 2% of its Adjusted Operating Income—a non-GAAP financial measure. InvestingPro analysis indicates the company maintains strong liquidity with a current ratio of 12.29, though it’s currently trading above its Fair Value. For deeper insights into Affirm’s financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
In the statement, Affirm included forward-looking remarks regarding its future association with Walmart, noting that actual outcomes could be influenced by various risks and uncertainties. These potential risks and the methodology behind non-GAAP financial measures like Adjusted Operating Income have been detailed in Affirm’s prior communications, including its Annual Report on Form 10-K and subsequent filings.
The company, headquartered in San Francisco, California, emphasized that it does not commit to updating any forward-looking statements unless legally mandated. This announcement is part of the routine financial disclosures Affirm Holdings, Inc. makes as a publicly-traded company on the Nasdaq Global Select Market under the ticker AFRM. Looking ahead, InvestingPro forecasts suggest a 37% revenue growth for fiscal year 2025, though analysts don’t expect profitability this year. The stock has demonstrated significant volatility, with additional insights available through InvestingPro’s extensive metrics and analysis tools.
Investors and stakeholders are reminded that this report is based on a press release statement and should consider the information within the context of Affirm’s broader financial reporting.
In other recent news, Affirm Holdings has filed a new prospectus supplement with the Securities and Exchange Commission, outlining the legal framework for its upcoming securities transactions. This filing is part of Affirm’s ongoing financial activities and includes a legal opinion from Gibson, Dunn & Crutcher LLP. Meanwhile, Affirm has expanded its partnership with Shopify (NYSE:SHOP), securing its role as the exclusive provider of Shop Pay Installments in the U.S. and Canada, with plans to extend this service to the UK. This development follows the successful adoption of Affirm’s pay-over-time solutions since 2021.
Additionally, Affirm has teamed up with StockX to offer flexible payment options for U.S. customers, enhancing access to high-demand brands. Affirm’s collaboration with Stitch Fix (NASDAQ:SFIX) further underscores its growing presence in the fashion sector, allowing customers to spread payments over time. However, Affirm faced a setback as Walmart announced a new partnership with Klarna, replacing Affirm as its buy-now-pay-later provider in the U.S. This transition is expected to intensify competition in the BNPL space. These developments reflect Affirm’s strategic initiatives and challenges in the evolving payment solutions market.
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