Shares of "buy now, pay later" (BNPL) services company Affirm Holdings (AFRM 5.31%) jumped as much as 16% early in Monday's session following an encouraging report on BNPL trends as the 2023 holiday shopping season kicks off. Shares then pulled back a bit, but were still trading up by 10.2% as of 1:30 p.m. ET.
According to the report released Monday morning by Adobe Analytics, BNPL purchases accounted for around $7.3 billion in online spending from Nov. 1 through Nov. 26, up 14% year over year. And that momentum appears to be accelerating following Black Friday. Adobe said BNPL purchases climbed 20% year over year over the holiday weekend, driving $782 million in online spending on Saturday and Sunday alone.
The rising influence of BNPL
BNPL options are presented to online shoppers as short-term interest-free loans -- an increasingly attractive option as consumers grapple with inflation, higher interest rates, and macroeconomic uncertainty. Affirm is integrated at the checkouts of more than 250,000 retailers -- notably including Amazon, Dick's Sporting Goods, Target, and Walmart -- making one of the most pervasive BNPL platforms on the market today.
According to a recent survey from Affirm last month, 54% of consumers were looking for retailers to offer a buy now, pay later option at checkout during the 2023 holiday shopping season.
And Affirm's reach doesn't stop with consumers. Earlier this month, it announced an expanded partnership with Amazon to become the first pay-over-time option available at checkout on the e-commerce giant's B2B shopping platform, Amazon Business.
What's next for Affirm investors?
Affirm announced results for its fiscal 2024 first quarter (which ended Sept. 30) on Nov. 8, crushing analysts' expectations on all metrics. It also raised its fiscal-year outlook. Investors can expect Affirm to announce its holiday-quarter results in early February.
Time will tell, of course, whether Affirm lives up to Wall Street's lofty expectations in the current quarter. Shares of Affirm have already more than tripled so far in calendar 2023, and analysts' latest consensus estimates call for the company to book a fiscal second-quarter loss of $0.72 per share on revenue of $517 million. The top-line figure is near the high end of Affirm's official guidance range of $495 million to $520 million. But if the latest BNPL data from Adobe is any indication, Affirm might not have much trouble stepping over that bar this holiday season.
